Ben Bernanke and Larry Summers are in the midst of a vigorous blog debate about why the world’s economy is so messed up and how it can be fixed.
Showing posts with label Eurozone. Show all posts
Showing posts with label Eurozone. Show all posts
Friday, April 03, 2015
Friday, December 20, 2013
Finland hit harder by recession than expected
HELSINKI: Finland's economy will contract by 1.2 percent this year, far lower than previous forecasts, the government announced in an economic report Thursday.
Thursday, August 29, 2013
German business confidence rises for fourth month: Ifo
German business confidence rose for a fourth month in a row in August, data showed on Tuesday, exceeding expectations as companies in Europe's top economy voiced more satisfaction with their situation.
Thursday, April 18, 2013
IMF lowers UK growth forecast for 2013 again
The International Monetary Fund's twice-yearly look at the world economy has lowered its forecasts for most developed economies, including the UK.
Tuesday, September 18, 2012
Spain shuns further cuts as unrest grows
Spain is digging in its heels against further austerity as protests sweep the country and mounting tensions with Catalan nationalists threaten to split the country.
Sunday, September 02, 2012
IMF Deputy MD David Lipton 'optimistic' about Greece
WASHINGTON: IMF Deputy Managing Director David Lipton said Friday he was optimistic that Greece could get its restructuring program back on track and remain in the eurozone.
Sunday, March 25, 2012
Banks urged to raise fresh capital
Wednesday, March 14, 2012
German investor confidence most in 21 months
German investor confidence has risen to the highest level since June 2010.
Thursday, December 16, 2010
EU leaders meeting amid eurozone jitters
Concerns about the stability of the eurozone are set to dominate a meeting of European leaders in Brussels.
The two-day summit is expected to see an agreement to set up a permanent system for rescuing countries that get heavily into debt.
But there is still much debate about how such a system should operate.
Meanwhile concern over Spain's financial stability continued as it was forced to pay a higher rate of interest in a government bond sale.
Spain has been under financial market scrutiny since the Irish Republic was forced to take an aid package of 85bn euros (£72bn; $113bn) last month.
That bail-out followed the 110bn-euro rescue of Greece in May.
Arriving at the summit, Sweden's Prime Minister Fredrik Reinfeldt stressed that beyond crisis management there was a long-term need for EU countries to reform labour markets and boost competitiveness.
Greece's Prime Minister George Papandreou said "the challenge is a collective one now - more integration... and all have to live up to their responsibilities".
'Succeed together'
Issues on the agenda in Brussels include:
* How to change the EU's Lisbon Treaty to allow changes to create a permanent stability mechanism for eurozone members
* Whether to increase the eurozone's 750bn-euro temporary bail-out fund, the European Financial Stability Facility (EFSF)
* The possibility of creating pan-European bonds to boost confidence in the euro.
But even assuming that leaders do agree to the way countries are helped, the slow pace of politics in Brussels means a permanent stability arrangement will not come into force until 2013, says BBC Europe correspondent Matthew Price.
In the meantime they will have to rely on the current temporary mechanism that has already been used to rescue Greece and the Irish Republic, he added.
And analysts have expressed concern that talks will not address a key issue - whether or not investors who have bought bonds in struggling euro nations will have to lose money, or in the language of the financial world, take a "haircut", on their investment between now and 2013.
This was causing "uncertainty" in financial markets, said Carsten Brzeski, a senior analyst at ING.
"This is an inconsistency. The politicians need to address this insolvency issue in the period between now and 2013," he told the BBC.
German caution
French Foreign Minister Michele Alliot-Marie said that the EU had to stop speculators from attacking eurozone countries and would adopt ways to do that at the summit.
And separately the Prime Minister of Luxembourg, Jean-Claude Juncker, said European leaders were determined to do everything to ensure the eurozone's financial stability.
On Wednesday, German Chancellor Angela Merkel stressed Berlin's commitment to help its European partners, pledging that: "Nobody in Europe will be abandoned. Europe will succeed together."
But she has been an opponent of some suggested actions, including increasing the eurozone's euro bail-out fund or introducing euro bonds.
Concerns reflected
In its latest bond auction, Madrid managed to raise 2.4bn euros.
But the yield on the Spanish bonds - essentially the interest rate which the government must pay in order to borrow money - was higher than that on previous auctions of similar bonds.
The Spanish treasury sold 1.8bn euros worth of 10-year bonds at an average interest rate of 5.4% - up from 4.6% in the last such auction in November,
And it was forced to pay a rate of 6% to sell 618m euros in 15-year bonds, up from 4.5% in October.
The rising cost of borrowing reflects investors' concern about the outlook for the Spanish economy and its banking sector in particular.
Madrid insists it will not need to apply for a bail-out from the EFSF - the temporary rescue scheme funded by the EU and International Monetary Fund.
Downgrade threat
While the demand for Spanish bonds remained oversubscribed, concerns remained about Spain's ability to get affordable funding to refinance its debts and support its banks, said Kathleen Brooks, research director at Forex.com.
And this had wider implications for the single currency, she added.
"Spain is the canary in the coal mine for the survival of the eurozone," Ms Brooks said.
On Wednesday, ratings agency Moody's said it was reviewing Spain's credit rating with a view to downgrading it - warning of problems the country faced in refinancing its debts next year.
Moody's had already cut Spain's sovereign debt rating from the top, triple-A rating to Aa1 in September.
The two-day summit is expected to see an agreement to set up a permanent system for rescuing countries that get heavily into debt.
But there is still much debate about how such a system should operate.
Meanwhile concern over Spain's financial stability continued as it was forced to pay a higher rate of interest in a government bond sale.
Spain has been under financial market scrutiny since the Irish Republic was forced to take an aid package of 85bn euros (£72bn; $113bn) last month.
That bail-out followed the 110bn-euro rescue of Greece in May.
Arriving at the summit, Sweden's Prime Minister Fredrik Reinfeldt stressed that beyond crisis management there was a long-term need for EU countries to reform labour markets and boost competitiveness.
Greece's Prime Minister George Papandreou said "the challenge is a collective one now - more integration... and all have to live up to their responsibilities".
'Succeed together'
Issues on the agenda in Brussels include:
* How to change the EU's Lisbon Treaty to allow changes to create a permanent stability mechanism for eurozone members
* Whether to increase the eurozone's 750bn-euro temporary bail-out fund, the European Financial Stability Facility (EFSF)
* The possibility of creating pan-European bonds to boost confidence in the euro.
But even assuming that leaders do agree to the way countries are helped, the slow pace of politics in Brussels means a permanent stability arrangement will not come into force until 2013, says BBC Europe correspondent Matthew Price.
In the meantime they will have to rely on the current temporary mechanism that has already been used to rescue Greece and the Irish Republic, he added.
And analysts have expressed concern that talks will not address a key issue - whether or not investors who have bought bonds in struggling euro nations will have to lose money, or in the language of the financial world, take a "haircut", on their investment between now and 2013.
This was causing "uncertainty" in financial markets, said Carsten Brzeski, a senior analyst at ING.
"This is an inconsistency. The politicians need to address this insolvency issue in the period between now and 2013," he told the BBC.
German caution
French Foreign Minister Michele Alliot-Marie said that the EU had to stop speculators from attacking eurozone countries and would adopt ways to do that at the summit.
And separately the Prime Minister of Luxembourg, Jean-Claude Juncker, said European leaders were determined to do everything to ensure the eurozone's financial stability.
On Wednesday, German Chancellor Angela Merkel stressed Berlin's commitment to help its European partners, pledging that: "Nobody in Europe will be abandoned. Europe will succeed together."
But she has been an opponent of some suggested actions, including increasing the eurozone's euro bail-out fund or introducing euro bonds.
Concerns reflected
In its latest bond auction, Madrid managed to raise 2.4bn euros.
But the yield on the Spanish bonds - essentially the interest rate which the government must pay in order to borrow money - was higher than that on previous auctions of similar bonds.
The Spanish treasury sold 1.8bn euros worth of 10-year bonds at an average interest rate of 5.4% - up from 4.6% in the last such auction in November,
And it was forced to pay a rate of 6% to sell 618m euros in 15-year bonds, up from 4.5% in October.
The rising cost of borrowing reflects investors' concern about the outlook for the Spanish economy and its banking sector in particular.
Madrid insists it will not need to apply for a bail-out from the EFSF - the temporary rescue scheme funded by the EU and International Monetary Fund.
Downgrade threat
While the demand for Spanish bonds remained oversubscribed, concerns remained about Spain's ability to get affordable funding to refinance its debts and support its banks, said Kathleen Brooks, research director at Forex.com.
And this had wider implications for the single currency, she added.
"Spain is the canary in the coal mine for the survival of the eurozone," Ms Brooks said.
On Wednesday, ratings agency Moody's said it was reviewing Spain's credit rating with a view to downgrading it - warning of problems the country faced in refinancing its debts next year.
Moody's had already cut Spain's sovereign debt rating from the top, triple-A rating to Aa1 in September.
Thursday, November 04, 2010
Shares hit two-year highs after US Fed move
US and UK shares hit two-year highs as global stock markets reacted positively to the decision by the Federal Reserve to pump $600bn (£373bn) into the US economy to try to boost its recovery.
Both the FTSE and Dow Jones indexes closed up 2%, while leading indexes in France and Germany rose sharply.
The price of oil also jumped, while the dollar fell against major currencies.
Although the Fed's move was widely expected, most analysts had predicted a lower figure of $500bn to be injected.
Weakening dollar
The FTSE 100 closed up 114 points at 5863, while the Dow gained 220 points to close at 11435.
In Paris, the Cac 40 climbed 74 points to 3,917, while Germany's Dax was up 117 points at 6,735.
Earlier, Asian shares closed higher, with Japan's Nikkei index gaining 199 points to finish at 9,359 and Hong Kong's Hang Seng rising 391 points to close at 24,536.
The price of oil also rose to its highest level since early April, with US light crude gaining $2 a barrel to $86.71. London Brent rose by $1.80 to $88.19 a barrel.
With more dollar cash in circulation and with the US government's policy of buying bonds with the $600bn putting downward pressure on interest rates, as expected the dollar weakened against major currencies.
The euro rose 2 cents against the dollar to $1.4239, while the pound also rose 2 cents to $1.6273. The dollar slipped to 80.66 yen, from 81.29 yen.
European reaction
European Central Bank president Jean-Claude Trichet refused to comment on the Fed's action at the ECB's monthly press conference.
However, he did say that he was confident the Fed still supported a strong dollar, despite reports that the second round of quantitative easing was designed to weaken the US currency, in order to make its exports more competitive.
"I have no indication that would change my trust in the fact that [Fed policymakers]... are not playing the strategy of the weak dollar," he said.
"It is in the interest of the US to have a strong dollar vis-a-vis the other floating currencies."
'On the hoof'
The latest move by the Fed has been dubbed QE2 as it follows the central bank's decision to pump $1.75tn into the economy during the downturn in its first round of quantitative easing.
Rob Carnell, chief international economist at the banking group ING, said the action was unusual because the economy is in a completely different shape to how it was before.
"[During the first round of QE], you had massive financial market disruptions - really serious problems, mortgage yields and rates were shooting through the roof, no one could borrow. That's clearly not the case right now," he told BBC World Service.
"The justification for it seems to have utterly changed... It's really policy on the hoof, trying to justify it as they go along."
Source: BBC
www.bbc.co.uk
Both the FTSE and Dow Jones indexes closed up 2%, while leading indexes in France and Germany rose sharply.
The price of oil also jumped, while the dollar fell against major currencies.
Although the Fed's move was widely expected, most analysts had predicted a lower figure of $500bn to be injected.
Weakening dollar
The FTSE 100 closed up 114 points at 5863, while the Dow gained 220 points to close at 11435.
In Paris, the Cac 40 climbed 74 points to 3,917, while Germany's Dax was up 117 points at 6,735.
Earlier, Asian shares closed higher, with Japan's Nikkei index gaining 199 points to finish at 9,359 and Hong Kong's Hang Seng rising 391 points to close at 24,536.
The price of oil also rose to its highest level since early April, with US light crude gaining $2 a barrel to $86.71. London Brent rose by $1.80 to $88.19 a barrel.
With more dollar cash in circulation and with the US government's policy of buying bonds with the $600bn putting downward pressure on interest rates, as expected the dollar weakened against major currencies.
The euro rose 2 cents against the dollar to $1.4239, while the pound also rose 2 cents to $1.6273. The dollar slipped to 80.66 yen, from 81.29 yen.
European reaction
European Central Bank president Jean-Claude Trichet refused to comment on the Fed's action at the ECB's monthly press conference.
However, he did say that he was confident the Fed still supported a strong dollar, despite reports that the second round of quantitative easing was designed to weaken the US currency, in order to make its exports more competitive.
"I have no indication that would change my trust in the fact that [Fed policymakers]... are not playing the strategy of the weak dollar," he said.
"It is in the interest of the US to have a strong dollar vis-a-vis the other floating currencies."
'On the hoof'
The latest move by the Fed has been dubbed QE2 as it follows the central bank's decision to pump $1.75tn into the economy during the downturn in its first round of quantitative easing.
Rob Carnell, chief international economist at the banking group ING, said the action was unusual because the economy is in a completely different shape to how it was before.
"[During the first round of QE], you had massive financial market disruptions - really serious problems, mortgage yields and rates were shooting through the roof, no one could borrow. That's clearly not the case right now," he told BBC World Service.
"The justification for it seems to have utterly changed... It's really policy on the hoof, trying to justify it as they go along."
Source: BBC
www.bbc.co.uk
Thursday, October 21, 2010
EU austerity drive country by country
A new austerity drive has been sweeping across Europe, as governments struggle to trim huge budget deficits and the 16-nation eurozone races to reassure sceptical markets.
Some of the biggest protests have been seen in France but industrial action is making headlines elsewhere too.
EU finance ministers have agreed rules that will automatically punish member-states which break budgetary rules.
With the EU expecting all member-states to have achieved a maximum budget deficit of 3% of GDP by the financial year 2014-15, what belt-tightening measures are the countries taking?
UK
The Conservative-Liberal Democrat coalition government has announced the biggest cuts in state spending since World War II.
Savings believed to amount to about £83bn (95bn euros, $131bn) are due to be made over four years.
The Chancellor, George Osborne, told parliament that 490,000 public sector jobs would be cut over four years because the country had "run out of money". Experts predict a similar number of job losses in the private sector.
Most Whitehall departments face budget cuts of 19% on average while the defence budget will be cut by 8%. The retirement age is to rise from 65 to 66 by 2020.
Some incapacity benefits will be time-limited and other money will be clawed back through changes to tax credits and housing benefit. A new bank levy will also be brought in.
While there was no widespread industrial unrest ahead of the cuts' announcement, the general secretary of trade union Unison, Dave Prentis, accused the government of "taking a chainsaw" to public services for ideological reasons. The opposition Labour Party accused the government of a "slash and burn" policy.
FRANCE
France has announced plans to cut spending by 45bn euros (£39bn; $62bn) over the next three years in order to meet the budget deficit target.
Some of this money is expected to be saved through closing tax loopholes and withdrawing temporary economic stimulus measures.
President Nicolas Sarkozy has insisted he will press ahead with plans to raise the retirement age from 60 to 62 and the full state pension age from 65 to 67. The highest earners will also be required to pay an extra 1% income tax.
Trade unions have been organising nationwide strikes since September, with days of action in which more than a million people have regularly taken part.
French riot police have been used to re-open fuel depots blocked by protesters, though the demonstrations have been largely peaceful.
REPUBLIC OF IRELAND
The cost of bailing out the Republic of Ireland's stricken banks has risen to 45bn euros (£39bn; $62bn), opening a huge hole in the Irish government's finances.
The increased cost will see the government run a budget deficit equivalent to 32% of GDP this year.
It aims to reduce this in stages, to reach 2.9% by 2014, with savings of 7.5bn euros over that period. But a figure of 10bn euros may be more realistic, according to the parliamentary opposition.
Government spending has been slashed by 4bn euros, with all public servants' pay cut by at least 5% and social welfare reduced.
Child benefit was cut by 16 euros a month, bringing the lower rate to 150 euros a month and the higher rate to 187 euros a month.
A carbon tax has been brought in, set at 15 euros per tonne of CO2.
Bad news came in September when figures showed the economy had shrunk in the second quarter from the previous three months.
NETHERLANDS
The centre-right coalition formed after months of negotiation on 8 October said it wanted to cut the budget by 18bn euros ($24bn; £15bn) by 2015.
But the new government will have to rely on the radical Freedom Party to enact legislation and there are doubts about its long-term viability.
SPAIN
The Spanish government has approved an austerity budget for 2011 which includes a tax rise for the rich and 8% spending cuts.
Madrid has promised European counterparts to cut its deficit to 6% of its gross domestic product (GDP) next year, from 11.1% last year.
Government workers face a pay cut of 5%, starting in June, and salaries will then be frozen for 2011.
A tax rise of 1% will be applied to personal income above 120,000 euros.
Smaller savings include an end to a 2,500-euro cash payout for new mothers, known as "baby cheques".
Unemployment has more than doubled - to about 20% - since 2007.
GREECE
The Greek government has pledged to end its economic woes to make drastic spending cuts and boost tax revenue in return for a 110bn-euro (£95bn) bail-out from the EU and International Monetary Fund.
It has started drawing on the bail-out money because a sharp downgrade of its sovereign debt rating made its borrowing costs soar.
The aim is to slash the budget deficit from 13.6% of GDP.
The country has started cracking down on tax evasion, and on corruption within the tax and customs service. It will also curb its widespread early retirement schemes. The average retirement age is set to rise from 61.4 to 63.5.
Under the plan to slash the budget by 30bn euros (£26bn; $37bn) over three years Greece aims to: scrap bonus payments for public sector workers; freeze public sector salaries and pensions for at least three years; increase sales tax (VAT) from 19% to 23%; raise taxes on fuel, alcohol and tobacco by 10%.
The harsh measures have triggered public sector strikes and violence on the streets of Athens.
ROMANIA
The government proposed wage cuts of 25% and pension cuts of 15% in July in order to reduce the country's budget deficit.
Romania's economy shrunk more than 7% in 2009 and it needed an IMF bail-out in order to meet its wage bill.
It says it needs to implement new austerity measures to qualify for the next instalment of the 20bn-euro ($25bn; £17bn) IMF loan.
Angry protests have greeted the cuts and Interior Minister Vasile Blaga resigned after thousands of police officers went on strike over the 25% pay cut.
ITALY
The Italian government has approved austerity measures worth 24bn euros for the years 2011-2012. The cuts amount to about 1.6% of Italian GDP
Italy aims to cut public sector pay and freeze new recruitment. Public sector pensions and local government spending are also being targeted, and there are plans to crack down on tax evasion.
Funding to city and regional authorities is expected to be cut by more than 13bn euros.
For the next three years there will be a freeze on public sector pay rises and cuts in public sector hiring, replacing only one employee for every five who leave.
Progressive pay cuts of up to 10% are planned for high earners in the public sector, including ministers and parliamentarians.
Retirement will be delayed by up to six months for those who reach retirement age in 2011.
Provincial governments serving fewer than 220,000 inhabitants will be scrapped, as will several publicly funded think-tanks.
GERMANY
The German government has proposed plans to cut the budget deficit by a record 80bn euros ($96bn; £66bn), or 3% of GDP, by 2014.
The total deficit in 2009 was 3.1%, but is projected to grow to more than 5% this year.
"Germany has an outstanding chance to set a good example," said German Chancellor Angela Merkel.
The plans include a cut in subsidies to parents, 10,000 government job cuts over four years, and higher taxes on nuclear power. The rebuilding of the baroque Stadtschloss palace in the heart of Berlin will also be postponed.
PORTUGAL
The Socialist government of Jose Socrates has announced a range of austerity measures aimed at cutting the deficit to 7.3% this year and 4.6% in 2011.
Top earners in the public sector, including politicians, will see a 5% pay cut.
VAT will rise by 1% and there will be income tax hikes for those earning more than 150,000 euros. By 2013 they will face a 45% tax rate.
By 2013 military spending will have been cut by 40% and the government is delaying the launch of two high-speed rail links - the Lisbon-Porto and Porto-Vigo routes.
Some of the biggest protests have been seen in France but industrial action is making headlines elsewhere too.
EU finance ministers have agreed rules that will automatically punish member-states which break budgetary rules.
With the EU expecting all member-states to have achieved a maximum budget deficit of 3% of GDP by the financial year 2014-15, what belt-tightening measures are the countries taking?
UK
The Conservative-Liberal Democrat coalition government has announced the biggest cuts in state spending since World War II.
Savings believed to amount to about £83bn (95bn euros, $131bn) are due to be made over four years.
The Chancellor, George Osborne, told parliament that 490,000 public sector jobs would be cut over four years because the country had "run out of money". Experts predict a similar number of job losses in the private sector.
Most Whitehall departments face budget cuts of 19% on average while the defence budget will be cut by 8%. The retirement age is to rise from 65 to 66 by 2020.
Some incapacity benefits will be time-limited and other money will be clawed back through changes to tax credits and housing benefit. A new bank levy will also be brought in.
While there was no widespread industrial unrest ahead of the cuts' announcement, the general secretary of trade union Unison, Dave Prentis, accused the government of "taking a chainsaw" to public services for ideological reasons. The opposition Labour Party accused the government of a "slash and burn" policy.
FRANCE
France has announced plans to cut spending by 45bn euros (£39bn; $62bn) over the next three years in order to meet the budget deficit target.
Some of this money is expected to be saved through closing tax loopholes and withdrawing temporary economic stimulus measures.
President Nicolas Sarkozy has insisted he will press ahead with plans to raise the retirement age from 60 to 62 and the full state pension age from 65 to 67. The highest earners will also be required to pay an extra 1% income tax.
Trade unions have been organising nationwide strikes since September, with days of action in which more than a million people have regularly taken part.
French riot police have been used to re-open fuel depots blocked by protesters, though the demonstrations have been largely peaceful.
REPUBLIC OF IRELAND
The cost of bailing out the Republic of Ireland's stricken banks has risen to 45bn euros (£39bn; $62bn), opening a huge hole in the Irish government's finances.
The increased cost will see the government run a budget deficit equivalent to 32% of GDP this year.
It aims to reduce this in stages, to reach 2.9% by 2014, with savings of 7.5bn euros over that period. But a figure of 10bn euros may be more realistic, according to the parliamentary opposition.
Government spending has been slashed by 4bn euros, with all public servants' pay cut by at least 5% and social welfare reduced.
Child benefit was cut by 16 euros a month, bringing the lower rate to 150 euros a month and the higher rate to 187 euros a month.
A carbon tax has been brought in, set at 15 euros per tonne of CO2.
Bad news came in September when figures showed the economy had shrunk in the second quarter from the previous three months.
NETHERLANDS
The centre-right coalition formed after months of negotiation on 8 October said it wanted to cut the budget by 18bn euros ($24bn; £15bn) by 2015.
But the new government will have to rely on the radical Freedom Party to enact legislation and there are doubts about its long-term viability.
SPAIN
The Spanish government has approved an austerity budget for 2011 which includes a tax rise for the rich and 8% spending cuts.
Madrid has promised European counterparts to cut its deficit to 6% of its gross domestic product (GDP) next year, from 11.1% last year.
Government workers face a pay cut of 5%, starting in June, and salaries will then be frozen for 2011.
A tax rise of 1% will be applied to personal income above 120,000 euros.
Smaller savings include an end to a 2,500-euro cash payout for new mothers, known as "baby cheques".
Unemployment has more than doubled - to about 20% - since 2007.
GREECE
The Greek government has pledged to end its economic woes to make drastic spending cuts and boost tax revenue in return for a 110bn-euro (£95bn) bail-out from the EU and International Monetary Fund.
It has started drawing on the bail-out money because a sharp downgrade of its sovereign debt rating made its borrowing costs soar.
The aim is to slash the budget deficit from 13.6% of GDP.
The country has started cracking down on tax evasion, and on corruption within the tax and customs service. It will also curb its widespread early retirement schemes. The average retirement age is set to rise from 61.4 to 63.5.
Under the plan to slash the budget by 30bn euros (£26bn; $37bn) over three years Greece aims to: scrap bonus payments for public sector workers; freeze public sector salaries and pensions for at least three years; increase sales tax (VAT) from 19% to 23%; raise taxes on fuel, alcohol and tobacco by 10%.
The harsh measures have triggered public sector strikes and violence on the streets of Athens.
ROMANIA
The government proposed wage cuts of 25% and pension cuts of 15% in July in order to reduce the country's budget deficit.
Romania's economy shrunk more than 7% in 2009 and it needed an IMF bail-out in order to meet its wage bill.
It says it needs to implement new austerity measures to qualify for the next instalment of the 20bn-euro ($25bn; £17bn) IMF loan.
Angry protests have greeted the cuts and Interior Minister Vasile Blaga resigned after thousands of police officers went on strike over the 25% pay cut.
ITALY
The Italian government has approved austerity measures worth 24bn euros for the years 2011-2012. The cuts amount to about 1.6% of Italian GDP
Italy aims to cut public sector pay and freeze new recruitment. Public sector pensions and local government spending are also being targeted, and there are plans to crack down on tax evasion.
Funding to city and regional authorities is expected to be cut by more than 13bn euros.
For the next three years there will be a freeze on public sector pay rises and cuts in public sector hiring, replacing only one employee for every five who leave.
Progressive pay cuts of up to 10% are planned for high earners in the public sector, including ministers and parliamentarians.
Retirement will be delayed by up to six months for those who reach retirement age in 2011.
Provincial governments serving fewer than 220,000 inhabitants will be scrapped, as will several publicly funded think-tanks.
GERMANY
The German government has proposed plans to cut the budget deficit by a record 80bn euros ($96bn; £66bn), or 3% of GDP, by 2014.
The total deficit in 2009 was 3.1%, but is projected to grow to more than 5% this year.
"Germany has an outstanding chance to set a good example," said German Chancellor Angela Merkel.
The plans include a cut in subsidies to parents, 10,000 government job cuts over four years, and higher taxes on nuclear power. The rebuilding of the baroque Stadtschloss palace in the heart of Berlin will also be postponed.
PORTUGAL
The Socialist government of Jose Socrates has announced a range of austerity measures aimed at cutting the deficit to 7.3% this year and 4.6% in 2011.
Top earners in the public sector, including politicians, will see a 5% pay cut.
VAT will rise by 1% and there will be income tax hikes for those earning more than 150,000 euros. By 2013 they will face a 45% tax rate.
By 2013 military spending will have been cut by 40% and the government is delaying the launch of two high-speed rail links - the Lisbon-Porto and Porto-Vigo routes.
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