Euro Watch

Gazprom, Russia’s leading natural gas company has postponed a deadline for Belarus whom has been behind in their natural gas payments.

Originally, Gazprom was going to cut the supplies given to Belarus in half had they not paid their debt as of Friday, August 9th. However, after Belarus made an attempt by paying its first payment of $190 million (£93m) they opted to give them another day. They are expected to pay the remaining $456 million by August 10th. This is an additional 58% that is still owed by Belarus.

There is been delegation from Belarus in Moscow where they have tried to come to a settlement with Gazprom.

This incident is a reminder of the disputes among ex-Soviet republics that we have seen throughout 2005 and 2006.

Belarus had been stating repeatedly over the past several weeks that they needed more time to pay what was owed. They had proceeded to blame the Gazprom for the situation by making claims that Gazprom had doubled their price for gas earlier this year.

A deal had been agreed at the beginning of the year that Russia would increase their price for each 1,000 cubic meters of gas. It had, in fact, more than doubled. It went from $46 to $100 per cubic meter. Moscow has been denying accusations that they have been bullying its neighbors by price-gouging them through their natural gas prices. Instead, they have insisted that prices have been raised merely as a reflection of the Soviet-era subsidies.

Belarus is not the only country which has had to endure the increase in prices. Ukraine is also caught under the same pricing situation for natural gas. Unfortunately, Gazprom reduced Ukraine’s supplies and as a result a reduction of natural gas that has been passing through Western Europe.

The situation with Ukraine and Belarus has sparked a large concern among European Union nations. They are worried of their energy security and reliability of using Russian gas sources. Unfortunately, Gazprom supplies what much of Europe uses in natural gas.

Tags: European Economy News by stewart
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The European Central Bank has today announced maintained interest rates at 4% across the Eurozone, for the second consecutive month.

The European Central Bank, responsible for economic policy across the thirteen eurozone nations, announced today its decision to maintain interest rates at the level set last month.

Interest rates throughout Europe have grown steadily over the last two years, leading to suppressed economic growth and business expansion.

However, slowing growth and receding inflation over the last month may be behind the decision from the ECB today in leaving rates untouched after the decision to settle at 4% over a month ago.

The news is set to be taken well by markets across Europe, as a relief for business and homeowners alike after consistent rises in recent months leading to increased borrowing costs across the eurozone.

Markets across Europe have been struggling over the last few weeks, after poor trading in the US, and the feared impact of growing interest rates on business and company performance.

But the ECB have maintained monitoring inflation is high on their list of priorities, promising to tackle any perceived risk head on in order to prevent uncontrollable price rises.

The euro has remained consistent against the dollar, which has led to poor eurozone exports through increased pricing.

Fears of a further strengthening of the currency were today forgotten, as the interest rate decision remained within the boundaries of analyst predictions.

The Bank of England also announced no change in interest rates today, as predicted by analysts earlier in the week. The news would suggest that the interest rate decisions of the last few months are taking their effect in curbing inflation and consumer spending, despite analyst forecasts of impending further rises throughout the second half of this year.

Tags: ECB: European Central Bank News by stewart
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Stock markets across Europe showed promising results on close of trade yesterday, after what has been a rough week for markets worldwide.

Stock markets around the world performed poorly over the last week or so, driving down indexes and resulting in panic share offloading.

After upset in the US markets from further lending problems in the sub-prime market, and the overarching concern as world economies tighten interest rates and bring in their growth forecasts, the trading comes as somewhat of a relief, with the stock market regaining power on last week.

All major European markets, from the FTSE to the Dax have shown strong trading performance over the course of yesterday, despite a downturn in trade early this morning.

The relief came partially as a result of the poor trading through last week, in which bargain price shares were snapped up by eager investors blinded by the worldwide economic problems.

Particularly given beneficial news about the US housing market launched today by the National Association of Realtors, trading over today is forecast to remain strong throughout Europe as the markets pick up momentum from their sluggish performance last week.

The Dax in Germany saw a 1.6% jump at close yesterday, while the Cac grew by around 1.4% by the finishing bell. The value of the Euro remained strong against the dollar at just above $1.37, showing consistent strength in the Eurozone against the US.

The impact of the US housing market and the perceived turnaround announced today has led to strong trading on Wall Street, which will more than likely continue throughout today given the effect of housing on the economy as a whole.

The effect of this positive trading is likely to be felt throughout Europe over the rest of today, and hopefully the remainder of the week.

Tags: European Stocks & Shares News by stewart
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