interest Archives

Bulgaria: China has an Interest in Building the Belene NPP, a Highway and a Railway Line to the Aegean Sea

July 6, 2018 By administrator

China has the desire to invest and participate in the construction of a railway linking Bulgaria with the Aegean Sea, the North-South Highway and the Belene NPP. This was understood after the meeting of Prime Minister Boyko Borissov and the chairman of the State Council of China Li Keqiang. He is on a four-day visit to Bulgaria, during which a meeting with the leaders of the countries of Central and Eastern Europe will be held in the form “16 + 1”.

We believe it is most important to follow EU market rules and laws, Li said. So far, the EU’s rules on transparency in EU procurement have been seen to contradict China‘s way of doing business. “Public procurement will be carried out and non-state projects will be guaranteed by the state,” Li said. He wanted to emphasize that 16 + 1 is not a political platform and does not separate the EU, it will even help to integrate into the union the countries of the initiative, some of which are not members. “We understand that the EU is an important force for global prosperity and peace.” The EU supports democracy in international relations, and without Europe on the global stage there will be no global development, Li said.

Borisov “hired” Li Keqiang as an advertising agent

Borisov showed Li Keqiang and his wife the National Historical Museum. “I saw the surprise of the Prime Minister and his wife of gold which 7000 years old. I hired him as an advertising agent of the Bulgarian cultural and historical heritage,” said Borisov. “Please tell the Chinese people about the 7,000-year-old processed gold, how exquisite it is, how beautiful it is, show the pictures,” Li Keqiang told Chinese journalists. “Even if only that is achieved the visit would be worth it,” added Borisov. “And I very much want more Bulgarians to travel to China,” Li Keqiang said.

During the visit of the Chinese prime minister to Bulgaria, dozens of joint agreements and memoranda were signed. The largest amount is a financial agreement for 1.5 billion euros between the Bulgarian Development Bank and the Chinese Development Bank, followed by an agreement between Bulgarian Maritime Fleet and a Chinese bank for $ 94.15 million for the construction of six bulk carriers .

Li Keqiang is the first Chinese prime minister to come to Bulgaria since 2000, and his delegation consists of nearly 700 people.

For four days in Sofia Li will meet with the Bulgarian leaders and then with the leaders of the countries of Central and Eastern Europe in the form “16 + 1”. In the afternoon, President Rumen Radev will also welcome Li.

Last year, according to Beijing’s Ambassador to Sofia, Zhang Haizhou, trade between Bulgaria and China was $ 2.13 billion (65% growth), with exports of $ 960 million and imports of 1.17 billion dollars.

Source: Dnevnik, Georgi A. Angelov

Major French companies show interest in Armenian market, Ambassador says

July 13, 2017 By administrator

Major French companies show interest in Armenian market, Ambassador says “The trade-economic relations between Armenia and France are at a low level. The commodity turnover in the two directions amounts to 50 million euros,” Jean-François Charpentier, Ambassador Extraordinary and Plenipotentiary of France to Armenia, said at a news conference on Thursday, reports Panorama.am.

In his words, this is also conditioned by the fact that the Armenian economic market is not well known in Western Europe. “Currently the things tend to change, however a clearly marked desire to immediacy get integrated in that market is not yet observed. The positive dynamics is that major French enterprises already show interest towards the Armenian market. This is also linked with the fact that the Armenian market also entails another potential opportunity to get in touch with the Iranian market. Armenia’s membership to the EAEU can also promise possible prospects,” Mr. Charpentier noted.

The Ambassador underscored that regardless the low commercial and economic turnover, France has quite a significant presence in the Armenian economic field.

Jean-François Charpentier noted that the situation can be considered more satisfactory in terms of investments, since there are French companies operating in Armenia.

Asked whether the improvement measures taken by the Armenian Government inspires trust to the French investors to make investments in Armenia, the French diplomat noted that the Government’s trust actions are among the factors that condition the outlined interest of French enterprises towards Armenia.

EU: Negative interest rates – the ECB’s new ‘big bazooka’

June 6, 2014 By administrator

Be prepare and be aware soon the Banks will charge you for parking your money at the bank instead of giving you interest. (Emphasis mine)

Two ghosts are haunting the eurozone: low inflation and a strong euro. The European Central Bank (ECB) has taken aim at both by punishing banks that park money with the ECB.

“We’re very aware of the fact that an extensive period of low inflation carries risks,” ECB president Mario Draghi told international central bankers at a meeting in Portugal last week. He is referring to the risk of deflation, the vicious circle of declining prices, yielding company profits, reduced investment, higher unemployment and ultimately an intensified recession. Once caught in this vicious circle it is hard to find the exit – the example of Japan serves as a warning to all.

Draghi does not see any risk of broad-scale deflation for the time being – an assessment backed by the improving economies in crisis-ridden southern Europe. But the strong euro is threatening to neutralize the enhanced competitiveness gained by the wage cuts in these quarters. Experts say the common currency is overvalued by about ten percent. This is mainly due to “the significant capital inflows that want to profit from an end of the crisis,” says Martin Huefner, Chief Economist at Assenagon in his weekly commentary.

Interest rate reduction already priced in

It was an open secret that the interest rates are set to fall,” says Jens-Oliver Niklasch, Chief Economist with Baden-Wuerttemberg’s state bank LBBW. Rates were cut for the eurozone from 0.25 percent to 0.15 or 0.10 percent. As a rule such interest rate cuts trigger a devaluation of the currency. In this case the effect will probably be limited. What difference does 0.1 percent make after all? And secondly: “An interest rate reduction is already priced in,” Niklasch told Deutsche Welle.

But the ECB has done more. The European monetary watchdogs are going to try out a new tool: the negative interest rate. This means that a commercial bank is obliged to pay a penalty rate if they park money with the ECB. The ECB is hoping to achieve two targets with this measure, says LBBW analyst Niklasch: “The first is rather simple: that the euro is weakened on currency markets; the second is that the vast liquidity offered by the ECB finally reaches the private sector.”

More loans for businesses

In other words: The banks should finally dish out more loans to companies. This would generate more investment, more growth and ultimately higher inflation rates. If the euro softens at the same time, the ECB have killed two birds with one stone. Experts are skeptical as to whether this plan will work. “The granting of loans by commercial banks actually hinges more on demand than supply,” says Jens-Oliver Niklasch.

This means: The debt crisis and recession dampened demand for loans, especially in southern Europe. The ECB can not force banks to provide loans to the private sector. Banks will probably look for alternatives to avoid the penalty rates, such as government bonds of debtor countries in the eurozone. These still have good returns and are guaranteed by the ECB. However, this means more money will go to southern Europe and it defeats the object of devaluing the euro.

Sowing the seed for the next crisis?

So what needs to be done? Nothing, says Roland Vaubel, economist at the University of Mannheim: “The recession is practically over. We have positive growth for the entire eurozone. We have solid monetary growth.” So he sees no need to soften monetary policy.

But what about low inflation? Is he not worried at all about that? No, says Vaubel: “Because this is the result of the monetary policy dating back two to three years. This is a lagging indicator. The ECB is making a mistake if they’re looking at the current inflation rate.”

They should keep their eyes on monetary growth and demand, both of which were positive thanks to the improving business climate. He says further relaxation of the monetary policy does not make sense and would prepare the ground for the next crisis: “We’re running the risk that we fail to drop this hyper-expansive monetary policy fast enough when the economy makes a significant leap and inflation rates soar. I fear that this so-called exit won’t work then.”

Source: DW.DE