Especially in East European countries there is far too much capacity so you can expect much of the next consolidation round there,” he said. Italy’s 52,000 barrels per day (bpd) Mantua refinery will halt operations on New Year’s Eve and be converted into a product storage terminal, its owner Hungary’s MOL Group said this month. The closure was “a consequence of the unfavourable economic environment that the refining business faces in Italy,” said Ferenc Horvath, downstream vice president for MOL. Demand for refined fuels in Italy dropped from 116 million tonnes in 2000 to 80 million tonnes in 2012, he said. In Scotland, the 210,000 bpd Grangemouth refinery was shut down earlier this week in a labour dispute that could lead to the plant’s full closure. A total of 16 European refineries, or 1.7 million bpd of refining capacity has been mothballed since 2008, according to the International Energy Agency. Europe’s nameplate capacity stood at around 16 million bpd in 2012, according to the IEA. Around 330,000 bpd of European refining capacity – or six Mantua refineries – need to be shut down every year by 2020 in order to meet declining demand and rising competitive pressures, Wech said. THE LOSER IS EUROPE Many of Europe’s refineries, numbering around 120, were built in the two decades following the Second World War and are heavily geared towards gasoline production. But as demand for gasoline sharply declined in recent years in favour of diesel, refineries today face a huge surplus of gasoline which is increasingly hard to sell overseas as demand from the United States weakens. At the same time, massive state-of-the-art refineries in the United States, Asia and the Middle East are sending ever-growing volumes of diesel to Europe. And as they benefit from cheaper feedstock and lower energy costs, they can easily compete against Europe’s regional refiners.
This is the nub of the problem facing finance ministers at the two-day talks. With the eurozone barely out of recession, a failure to put aside money to deal with the problems revealed could rattle fragile investor confidence and compound borrowing difficulties for companies, potentially killing off the meek recovery. In turn, that raises the question about who pays for the holes that are found in balance sheets in countries such as Spain and Italy. While Rome and Madrid would like easy access to the euro zone’s permanent bailout fund, the European Stability Mechanism, Germany, Finland and other strong countries say each country should pay for its own clean-ups. This time around, the task of cleaning up banks should not be quite as daunting as five years ago because shareholders, bondholders and wealthy depositors can expect to take some of the losses, as happened in the bailout of Cyprus in March. But if that is not enough, it will fall to governments to pick up the tab. Although technical, talks about banking union have sparked an acrimonious debate touching on fundamental questions such as rewriting basic EU law that risk dividing the European Union. (emphasis added) Judging from the state of the debate as of the Cyprus bailout, the new rule is that not only bondholders and shareholders, but also large depositors of failing banks must expect haircuts. Depending on how big such haircuts eventually become, they could actually end up shrinking the euro area’s money supply. Moreover, any bank that comes under suspicion of hiding large losses must expect a run on its deposits. All of this is actually as it should be – and it is only possible because the interests of the paymasters are not congruent with the interests of those hoping for bailouts.
We must keep our eye on the long term, Harper said in comments to lawmakers, according to remarks provided to reporters by the Prime Ministers office. For Canada to prosper through the challenges of this uncertain world, we must do more. Harper has sought to diversify the nations trade away from the U.S. to fuel the recovery as the worlds 11th largest economy struggles to build momentum, in part because of weak exports. Canada has averaged annualized quarterly growth rates of 1.3 percent since the start of 2012, down from 3 percent in 2010 and 2011, according to Statistics Canada data. The economy has added 113,100 jobs so far this year, on pace for its second worst annual result in the past decade. Negotiations Dragging With European trade negotiations dragging into a fifth year, Canadian executives have been warning that Harper was running out of time to complete an agreement amid concern that talks with the U.S. will leapfrog Canada as a priority for Europe . Canadas largest manufacturing lobby group called on provincial leaders today to back the agreement. Canadian manufacturers and exporters hope that we can count on your support when negotiations are finally concluded, the Ottawa-based group said in an open letter to provincial premiers. It is a critically important agreement. The pact includes doubling the amount of European cheese that can be imported into Canada, the National Post newspaper reported, without saying how it obtained the information. Throne Speech Harper sought to break a deadlock over issues such as beef and dairy exports by stepping up his involvement in negotiations, people familiar with the strategy said in September. A successful trade pact with the EU could help Harper burnish his reputation as a competent economic manager, an advantage he holds over his rivals. Even as the ruling Conservatives have fallen in public opinion polls amid an expenses scandal implicating some of his lawmakers, Harper continues to have an edge on economic issues, surveys show. An agreement would also bolster the EUs efforts to negotiate a deal with the U.S., which would be the largest trade pact in history.
They worry that transactions capable of destabilising markets could go undetected unless limits are introduced. They also fear users are draining liquidity from public exchanges, making it harder for other investors to value stocks accurately. Anyone can use these pools if they have membership and fees are typically lower than trading stocks using traditional stockbrokers. The biggest users of these networks are large fund managers and banks who regularly trade large volumes of stocks. Supporters of off-exchange trading say removing the option of buying and selling shares privately will make large portfolios more costly to manage and potentially hurt performance of investment funds and pensions. “This will hurt liquidity but more specifically, it will hurt European citizens. When the price for one security is set, you are removing the capacity for an asset manager to negotiate something lower,” Dessard added. Thomson Reuters aggregates all trade data on ‘dark’ Multilateral Trading Facilities (MTFs) and platforms provided by BATS-Chi X, London Stock Exchange-operated Turquoise (LSE.L) and Liquidnet. MTFs match buyers and sellers anonymously and publish the trade on data feeds available to all market users after the market has closed. The Markit data, meanwhile, only gives a snapshot of aggregate trade at six of the large Broker Crossing Systems, where bank traders match up clients privately but only report the trades in a job lot at the close, without breaking down the stocks concerned. Without more comprehensive data, critics say it is tough to establish whether dark pools help or hinder the broader market, or make public exchanges less efficient in discovering price. This could render new rules challenging to enforce. “Because the data isn’t really out there to understand precisely what is the percentage of market share of dark pools … It’s very hard to know if we’re at that cap or beyond it,” Mark Goodman, head of quantitative electronic services, Europe at Societe Generale, said.