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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: gerard mangiardi who wrote (27182)	6/24/1999 11:05:00 AM
From: IQBAL LATIF	Respond to of 50167

U.K. Policy-Makers Hint They Could Ease Again Date: 6/24/99 The Bank of England opened the door to another interest rate cut in July, its June meeting minutes show. Policy-makers voted 8-1 to cut rates by a quarter-point to 5% on June 10, citing the pound's strength. They also noted slowing wage gains and falling inflation. With the pound still strong, analysts say the BOE could cut rates again, but probably won't. The economy seems to be on the mend, and the repo rate is at a 22-year low. Still, the pound fell on the news. Germany's Cabinet OKs Big 2000 Spending Cuts Chancellor Gerhard Schroeder's cabinet approved $15.9 billion in budget cuts. The plan includes tax cuts for business, fewer industrial subsidies and lower social spending. Fuel taxes would rise. The government hopes to boost the sluggish economy, reduce unemployment and stabilize the euro. Analysts say the net impact would be positive, but not by much. The plan may face opposition in parliament. West German Sentiment Is Stabilizing, Ifo Says The Ifo Institute said current sentiment stopped tanking in May for the first time since March 1998. The index of current conditions among West German manufacturers fell marginally to 14.1 from 14 in April. Expectations rose to their highest level since August. Asia's 'Feds' Intervene To Weaken Currencies With Asia on the road to recovery, currencies are rising, and central banks don't like that. Domestic demand remains weak, so Asia is relying on exports. Japan has intervened heavily several times recently to weaken the yen against the dollar and the euro to keep exports competitive. Korea's central bank is also intervening to keep the won from rising. Thailand isn't stepping in yet, but is jawboning the market. Analysts say these moves show countries are trying to steal growth from each other. Japan: Asia Recovering On A Slower Growth Path Asian economies are on track for a gradual recovery this year, but slower investment and productivity gains will prevent a return to the rocketing pre-crisis growth rates, Japan's Economic Planning Agency said. Southeast Asian nations should grow 5% to 6% a year over the next decade, vs. 7.3% from 1987 to 1997. As Japan recovers, it's buying more from Asia. But that may not last, an EPA official warned. Argentina Wants To Talk Dollar Treaty Formally Argentina asked the U.S. for formal talks on a treaty to make the dollar its currency. Argentina now has a currency board with a 1-to-1 peso-dollar rate, but devaluation fears still exist. It could adopt the dollar by itself. But a treaty would give it a cut of the U.S.' profits from printing dollars, as well as access to the Fed's discount window. The U.S. doesn't like the idea. Italy Vague On Pensions Due To Union Pressure After meeting with unions, Italian Prime Minister Massimo D'Alema said his 2000 to 2003 economic plan will contain no specific measures to lower the budget deficit. He still seeks to cut the deficit- to-GDP ratio to 1.5% in 2000. But unions signaled they'd fight any pension cuts. Meanwhile, the IMF urged Italy to make ''every effort'' to meet its original 1999 deficit target of 2%, not the more recent 2.4% forecast.