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Economy

Bad Or Worse? Gauging Europe's Economic Prospects For 2012

Analysis: Looking ahead to the next 12 months, European business leaders are hoping the current economic slowdown will be more manageable than the crisis four years ago. Fear of a worst-case scenario, however, is part of everyone's calculation.

A Pétroplus refinery in Petit-Couronne, France
A Pétroplus refinery in Petit-Couronne, France
David Barroux


LES ÉCHOS/Worldcrunch

PARIS – The year 2012 has just begun with one grim question: is it going to be "just" a tough year...or an awful one?

On paper, businesses have much to worry about. France has already entered a recession, the rest of the world seems to be slowing down, the euro zone is on the verge of imploding, and the multiplicity of elections taking place in 2012 is likely to paralyze public action in several countries. Seldom have the drivers of businesses had to find their way in so thick a fog: visibility is almost nil, obstacles are everywhere and a collision is bound to occur. In the end, the only unknown variable is the violence of the inevitable accident.

Companies are cautiously gearing up for the crash. For several months now, they have opted for a freeze on hiring, delayed investments, and put major acquisition projects on hold. Companies are now sporting their "crisis management" cap. But like a self-fulfilling prophecy, this cautiousness from our captains of capitalism may well have a morose impact on an already grim situation.

Still, it looks like companies are actually better equipped to face the storm today than in they were in 2008. First, because they have anticipated it and are therefore able to reduce their inventories. But there is also the hope this time that the economic machine is simply slowing down, rather than about to jerk to a sudden stop.

Don't look for state help

Let's be clear: not all groups are going to come out of 2012 unscathed. The current situation of Petroplus, Europe's largest independent oil refiner, shows it: those who step into this economic crisis without having overcome their structural problems will be the first victims. And unlike previous crises, CEOs must be aware that politicians will not be able to help them much this time.

In 2008, faced with a sharp economic downturn and the disruption of banking and financial markets, European governments played their part as economic firefighters. But today, the firefighters themselves are in debt, naked and vulnerable. What companies fear is not only that governments are not able to finance potential measures to relaunch the economy, but that the European states in particular are unable to extinguish the monetary fire still that is still burning.

In 2008, companies had to face failing money markets; let's hope that in 2012 they won't have to deal with the disappearance of a currency. Many would not be able to survive the blow.

Read the original article in French

Photo – zigazou76

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China

How China's Mass Protest Took The World By Surprise — And Where It Will End

China is facing its biggest political protests in decades as frustration grows with its harsh Zero-COVID strategy. However, the real reasons for the protests run much deeper. Could it be the starting point for a new civic movement?

Photo of police during protests in China against covid-19 restrictions

Security measures during a protest against COVID-19 restrictions

Changren Zheng

In just one weekend, protests spread across China. A fire in an apartment block in Urumqi in China’s western Xinjiang region killed 10, with many blaming lockdown rules for the deaths. Anti-lockdown demonstrations spread to Beijing, Shanghai, Wuhan, Chengdu and other cities. University students from more than half of China's provinces organized various protests against COVID restrictions.

Why and how did the movement spread so rapidly?

At the core, protesters are unhappy with President Xi Jinping's three-year-long Zero-COVID strategy that has meant mass testing, harsh lockdowns, and digital tracking. Yet, the general belief about the Chinese people was that they lacked the awareness and experience for mass political action. Even though discontent had been growing about the Zero-COVID strategy, no one expected these protests.

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