The European Parliament will today vote on a vote of confidence in the new composition of the European Commission. Expectations are that the EP will overwhelmingly support the 27-member commission to which they will be joined by the new Bulgarian commissioner Kristalina Georgieva. The main political groups in the European Parliament had already decided to vote for “the second Commission Jose Barroso. To be approved the new committee needs a simple majority, and ERA, Socialists and Liberals have significantly more than the necessary votes for it. In this situation, few believe it important that the Greens and the far-Left intend to give a negative vote by an argument that the new commission seems to be weak and incompetent. Of the three largest parties, which will make it possible, are convinced that the already approved 26 commissioners have the necessary qualities and their President Jose Manuel Barroso – the necessary determination to push through important decisions, of course, taking into account the position of the European Parliament. Therefore expectations are significantly more votes than necessary. The mandate of the new European Commission will continue to the next European elections in 2014, and some of the most important tasks before it will be linked to economic stabilization, climate change, energy independence. If, as expected, the vote is positive, European commissioners will take the oath in Luxembourg tomorrow.
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Spain to the European Commission presented a plan to curb its budget deficit, which reached 11.4 percent of GDP last year, cited by EUobserver. And Greece to the European Commission asked the UK to shrink the deficit to maximum limit of 3 percent for the euro area. Under the Madrid will have to reduce its budget deficit to 9.8 percent of GDP this year, up 5.3 percent in 2012 and in 2013 will have a limit of 3 percent, down in the Pact for Stability and Growth of the EU. Yet last week the government approved a saving of 50 billion state spending over the next four years. Despite the measures which Spain is prepare to take the ratio between debt and GDP will continue to grow and will reach 74.3 percent in 2012, according to a European Commission forecast. However, in this respect Madrid is actually much better presented as an average for Europe last year, debt-GDP ratio was 78.2%. In Spain it was 55.2%.
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The European stocks fell by withdrawing from the 14-week highs registered in the previous session. The prices of bank shares retreated the most, while shares of Swiss pharmaceutical company Basilea collapsed after receiving a refusal to sell in the U.S. on its primary medicine. Pan-European index Dow Jones Stoxx 600 fell by 0.4 percent to 253 16 points. On Tuesday the measure closes at highest level since October 2008 onwards. German DAX 30 closed with a fall of 0.9% at 5 957.43 points from the last session of the year. Germany’s market surged by 23.8 percent traveled to 2009, which was his best performance since 2005. For the year the largest rise among the main German stock index registered shares of Infineon Technologies, which jumped 353 percent, while those of Commerzbank is ranked last with an increase of 11.4%. Today, the French CAC 40 dropped by 0.6 percent to 3 935.5 points, the UK’s FTSE 100 lost 0.7% to 5 397.86 points. Shares of most European banks fell. Among them were shares of Royal Bank of Scotland, with a decline of 3, 2%, and those of Bank of Ireland, which were down by 1%.
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The Bank of America-Merrill Lynch increased its forecast growth in gross domestic product (GDP) of Russia for 2010 from 3.9% to 5%, says the analysis, quoted by RIA Novosti. The increase in the estimate is based largely on expectations of increases in 2010/11, the average prices of Brent crude oil to 85 dollars per barrel in the previous forecasts for $ 75 a barrel. “The rise in oil prices by an average of 10% leads to accelerate the growth of Russia’s GDP by 1 percentage point,” said analysts from Merrill Lynch. They estimated that an additional 10 dollars a barrel to the price of oil will bring to Russia 26 billion dollars more revenue, which will affect positively the balance of payments. Thus, the positive trade balance of the country in 2010 amounted to 4,1% of GDP (compared with a previous forecast of 2.6 percent). According to the latest Merrill Lynch forecasts the budget deficit to Russia next year will be 4.3 percent (compared with a previous forecast of 5%). The bank commented that the accumulated funds in the so-called. Reserve and home loans will be sufficient to cover the budget deficit, but in 2011 Russia will probably have to borrow funds from outside. Consumer demand in Russia is still a low level, but this situation is normal for this stage of the economic crisis, says an analysis of the bank. From Merrill Lynch provide unemployment in Russia soon begin to decline, while there is growth in real incomes of the working population by 2%, and pensions – by 40%. Specified by the financial institution that wage growth in the private sector is questionable, but because of relatively low inflation (an average of 8% last year) and employees in private companies will have to rely on, albeit insignificant, increase their income.
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The Indexes in Europe ended in the red for the last session this week under the influence of energy shares fell along with the decrease in oil prices. Dow Jones Stoxx 600, which monitors the securities markets in 18 western states, slid 0.5 percent to 244.89 points. Thus increase the stock measure deleted from the previous day and ended the week with a fall of 0.3 percent. “Come back in a situation in which markets went up quite strongly. It became an interesting week that there were good and bad news. I think this is harvesting profits, “said Howard Uildan, strategist at BGC Partners, quoted by Reuters. Shares of oil companies helped pay positive price movement after the “black gold” fell by 1.2 percent because of doubts that the economic recovery is stable enough to trigger a strong demand for fuel. Among the losers were oil companies Petroplus German with a fall of 1.59 percent and France’s Total, which slid 0.4 percent. Pharmaceutical companies saw the biggest decline, as shares of Elan Irish collapsed by 22 percent after European regulators said it would investigate its relationship to mozhestvena sclerosis drug Tysabri, with 23 cases of potentially fatal brain infection. At the regional level, the English FTSE 100 rose by 0.7% to 5 242.57 points, the German DAX retreated 0.4% to 5 740.25 points, and France’s CAC 40 lost 0.3 percent to 3 808.24.
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