Despite GOP gains, Democrats still rule in Olympia
Republican gains, Democratic leadership shake-ups and a conservative fiscal mandate from voters will shape the way Washington’s new-look Legislature deals with its most significant budget deficit yet.
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BUDGET TIME
Spotsylvania supervisors will hear from public on budget priorities for next fiscal year
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Napolitano Urges Italian Parliament To Approve 2011 Budget
Rome, Italy (AHN) – Italian President Giorgio Napolitano has called on the heads of Parliament to put aside the current political crisis and concentrate on more important issues like approving a budget plan for the benefit of the country.
The president’s comments came after a meeting with House Speaker Gianfranco Fini and Senate leader Renato Schifani where they addressed the upcoming parliamentary deadlines. Napolitano said the country’s first political priority is approving a budget plan.
Once this is done, then find out solution to resolve the ongoing political crisis by calling a no-confidence motion, which could Prime Minister Silvio Berlusconi’s future at stake since he does not have majority in the House.
Napolitano also urged Schifani and Fini to find a constructive agreement to end the current political turmoil.
The president summoned both the House leaders after a few ministers of Fini’s Future and Freedom Party pulled out from the government earlier this week.
The Italian Constitution allows the head of the state to call for new elections, if he finds forming a new majority with the government program impossible.
If media reports are to be believed, the Parliament is likely to approve the budget plan for next year by December 10. Berlusconi is considering presenting the confidence motion to the House on December 13.
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Barbour prepares to release FY12 budget proposals
Mississippi Gov. Haley Barbour is expected to urge fiscal restraint as he releases his budget proposals for the coming year.
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Pressure piles on Greece to harden fiscal measures
Greece’s budget problems are far from over, as its deficit is likely to have narrowed much less sharply than the Government had predicted, Capital Economics said in a note. “Greece will now come under heavy pressure to implement an even more draconian fiscal squeeze,” Ben May, a European economist with Capital Economics, said.
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Irish bailout rumours hit markets
Long-term Irish interest rates soar as austerity cuts seem to have failed to convince international investors
Fears that Ireland could be forced into a Greek-style bailout by the European Union or the International Monetary Fund swept through financial markets today after the beleaguered country’s borrowing costs soared to levels seen as unsustainable by investors.
Long-term Irish interest rates surged to their highest levels since the launch of the single currency amid growing evidence that repeated bouts of budget austerity have failed to convince international investors that the former Celtic Tiger economy can cope with the banking crisis caused by a boom-and-bust in its housing market.
Attempts by Patrick Honohan, the central bank governor, to reassure investors by stressing that the Irish government was already planning the tough fiscal measures the IMF would insist upon backfired and helped push yields on 10-year Irish bonds up by 61 basis points to 8.7%.
“Putting Ireland and the IMF in the same sentence can trigger palpitations in the credit markets,” said Gavan Nolan, a credit analyst at Markit. “Speculation that the Irish government and the IMF have already reached an agreement was doing the rounds.”
The premium that investors demand to buy Irish bonds over the rock-solid German bunds also soared to an all-time high of 615 basis points, or 6.15 percentage points. Panic about Ireland spread to Portugal, whose benchmark 10-year bond yield jumped 30 basis points to 7.2%.
“There will have to be a bailout of some sort in the end, for Ireland and Portugal,” said Ashok Shah, chief investment officer at London & Capital. “The cost of capital is becoming just too much, and the debt levels are already too high. The prospects of deficit reductions mean the economies will probably contract, so cash flows will be more difficult to get. These countries will have to borrow to meet interest payments, that is an unsustainable position to be in. Before they get into this, a solution needs to be found, mainly, going into the stabilisation funds.”
Taoiseach Brian Cowen’s unpopular government has pledged to outline a four-year plan later this month to bring the ballooning budget deficit under control, and to push through €6bn (£5.13bn) in savings in the 2011 budget on 7 December. But financial markets have become concerned both at the government’s wafer-thin majority and the deflationary impact of further tax increases and spending cuts on growth.
bond sell-off was partially triggered by LCH.Clearnet, a London-based clearing house, which made it more expensive to trade Irish bonds amid concerns of a potential debt restructuring.
For months, bondholders have been worried about Ireland’s capacity to pay its deficit, the product of a debt-fuelled decade that ended up with the recent property collapse. Several announcements of drastic budget cuts this year have not been enough to convince the so-called bond vigilantesthat the country would be able to meet its interest payments.
“I don’t see what else they can do, after a certain point, this becomes self-reinforcing – it’s hard to see … those bond yields coming down,” said a fund manager who wanted to remain anonymous. “Ireland has announced various rounds of fiscal tightening and it hasn’t worked, it looks as if investors are just getting out. Once it blows out like this, you see people cutting losses. What can the government do? It looks as if they are going to have to access support.”
Earlier this year, bond investors sold Greek bonds on concerns the government would not be able to pay their debts. The sales lifted borrowing costs to impossible levels, forcing the country into an IMF and EU bailout. To avoid a similar scenario, the EU announced an €750bn emergency fund that countries could access if the markets turned their backs on them, by charging too much interest. “The IMF or the EU are not only providers of funds, but external arbiters that give you credibility, the endorsement,” the fund manager said.
Investors say the Irish situation is unsustainable, despite the government having no immediate need to raise funds. “Irish private sector companies wouldn’t be able to raise money abroad, the government could also suffer a big downgrade, and panic would spread to other countries, such as Portugal,” the fund manager added.
Greece and Portugal have made significant efforts to attract Chinese investors to stabilise their debt markets and to inject cash into their ailing economies. Asked if he would allow Chinese ownership of Irish banks, Honohan said he is “too much an internationalist to say no to that”. Ireland European monetary union IMF Europe Financial crisis Global recession Banking European Union Economics Portugal Greece Elena Moya Larry Elliott guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
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EU Eyes Irish Budget For Possible Support
Brussels, Belgium (AHN) – European Union’s Economic and Monetary Affairs Commissioner Olli Rehn, in Dublin to review Ireland’s draft 2011 budget, has not talked about any financial help from the EU to the Irish Republic.
Rehn said that the country could restore confidence after it publishes its four-year plan to reduce debt.
His comments came amid fears that the government would default on its debts. Analysts see his visit as an effort to convince financial markets that Ireland will not need a bailout in Greece style.
“Ireland has not requested the activation of any European financial backstops, we have not discussed this matter,” Rehn said.
Ireland will vote on the budget plan next month amid fears that the proposal may not get Parliament’s approval.
Rehn called on all political parties to support the proposed cuts.
His comments came during his joint press conference with Irish Finance Minister Brian Lenihan. Ireland has vowed to bring its deficit in line with the EU norms within next four years. Currently, the deficit stands at 12 percent of economic output.
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Weak dollar not a concern for Gulf economies: Kuwait
The weak U.S. dollar is not a concern for Gulf economies and Kuwait is likely to increase spending in its budget for the next 2011/12 fiscal year, the OPEC country’s finance minister said on Saturday.
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Ex Bulgarian Minister: FinMin Suffocates Economy
Bulgaria’s budget policy is in complete chaos, said former Energy Minister, Rumen Ovcharov, and accused the Finance Minister Simeon Djankov of suffocating the Bulgarian economy. In an interview for the Bulgarian private TV channel bTV on Friday, Ovcharov said that in a period of 30 months, the inflation in the country will be 10%. He said that for the last year and three months, since the Bulgarian ruling party GERB swept into power, Djankov’s team and the Prime Minister Boyko Borisov were suffocating the country’s economy. …
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Japan cabinet OKs budget for US$63 bil. stimulus package
TOKYO — Japan’s cabinet on Tuesday approved an extra budget to help finance US$63 billion of stimulus spending aimed at spurring the country’s lackluster economy as it battles deflation and a strong …
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