KEY WEEK FOR BOTH DOMESTIC AND EURO ZONE ECONOMY - The French President Nicolas Sarkozy and German Chancellor Angela Merkel will meet later today to outline joint proposals to put to a December 9 European Union summit, seen as make-or-break for the currency union. Tomorrow, the US Treasury Secretary Timothy Geithner kicks off his European visit in Germany to meet ECB President Mario Draghi and German officials. He will join EU leaders later in the week.
At home, the Minister for Public Expenditure and Reform, Brendan Howlin, will today outline €1.4 billion worth of cuts to spending programmes as part of Budget 2012, which is being delivered over two days
Markets analyst Paul Sommerville says the week ahead will be a busy one for both the domestic economy and that of the euro zone. The ECB meets on Thursday and Mr Sommerville says that most analysts are expecting that euro zone interest rates will be cut again by 25 basis points after the world's main central banks last week announced a co-ordinated move to increase liquidity in the banks. He says the central banks carried out similar efforts in late 2007 and also in October 2008 as it tried to fend off a credit crunch. He predicts that the ECB will be given more powers to buy Italian and Spanish bonds in greater amounts in an effort to solve their debt problems.
Ahead of today's Budget, the analyst says that he would really like to see Joan Burton's speech as her Social Welfare Department will bear the brunt of cuts, although he notes that the Government seems to have pulled back from any cuts in child benefit cuts. He also says that he was disappointed with Taoiseach Enda Kenny's announcement last night that he was cutting to cut 50 quangos. He says this is not reform but simply a process of name changing.
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MORNING BRIEFS - Greencore this morning confirmed that it is no longer engaged in any discussions regarding a potential offer for the company. Greencore had said in October that it had received an approach which may or may not lead to an offer for the company.
*** The US Federal Reserve, along with the 17 euro zone national central banks, may help to provide the International Monetary Fund with funds that could be used to help countries in debt, according to a German newspaper today. Die Welt says euro zone central banks could pay at least €100 billion into a special fund that could be used for programmes for countries struggling to control their debts. The US Treasury Secretary Timothy Geithner will discuss the idea in the coming weeks when he visits Europe, the newspaper says.
*** A new report from NCB Stockbrokers shows that activity in the services sector in November grew again - this marked growth for the eleventh month in a row. The services sector expanded at the sharpest pace in nine months last month, as new business orders reversed a six-month decline. NCB says this growth is expected to continue as the new business index performed strongly. NCB says that while things in the euro area are extremely weak, it is encouraging to see that the US continues to muddle through and this likely explains the relative strength of Irish services companies.
*** On the currency markets the euro is trading at $1.34 and 85.8 pence sterling.
