Important News For Europe

OK I’m pushing the point quite hard here, but what I want to emphasise is that a European blog in a global world has a pretty broad reach. The latest round of US employment figures are in, and they are nowhere near as pretty as everyone (including even me) was expecting. Over 400,000 people stopped looking for work due to the fact they considered the jobs weren’t available. The most important thing is that manufacturing industry is expanding production without hiring, in fact jobs were lost, while hours worked went down not up as they should have if the recovery was really gathering momentum.

So the situation is extraordinarily complex, the big Asian wheel keeps on rolling, the US turns round and round but not quite quickly enough, energy leaks out of the system, and we here in Europe catch the backdraft. Which means that today the euro touched another record high of $1.2868 before falling back slightly. Economics as they say is not a zero sum game, so among the possible results are both win-win, and lose-lose. America’s discomfort is not our great opportunity.

Meantime back over here the Parmalat scandal trundles on with the Bank of America offices in Italy being raided, and Grant Thornton expelling its Italian business – which currently has two of its partners in prison – from its global network.

Investigators raided Bank of America’s offices in Milan on Friday morning in a further extension of their probe into Parmalat after two partners of accounting firm Deloitte were formally placed under investigation………

Investigating magistrates also extended their net on Thursday to include Luca Sala, a former Bank of America official who resigned last summer to become a consultant to Parmalat.

Underlining the reputational threat posed by Parmalat, Grant Thornton on Thursday night expelled its Italian business from its global network. The unit had audited up to 49% of Parmalat’s assets.

Grant Thornton, a medium-sized firm, is desperate to limit the fall-out from the Parmalat affair.

David McDonnell, head of Grant Thornton International, said it had “lost confidence” in its Italian business, two of whose partners are in jail.

“Grant Thornton [Italy] has been unable to provide sufficient assurances or access to the appropriate information and people in an acceptable timeframe,” he said……

Magistrates in Parma also placed under formal investigation Angelo Ugolotti, a Parmalat employee whose duties involved overseeing the group switchboard. Mr Ugolotti appears to have been used as a front man on the board of up to 30 group subsidiaries.

The Ansa news agency reported Mr Ugolotti had no knowledge of his additional positions, and said he would now seek back pay.

In Luxembourg a magistrate said investigations had been opened into possible money laundering by Parmalat.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

One thought on “Important News For Europe

  1. “The Ansa news agency reported Mr Ugolotti had no knowledge of his additional positions, and said he would now seek back pay.”

    That’s funny.
    Straight out of the Little World of Don Camillo, almost.

    But sure, the more the merrier, in the long line of Creditors.

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