Europe's single currency

A decade on from the decision to launch the euro

Ten years after the EU's historic decision to adopt a single currency, the European Commission has presented a detailed analysis of the euro's experience to date and launched a debate on how to address the challenges likely to be faced over the next decade.

In May 1998 European leaders agreed to introduce the euro in 11 countries at the start of 1999. Although euro banknotes and coins did not make their appearance until 2002, economic and monetary union (EMU) started in 1999 with a single exchange rate and monetary policy run by the European Central Bank (ECB). A decade later, the euro zone embraces 15 members with a total population of 320m, greater than that of the US. ...

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Gloves off in Lebanon

New clashes between the government and Hizbullah

Lebanon has taken another lurch towards civil war, following the most serious conflict thus far between the government of Fouad Siniora, the Western-backed prime minister, and the opposition, which is led by Hizbullah, the Shia political and military movement backed by Iran and Syria. Developments in Lebanon could have significant regional implications, as any move by Hizbullah to extend its physical control over large parts of the country, notably including Beirut's international airport, would be likely to elicit a strong reaction from Israel and from pro-Western Arab states. Hizbullah's leader, Sayed Hassan Nasrallah, has reiterated his assurance that the group will not use its weapons against other Lebanese parties, but the scope for any political resolution of the conflict has perceptibly narrowed.

Hizbullah and its principal ally, the Free Patriotic Movement (FPM) of Michel Aoun, a Christian former army commander, started their campaign against the Siniora government at the end of 2006, with the ostensible aim of forcing a redistribution of executive power in favour of the parliamentary minority. Behind this argument about cabinet seats lay a number of bigger questions: the position of the Shia in the Lebanese political system; the role of Hizbullah's armed forces; Syria's interest in reasserting control over Lebanon and in subverting the operations of the tribunal on the assassination of Rafiq al-Hariri, a former prime minister; and Iran's ability to project its influence through regional allies. ...

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[Source: The Economist: News analysis

The week ahead

What may be in the news

? DEMOCRATS in Pennsylvania have their say about who the party's presidential candidate should be when the state holds its primary election on Tuesday April 22nd. In the six weeks since the last contest in Mississippi Hillary Clinton and Barack Obama have made gaffes over Bosnian snipers and free-trade agreements (Mrs Clinton) and race-baiting pastors and ?bitter? voters (Mr Obama). Mrs Clinton is expected to win the vote on Tuesday. If not, it will spell the end of her campaign.

For background see article ...

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[Source: The Economist: News analysis

Merrill Lynch announces job cuts after $2 billion loss

Merrill Lynch, the investment bank, posted a loss Thursday and announced that it would lay off about 2,900 additional workers. Including about 1,000 jobs already eliminated this year, the company's work force is to shrink by 10 percent, or about 4,000 jobs, over the course of 2008.

The bank reported worst-than-expected earnings for the first quarter, including $6.5 billion in write-downs and adjustments to assets in its mortgage, leveraged finance and other divisions. The write-downs bring the total taken by Merrill Lynch in the last three quarters to more than $30 billion.

Merrill Lynch said it suffered a loss of $1.96 billion, or $2.19 a share, after its write-downs, in the first three months, down from a profit of $2.11 billion, or $2.26 a share, a year ago.

Analysts surveyed by Bloomberg News had expected a loss of $1.79 a share. Revenue, including interest and dividends, was $2.9 billion - down 69 percent from a year ago.

The job cuts will come from the company's global markets and investment banking division, which includes fixed income, currency, commodity and equity trading as well as banking. That part of the bank recorded a pre-tax loss of $4 billion for the first quarter and negative revenue of $690 million. The layoffs will save $800 million a year in compensation expenses, the bank said.