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Today’s Update: Thirteenth Month of Eurozone Contraction
Eurozone manufacturing output has fallen for the thirteenth month in a row. New figures show that the Performance of Manufacturing Index, PMI, for the Eurozone in August rose from 45.1 from 44 in July.
PMI figures measure manufacturing output with any figure below 50 indicating a contraction and any figure above 50 showing growth.
Whilst outside the Eurozone the UK manufacturing PMI rose from 45.2 to 49.5 the figures demonstrate that the sector is contracting less slowly rather than growing.
The Eurozone contraction comes as Asia’s PMI rose by five points, with China’s manufacturing sector falling to 47.6.
Previous Timeline:
July 2nd
ECB executive board member Jörg Asmussen has warned that progress to resolve the Greek financial crisis has “virtually stalled” over the last three months since the last bailout agreement.
July 3rd
Plans for an EU-wide banking union overseen by the European Central Bank, (ECB,) lack required details to ensure they succeed, credit ratings agency Fitch warned yesterday.
July 4th
As IMF, ECB and European Commission officials meet in Greece to assess the initial success of the country’s recent bailout newly released PMI figures were announced showing that Germany’s service sector contracted in June.
July 5th
Former head of the International Monetary Fund Rodrigo Rato is due to appear in a Spanish court over accusations of criminal fraud relating to his involvement with mortgage lender Bankia.
July 6th
Markets fell across much of the globe yesterday, despite renewed efforts by central banks desperate to reignite struggling economies exposed to the Eurozone crisis.
July 9th
The newly formed Greek government has won a vote of confidence in the Greek parliament providing a mandate to tackle the country’s on-going financial problems and stay within the eurozone.
July 11th
Spanish Prime Minister Mariano Rajoy has announced a further range of spending cuts and tax increases designed to balances the country’s budget.
July 12th
European carmaker Peugeot Citroen has cited a “profound crisis” in Eurozone markets for the loss of 8,000 jobs and fall in demand.
July 16th
Europe’s on-going financial crisis has impacted Asia’s 2012 economic performance, with China’s GDP falling to 7.6 per cent and Singapore’s economy contracting by 1.1 per cent in Q2.
July 17th
The International Monetary Fund (IMF) has warned the worst of the euro crisis may be yet to come, as it cut its global growth forecast again this week.
July 18th
Italy’s economic minister has argued that greater action is required to resolve the Eurozone crisis. Addressing a parliamentary hearing in Rome Vittorio Grilli said that the European Union’s responses “are still not satisfactory”.
July 19th
The future of Spain’s banking system is being debated by German politicians this afternoon.
July 20th
Spain’s much-needing banking system rescue, worth €100 bn, is expected to be finally ratified by EU finance ministers later today,
July 23rd
Euro hits new low and Spain’s borrowing costs remain unsustainable, over fears the nation may need a complete bail-out.
July 24th
The challenges the Greek government now faces are “Herculean” according to Antonis Samaras, the nation’s new Prime Minister. The Spanish problem continues to spook investors.
July 25th
A group of global economists including two advisers to the German government have sounded a dire warning for debt-stricken Europe, stating it is “sleepwalking toward a disaster of incalculable proportions’. Effects of the crisis are being felt as far as Russia and Thailand.
July 26th
Greece has a 90 per cent chance of leaving the euro within 18 months, according to a statement released today by Citigroup.
July 27th
European Central Bank (ECB) president Mario Draghi’s pledge to “do whatever it takes” to save the euro saw markets close well up yesterday.
July 30th
Luxembourg prime minister and Eurogroup President Jean-Claude Juncker has argued that the euro has reached a “decisive point” and that leaders will decide in the coming days “what measures we will take”.
July 31st
Expectation is mounting ahead of Thursday’s key meeting of European Central Bank (ECB) officials, following president Mario Draghi’s promise the institution would do “whatever it takes” to save the euro.
August 1st
US treasury secretary Timothy Geithner has argued that Europe has the means and commitment necessary to resolve the continuing euro debt crisis.
August 2nd
The average yield on 10-year Spanish bonds has risen to 6.65%, a 0.22% from a bond sale in July. In addition to a yield increase demand for the bonds fell from 3.2 times the amount of bonds last month to 2.4.
August 7th
The White House has stated that Spain faces “difficult challenges” following a discussion between President Obama with Spanish Prime Minister Mariano Rajoy.
August 8th
Leading indexes and the euro have continued to hold recent gains following the European Central Bank’s decision to buy Spanish and Italian bonds.
August 10th
Data from Germany, the ECB and China indicates Europe is inching ever-closer to the financial abyss.
August 13th
The Governor of the Bank of England Sir Mervyn King has said there is “no obvious end in sight” to the on-going euro crisis, creating a series problem for a UK recovery.
August 14th
The eurozone economy is now 0.4pc smaller than it was a year ago, whist the region contracted 0.2 pc in the second quarter, eurozone GDP figures released this morning show.
August 15th
The Greek government is to ask for the country’s debt reform plan to be relaxed during meetings with the French President Francois Hollande and the German Chancellor Angela Merkel.
August 17th
Finland’s foreign minister Erkki Tuomioja has caused waves by suggesting the nordic nation is preparing for a eurozone breakup.
August 29th
Italian Prime Minister Mario Monti has flown to Berlin to meet with German Chancellor Angelia Merkel before a new sale of Italian debt to discuss the current state of the Eurozone crisis.
August 30th
Unemployment figures have risen in Germany for the fifth month in a row. Whilst remaining at a post-reunification jobless low the employment market has suffered following a second quarter of falling GDP figures.
September 3rd
Eurozone manufacturing output has fallen for the thirteenth month in a row. New figures show that the Performance of Manufacturing Index, PMI, for the Eurozone in August rose from 45.1 from 44 in July.
