European economic growth, already slowing as exports dwindle and stocks slide, may grind to a halt in the wake of yesterday's terrorist attacks on the US, analysts said.
European companies sell 14 percent of their exports to the US. Disruptions to business and the shaken confidence of consumers in the US may mean the economy there will shrink in the third quarter for the first time in more than eight years, increasing the possibility of the first recession in a decade.
"The timing could hardly be worse given that fears of US and global recession were already rife," said Mark Cliffe, global head of economics and strategy at ING Barings in London.
Interest rate futures contracts in Europe rallied as investors bet central banks will lower benchmark lending rates to counter the threat of recession. The rate on the three-month euro contract for September settlement dropped 13 basis points to 4.08 percent in two days, below today's three-month money market rate of 4.24 percent.
Central banks moved to reassure markets. ECB President Wim Duisenberg told the European Parliament: "The ECB and the national central banks are standing ready to support the normal functioning" of financial markets if the need arises.
The Bank of Japan added an extra ?2 trillion (US$16.8 billion) to the money market. Other Asian central banks pledged to defend their currencies and provide cash to keep markets functioning. The Swedish central bank said it had "increased its emergency preparedness."
In the US, Federal Reserve Governor Edward Gramlich said yesterday that "If credit is needed to make transactions go, the Fed will provide it."
Sales may decline at such airlines as British Airways Plc and Air France SA. The attacks raised expectations that executives will cancel travel arrangements and limit air travel for some time to come. Conferences in European cities from Barcelona to Stockholm were scrapped.
Shares in British Airways fell 21 percent yesterday. European stocks fell on concern that consumer confidence and economic growth will suffer as a result of the attacks. The Dow Jones Europe Stoxx 50 Index dropped 1 percent, or 30.86 points, to 3147.37 after shedding 6 percent of its value yesterday.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique