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The EU in Crisis

 

Euorozone in Panic

The UK growth for the last quarter has been revised up from 0.2% to 0.5%, which the coalition is heralding as a success. RFT have just experienced one of the poorest Octobers on record, but we aren’t alone on this. I was in the office of one of the UK's biggest parcel delivery networks, and their actual number of parcels delivered in October was 40% down than when we were in recession. We have hanging garments in the warehouse which would have normally been delivered 2 months ago, but lack of sales have meant that clients are paying to have their stock stored.

Consumer Confidence
We can expect big discounts on a lot of items in pre Christmas sales, probably more than last year. Consumer confidence is unlikely to improve in the near future. Several companies we regularly deal with are complaining about lack of funding from the banks, with several national and international haulage and delivery firms running short of work. With the information we have gathered from our clients it is looking more likely that the next quarter’s growth could be 0%.

Greece, UK double Dip?
The EU problems, compounded by the uncertainty of the Greek position, could help push us into a double dip recession. The instability and uncertainty of the EU and the Euro have made many companies wary of bidding for contracts where payments are made in the Euro. Last month we had two contracts we were asked to quote for, normally we would spread the risk by asking other companies to take on part of the contract with us. With the problems associated with the EU and the Euro, we couldn’t manage to find enough partners willing to participate.
If we do go into recession in 2012, it will be a lot harder than the last one. A lot of companies don’t have the resources to help see them through, and the chances of firms reducing costs to compete for business is less likely than in the previous recession.


There are countries where their growth is still healthy or expanding. Others such as China appeared to be keen to bolster the EU with cash, the unexpected news from Greece about the bail out being held back due to the intended referendum, and the possibility that they may default and withdraw from the EU has sent shivers down the stock markets worldwide, and left the position of China helping the EU up in the air. This also affects Italy who is expected to ask for a much bigger bailout, and Spain is also expected to need money from the bail out fund.
It could be argued that if Greece does accept a 50% write off on their original bail out, this could set a precedence for other countries to do the same.

Britain won't lend to Euro Bail out
Britain will not contribute to the EU bail outs, but it will lend money to the IMF [International Monetary Fund] which lends to about 50 countries world wide. David Cameron justifies the UK bolstering the EU through the IMF, on the grounds that no country lending to the IMF has lost money.
There is always a first time for everything David.
Remember the general public haven’t had to bail out so many banks before, because we haven’t had a banking crisis like this before.

Late news, Greece scraps referendum.

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Vic Farron RFT Express.
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Tags : The Economy Unemployment Rising. No Confidence in Economy Vince cable, BBC, Ministerial Code, What Did Cameron Know,

 

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RFT Express : Specialist Hanging Garment Deliveries UK - Europe : Fashion Delivery : Hanging Garment Transport : Same Day - Next Day