here is no credit crunch in Europe and the International Monetary Fund has been too pessimistic in its growth forecasts for the region, a senior Banque de France official said on Tuesday. "Today in Europe there is no credit crunch," Jean-Pierre Landau, second deputy governor of Banque de France, told a European Parliament hearing on hedge funds and private equity. Landau, speaking in a personal capacity, said the IMF growth forecasts for the euro zone and Europe were too pessimistic as they had taken into account risk from financial market turmoil. "That should have been dealt with ... separately," Landau told the EU assembly's economic affairs committee. The IMF has cut its estimate of euro zone 2008 economic growth, a source familiar with the matter told Reuters last week. The IMF will say on April 9 that it now forecasts the economy of the countries using the euro to grow less than 1.3 percent this year, down from a previous forecast of 1.8 percent published in January, the source said. Attempts through the use of securitisation to spread risk throughout the market in recent years have turned out less effective than thought and it has ended up concentrated in big banks, Landau said http://www.reuters.com/article/privateEquity/idUSL0880701620080408 We have no credit crunch in France, that is why we have Jerome Kreviel ! He is in control of credit markets after messing up stock markets...
EUR/USD: Reluctant Traders Mull Cracks In European Facade Tuesday, April 08, 2008 12:24:00 PM New York, April 8th. With virtually every European politician insisting that Europe will not enter a recession, and that "Europe isn't the US", US traders are mulling some overnight cracks in the European facade that give food for thought. The Spanish government is responding to the collapsing housing market with a US style mortgage repayment relief and fiscal stimulus package, priming the pumps with a stimulus package worth E22bn, or roughly 0.5% of GDP according to analysts' reports. Spanish Prime Minister-Elect Zapatero is waiting for parliament to approve his nomination later this week, and promised to "take measures to counter the economic slowdown" immediately. In Paris there was another night of rioting with police being forced to use tear gas to suppress high school students protesting cut backs in school budgets and teacher layoffs. The layoffs are necessary to get France's bloated budget below ECB guidelines by 2010. Traders note the growing strains in the EU and wonder just how long EUR/USD can defy gravity, last 1.5697.