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OPINION

SEVEN DAYS: 11 January 2013

SEVEN DAYS: 11 January 2013
January 11, 2013
SEVEN DAYS: 11 January 2013

EU're not working

Jobless record

The number of unemployed in the eurozone has reached a new record high of 11.8 per cent of the eurozone workforce in November. Across the European Union as a whole, 26m people were out of work in November, or 10.7 per cent of the workforce. Of even more concern was the statistic that showed 24 per cent youth unemployment in the European Union. The periphery countries remain worst hit, with Spanish unemployment up to 26.6 per cent in November. Meanwhile, European commission president Jose Manuel Barroso this week declared that the existential threat to the euro was over.

Samsung soars

Galaxy drives record

Korean electronics giant Samsung has posted record financial figures after the storming success of its Galaxy SIII smartphone. The phone, pitched as the top of the range Android-based handset, has been enthusiastically received as an alternative to Apple's iPhone since its launch and has helped boost sales of Samsung's suite of smartphones to the region of 60m in the final quarter of 2012. Fourth-quarter revenues rose by 18 per cent and operating profits were 89 per cent higher. The next iteration of the Galaxy S series of smartphones is expected in the second quarter of 2013.

$20bn bill

US banks hit

The embattled US banking sector took another hit this week in its long road to redemption when a number of US lenders agreed to pay out compensation totalling $20bn (£12.5bn) in settlement of claims of bad loans arising from the mortgage crisis. Hardest hit was Bank of America, which paid out $11.6bn to mortgage lender Fannie Mae to compensate for bad loans. Bank of America was also among the 10 banks that agreed to pay $8.5bn to regulators in the US against claims that they had misused the foreclosure system which allows banks to claim homes from defaulting mortgage holders. At the same time, European banks were given a lift as regulators pushed out a date for the implementation of Basel III liquidity rules from 2014 to 2019 and also loosened the way the liquidity ratio is calculated.

What worries you?

Eurozone warning

The World Economic Forum has published its Global Risks 2013 report, which highlighted the continued threats to the health of the global economy, saying that the risk of systemic financial failure has not yet receded with the eurozone still at particular risk of implosion. The report takes the views of 1,000 experts and business leaders on the biggest threats to the world, producing a list of 50 key risks for the next decade. For the second successive year, the biggest risks were identified as the growing gap between the rich and the poor and burgeoning government debt. Recent severe weather events were also highlighted, with rising greenhouse gases leading to environmental change seen as the third-biggest threat.

Triple trouble?

Threat remains

Trade figures for November have done little to dispel fears that the UK economy could yet slip into a 'triple dip' recession. The UK's goods trade deficit shrank to £9.2bn in the month, from £9.5bn in October, although the reduction was smaller than expected. Exports to Europe rose, but remain well behind their levels of the previous year. The main concern came from a widening in the trade deficit to non-EU countries, which suggests exporters are gaining no traction with other regions, a factor that had been expected to contribute to the improving picture. Added to the shrinking in the services sector reported earlier this month, the overall health of the UK economy appears to be deteriorating once more.

Less black gold sold

US demand falls

The US will import less oil in 2014 than at any time in the past quarter of a century, according to forecasts from the Energy Information Administration. Demand for imports is being squeezed by a combination of increasing domestic production and slower growth in overall demand. The US has experienced a boom in domestic production of natural resources in recent years as technology for extracting more oil including unconventional sources of oil extracted through fracturing and horizontal drilling. The International Energy Agency has predicted that the US will overtake Saudi Arabia and Russia as the world's single biggest oil producer by 2020.