The situation in the EU is fixed thus at least according to some European leaders. But last figures show us that the most powerful motor of the EU economy – Germany is slowing down and could face recession. It has still 0.7% growth of GDP but public sector was one of the biggest contributors to the growth which is definitely not sustainable. And it is nothing surprising because German export economy is dependent also on the situation in the rest of the EU which is not very optimistic. This did not leave anyone cool of course and Euro Group Chief Jean-Claude Juncker uttered that the euro exchange rate is dangerously high which caused immediate decline in the rate. And we need not be very surprised once again. As Russian central bank representatives mentioned the world is heading into the new era of currency wars. Japan is devaluating its yen against US dollar, US dollar tries to be weakest currency and Euro group must react. Because if European export falls down (meaning German one) we will not see any growth and all hopes for saving the Euro disappears. But currency wars end in permanent devaluation and inflation. The other option is strong currency, meaningful taxes, less public spending and better regulation – German way after the WWII.

Desperate and unemployed Greeks cut public woods to heat up their homes. Yes it is a reality of the Greece and some parts of eastern Slovakia where Roma people live. But it is not only feature of these particular countries. It starts to be a normal behavior in Germany as well. It is the consequence of the last trend. Many Germans bought heating devices that burn wood and coal which caused higher prices of the raw material. More and more Germans are cutting trees in the woods now to save some money.

Spain PM Mario Rajoy swore to God that Spain will need not any more help for their banking sector. He states that the Spanish banking sector had revealed all of their troubles and provided to public a “complete striptease”. He probably meant some kind of catholic striptease where nothing is shown just hair and face because everybody expect that the deterioration of housing prices break the neck of Spanish banks and high unemployment and rigid working code break neck of Spanish economy. And surprisingly because nobody expected that … Greek economy will need more help from euro partners according the IMF Friday´s report. IMF estimates that the country will need something between €5.5 to €9.5 bn. I think that we could double it just for sure, for better tomorrows and for peace on the earth right now. It is not only Gerard Depardieu who is escaping from France. Banque de France data shows some capital outflows from the country in October and November worth € 53 bn. close after the tax hikes in the country. Hollande government is on successful road to hell.

Bank of Japan is prepared for easing of its monetary policy and we will see today what it will mean exactly. Country leader Mr. Abe asks for more inflation to boost the economy. Some prices already reacted on the call especially gasoline one. The price has climbed 4.5 yen, or 3%, since late November, when the yen’s downswing started.

Fitch warns the US that it could lose its triple “A” status because of the situation about the Fiscal cliff. More than half of Republicans inclined to the idea of the temporary government shutdown at the beginning of the previous week unless Obama aggress to dramatic cuts. But they changed mind at the end of the week. Republicans revised their strategy and decided to agree with a three-month debt-limit increase without demanding spending cuts. They want to use time to spell out their spending cuts proposals to Democrats. Republicans also plan to block salaries for members of Congress if the House or Senate will not adopt budget by the end of the proposed debt-limit increase. So we will see what they come up with next week.

Matúš Pošvanc