In Brief
Eurozone debt crisis symptoms to linger LONDON (Reuters) – The symptoms of the eurozone debt crisis will persist for at least another year, according to a Reuters poll of 60 economists, who see governments struggling to contain their vast debts for some time to come. A slowdown in the United States poses the biggest threat to a sustainable recovery in the eurozone economy, the poll showed, with fiscal tightening and debt worries also seen as major risks to growth. The crisis – defined in the poll as 10-year government bond yield spreads of at least two eurozone members staying above 100 basis points over German Bunds – will last at least a year, according to 55 economists who answered the question. Twenty-six of these said it would last at least two years. Several eurozone governments have committed to stringent austerity measures to regain control of swollen budget deficits, although many of these programs are still in the earliest stages. «Only when some of these countries translate words into action and some of these spreads start to come in, then perhaps markets will fully believe we’re on the road to a longer-lasting recovery,» said Mark Miller at Lloyds Banking Group. «I think that’s going to happen over a longer, rather than a shorter, time horizon.» On Wednesday, Portuguese and Irish 10-year government spreads over the equivalent German Bunds hovered just under the 300-basis-point mark, while the Greek spread was around 845 basis points. While the 16-nation euroarea enjoyed quarter-on-quarter growth of 1.0 percent during April-June, attention has shifted over the last month or so from the sovereign debt crisis in Europe to the fast-cooling US economy. Cyprus direct tax revenues up 2 percent Cyprus’s direct tax revenues from January to July increased 2 percent from the year earlier period, the Nicosia-based Finance Ministry said on its website yesterday. Revenues rose to 916.7 million euros ($1.2 billion) boosted by higher income tax and capital gains tax receipts, according to the statement from the Cyprus Inland Revenue Department. Revenues from a capital-gains tax rose 26 percent to 55 million euros. The increases offset drops in the collection of taxes from the self-employed and in corporate taxes, the statement showed. (Bloomberg) Advisers chosen Greece has chosen the investment banks to advise it on planned bank privatizations and will reveal their names in the coming days, a Finance Ministry official said yesterday, without providing further details. The ministry had no comment on press reports that Deutsche Bank, Credit Suisse and Morgan Stanley would advise it on an offer by Piraeus Bank to buy government stakes in ATEbank and Hellenic Postbank. «The advisers have been picked; we will announce the names in the next few days,» the official, who declined to be named, told reporters. Piraeus Bank, Greece’s fourth-largest lender, has offered 701 million euros in cash ($900 million) to buy 77.3 percent in ATEbank and 33 percent in Hellenic Postbank. The offer, announced July 15, sparked a rally in bank stocks previously battered by the country’s debt crisis. The government, which wants banks to explore tie-ups to become bigger and stronger, has said it would seriously assess the bid. (Reuters) Delivery costs The cost of delivering Middle East crude oil to Asia, the world’s busiest route for supertankers, fell for a second day due to an oversupply of ships. Charter rates for very large crude carriers, or VLCCs, hauling Saudi Arabian crude to Japan declined 1.5 percent to 58.41 Worldscale points, according to the Baltic Exchange in London. Rental income from the route slumped 4.7 percent to $20,019 a day. The supply of vessels in the Persian Gulf is «still healthy» and the number of bookings this month declined from July, Nikos Varvaropoulos, an official at Optima Shipbrokers Ltd in Athens, said by e-mail yesterday. Owners of crude-oil tankers are contending with reduced shipments as members of the Organization of Petroleum Exporting Countries (OPEC), suppliers of about 40 percent of the world’s oil, cut output by about 3.5 million barrels a day compared with 2008, according to Bloomberg estimates. (Bloomberg)
