Sweden’s central bank announced today they were dropping their prime rate a half a point to 1.5% and their growth forecast right along with it. Many investors expect Europe’s central bank to follow suit although they’ve said they have no plans too.
The Riksbank of Sweden operates independently of Europe’s bank because they’ve not adopted the euro. This drop underscores the slowing economy that’s hitting the rest of Europe. Sweden remains one of the stronger economies in all of Europe for the last decade.
These issues have also driven up the value of the Euro against the U.S. dollar. Today in currency trades, the U.S. dollar dropped against several currencies besides the euro including the Swiss Franc, the British pound sterling, the Japanese yen and the Canadian dollar.
Europe’s economy has been slowing down tremendously. Some nations, like France are reeling from double-digit unemployment and many critics say Europeans will need to change their whole outlook to be able to compete in the world market.
According to the Telegraph, France’s finance minister, Thierry Breton, lowered his growth forecast from 2.5% to just 2%, adding that 2% had ”become a ceiling rather than a floor”. Sales of manufactured goods were down 0.9% in May.
Mr Breton said the French people had been “living beyond their means” for 25 years, leaving the country saddled with debt.
In a broadside against the country’s holiday and leisure culture, he said it was time for the French to face up to the realities of the world economy and put their shoulders to the wheel.
“It’s indispensable that we permit those who want to work longer to be able to do so,” he said.
This also underscores the problems the EU has had lately in a multitude of issues. Right now, the Union has been torn asunder by conflicts over the budget with France and Britain jousting over rebates and farm subsidies.
France and the Netherlands also failed to ratify the EU constitution as several new nations prepare to enter into the ever-growing confederation. Some nations, like Turkey seem to be on the “wait and see” track of membership as questions about an Islamic country joining the EU continue to arise as xenophobia starts become apparent.
John Stith is a staff writer for Murdok covering technology and business.
