'Stimulus'에 해당되는 글 14건

  1. 2008.11.27 Europe's $260B Game Plan by CEOinIRVINE
  2. 2008.11.25 Beijing's Confidence Game by CEOinIRVINE
  3. 2008.11.25 Democrats' Stimulus Plan May Reach $700 Billion by CEOinIRVINE
  4. 2008.10.21 Bernanke Recommends Second Stimulus Package by CEOinIRVINE

Europe's $260B Game Plan

Business 2008. 11. 27. 04:01

Europe's $260B Game Plan

Lionel Laurent

A bigger-than-expected stimulus package will leave it up to individual member states to fight the downturn.

 












 

A bigger-than-expected stimulus package will leave it up to individual member states to fight the downturn.

  Jose Manuel Barroso
 
  European Commission

European Commission president Jose-Manuel Barroso unveiled a larger-than-expected stimulus plan for the 27-member European Union on Wednesday, which he described as a "tool box" that could turn the global financial crisis into an opportunity. But questions still remain as to whether the broad menu of options will be enough to heal Europe's divided approach to the crisis.

Although Wednesday's final figure of 200 billion euros ($258.8 billion) came in higher than the previously-mooted 130 billion-euro ($168.2 billion) figure, the proposed stimulus package gave a nod to the fractures within the European Union. Commission president Barroso admitted it would be a "complete mistake" to have a 'one-size-fits-all' package, citing the "very different situations" facing European economies; individual member states will therefore choose their own stimulus within the proposed framework.

Barroso said that individual member states would contribute 170 billion euros ($219.9 billion) towards the overall plan, with the remaining 30 billion euros ($30.6 billion) coming from the European Union's budget. He said the plan would boost demand and create "millions" of jobs, largely by helping out small businesses, relaxing employers' social charges on lower incomes and by turning a blind eye to national budget-deficit limits.

Europe's biggest economies--Germany, France and Britain--have already taken divergent paths in their bid to fight the downturn. Britain's 20 billion pound ($30.6 billion) package is targeting consumer spending by cutting the value-added tax rate for a year, but Germany and France have ruled out such a move. (See "Europe's Fractures Will Hurt Stimulus Plan.") Germany's own measures, meanwhile, have been slammed as far too weak--they have been estimated at about 0.5% of gross domestic product over the next two years, and should bring in 50 billion euros ($76.5 billion) in new investment.

"We should not get into a race for billions," Merkel told the Bundestag lower house of parliament Wednesday morning, according to Reuters. "We should walk a path of measure and middle ground, which is made-to-measure to the situation in Germany."

Taking the "middle ground" may not be enough in the current economic climate, which has seen the 15-member euro area officially slip into recession. The International Monetary Fund predicts the 15-member euro area will shrink 0.5% in 2009, while the Organization for Economic Co-operation and Development has forecast a contraction of 0.6%.

At least the European Central Bank is prepared to take up some of the slack: central bank president Jean-Claude Trichet said on Wednesday that rates could be cut in December.


Posted by CEOinIRVINE
l

Beijing's Confidence Game

Business 2008. 11. 25. 04:36

State TV says provinces are slating an eye-popping $1.5 trillion in stimulus spending. The reality is likely far more underwhelming.

If China knows about anything, it is propaganda. The considerable power of the state's propaganda machine is now being thrown behind the effort to stop the economy from slowing too much.

On Sunday, as Prime Minister Wen Jiabao was on the last day of a three-day tour of Shanghai and Zhejiang province exhorting local companies to show confidence that they would get through what he called "difficult times," state broadcaster CCTV was reporting that provinces across China would add 10 trillion yuan ($1.5 trillion) to the 4 trillion yuan stimulus package that Beijing announced earlier this month.

Ten trillion yuan is an eye-catching number. It is twice the level of all state spending in 2007, not to mention two and a half times greater than the central government's proposed package of investments in infrastructure and social programs over two years. Lest we forget, Beijing was meant to be financing only a third of that directly; the rest was to come from provincial and local administrations, and from state-owned banks and companies.

It has not been clear what was new money in the 4 trillion yuan package and what old, already budgeted for in the current five-year plan or earmarked for natural disaster relief, and just bundled up to provide an eye-catching headline number. The 10 trillion yuan suffers from similar opaqueness behind the headline number.

CCTV came up with it after doing the rounds of the provinces counting up spending plans. The two biggest sets it found were 3 trillion yuan in Yunnan in the southwest and 2.3 trillion yuan in Guangdong, the southern export hub. These, though, are spending proposals, not commitments.

What we suspect is happening is this: after three years in which provincial governments have found financing infrastructure projects difficult as central government tried to stamp down on inflation by restricting credit, they are now rushing to find projects with which to lay claim to the 80 billion yuan not yet allocated out of the 100 billion yuan Beijing wants spent in the final quarter of this year. Those with the fattest pipeline, local officials believe, have the best chance of securing funding.

CCTV interviewed one local official in Hubei province who boasted how his colleagues had put in extra hours over the past two weeks as policy had suddenly reversed from curbing inflation to slowdown prevention, and had come up with 100 infrastructure and local develop projects to pitch. The official said their marching orders were to find already started projects being held back for lack of capital, or new projects that could give a quick boost to the economy.


'Business' 카테고리의 다른 글

Jet Set  (0) 2008.11.25
The Obama Effect  (0) 2008.11.25
Can Supercomputers Save Wall Street?  (0) 2008.11.25
Campbell Soup 1Q earnings down 3.7 percent  (0) 2008.11.25
King Pharma's $1.6B offer wins over Alpharma  (0) 2008.11.25
Posted by CEOinIRVINE
l

Facing an increasingly ominous economic outlook, President-elect Barack Obama and other Democrats are rapidly ratcheting up plans for a massive fiscal stimulus program that could total as much as $700 billion over the next two years.

That amount, more than the nation has spent over the past six years in Iraq, would rival the sum Congress committed last month to rescuing the country's financial system. It would also be one of the biggest public spending programs aimed at jolting the economy since President Franklin D. Roosevelt's New Deal.

Hints of a hefty new spending program began emerging last week. New Jersey Gov. Jon Corzine (D), an Obama adviser, and Harvard economist Lawrence H. Summers, whom Obama has chosen to lead his White House economic team, both raised the possibility of $700 billion in new spending. Yesterday, Obama adviser and former Clinton administration Labor secretary Robert Reich and Sen. Charles E. Schumer (D-N.Y.) also called for spending in the range of $500 billion to $700 billion.

Transition officials would not confirm that they are considering spending of that magnitude, but they made clear that economic conditions are dire, and suggested that Obama might be forced to delay his pledge to repeal President Bush's tax cuts for the wealthy.

Last week, Goldman Sachs said it expects the economy to shrink even faster by the end of the year, at a 5 percent annualized rate. Meanwhile, the Dow Jones industrial average dropped 5.3 percent for the week; and the nation's largest bank, Citigroup, sought government assistance to avoid collapse.

While Obama has set a goal of creating or preserving 2.5 million jobs by 2011, his economic team -- whose members are scheduled to be formally introduced at a news conference today in Chicago -- have yet to decide how that would be accomplished or how much it would cost.

Still, Austan Goolsbee, a spokesman for Obama on economic issues who is in line to serve on the White House Council of Economic Advisers, yesterday acknowledged that Obama's jobs plan will cost substantially more than the $175 billion stimulus program he proposed during the campaign.

"This is as big of an economic crisis as we've faced in 75 years. And we've got to do something that's up to the task of confronting that," Goolsbee said on CBS's "Face the Nation." "I don't know what the exact number is, but it's going to be a big number."

Republicans quickly criticized the idea of such a vast initiative, saying Congress should instead cut taxes to spur economic growth.

"Democrats can't seem to stop trying to outbid each other -- with the taxpayers' money," House Minority Leader John A. Boehner (R-Ohio) said in a statement. "We're in tough economic times. Folks are hurting. But the American people know that more Washington spending isn't the answer."

With financial markets fluctuating wildly and unemployment rising, Democrats want to push a stimulus package through Congress in January and have it ready for Obama's signature when he takes office Jan. 20. Over the weekend, the president-elect announced that he had instructed his advisers to assemble a massive jobs program that also would make a "down payment" on much of his domestic agenda.

The plan would include new funding for public-works projects to repair the nation's crumbling infrastructure, as well as a fresh infusion of cash to promote green technology and alternative-energy sources. It also would include targeted tax cuts for working families, students, the elderly and job-creating businesses that Obama touted on the campaign trail.

Posted by CEOinIRVINE
l
Federal Reserve Chairman Ben Bernanke told Congress Monday a fresh round of government stimulus is a good idea because there's a risk the country's economic weakness could last for some time.


Congress should consider implementing a second economic stimulus package, Federal Reserve Chairman Ben S. Bernanke said today, advising that any such program should be designed to have immediate impact and promote access to credit.

Bernanke, testifying before the House Budget Committee, hardly gave a full-throated endorsement of using government taxing and spending, an approach embraced by many Democrats. But his remarks dramatically increase the pressure on President Bush to drop his resistance to a second stimulus package.

"With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate," Bernanke said.

He urged that any stimulus bill be "well-targeted" so that its impact would be felt soon, get maximum bang for the buck in terms of economic impact, and not increase the long-term deficit. In prepared testimony, he did not specify what sorts of programs would or wouldn't meet those criteria, although the spending on roads, bridges and other infrastructure favored by many Democrats may not pass that test because such spending tends to occur over many years. The White House has long resisted calls for a second stimulus package, arguing until recently that the first stimulus needed more time to have full impact. That position has softened as the global financial crisis has worsened, however, and officials have now signaled a willingness to consider stimulus proposals from Congress.

The White House was measured in its response to Bernanke's remarks today. Press Secretary Dana Perino, speaking to reporters aboard Air Force One, said the administration was open to considering stimulus ideas, but said it would depend on the details.

Perino also declined to say whether Bush agreed with Bernanke on the need for a second stimulus, saying he would consult with Treasury Secretary Henry Paulson Jr. and other senior aides before reaching a conclusion.



"We think that there's ample opportunity when Congress gets back to talk about lots of those ideas," Perino said. "What we've seen put forward so far by the leaders in Congress, the Democrats, were elements of a package that we did not think would actually stimulate the economy. So we would want to take a look at anything very carefully."

Perino added: "We've had an open mind about it, but what we are focused on right now is the urgent need to get this rescue package implemented."

Perino made the comments during a flight to Alexandria, La., for a meeting between President Bush and local business leaders to discuss the impact of the economic crisis.

On Capitol Hill, Bernanke said that any fiscal stimulus package should also aim to ease the problems in credit markets that are a major cause for the economic downturn. If Congress passes a fiscal package, Bernanke said, "it should consider including measures to help improve access to credit by consumers, home buyers, businesses and other borrowers."

In January, as Congress considered a first economic stimulus package, Bernanke gave a more full-throated endorsement, which proved significant in building momentum for the action. In February, Congress passed a bill whose prime feature was tax rebates for most Americans.

In his testimony today, Bernanke also ticked off a list of ways that the housing crunch and financial crisis are affecting the broader economy, using dour language to characterize the risks the economy faces.

"Incoming data on consumer spending, housing and business investment have all showed significant slowing over the past few months, and some key determinants of spending have worsened," Bernanke said.

But he gave little indication of whether, or how much, the Fed is inclined to cut interest rates at its Oct. 28-29 policymaking meeting, saying that "the uncertainty currently surrounding the economic outlook is unusually large."






Posted by CEOinIRVINE
l