European leaders disagree over China's EU investments

EU Industry Commissioner
Antonio Tajani by ZioDave

European leaders are in disagreement over limiting China's European Union investments which increased by 12 percent this year, Deutsche Welle television reported on Tuesday.

European Union industry commissioner Antonio Tajani warned EU Member States on Monday about the growing influence China has in some strategic sectors of the European economy and added that EU businesses should be protected from possible future takeovers by Chinese companies.

In 2010, China's direct investments in Europe increased by 12 percent, or 37 billion euros ($50 billion), while the EU invested a total of 3.8 billion euros ($5.1 billion) in China. The increment was the result of EU businesses which are expanding their investment from the manufacturing sector to services and other fields.

According to the EU statistical bureau Eurostat, from January to September, the EU exports to China reached 82.3 billion euros ($107.8 billion) which represented a 39 percent increase from 2009. In addition, EU imports from China were of 204.5 billion euros ($267.8 billion), increasing by 30 percent.

USA: Prices fell by 1,3 percent in October

photo By uzi978

A study carried out in 20 U.S. cities in the month of October showed that home prices decreased by 1.3 percent compared to September, and 0.8 percent year-over-year, a report released on Wednesday by S&P/Case-Shiller said.

While housing prices are still above their spring 2009 lows, six cities - Atlanta, Charlotte, Miami, Portland (OR), Seattle and Tampa - hit their lowest levels since home prices started to fall in 2006 and 2007, meaning that average home prices in those areas have fallen beyond the recent lows seen in most other markets in the spring of 2009.

In October, the annual growth rates moderated from their prior month's pace confirmed a clear deceleration in home price returns for the fifth consecutive month.

ECB increases its capital

The European Central Bank (ECB) has decided to increase its subscribed capital by €5 billion, from €5.76 billion to €10.76 billion, with effect from 29 December 2010. This decision was taken by the Governing Council of the ECB in accordance with the Statute of the European System of Central Banks and the ECB, as well as the Council Regulation No 1009/2000 of 8 May 2000 that foresees an increase in the capital of the ECB by up to this amount.

This decision resulted from an assessment of the adequacy of statutory capital conducted in 2009. The capital increase was deemed appropriate in view of increased volatility in foreign exchange rates, interest rates and gold prices as well as credit risk. As the maximum size of the ECB’s provisions and reserves is equal to the level of its paid-up capital, this decision will allow the Governing Council to augment the provision by an amount equivalent to the capital increase, starting with the allocation of part of this year’s profits. From a longer-term perspective, the increase in capital – the first general one in 12 years – is also motivated by the need to provide an adequate capital base in a financial system that has grown considerably.

Estonia adopts the euro

Estonians will start using the euro on 1 January 2011. Good advance planning and public information should make for a smooth changeover from the kroon.

Recent publicity campaigns have aimed to prevent confusion about the conversion rate - so that shoppers know how much they are spending and don't fall prey to dishonest traders.

In November, Estonians received leaflets with practical details and two handy reference cards - one with a kroon-euro conversion chart and the other explaining the anti-forgery features on the banknotes.

From 1 December, coin starter kits have been available from banks, so the public can get a feeling for the currency.

Meanwhile, back in August, retailers, financial institutions and local governments were invited to sign up to a fair pricing agreement, pledging them not to increase their prices without good cause after the changeover.

For the first two weeks of the changeover, Estonian kroons and euros will circulate alongside each other, after which the euro will become the sole legal tender. To help consumers, retailers began displaying prices in both currencies on 1 July 2010, and must continue to until 20 June 2011.

Government's Consumer Protection Board will monitor businesses and prices, and will make public any information about major violations of the rules.

Estonia joined the EU in 2004 and has fervently pursued economic reform, earning itself the nickname "Baltic tiger". The economy is highly flexible and, while not immune to the crisis, has shown its ability to operate and adjust under a fixed exchange rate for close to two decades.

But euro adoption is not the end of the road. As the 17th eurozone member, Estonia will be required to pursue policies on debt and budget deficits that support economic growth, job creation and a stable inflation rate.

Other recent additions to the euro area include Slovenia, which joined in 2007, Cyprus and Malta in 2008 and Slovakia in 2009.

source: www.europa.eu


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