Portugal’s statistics agency says that the budget deficit fell to 2.1 percent last year, with the government saying the drop proved critics of its anti-austerity measures wrong. The National Statistics Institute said Friday the deficit dropped from 4.4 percent in 2015 due to spending cuts and higher tax revenue. The 2016 deficit was the lowest in more than 40 years. When the center-left Socialist government took power in 2015 its opponents warned that bringing back four public holidays, returning government workers to a 35-hour working week and cutting the sales tax on restaurant meals to 13 percent from 23 percent could spell financial disaster. Portugal needed a €78-billion bailout in 2011, after recording a deficit of more than 11 percent the previous year. (AP)
The European Commission President Jean-Claude Claude said on Friday eurozone lenders and Greece should reach a technical deal before a meeting of eurozone finance ministers on April 7. In a statement responding to a letter by Greek Prime Minister Alexis Tsipras criticizing IMF demands for labor reforms, Juncker declined to take a clear position on the contentious issue. The IMF is pushing Greece to adopt such reforms as a condition to join an €86 billion bailout program, so far funded only by eurozone creditors. Tsipras had sought to link Greek support for a declaration marking the EU’s 60th birthday in Rome on Saturday to a recognition that the EU legal framework on social issues, known as acquis, also applied to Greece. (Reuters)
Germany urged the US on Friday to rethink a report, commissioned under Barack Obama’s administration, that said some European Union countries were dumping steel. Global steel prices have slumped as Chinese producers, which account for about half of worldwide steel supply, have flooded export markets. In November, the US Commerce Department said that nine exporters, including Germany and four other EU member states, had dumped certain imports of carbon and alloy steel cut-to-length plate. Germany’s Foreign Minister Sigmar Gabriel is worried the report, which is expected to be finished soon, will be used by US President Donald Trump’s administration to disrupt international trade. (Reuters)
Russia’s special industrial zones may be extended to other countries after the pilot opening in Egypt, Minister of Industry Denis Manturov said on Friday. “We want to work out all the possible implementation scenarios there not merely for Egypt but also for other countries,” TASS quoted him as saying. Russia expects that the agreement with Egypt will be concluded during the St. Petersburg International Economic Forum in early June, Deputy Minister of Industry Gleb Nikitin said earlier. The project provides for a special area with a preferential taxation regime for Russian resident companies. The zone specialization stipulates the localization of Russian industrial companies from machine-building, pharmacy, modern technologies and agriculture spheres.
Eurozone lenders estimate Greece had a primary surplus between 2 and 3 percent of its GDP last year, much higher than the target set under its bailout program and more than previously forecast, an EU official said on Friday. The size of Greece’s primary surplus - the budget balance before debt-servicing costs - is a source of contention between eurozone governments and the IMF, which believes the surplus in 2016 was only 0.9 percent. Better-than-expected figures could smooth bailout talks, which have been stalling for months on Greek pension and labor market reforms required by creditors in exchange for the disbursement of new loans to pay debt due in July. (Reuters)
France’s private sector growth accelerated in March to reach its highest level in nearly six years, a key survey showed Friday. Services were the main driver for the expansion, according to the Purchasing Managers Index (PMI) compiled by Markit, with manufacturing also helping growth. “March PMI data continued to signal strong growth in the French private sector, and completed a solid set of numbers for the first quarter,” said Markit economist Alex Gill. “The expansion was broad-based across both the service and manufacturing sub-sectors, although the former continued to be the principal underlying driver.” The PMI rose to its highest level since May 2011 in March, reaching 57.6 against 55.9 in February. (AFP)
If the latest surveys of business intentions are to be believed, the eurozone economy is sparkling, growing at a pace that easily explains the hints from some European Central Bank policymakers of a pullback from their easy-money regime. IHS Markit’s eurozone Flash Composite Purchasing Managers’ Index (PMI) hit a near six-year high this month. It climbed to 56.7 from February’s 56.0, its highest reading since April 2011. At the same time, flash surveys for the currency bloc’s two largest economies - Germany and France - also stormed past expectations to register near six-year highs, conditions likely to play into elections in both countries this year. (Reuters)