Serbia laid out painful spending cuts on Tuesday, as it looks to a deal with the Fund early next year to reassure investors and cut borrowing costs. Roaf said the IMF was “ready to support (Serbia)… in any way that suits”. HIGHER FORECAST FOR POLAND On Poland, the region’s biggest economy, Roaf said the IMF would soon raise its 2014 economic growth forecast to about 2.5 percent from 2.2 percent now as investment was picking up and exports had been doing well. But the new forecast would already be close to the potential growth rate at which Poland’s economy can expand without creating imbalances. This is much lower than the 4-5 percent registered before 2008 and unlikely to be enough to bring down the 13 percent unemployment rate, denting 37-million-strong nation’s aspiration to quickly close the wealth gap with its Western counterparts. The IMF official said structural reforms to make the business environment more investment-friendly could help speed up growth, but this was something countries had to work on. The slower potential growth rates across the region were mainly a result of slower growth in western Europe and sharply reduced investment flows. “Slower growth points to more problems with employment going forward. Also fiscal problems”, Roaf said. In an effort to reduce its debt and close a budget gap, Poland is transferring to the state a large portion of the assets held by state-guaranteed private pension funds.
Western bank retreat clouds emerging Europe’s recovery -IMF
to offset the drop in European sales. During the first quarter, Chrysler and its line of trucks and SUVs helped Fiat post a 4% increase in trading profit and similar results were noted in second quarter. Hyundai’s lower production costs give the company a competitive advantage over its European rivals.Unlike European automakers, Hyundai’s factories tend to operate at full capacity, making it easier for the company to cover its high fixed production costs. The company’s European manufacturing plant in Turkey was upgraded this year to increase production to 200,000 vehicles a year by 2014. This plant will produce the i10 and another new model, the i20. Another plant located in the Czech Republic is producing 300,000 vehicles a year. Volkswagen looks to hold market position For Volkswagen, maintaining a competitive cost position and earnings momentum are two key goals for powering through the economic crisis in Europe. Volkswagen is well known in Western Europe, where one in four new cars, or 24.4%, carry the Volkswagen brand.The company’s Europe market sales in 2012 rose 11.1% over the previous year but in the first half of 2013 were down 0.4%. VW’s luxury brand, Audi, has provided sales support in September 2013, Audi’s year-on-year sales were up 10%. Audi also had strong sales in the U.S ( up 6.2%) and China (up 28.2%). By the end of 2013, the company expects vehicle deliveries to exceed those of the previous year. My foolish conclusion Even with ongoing uncertainty in the European market, it appears Hyundai’s goal to expand its line of vehicles in Europe is starting to pay off. Its competitively priced car models have led the company to gain greater market share from its rivals. Back in 2009, Hyundai was also able to capitalize on government subsidies passed in several European countries that encouraged car buying; the company was better equipped than its rivals to handle the additional demand.
US shale revolution leaving Europe in the cold
“I don’t think the U.K. is anywhere near catching up with the U.S.,” David Thomas, lead oil & gas analyst at Credit Suisse told CNBC on Wednesday. “You have to look at how much volume is currently being produced by the U.S., and the fact that it’s easy for the U.S. to carry on with its shale production.” While the exploration and production of shale gas — an increasingly important source of cheap natural gas — was underpinned by a supportive political and legal regime in the U.S, such support was lacking in the U.K. and Europe, Thomas said. The U.S. has embraced shale gas production whole-heartedly, leading to a fall in domestic gas prices and making it possible that the country could achieve energy independence in oil and gas by 2035, according to the International Energy Agency. But the 27-nation European Union has been slower to explore the possibilities presented by the controversial energy supply. ) EU policymakers are set to decide by the end of the year whether strict regulation of the industry is required. Opponents of shale gas exploration in Europe say existing environmental law is inadequate for the potential risks involved in the extraction process — the hydraulic fracturing for the gas known as “fracking.” Reflecting public anxiety over fracking in the U.K., protests have been staged at a site where test drilling was being carried out by energy firm Cuadrilla. government is keen to explore shale gas as an alternative domestic energy supply, however, and on Tuesday the country’s Economics Affairs Committee held its first session hearing evidence from experts on shale gas and the possible impact of its extraction. Pro-shale gas campaigners in the energy Industry insist that shale gas provides lower energy costs, can curb greenhouse emissions and could provide a more indigenous source of energy – a moot point for the U.K. and majority of Europe which largely relies on Russia for its gas supply. Thomas said there would be a “very slow development in shale outside the U.S” with Europe posing challenges in terms of its higher population density, different land rights, oil field services and geology.