Spain Unlikely To Prolong Europe Bank Aid Programme

Credit: Reuters/Francois Lenoir LUXEMBOURG | Tue Oct 15, 2013 9:46am EDT LUXEMBOURG (Reuters) – Spain will probably bring an end to the programme of international aid for its banks on schedule this year, Economy Minister Luis de Guindos told a news conference in Luxembourg on Tuesday. Madrid turned to Europe last year for 41 billion euros ($56 billion) to help the weakest of its banks, which have been crippled by the collapse of its real estate market and resulting mass of failed loans to developers and houseowners. With the economic fortunes of Europe’s debt-ridden southern half showing signs of improving, a senior official in Brussels told Reuters last week that Spain was unlikely to seek more financial aid for the banks when the current programme runs out. “The central scenario, and the most probable one, is that on November 15 (it will be decided that) Spain’s banking programme will come to a close,” de Guindos told reporters at a meeting of European Union finance ministers. The European Central Bank and the European Commission, which backed the rescue, last month said in a review of Spanish banking reforms that the sector remained comfortably solvent, and praised its turnaround. They stressed, however, that Spain’s weak economy – set to emerge from a two-year recession by the end of the year – and a fall-off in lending still posed a risk. Like their European peers, Spanish banks also face a European review of their balance sheets early next year before the ECB takes over as supervisor. Some believe their restructured or refinanced loans could come under particular scrutiny, and that they could be told to put more cash aside to counter potential losses on these, banking sources in Madrid have said. Any capital gap that that process leaves is likely to be manageable, though smaller banks that are owned by the state are unlikely to be able to turn to the market like some of their peers. The Spanish government currently estimates that lenders will have to put aside an extra 5 billion euros in provisions to counter such losses, a source at the Economy Ministry said. “The general perception is that in Europe the banking system has not been as thoroughly cleaned up as in the United States …

World is waiting for Congress, the Fed, Europe

While emissions of some pollutants have declined sharply in Europe in recent decades, more diesel cars and a rise in wood burning by households as a cheap alternative to gas mean other types of harmful pollution are receding more slowly. European regulators are expected to propose a tightening of EU limits on microscopic particles known as particulate matter (PM) and other pollutants, with legislative proposals expected before the end of the year. A total of 22 European countries including France, Italy and Poland exceeded the daily EU limit value for PM in 2011, while stricter, non-binding guideline limits set by the World Health Organization (WHO) were exceeded at most monitoring stations across continental Europe, according to a report by the European Environment Agency (EEA). EU Environment Commissioner Janez Potocnik said it should be realistic for the European Union to achieve WHO guidelines by 2050 at the latest and debate was ongoing on what kind of interim targets the Commission would propose. “My main objective is to put the EU on a clear pathway towards achieving WHO guidelines,” he said at a presentation of the EEA report. “It’s a roadmap for how we can live longer, live healthier and protect our fragile ecosystems better.” PROGRESS SO FAR In the last decade, tighter European regulations on power stations and other sources of pollution have seen a 50 percent cut in emissions of sulphur dioxide, which causes acid rain, while carbon monoxide emissions have fallen by a third. By contrast, the amount of harmful particles and ozone in the air has fallen only slightly. Combined with WHO findings that lower concentrations of air pollution can be more harmful than previously thought, pressure is building on the European Union to do more. “Air pollution is causing damage to human health and ecosystems. Large parts of the population do not live in a healthy environment, according to current standards,” said Hans Bruyninckx, Executive Director of the Copenhagen-based EEA. The tighter proposed limits on PM could pose problems for EU governments, many of which have struggled to meet the existing limits in force since 2010, resulting in up to a third of Europeans being exposed to dangerous levels of PM pollution. In its report, the EEA said PM pollution – particularly in urban areas – posed the greatest risk to human health because it can pass directly from the lungs into the bloodstream. Although struggling to meet the limits, cities in Europe – along with the Americas – enjoy relatively low average PM pollution levels compared with those in southeast Asia, the Middle East and Africa, WHO data showed.

Europe’s Air Pollution Spurred By Growing Use Of Wood Fires And Diesel Cars, Watchdog Group Says

shutdown, and declines in emerging market growth are all having an effect on Europe. No one representing (as opposed to promoting investment in) the Old Continent at the Washington meetings was in any way upbeat about Europe. MarketWatch Enlarge Image The IMF is forecasting slower growth for the third straight year. This is still a highly anaemic recovery, with the International Monetary Fund forecasting just 1% growth for the euro area in 2014 after declines of 0.4% this year and 0.6% in 2012. Interest rate cuts are still being discussed at the ECB, which, at the same time as the Fed is starting finally to wind down its asset purchases, might be seen (again) as a harbinger of a weaker euro /quotes/zigman/4867933/sampled EURUSD +0.0045% something the Europeans must want to help kick-start faltering growth. One of the most problematic countries is Italy, despite the new-found stability of the Rome government, where competitiveness and industrial production are still falling. There are half a dozen trigger points that could spark fresh European financial turbulence. These include the forthcoming German constitutional court judgment on the Bundesbank s participations in planned , conditional bond purchases by the ECB, where fresh constraints are likely to be put on German action. The world will wake up to the realization that the new German government will be no more conducive than the old one to mass bailouts in Europe. The left-leaning governments in Rome and Paris may get restive. Anti-euro parties will gain further traction ahead of the European elections in May. The IMF may make some critical noises about the Europeans lack of progress toward debt sustainability. The world has a lot to wait for, but little to look forward to.