IT IS ironic that as eurozone fringe players Spain and Ireland have come out of recession, and Greece is heading that way, the economic bedrock of the bloc, Germany and France, are sending out worrying signs. The Greeks probably have a word for it – schadenfreude-opolis?
The French government has slashed its forecast for growth in half to just 0.5 per cent after that country’s GDP stagnated for a second consecutive quarter, while Germany’s economy shrank for the first time since the end of 2012.
It will do little to persuade people that the socialist French government can push through necessary public sector reforms. And the German setback for the eurozone’s wider health is like a football team losing its linchpin attacker to a troublesome Achilles injury.
A triple-dip eurozone recession? Too early, probably, to panic on this possibility. But, particularly with the economic repercussions of the standoff in east Ukraine still uncertain, the latest data will concentrate a few minds at the European Central Bank.
The data from the two countries that are the joint political and economic motor of the trading bloc is also not good news for Britain, with 40 per cent of our exports normally heading there.
Construction of a costcutting case…
IF YOU don’t succeed, try, try again. Undeterred by two spurned takeover approaches, construction group Carillion has come back with a third for British rival, Balfour.
The two groups obviously cannot agree on strategy – Balfour walked the first time because Carillion insists it cancel the planned sale of its US engineering and design business – so now the suitor has got down to the brass tacks of cost-cutting benefits. That and the first public promise of a special divi for Balfour shareholders.
Carillion reckons it can deliver £175 million in synergies, a figure that will not be new to Balfour’s big institutional shareholders because the suitor has been talking to them this week. It reckons they can be delivered through closing one of the head offices, in back office, support functions, IT, the supply chain, and, not to put too fine a point on it, using Carillion’s “lean” operating structure (suggesting it believes Balfour to be a bit on the flabby side).
But it is too early to herald happy endings for the mooted deal because Balfour said yesterday that it had serious reservations about whether that level of costsavings could be achieved.
The parties cannot agree on strategy or synergies, then. Apart from that, it is a marriage made in heaven.