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Uniquely Recent Financial News

Unsurprisingly, the European Central Bank (ECB) left unchanged Thursday, April 4 its key rate, the barometer of the cost of credit in the euro zone, to 0.75%, its lowest level in history, which he parked since July 2012.

This decision was expected by economists, despite disappointing economic indicators remain in the eurozone, the Cyprus crisis and inflationary risks are receding. But the confession of ECB officials, a new rate cut would have little effect in supporting the economy of the euro area.

Read also: The ECB pressed to take action on renewed concerns in the euro zone


Despite its accommodative monetary policy, credit to the private sector remained depressed in the region (- 0.9% in February year on year), and the situation is particularly critical for small and medium enterprises (SMEs) countries in difficulty, access to credit continues to tighten.

“The weak economy continued in the beginning of the year. A gradual recovery is expected in the second half of the year, but subject to downside risks,” warned Thursday the ECB president, Mario Draghi, during his monthly press conference in Frankfurt, stressing that the ECB will continue its accommodative monetary policy as long as necessary.

In addition, Mr. Draghi said that the ECB was considering “various tools” to support additional euro area, suggesting that his institution would also seek to learn from the experience of other countries.

Read: In southern Europe, the credit crunch strangling SMEs (link subscribers)
New monetary status quo for the Bank of England

The Bank of England (BoE) has unsurprisingly held Thursday its key rate at 0.5% and left unchanged at 375 billion pounds total of its program of asset purchases at its monthly monetary policy meeting .

The total amount (375 billion pounds, 442.5 billion euros) program of asset purchases – said of “quantitative easing” – the institution was raised in July of 50 billion pounds, a slice exhausted early November.


Federal budget cuts: what impact on medical innovation?

Since 1 March 2013, the United States entered the era of “receivership”, that is to say the gel, if the budget cut. Without political agreement to reduce the U.S. federal spending, cuts blind under the agreement of August 2011 between the White House and Congress are actually in force.

The mechanism gives partly because funding for federal agencies, including that of the “Food and Drug Administration” (FDA) and the “National Institute of Health” (NIH). This situation could profoundly change the outlook of the biopharmaceutical industry in the United States by impeding reforms to modernize the FDA and weighing on the employment situation of researchers, not to mention the impact of the new public health policies. The purpose of this paper is to examine these issues.

1. An impact on the functioning of federal agencies …

The FDA budget would decline by about $ 210 million for fiscal 2013, which represents approximately 9% decrease from the budget of the year 2012. To offset the effects of the cut, the organization seeks to find new sources of funding. The question of “Prescription Drug User Fee Act” (PDUFA V) and quite naturally comes to the front of the stage. [1] This law, first enacted in 1992 and renewed in early 2012, allows the FDA to impose substantial costs on companies that submit an application for authorization to market a new drug. In return, the FDA is committed to maintaining high efficiency standards during the evaluation procedure. PDUFA, which is the subject of a broad consensus within the biopharmaceutical industry, also strictly regulates the financial relationships between the Agency and the pharmaceutical companies. [2]

Like the majority of funding for federal agencies, the PDUFA is subject to the constraints of budget cuts. The fees related to PDUFA that can be spent by the Agency is thus limited. In this context, the Obama Administration Urges Congress to exclude the PDUFA receiver to allow the FDA to use all of the funds paid by enterprises. FDA and recover the sizeable budget of 36 million dollars.

The FDA, however, remains less severely affected by the consequences of budget sequestration. If the organization has indicated that at present he did not intend to put its staff layoffs, many observers expect layoffs. We naturally think to many contractors. For its part, the White House believes that the decline in resources allocated to agencies resulting in numerous delays and disruptions. This is the case of the evaluation of matters entrusted to the FDA.

Reform the FDA mentioned in several newsletters [5] and considered crucial to the future of the pharmaceutical industry in the United States, is also seen highly questionable, as the implementation of the Action Plan in Science regulatory launched in summer 2011. Budget cuts could ultimately threaten the competitiveness of the U.S. pharmaceutical industry, especially through delays in the approval of new drugs.

2. … Research …

White House considers therefore that the job losses researchers are mechanically induce delays in the development of new drugs. But this is not all. The same source gives a figure of 12,000 students and researchers who suffer the consequences of these cuts. [3]

Jon Retzlaff, managing director of science policy and government affairs for the American Association for Cancer Research, said in an interview with “FierceBiotechResearch” that not only cuts will jeopardize the development of new cancer therapies for the benefit of patients, but they will also challenge the dominance of the country’s medical research [3].

Sequestration budget is therefore a positive break for innovation in the field of health. Since ten years, important medical innovations were developed. Include authorization to market by the FDA for treatment against MDR-TB infection ranked second most deadly in the world. The FDA has also approved the first drug (Truvada) for HIV prevention targeting high-risk individuals [4]. Finally, we learned the week of March 4, thanks to a groundbreaking study funded by the NIH Mississippi a young child was cured of HIV, the virus is no longer detected [6].

Sequestration budget will therefore have a significant impact on scientific and medical research, particularly on the federal budget allocations to the NIH. According to recent estimates, the NIH, like other government agencies, should reduce its budget by 5.1% now, which represents a loss of approximately $ 1.6 billion. This means that the NIH will lead to decrease of 2,000 (out of 50,000) the volume of appropriations for research units [3].

An analysis conducted in February by the Federation of American Societies for Experimental Biology (FASEB) has calculated the impact of budget cuts on the NIH each state. Three states, California, Massachusetts and upstate New York could lose more than $ 100 million each. [3] This assessment is similar to that of Thomas Levenson, a professor at the “Massachusetts Institute of Technology” (MIT), who recently declared in an editorial in Scientific American that budget cuts would cut the annual research budget of the MIT $ 40 million. The impact is especially strong when we know that the MIT 95% dependent on the federal government.

3. … and health policies

Cuts in the program “AIDS Drug Assistance” (AIDS) could prevent 7,400 patients have access to treatments against HIV. Similarly, in the “Centers for Disease Control” (CDC) who receive state subsidies, is expected to be 42,400 HIV tests less. On a similar amount of 450 million cut in the budget for this year CDC would have the opposite effect to that sought in public health as disease prevention is the most effective economic to reduce health care costs in the long term.

According to Dr. Christopher Pace, infectious diseases analyst for “GlobalData” (business intelligence), chronic infections also suffer an increase due to the cessation of prevention programs because “these chronic infections require treatment to life can become expensive “. [3] “These cuts should not have a major effect on the market of HIV therapy, but the cuts could push suppliers to sell at a lower cost treatments, which would decrease the demand for high value-added processing and costly as “Stribild” Gilead, “said Dr. Brad Tebbets, a team member of GlobalData infectious diseases.


Budget cuts currently being implemented could have significant consequences on the sector of biopharmaceutical research apméricaine. Thus, the challenge to reform the FDA and declining resources allocated to the agency may increase the time come assessment procedures for placing on the market of new drugs. In addition, job losses in the research, which remains largely irrigated by federal funds, and the new policy gives public health tend to create an environment less favorable to the current innovation in the biopharmaceutical industry.


Restructuring industrial solar claimed victims in the United States and around the world

In recent years, the solar PV market has experienced phenomenal growth, but also industrial resounding disappointment. Structuring and reconfiguration of the solar industry impact the economies of the world, and the turmoil of recent months experience in Asia, Europe and the United States.

The Chinese government has long dumped sun. Several complaints have been filed in Europe and the United States under the guise of unfair competition [1, 2], and anti-dumping measures U.S. have been put in place in order protectionist [3, 4], with a relative effectiveness. In the last five-year plan, Chinese officials announced a policy of investment of tens of billions of dollars in a sector seen as highly strategic. [5] The Chinese government economic intervention to fill gaps national solar companies led to a gross imbalance on the world stage today, the country has a hand on the chain crystalline photovoltaic modules. A great blows of consolidations, some Asian players now command of standard technologies: in 2013, the ten largest manufacturers of solar panels, five are Chinese. [6]

The war continues in the solar world
Credits: MS & T source Fotolia

And subsidizing its solar industry, the Chinese government maintains a massive overcapacity of production to enable its companies to export at low cost. Consequence: this overproduction has driven prices down dramatically, up to 75% in three years in some countries. Currently, photovoltaic module sells for around $ 1 per watt generated and photovoltaic (that is to say, the PV modules, the mounting bracket, cables, etc.). $ 2 per watt, almost double against ago three years [6]. This aggressive policy, which challenge the regulatory framework of international trade, causes few months the fall of the major players in the solar industry around the world, including the United States. If the pillars of the sector as Q-Cells in Germany, bought by South Korean Hanwha scored minds in Europe [7], other names such as Solyndra, Abound Solar and Miasolé have made the American newspapers, and multiple companies in Silicon Valley experiencing or have experienced increased competition eastern solar products [8]. Most of these American companies are now bankrupt, display real hardship or suffering from a lack of liquidity for growth (the only venture capital funds in this area are now primarily based in Shanghai and Singapore) : some have been recently acquired (Miasolé for example) or are approached by redemption funds or companies of Chinese origin. Germany, Bosh announced its withdrawal from the end of March the solar sector, claiming to be unable to make this competitive industry. [9]

What is the U.S. position in the tumultuous solar paradigm? In 2011, the U.S. federal state had guaranteed a loan to Solyndra to the tune of $ 535 million before the structure goes bankrupt, causing a major scandal [10, 11]. In January 2013, the Chinese group Hanergy Miasolé bought for $ 30 million: the company had also received a loan guarantee of up to $ 100 million from the U.S. Department of Energy. Following these setbacks (and the redemption of a portion of the U.S. industry by Chinese entities, including California), the U.S. government seems unwilling to fully engage in strategic support direct order on industrial the solar industry in an economic battle that already seems wrong committed. If the awareness of the economic battles around (for example) issues of cyber security is real, it is not true for some industrial and manufacturing sectors yet strategic, especially when they affect access energy. However, efforts have been made to try to weaken the predominantly Chinese taxing materials from China [3, 4], and new initiatives such as the Clean Energy Manufacturing Initiative (CEMI) to future innovations are focusing on sector and U.S. competitiveness in the global market. [12]

Recently, the reconfiguration accelerated solar sector also concerns the Chinese market. Suntech Power, the former world number one in the production of photovoltaic modules, has declared bankruptcy [13, 14] in particular following a financial scandal. [15] If the Chinese government should support local short-term losses of the company to maintain the activity, it is unlikely that public support is sustainable over the long term: the sale of intellectual property and assets of the company is considered . Suntech Power was one of the few Chinese companies to advocate innovation and open a production plant in the United States, where local competitors prefer direct observe the evolution of the market in the medium term. Other producers giant Chinese solar panels are also state losses for several quarters. Since mid-2012, Beijing is working to bring order in a domestic market where solar players are too many, and has publicly announced its massive support for mergers and acquisitions in the sector. [16]

What are the consequences of the fall of Suntech in the United States? Once again, the decline of a global player, in addition invested in solar output U.S. National (factory in Arizona mentioned above was partly funded by the stimulus of 2009), is indicative of the fragility and complexity of the global solar industry. Logically, Suntech Power announced the closure of its American operations and the dismissal of 42 employees. [17] This setback does not serve the research investment in the means of production technologies in the United States: it is a fact that, despite recent initiatives such as the CEMI will be difficult to change in the short term.

The key to future battles solar is obviously in the innovative capacity of the sector. If Chinese manufacturers that inhibit innovation by breaking the price of silicon, however, they do not want to miss the turn: Hanergy bought the American and German Miasole Solibro, two specialists in CIGS cells, an alloy of copper, indium, gallium and selenium, which is currently the rising star of thin layers (often considered the second generation of solar photovoltaic) [18]. Europe (including France) and the United States also florets research on CIGS. I bet that Western know-how will rebalance the medium term solar market heavily focused on the production of Chinese origin.

A boulder in the road to recovery from Spain

*Standard & Poor’s believes that there is a 40% chance that the eurozone into recession
*The ECB calls “devastating blow” the S & P cut Spain and eight other EU countries
*Montoro: “The downgrade of Standard & Poor’s coming back, but you have to react”
*Merkel believes that the reduction of S & P increased pressure to approve the fiscal pact
*A massive attack of S & P to the EU hit Spain and triple knock the French

Overacting and wrapped with a grandiose staging, S & P on Friday struck a resounding right hand to the struggling eurozone. Although the credibility of rating agencies is under surveillance, their decisions still cause devastating effects on economies to punishing and, on many occasions, only serve to put more land in a deep hole. The Spanish Government has ensured that there is only “work” to reverse the effect of this “inheritance” poisoned but Spain certainly felt the blow from different angles.

More expensive funding

As a first effect, the State will be more difficult to place its debt, both in volume and price. Just remember how markets affected the mere rumor of the reduction-the Spanish bond differential with Germany rose 16 basis points in just a few hours to understand that the degradation of two steps is a potent fertilizer distrust. Bad news after placement confirmed Thursday that investors were beginning to recognize that the duties were already doing, and with good handwriting.

Deferred growth

To finance the extra cost could have an unwanted side effect: aggravate the recession that all experts predict the coming months. With limited debt capacity, economic recovery policies would be delayed. Supported now by the artificial respiration of the ECB, banks and savings banks will also have even more problems for financing in the market, which ultimately condemn the dry hole credit.

Widespread contagion

The sales of “rating” are never alone. After the degradation of a country’s debt in a few weeks general reduction occurs at other administrations and companies. “It is a metastasis to hit across Spain” José Carlos Díez statement, chief economist InterMooney. In addition, other agencies often take note of the way and end up opening their own advertising sales.

Added pressure

The pending reforms in our country will be accelerated, while the consensus range. And we must not fail in the shot. S & P warns in its report on Spain that if the new labor market legislation is not satisfactory there will be new and upcoming sales. The message, both in Madrid and in Brussels, should be firm, because as recognized by Jose Luis Martinez, an analyst at Citi in Spain, this financial and economic crisis, “but also political.”



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