Euroland Has No Plan B: It Needs An Urgent Recovery Plan - by Jörg Bibow

At last, the eurozone economy appears to be experiencing some kind of recovery. GDP started growing again in the spring of 2013, following seven quarters of decline, with domestic demand shrinking for even nine consecutive quarters between 2011 and 2013. Today, it is conceivable that within a year or so the eurozone might recoup its pre-crisis level of GDP, perhaps marking the end of a “lost decade”.

But it is too soon to declare victory and become complacent. The eurozone remains fragile and the recovery uneven. Having primarily relied on export demand for its meagre growth since 2010, developments in China and elsewhere in the emerging world are posing an acute threat. More recently home-grown demand benefited from peculiar tailwinds that are

emporary in nature. It is unclear at this point whether these forces will merge into a stronger self-sustaining recovery, while the likelihood of renewed and spreading political instability along the way keeps rising. It seems unwise, in fact hazardous, not to have a plan B ready at hand should growth falter once again.

Read more: Euroland Has No Plan B: It Needs An Urgent Recovery Plan

Is sun shining on Spain’s ‘Golden Visa’ regime?

Spain’s ‘Golden Visa’ scheme has been helping to bolster a recovery in parts of the country’s luxury property market.

Launched in 2013, the scheme grants Spanish residency to investors who spend at least 500,000 euros on property in the country.

It is one of several such schemes across Europe to encourage foreign investment. The UK, Ireland, Portugal, Malta and Cyprus have implemented similar programs.

“We have helped anyone who wants to come and invest in Spain, to invest capital, to boost job creation in Spain – and we definitely want that,” explained Spain’s Secretary General for Immigration and Emigration, Marine del Corral Tellez.

House prices in Spain fell by more than 25 percent between 2007 and 2013 according to the country’s statistics bureau.

In some of the wealthiest neighbourhoods – such as Madrid’s Salamanca and Passeig de Gracia in Barcelona – residential property has already recovered more than 20 percent in lost value, primarily driven for foreign demand.

Read more: Is sun shining on Spain’s ‘Golden Visa’ regime? | euronews, economy

Britain has 'Alice in Wongaland' economy - by Steven Swinford

Britain has an "Alice in Wongaland" economy in which people are taking out payday loans and raiding their savings to fuel shopping sprees.

However Ann Pettifor, of Prime Economics, warned that the improved figures were fuelled by debt and will ultimately prove to be "unsustainable".

She also warned that the government's Help to Buy scheme, under which people can take out government-backed mortgages to buy new homes, will create another "bubble".

She said: "I think it's artificial and can't be sustained. People's incomes are falling in real terms, and have done so for five years. Now there's been this sudden, go on let's just go made because everyone says its recovery.

"At a fundamental level it's quite dangerous because household debt is still 153 per cent of GDP.
"There's nothing seriously underpinning this recovery, and that's why it's Alice in Wongaland, the confidence fairy is out there."

Read more: Britain has 'Alice in Wongaland' economy - Telegraph

Automobile Industry: EU and US car industries pull out of ditch

Car industries in Europe and the United States and Europe are showing clear signs of getting back on track after severe setbacks in the financial and debt crises.

The US auto market returned to pre-crisis levels in July and the slump in European sales seemed to ease.

US car sales reached the best levels for seven years as American consumers are being encouraged by low interest rates and a boom in the shale oil and gas industry.

A closely watched indicator, the sales adjusted annualised rate (SAAR), gave a reading of 15.67 million units, allowing the sector to return to the volumes it knew before the 2007 global financial crisis that crippled the sector.

It's a stunning recovery from a deep and painful downturn which pushed General Motors and Chrysler into bankruptcy in the wake of the 2008 financial crisis and which forced the American auto industry to undergo massive restructuring.

Both GM and Ford last month reported better-than-expected results for the quarter while Chrysler inflated the earnings of its parent company Fiat.

Read more: SKNVibes | US, EU car industries pull out of ditch