MM1B, Commercial Economics

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Martin Bos.

MM1B, Commercial Economics.

Module 2.

Table of contents.
Article 1 3

Personal Idiom file 1 4

Article 2 5

Personal Idiom file 2 6

Article 3 7

Personal Idiom file 3 8

Article 4 9

Personal Idiom file 4 10

Article 5 11

Personal Idiom file 5 12

Article 6 13

Personal Idiom file 6 14

Article 7 15

Personal Idiom file 7 16

Article 8 17

Personal Idiom file 8 18

Article 9 19

Personal Idiom file 9 20

Article 10 21

Personal Idiom file 10 22
Personal Essay 23

Corrected Personal Essay 25

Viewing Assignment 28

APPLE.COM – Article 1
CUPERTINO, California—July 19, 2011—Apple® today announced financial results for its fiscal 2011 third quarter ended June 25, 2011. The Company posted record quarterly revenue of $28.57 billion and record quarterly net profit of $7.31 billion, or $7.79 per diluted share. These results compare to revenue of $15.70 billion and net quarterly profit of $3.25 billion, or $3.51 per diluted share, in the year-ago quarter. Gross margin was 41.7 percent compared to 39.1 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter’s revenue.

The Company sold 20.34 million iPhones in the quarter, representing 142 percent unit growth over the year-ago quarter. Apple sold 9.25 million iPads during the quarter, a 183 percent unit increase over the year-ago quarter. The Company sold 3.95 million Macs during the quarter, a 14 percent unit increase over the year-ago quarter. Apple sold 7.54 million iPods, a 20 percent unit decline from the year-ago quarter.

“We’re thrilled to deliver our best quarter ever, with revenue up 82 percent and profits up 125 percent,” said Steve Jobs, Apple’s CEO. “Right now, we’re very focused and excited about bringing iOS 5 and iCloud to our users this fall.”

“We are extremely pleased with our performance which drove quarterly cash flow from operations of $11.1 billion, an increase of 131 percent year-over-year,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the fourth fiscal quarter of 2011, we expect revenue of about $25 billion and we expect diluted earnings per share of about $5.50.”

Apple will provide live streaming of its Q3 2011 financial results conference call beginning at 2:00 p.m. PDT on July 19, 2011 at This webcast will also be available for replay for approximately two weeks thereafter.

This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue and earnings per share. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavourable results of other legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 25, 2010, its Forms 10-Q for the quarters ended December 25, 2010 and March 26, 2011, and its Form 10-Q for the quarter ended June 25, 2011 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced iPad 2 which is defining the future of mobile media and computing devices.

  1. Diluted Share Verwaterde Aandelen

  2. Gross Margin Brutomarge

  3. Revenue Inkomsten

  4. Approximately Ongeveer

  5. Thereafter Daarna

  6. Forward-looking Toekomstgericht

  7. Uncertainties Onzekerheden

  8. Limitation Beperking

  9. Sole Uitsluitend

  10. Dependency Afhankelijkheid

  11. Public Health (Issues) Volkgsgezondheid(problemen)

  12. Unfavourable Ongunstig

  13. Legal Proceedings Gerechtelijke Procedures

  14. Obligation Verplichting

  15. Reinvented (To Reinvent) Opnieuw uitgevonden (Opnieuw uitvinden)

Nokia boosted by sales of cheap handsets

Nokia’s declining share of the smartphone market continued to weigh on its third-quarter revenues and operating profits in spite of an upturn in sales among its cheaper ranges.

The Finnish handset maker reported better than expected sales for its market-leading lower priced “feature phone” business, where it has shipped 18m of a new dual SIM phone range, although revenues still decreased as it lost more ground in the smartphone market to the iPhone, as well as phones that run on Google’s Android operating system.

Nokia will respond next week with the launch of the first smartphone to be produced under its partnership with Microsoft. This range of smartphones is expected to be key to driving earnings growth given a gradual erosion of its still strong, but lower-margin, feature phone business in many emerging markets by cheaper Chinese makers.
The once-dominant phone maker was described as needing to jump from a “burning platform” earlier this year by Stephen Elop, chief executive, as he sought to underline the company’s precarious state amid aggressive restructuring in order to make it more competitive in a market where speed and innovation are crucial.
Mr Elop pointed to “signs of early improvement in many areas”. He added that the company continued to take the action necessary to “drive the structural changes required for Nokia’s long-term success”.
He said: “I am encouraged by the progress we made during [the quarter], while noting that there are still many important steps ahead in our journey of transformation. From a product standpoint, our overall mobile phones portfolio performed well.”
Net sales of its handsets fell 3 per cent to €8.98bn in the quarter, or a decline of 13 per cent against the same quarter last year, even though the volume of sales of its phones rose by one-fifth in the period to 106.6m.
Shares in Nokia jumped 9 per cent on the sales numbers to €4.90. Its operating margin increased in the quarter to 2.4 per cent, from -4.5 per cent in the second quarter, but fell from 11.3 per cent a year ago. Nokia said that underlying operating margin in the fourth quarter 2011 would be between 1 per cent and 5 per cent, compared with 4.1 per cent in the third quarter, based on the expectation of an increase in net sales against a greater seasonal increase in operating expenses as it launched new products and the macroeconomic environment.
The group reported an operating loss of €71m in the third quarter, an improvement on the €487m loss in the second but down from a profit of €403m the year before. The company, which issued a profit warning in May, said there had been a loss per share of €0.02, compared with €0.1 in the second quarter.
The company had €5bn in net cash and liquid assets in the third quarter, up from €3.9bn in the second. The overall net sales, gross and operating margins in the third quarter 2011 benefited a €70m royalty income from use of its patents by other manufacturers, while its booked a €430m royalty payment in the second quarter of 2011.

Nokia is seen by analysts as having missed out on the rapid growth of premium smartphones from Apple and Android phone makers such as Samsung and HTC, making this a key part of the turnround strategy put in place by Mr Elop.

He said he was encouraged by the progress of the first Nokia Windows Phone. “We look forward to bringing the experience to consumers in select countries later this quarter. We then intend to systematically increase the number of countries and launch partners during the course of 2012.”

Analysts played down the importance of the growth in feature phones, pointing to the need for success among its new generation of Windows phones.

Francisco Jeronimo, analyst at IDC, said that failing to deliver the Windows Phones this year would put Nokia “in a very dangerous position on the market”. He said that Nokia’s smartphone market share is expected to decline this quarter to 15 per cent, from 17 per cent in the third quarter of 2010. Nokia’s worldwide market share is expected to be about 29 per cent, down from 32 per cent a year ago.
He said: “Nokia results announced today [Thursday] show how painful has been the transition from Symbian to Windows Phones. For most mobile operators in Europe it is completely pointless to support a ‘ghost’ operating system. They want Windows Phones and that is what Nokia needs to deliver next week at Nokia World in London.”

  1. Among Onder

  2. Revenues Inkomsten

  3. Gradual Geleidelijk

  4. Erosion Erosie

  5. Sought Gezocht

  6. Underlying Onderliggend

  7. Margin Marge

  8. Encouraged Aangemoedigd

  9. Pointless Zinloos

  10. Expected Verwacht

  11. To announce Aankondigen

  12. Operating System Bestuursplatform

  13. To ship Verschepen(vervoeren)

  14. Rapid Snel

  15. Increase Toename

Eurozone crisis claims MF Global

MF Global became the largest US casualty of the eurozone crisis as it filed for bankruptcy

protection after making big bets on the European sovereign debt market.
The broker-dealer, run by Jon Corzine, an ex chief executive of Goldman Sachs and a former New Jersey senator and governor, admitted defeat on Monday in its attempt to stay in business after an 11th-hour deal to sell itself to Interactive Brokers Group fell apart. It is the largest failure of a US financial firm since the collapse of Lehman Brothers in 2008.
Several people close to the last-minute talks said due diligence raised questions about whether the firm’s commodities book was fully funded. They said the shortfall appeared to have been as much as several hundred million dollars. The Securities and Exchange Commission and the Commodity Futures Trading Commission said MF Global reported “possible deficiencies in customer futures segregated accounts held at the firm” as it told regulators a sale had fallen through.
US rules require customer funds to be held separately from a futures broker’s own

funds. It was not immediately clear whether the reported deficiencies related to

recordkeeping or more serious problems. As of August 31, MF Global was required to

keep $7.3bn in segregated accounts on behalf of customers, according to the CFTC.

After the talks on a sale fell apart, brokers backed by MF Global were barred from

trading floors across the US as market participants tried to assess whether the

compan’s failure would trigger the same catastrophic effects as Lehman or the more

short-term and contained upheaval caused by the 2005 bankruptcy of Refco, another

futures broker.

MF Global was undone by a slew of credit downgrades to “junk” after Moody’s,

Standard & Poor’s and Fitch decided the company had taken on too much risk with its

$6.3bn bet on European sovereign debt.
Mr Corzine worked with bankers from Evercore and lawyers from Skadden, Sullivan &

Cromwell and Weil, Gotshal & Manges through Sunday night to try to sew up the with Interactive Brokers. CFTC and SEC officials were on site and gave a “soft” deadline

of Monday, people close to the deal said.
On Monday, MF Global’s shares were suspended and the Federal Reserve Bank of New

York said it was stopping doing business with the company. Later, the Securities

Investor Protection Corporation said it was initiating the liquidation of MF Global Inc to

recover clients’ money.

The bankruptcy triggered a frenzy in Chicago’s futures-trading community, where

firms whose trades were cleared by MF Global found themselves unable to execute

orders. “Everyone’s in crisis mode, trying to work out how this affects them,” said one

futures broker. “MF was the biggest clearer of trades at CME, and many guys have

complex order books, with complex options and futures strategies – you can’t just

liquidate that in a couple of hours.”

However, signs of liquidity strains were limited, according to one large dealer, who said

that while trading was a bit more difficult in eurodollar futures and options, there were

no disruptions to the funding markets, such as commercial paper and swap spreads.
In the UK, the collapse triggered the first use of a Special Administration Regime, a new

form of financial company resolution set up after the collapse of Lehman, which aims to

return client assets as soon as possible. A judge described its use as historic.

  1. Casualty Slachtoffer

  2. Bankruptcy Faillissement

  3. Chief-Executive Directeur

  4. Failure Mislukking

  5. Firm Firma

  6. On behalf of Namens

  7. Segregated accounts Gescheiden rekeningen

  8. Short-term Korte termijn

  9. Liquidity Liquiditeit

  10. According to Volgens

  11. Disruptions Verstoringen

  12. Suspended Geschorst

  13. To trigger Veroorzaken/uitlokken

  14. Commodities Grondstoffen

  15. Diligence Ijver

Bank of England slashes growth forecast

The Bank of England has sharply downgraded its growth forecast for the rest of this year, cutting the rate to “close to zero” after having expected much stronger growth as recently as August, minutes of its monetary policy committee show.

The minutes, released on Wednesday, show that the MPC voted unanimously to instigate a £75bn programme of gilts purchases, known as quantitative easing, over the next four months. Moreover, the minutes showed that at least two members – one of whom was likely to have been external member Adam Posen – believed there was a case for an even more aggressive round of purchases. Indeed, the minutes show that programmes of £50bn to £100bn were discussed.
But the minutes clearly show that the MPC no longer expects growth in the final months of this year to be anywhere near the roughly 0.4 per cent quarter-on-quarter rate it had forecast at the time of the August inflation report. At the time, it expected an annualised growth rate of 2.1 per cent when compared with growth in the fourth quarter of 2010.
“In the UK, the path of output had been affected by a number of temporary factors, but the available indicators suggested that the underlying rate of growth had moderated and would be close to zero in the fourth quarter,” the minutes said.
Although private sector economists had been successively downgrading their own growth forecasts in recent months, the Bank only makes adjustments with its quarterly inflation reports, and its forecasts have been somewhat stronger than those of outsiders.
“From the perspective of the outside, it is a very significant downgrade,” said Jens Larsen, chief European economist at RBC Capital Markets. Mr Larsen noted that there were some parallels with 2008; the MPC’s growth forecast in August of that year – a point at which subsequent revisions of gross domestic product data show that the UK was already in recession – was for output to be broadly flat.
Economists now expect the lower growth forecast to be included in the next inflation report, to be released in November.
The minutes hint at a great deal of uncertainty, possibly reflecting different forecasts among members of the committee. In three different parts of the minutes, there are references to the need to monitor the progress of the gilts-buying programme closely with the possibility of varying it, either scaling it back or, as more economists expect, scaling it up.
“We expect that it completes the £75bn QE programme by January and then probably expands it,” said Michael Saunders, economist at Citi. “But there is a chance it will expand it sooner, especially if the MPC concludes at the November meeting – in light of the G20 meeting and inflation report forecasts – that economic prospects are even worse than it thought.”
The minutes also noted that the MPC had braced for a rise in the CPI measure of inflation above 5 per cent, well above its 2 per cent medium term target. “But the Committee’s central view was that domestically generated inflation had remained contained,” the minutes said, adding that this was expected to fall back “sharply” in 2012.

  1. To slash Snijden

  2. Unanimously Unaniem

  3. Easing Versoepeling

  4. Annualised Op jaarbasis

  5. Whom Wie

  6. External Externe

  7. Adjustments Aanpassingen

  8. Underlying Onderliggende

  9. Closely Nauw

  10. To reflect Weerspiegelen

  11. Varying Variërende

  12. Prospects Vooruitzichten

  13. To brace Versterken

  14. To generate Genereren

  15. Forecast Voorspelling

Credit Suisse to cut further 1,500 jobs

Credit Suisse on Tuesday announced swingeing changes to its business model, cutting 1,500

jobs and slimming down its investment banking division, while boosting private banking and

developing market activities.

The measures reflected profound challenges in the industry, as banks react to much tougher market and regulatory conditions, and are likely to be echoed – and potentially amplified – by arch rival UBS at an investor presentation later this month.
Credit Suisse’s measures included further job losses, on top of about 2,000 announced in July, as the group counters tough markets by raising next year’s cost-cutting target by SFr200m to SFr1.2bn and setting a yearly savings goal of SFr2bn by 2014.
The efforts came against a sharp deterioration in the Swiss bank’s underlying

profitability, in spite of superficially better results, amid a fall into loss in investment

banking and a steep drop in earnings in private banking because of one-offs.
Investment banking recorded a SFr190m pre-tax loss, compared with gross earnings of

SFr395m in the same period last year. Pre-tax profits in private banking plunged to

SFr183m compared with SFr836m last year.
The results were clouded by a variety of one-offs – most notably a SFr295m provision

for a potential legal settlement in the US, where the authorities are investigating Credit

Suisse and other Swiss banks under allegations they helped rich Americans evade tax

via offshore accounts. The case follows an earlier action against UBS, which in February

2009 paid $780m to settle.
One of the only bright spots was the ability to gather a net SFr6.6bn in net new money

in the period in wealth management, suggesting Credit Suisse remained attractive to

customers seeking stability in uncertain times.
During the third quarter we experience a challenging environment with a high degree

of uncertainty, low levels of client activity across businesses and extreme market

volatility,” noted Brady Dougan, chief executive.
The bank produced “underlying” profit figures, stripped of accounting gains from

changes in the value of its own debt, as well as one-off legal provisions, showing net

profits in the third quarter more than halved to SFr441m from SFr961m in the same

period last year.

The investment banking cuts will focus on fixed income, where the group plans roughly

to halve its risk-weighted assets, under the Basel III definition. The reduction would

lower fixed income’s share of group risk weighted assets to about 39 per cent from 55

per cent.

The bank gave no estimates for additional job losses, although further information was

expected in media and investor meetings during the day.

Credit Suisse reported a Basel II capital ratio – a measure of financial strength – of 17.7

per cent, down from 18.2 per cent at the end of last year. The core tier one ratio, a

tougher measure, slipped to 12.6 per cent from 13.1 per cent.

  1. Swingeing changes Kolossale veranderingen

  2. To boost Stimuleren

  3. Slimming down Afslanken

  4. Challenges Uitdagingen

  5. Losses Verliezen

  6. Deterioration Verslechtering

  7. Potential Potentiële

  8. A challenging environment Een uitdagende omgeving

  9. Profit Winst

  10. Attractive Aantrekkelijk

  11. During Tijdens

  12. Estimates Schattingen

  13. Reduction Reductie

  14. Risk-weighted Risicovol

  15. Additional Extra

Troika warns time running out for Greece

Greece should get its next €8bn in international aid, but its economic outlook is deteriorating so rapidly that the second bail-out plan, agreed just three months ago, is no longer adequate to keep Athens afloat, international lenders have determined.

The findings are part of a highly anticipated report by the so-called troika of Greek lenders – the European Commission, International Monetary Fund, and European Central Bank – and sent to eurozone countries on Thursday morning. The Financial Times obtained a copy of the report.
According to the findings, European Commission monitors believe the next aid tranche should be paid “as soon as possible” following concessions by Athens to get its fiscal reform and privatisation programmes back on track.
But the report paints a dire picture of the path ahead, saying Greece’s “debt dynamics remain extremely worrying”.
“When compared with the outlook of a few months ago, the debt sustainability has effectively deteriorated given the delays in the recovery, in fiscal consolidation and in the privatisation plan, as well as the perspective of bank recapitalisation,” it finds.
However, the report does not state how big the new fiscal gap has become. Although such figures are usually included in troika reports, European officials said the formal debt sustainability analysis had not yet been completed, though it will be done by the time finance ministers meet in Brussels on Friday.
Part of the reason for the delay is a standoff between two of the members of the troika – the IMF and ECB – over whether Greece can keep paying its debts without taking more stringent austerity measures. The ECB has taken a tougher line, while the IMF has urged more leniency.
Still, tables included in the report show that Greece is expected to miss 2011 deficit targets set in July by €1.4bn-€2bn, money that will have to be raised either through additional bail-out loans or further haircuts on private bondholders.
In addition, it predicts that Greek debt will balloon to 181 per cent of gross domestic product next year, well above the 161 per cent predicted in July.
The troika report puts the blame for Greece’s deteriorating economic outlook on both the broader recession and the government, but notes that the occasionally violent demonstrations in Athens and other Greek cities had contributed to economic unease.
“There is no doubt that Greece is undergoing a recession that is deeper and longer than expected in the previous quarterly report,” the study found. “The deterioration in the labour market, with employment falling much faster than expected, uncertainties of a political and financial nature, and social unrest and industrial action have weighed on supply and on domestic demand.”
The report acknowledges for the first time what has been widely acknowledged in Athens: that the €50bn privatisation programme, which was to contribute €28bn towards Greece’s second €109bn bail-out, is now off-course as well.
However, officials estimate that it will only delay the programme for “at least a quarter” and that the goal of raising €50bn by the end of 2015 “remains viable”.

  1. Deteriorating Verslechteren

  2. To monitor Bekijken

  3. Sustainability Duurzaamheid

  4. Recapitalisation Rekapitalisatie

  5. Although Hoewel

  6. Austerity Soberheid

  7. Bondholders Obligatiehouders

  8. Troika Houdt toezicht op staatsschulden

  9. To predict Voorspellen

  10. Unease Onbehaaglijk

  11. Quarterly Per kwartaal/Elk kwartaal

  12. Labour market Arbeidsmarkt

  13. Domestic Binnenlands

  14. Viable Levensvatbaar

  15. Bail-out plan Reddingsplan

UK economy grew 0.5% in third quarter

The UK economy grew by 0.5 per cent in the third quarter of the year, according to official

statistics, offering some relief to politicians and economists expecting evidence of even weaker growth.
Growth was supported by the services sector – which accounts for more than three-quarters of the economy – and the production industries.
Private sector economists and government officials expected the economy to grow by just 0.3 per cent in light of the worsening labour market and surveys that showed a stalling of the manufacturing sector. However, the 0.5 per cent figure does not signify strong growth, especially as it partly reflects a bounceback from unusual events in the previous quarter such as the royal wedding, which artificially depressed growth figures in that period.
“While it is reassuring to see that the economy did not slide back into contraction ...[the

0.5 per cent number] merely presents an illusion of a sustained recovery,” Chris

Williamson, economist at Markit, said.
The Office of National Statistics said that, in light of these distortions, is was better to

look at the past two quarters together. On that basis, the economy has grown by 0.6

per cent over the past six months and by just 0.5 per cent over the past 12 months.
The UK economic recovery has been depressed this year by falling real wages, the

Government’s austerity measures and cooling global demand. Concern that the

Eurozone’s sovereign debt problems could feed through to the UK have prompted the

Bank of England to pump another £75bn into the economy. Meanwhile, David Cameron,

the prime minister, has said he will stick to his plans to shrink the deficit but promised

to announce other policies to stimulate growth in the autumn statement later this

Within the services sector, the output of the transport, storage and communications

industries rose by a strong 0.9 per cent in the third quarter after being flat in the

second quarter. There was a particular lift from telecommunications, computer

programming and consultancy activities.

The production industries rose by a more modest 0.5 per cent, after falling in the

second quarter. Electricity, gas, steam and air conditioning activities were the strongest,

followed by manufacturing.
The output of the construction sector, which is small but volatile, fell by 0.6 per cent in

the third quarter.

Azad Zangana, European economist at Schroders, said: ³This could be the strongest

gross domestic product number we see for a few quarters as leading indicators are

pointing to a meaningful slowdown.´

Indeed, on Tuesday a closely watched survey of the manufacturing sector suggested

conditions in the sector deteriorated in October (the first month of the fourth quarter).

The index of activity fell from 50.8 in September to 47.4 in October – the weakest level

since June 2009. Manufacturing only accounts for about 10 per cent of gross domestic

product, but until this year it was the strongest driver of the economic recovery.

With consumer confidence falling again and worries about what the eurozone sovereign

debt crisis means for global activity the chances of a return to recession are clearly

rising,´ said James Knightley at ING.

  1. Official statistics Officiële statistieken

  2. Relief Opluchting

  3. Evidence Bewijs

  4. Labour market Arbeidsmarkt

  5. Bounceback Herstel

  6. Distortions Vervormingen

  7. Artificially Kunstmatig

  8. Deficit Tekort

  9. Consumer confidence Consumentenvertrouwen

  10. Level Niveau

  11. Recession Recessie

  12. Meaningful Betekenisvol

  13. Reassuring Geruststellend

  14. To signify Betekenen

  15. Volatile Vluchtig

Referendum call sparks fears over Greek bail-out

Shares slumped on fears that a “no” vote by the Greek people could lead to a messy default by Athens triggering sovereign debt contagion though the financial system.
The FTSE Eurofirst 300 index tumbled 3.3 per cent on Tuesday morning and the euro fell 1.1 per cent to $1.3709.

The Greek prime minister’s high-risk decision on Monday to call a national referendum on the country’s second international bail-out rattled global investors and left politicians reeling, amid doubts over the deal agreed at last week’s Brussels summit.

George Papandreou shocked both his own Pan-Hellenic Socialist Movement (Pasok) and the opposition conservatives on Monday night by opting for a plebiscite in a move aimed at defusing mounting pressure from his party to hold an early election.
The premier also raised the stakes by announcing a parliamentary vote of confidence in his hard-pressed government this week to endorse the referendum plan. The debate, led by political party leaders, will start on Wednesday with a vote set for midnight on Friday.

Antonis Samaras, leader of the opposition New Democracy party, on Tuesday called for snap elections, telling president Karolos Papoulias: “We have a historic responsibility to do what is necessary so that the future of the country and Europe is not placed at risk.”

He told reporters afterwards that elections were a “national imperative”.
No date has been set for the referendum, which would have to be approved by Mr Papoulias – provided the socialists win Friday’s vote.
"Mr Papandreou is dangerous, he tosses Greece's EU membership like a coin in the air," New Democracy spokesman Yannis Michelakis told Reuters. "He cannot govern and instead of withdrawing honourably, he dynamites everything."

Mr Papandreou has consistently stressed that early elections would derail the country’s flagging fiscal and structural adjustment programme and possibly force Greece into a disorderly default.

Pasok’s majority in the 300-member parliament has been whittled down from 10 seats to four as hardline deputies rebelled against successive austerity packages.

Anni Podimata, a Pasok MEP, told the BBC that the referendum “intends to provoke a catharsis” within the country. But Constantine Michalos, president of the Athens Chamber of Commerce, condemned the move as “an act of political schizophrenia and political blackmail”.

“What’s the point of a vote of confidence when he runs the risk of the people reversing the EU decision just a few weeks later?” he said. “The financial markets are in the doldrums, the real economy has completely stagnated and the euro stands threatened as a result of this gross act of irresponsibility and political mismanagement.”

Signs that the prolonged stress of the situation is also taking a physical toll on key figures in the Greek drama came with the news that Evangelos Venizelos, finance minister, was hospitalised suffering from “stress” and stomach pains.

The finance ministry said Mr Venizelos visited the clinic early on Tuesday and was expected to be released in the afternoon. His pain subsided shortly after he arrived, it said.

European Union officials scrambled to make sense of the referendum announcement, which appears to have blindsided fellow eurozone leaders and EU officials, who were preparing to meet on Thursday at the Group of 20 industrialised nations summit in Cannes.

It did not appear that Mr Papandreou had discussed the possibility of a referendum with fellow leaders at a summit in Brussels last week.

Official reactions from Herman Van Rompuy, the European council president, and the European commission, the EU’s executive arm, were being drafted and were expected later in the day.

EU officials expressed frustration and disbelief at Mr Papandreou’s gambit. Regardless of the result, some despaired that the fresh uncertainty introduced by the prime minister had already undermined the confidence generated by last week’s agreement by European leaders on the outlines of a plan to help stem the crisis.

Jonathan Loynes, the chief European economist for Capital Economics, a consultancy, said the referendum “clearly increases the risks both of a bigger and disorderly default on Greek debt and, ultimately, of Greece leaving the euro”.

A sour mood gripped the markets on Tuesday as many investors decided that the renewed outbreak of Greek political turmoil had thrown into question last week’s Brussels deal to deliver a €130bn second bail-out for Athens.

The euro has given up more than 3.6 per cent since last Thursday’s post-Brussels deal peak. The yield on the German 10-year Bund has slumped 17 basis points to 1.87 per cent as investors flood into the perceived haven of Berlin’s paper.

US president Barack Obama invited leaders of the European Union to a summit in Washington DC on November 28 “to discuss a broad range of issues of mutual concern, including the global economy”, the White House said in a statement on Monday night.

  1. Shares Aandelen

  2. To slump Ineenstorten

  3. Contagion Besmetting

  4. Amid Te midden van

  5. Summit Top(punt)

  6. To defuse Onschadelijk maken

  7. To endorse Onderschrijven

  8. Plebiscite Volksstemming

  9. Blackmail Chantage

  10. Irresponsibility Onverantwoordelijkheid

  11. Prolonged Langdurig/Aanhoudend

  12. Blindsided Overrompeld

  13. Despaired Wanhopig

  14. Regardless Ongeacht

  15. To undermine Ondermijnen

US economic recovery in the balance

The US returned to solid economic growth in the third quarter of 2011, but economists refused to sound the all-clear amid signs that the recovery is precarious.

The annualized 2.5 per cent increase in gross domestic product, led by encouraging growth in investment and consumption, met market expectations and calmed fears that the world’s largest economy was falling into recession. It was the fastest rate of growth since the third quarter of last year.
But consumers only managed to increase their spending through an unsustainable cut in their savings rate from 5.1 to 4.1 per cent. A fall in business inventories knocked 1.1

percentage points off growth.

The figures suggest that a succession of shocks from the eurozone’s debt problems, the row over raising the federal debt ceiling and Standard & Poor’s subsequent downgrade

to the US credit rating did not subtract as much momentum from the economy as

previously feared.
Consumer spending, which makes up about 70 per cent of the economy, rose at an

annualised rate of 2.4 per cent, while there was a roaring 17.4 per cent annualised rise

in business investment in equipment and software. Investment added 1.6 percentage

points to growth.

The report “put an end to the disappointing GDP performance that marked the first

half of the year, and the better-than-expected GDP breakdown will reinforce the more

constructive risk tone” in global markets, said Alan Ruskin, strategist at Deutsche Bank.
But the expansion rests on shaky foundations with little contribution from net exports,

further declines in federal government spending ahead, and consumers spending out of

stagnant incomes.
Jim O’Sullivan, chief economist at MF Global in New York, said the report offered

“some fodder to both sides” but that the fall in business inventories was “a positive sign

for future growth to the extent that inventories are more likely to add than from growth in the coming months”.
The White House lauded the report as “encouraging” but Katharine Abraham, a member of Barack Obama’s Council of Economic Advisers, said it was a “fragile moment in the world economy” and called on Congress to pass the president’s jobs bill.
Thursday’s figures follow a recent batch of mixed signals on the US economy. Consumer

confidence fell to recession-era lows in October, while the property market has

continued to struggle with falling prices and a glut of foreclosed homes. The Federal

Reserve may consider new moves to boost growth amid reports of mixed economic

activity across the country.

But other recent data have shown businesses are picking up investment, while the

third-quarter corporate reporting season has brought upbeat earnings figures from a

number of sectors, boosting the stock market after a tumultuous summer.

Persistently high unemployment has cast a shadow over the recovery, denting

consumer and business confidence and adding to housing market woes. Third-quarter

growth figures, while stronger than earlier in the year, are unlikely to boost hiring on

their own.

A separate report on Thursday suggested the labour market may be stabilising but that

stronger improvement is still a way off, analysts said. Initial claims for jobless benefits

were little changed at 402,000 in the week ending October 22 from a revised 404,000

the previous week. The less volatile four-week moving average rose 1,750 to 405,500.


  1. Solid Solide

  2. Precarious Onzeker

  3. Annualized Op jaarbasis

  4. Unsustainable Niet duurzame/Niet vol te houden

  5. Inventories Voorraden

  6. Subsequent Volgend

  7. Downgrade Afwaardering

  8. To subtract Aftrekken

  9. Roaring Brullende

  10. Contribution Bijdrage

  11. Stagnant Stilstaand

  12. To laud Loven

  13. Era Tijdperk

  14. Tumultuous Onstuimig

  15. To revise Herzien

US consumer spending rise outpaces income

US consumer spending rose in September, though concerns remained that the

expenditure was powered by diminished personal savings.
According to US commerce department data released on Friday, consumer purchases

increased 0.6 per cent as confidence improved, affirming recent encouraging economic

However, personal income rose only 0.1 per cent – below analysts’ expectations –

which suggested that consumers were dipping into savings to bolster spending.

“The lack of income growth meant that the boost in spending came from a decline in the

savings rate,” said David Semmens, US economist at Standard Chartered.

“This is worrying as it poses questions about the sustainability of the contribution from

the consumer going into the fourth quarter without some improvement in income

The savings rate fell 0.5 per cent in the period, reaching a level last seen at the end of


Paul Ash

worth, chief US economist at Capital Economics, countered that the saving rate

decline might have more to do with a transition to responsible spending.
“The upshot is that, on reflection, the sharp decline in the savings rate doesn’t concern

us quite as much as it did, since it is possible that it partly reflects a sharp decline in

debt servicing costs,” he said.
In a separate report, the Thomson Reuters/University of Michigan consumer

sentiment survey showed consumer expectations improved in the latter part of

October, rising to 60.9, a marked improvement on analysts’ expectations of 58. The

earlier reading two weeks ago registered at 57.5.

Data released on Thursday showed that the US economy expanded by 2.5 per cent in

the third quarter, which added some confirmation that the economy was improving,

although economists were wary about saying the country was in the clear.
Consumption was a key driver of the expansion, and consumer spending is an important

component of growth, which has been missing.

Recent jobless claims, at the weekly and the monthly non-farm payroll level, have

shown promise. Markets will pay close attention to next Friday’s release of October

unemployment data.


  1. Consumer Consument

  2. Expenditure Uitgaven

  3. Diminished Verminderd

  4. Savings Spaargelden

  5. To affirm Bevestigen

  6. To bolster Ondersteunen

  7. Lack of Gebrek aan

  8. Sustainability Duurzaamheid

  9. Sharp decline Sterke daling

  10. Upshot Uitkomst

  11. Servicing costs Onderhoudskosten

  12. Separate Gescheiden

  13. Confirmation Bevestiging

  14. Survey Overzicht

  15. Jobless Werklozen


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