Finland makes good the worst assumptions about the crisis

Finland has met the worst assumptions about the crisis to fall into recession in the first quarter of this year, a fate that, for now, only shared among the countries of the euro with Slovenia. Analysts say the latest developments in the crisis of deficits in the euro area and the implementation of plans drastic spending cuts in major powers predict that the situation will evolve a structure W. This scenario means that, after taking his head between the end of last year and the beginning of 2010 the economy contracted again in the future to the fragility of the recovery and the early withdrawal of incentives.
Today, Finland, March has closed its second consecutive quarter down, made good this theory. As shown in the official data, the country's Gross Domestic Product, which the World Economic Forum is the sixth most competitive economy, has fallen 0.4% between January and March after losing 0.2% in last three months of 2009, according to the latest revision of this figure, which originally pointed to a standstill with a rate compared to previous period, 0%. The Finnish economy has a slightly larger size of Portugal in GDP volume and accounts for 1.8% of total Eurozone.
Nordic country's GDP began to decline in quarterly rates in the last quarter of 2008 following the international financial crisis and remained in negative territory until October last year, growing by 0.3%. However, the decline in European commerce and the weakness of international consumption, vital for the country because of its dependence on exports of pulp and paper industry and the multinational sales of Nokia, has returned to the field of recession.

The World Bank warns that the situation in Spain is "very serious"

The World Bank (WB) said today that the economic situation in Spain is "very serious", although it has indicated that fiscal austerity measures taken by the Government are in the "right direction." "I think the situation in Spain is very serious and extremely high unemployment," said today the director of World Bank macroeconomic trends, Andrew Burns, during a press conference which introduced the report Global Economic Prospects 2011.

Burns added that it was "probable" that the fiscal consolidation measures implemented by the Spanish Government to reduce the risk of a worsening economic situation. It has also highlighted that market indicators show that investors see the situation in Spain as less serious than that of Greece or Portugal. On the possibility of a debt crisis in our country, something considered unlikely at the moment, has warned that would impact on Spanish banks, which in turn could take its toll on Latin America.

The agency believes that the current "debt crisis" in some European countries is one of the major threats to global growth. "The global economic recovery continues but debt crisis of Europe has placed new obstacles in the path to a sustainable medium-term growth," says the report released today. However, it has raised its forecasts for global economic growth this year to 2.9% compared to 2.7% later in January, and 3.3% in 2011, one tenth more.

German budget cuts last Merkel to assert authority

German Chancellor Angela Merkel agreed on Monday with his cabinet a package of budget cuts and will outline his policy agenda until 2014, a series of steps he hopes will help push the euro as its own authority.

The ministers resumed talks on Monday after work Sunday night. Merkel is expected to announce the result of the proposed 2011 budget and financial planning for the next four years in the early afternoon on Monday.

Some experts say the plan cuts of up to 10,000 million euros annually (11 940 million), along with some limited tax increases will be the largest German austerity plan since the Second World War.

Merkel wants to give an example of fiscal adjustment to try to regain investor confidence in the euro, damaged by high deficits in Greece and other euro zone states. However, you must deal with a delicate balance to ensure that the cuts will not cloud the fragile recovery of the first euro zone economy.

The German public deficit would likely exceed 5 percent of gross domestic product (GDP) this year. Despite being significantly below the levels of other euro area countries still exceeds the limit set by the European Union's 3 percent.

Moreover, Merkel's political authority is also at stake.

Affected by a decline in the popularity of his conservative party and accused of weak leadership in the crisis in the eurozone, needs to regain the political initiative and present a package that voters support sustainable.

"The cabinet meeting will be an important direction for Germany in the coming years, which will be decisive," Merkel told reporters Sunday before starting the talks.

Merkel has promised to protect education and pensions, but has pointed to social security spending as an area of possible cuts.

It also seems likely to make targeted reductions to unemployment as well as maternity aid for the unemployed, measures which could save around 400 million euros.

In addition, 10,000 jobs will be cut in public, according to German media. The defense budget would be reduced by about 600 million euros in 2011 and savings would reach 1,100 million euros in 2012.

It is also likely to create a tax on the use of nuclear fuel for those companies that benefit from the planned extension of the life of some nuclear plants. According to the German media, the measure could raise around EUR 2,300 million a year.

Once the Cabinet had agreed the draft budget for 2011, Merkel is to gain the approval of the upper and lower houses of Germany, which is not as easy as his coalition lost its majority in the Senate last week .