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By Peter Stevenson MEMBERS of Volunteer Doctors Cyprus have treated around 350 people at their free clinic in Nicosia since it opened three months ago, while two more, one in Paphos and one in Polis are due to open today. Limassol also has a free clinic, which was opened only last month, and plans have been drawn ...
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SOME 10 days ago, foreign minister Ioannis Kasoulides raised expectations by announcing the possibility of a deal with Turkey for the opening of the fenced off area of Famagusta, for the return of its inhabitants. In exchange the Cyprus government would agree to the opening of Tymbou airport to direct flights. ...
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By George Psyllides PRIVATE auditors have expressed doubt the electricity authority (EAC) could be considered a going concern and have asked its board to draft a credible plan to tackle the problem, according to the auditor-general’s 2012 report on the semi-state company. Among other issues, ...
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Cyprus Internet Directory [ German economy gives hope; BoE cash supply unchanged ]

German economy gives hope; BoE cash supply unchanged

German economy gives hope; BoE cash supply unchanged
July 09, 2009 - Reuters

Germany said on Thursday it may have already emerged from recession and Britain's central bank decided against expanding a scheme to pump money into the economy, despite concerns the global recovery remains fragile.

Sterling jumped versus the dollar and UK gilt futures dropped sharply on the surprise decision by the Bank of England, which had been expected to add 25 billion pounds ($40 billion) to the 125 billion planned for quantitative easing.

The bank has bought government bonds from the market to encourage lending to businesses and help the economy. Analysts said the bank wanted to see August inflation data before deciding its next move.

"This could be a pause, or it could represent a halt for the Bank of England's gilt purchases," said Stephen Lewis, economist at Monument Securities.

Business lobbied for more easing.

"It is important to significantly increase the programme's size, so as to underpin business confidence," said David Kern of the British Chambers of Commerce. "We urge the Chancellor (finance minister) to increase the ceiling for the programme by a further 50 billion pounds, to 200 billion pounds."

There were fresh signs that Germany had turned the corner, with a senior German government official telling Reuters that Europe's biggest economy may have emerged from recession in Q2, just as trade data showed exports making a tentative recovery.

"Gross domestic product could have been flat or may have even grown very slightly in the second quarter," the official said, speaking on condition of anonymity.

"This isn't an upswing yet, it's a normalisation after the big economic slump," the official added. The Federal Statistics Office is due to give a preliminary estimate of second quarter GDP on Aug. 13.

Trade figures also lent some support to hopes that the eurozone anchor is emerging from the worst global recession since World War Two, recording a higher-than-expected surplus of 10.3 billion euros ($14.3 billion) in May.

"We can't talk about a change in trend. But the freefall appears to have stopped. There is a lot to suggest that foreign trade supported the economy again in the second quarter," said Thorsten Polleit from Barclays Capital.

Despite some encouraging data and corporate results, doubts remain over the strength of any recovery, and leaders of the Group of Eight industrial nations meeting in Italy agreed it was too early to cut off economic lifelines -- despite deep interest rate cuts and an estimated $5 trillion in public spending.

"All were of the view that the crisis is a long way from being over," said German Chancellor Angela Merkel. "With luck, we have reached the bottom," she told reporters in L'Aquila, where leaders of the United States, Japan, Germany, France, Britain, Italy, Canada and Russia held their annual summit.


The International Monetary Fund raised its 2010 global growth outlook, but warned that neither the economy nor the banking industry at the heart of the financial crisis were strong enough to do without heavy public spending and cheap central bank funds.

"The recovery is coming, but it's likely to be a weak recovery," IMF chief economist Olivier Blanchard said after the Fund forecast the world economy will slowly pull out from a 1.4 percent slump this year and grow 2.5 percent in 2010, faster than the 1.9 percent growth it forecast in April.

European stocks snapped a sharp five-session losing streak, as forecast-beating results from U.S. bellwether Alcoa calmed fears over the incoming earnings season. But lingering concerns about the global economy drove Asian stocks lower and gold enjoyed a bounce as investors sought to protect portfolios against economic and financial uncertainty.

"Markets are still vulnerable right now to some further risk aversion," said James Moore, analyst at TheBullionDesk. "What we've seen over the past week or two is a realisation that perhaps, certainly for the U.S., the V shaped recovery scenario is looking less likely."


China offered fresh assurances that the world's third-biggest economy was regaining momentum, with a leading think-tank saying growth should come within the 8 percent target this year.

In contrast, economies in Europe and the United States are expected to keep losing jobs for months to come, driving unemployment rates to double digits.

While battling recession topped the G8 agenda on Wednesday, Thursday's focus shifts to talks on global warming and trade with major emerging nations, which have complained they are suffering heavily from a crisis not of their making.

However, a breakthrough on trade did look within reach. Diplomats say the G8 and major developing economies should agree to conclude the stalled Doha round of trade talks in 2010.

(Source: Financial Mirror,

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