These are stories Report on Business is following Tuesday, Jan. 8, 2013.
European youth hit hard
A lost generation is taking shape in the embattled regions of Europe, threatening further unrest.
Unemployment is intolerably high in the 17-member euro zone, at 11.8 per cent in November, according to the latest numbers released today. For young people, you question how some countries can even cope.
In Greece, the Eurostat agency reported, youth unemployment now stands at almost 58 per cent. In Spain, it’s almost 57 per cent. And in Italy, it’s 37 per cent.
Across the 17 countries that share the currency, unemployment for young people under the age of 25 is 24.4 per cent. In the wider 27-member European Union, it’s 23.7 per cent.
In terms of straight numbers, almost 5.8 million young people can’t find work in the EU, more than 3.7 million of them in the euro zone.
Demonstrations and strikes have been widespread across Europe, with violence mounting as the debt crisis grew deeper. The latest numbers illustrate just what a powder keg the continent has become.
Over all, 26 million people are jobless in the EU, almost 19 million of them in the euro zone.
- Euro zone unemployment hits record high
- Economy Lab: Europe faces another daunting year
- Eric Reguly: In Rome, economic reality grinds away at street life
- Brian Milner: Don’t count on a policy shift from ECB
- Italy’s wide-open election will determine intensity of euro crisis year
- Spare a thought for our unemployed, underemployed youth
Barrick ends talks
Shares of African Barrick Gold PLC plunged today after its Canadian parent said talks to sell the unit to a Chinese company had collapsed.
Barrick Gold Corp. had been working toward a multibillion-dollar sale of some, or all, of its majority stake to China National Gold.
But today, the Canadian gold giant said it is “no longer in discussions” with the Chinese group, though it didn’t go into detail as to why the talks broke down.
“These discussions were part of our ongoing efforts to identify opportunities to optimize our portfolio, however we are approaching this in a prudent and disciplined manner and will only proceed with opportunities that generate acceptable value for Barrick,” said chief executive officer Jamie Sokalsky.
As The Globe and Mail’s Pav Jordan reports, Mr. Sokalsky put the unit on the block last summer after he became CEO. Analysts had expected the sale could fetch about $2.5-billion.
LePage sees slowdown
Royal LePage expects Canada’s housing market to go through a mild correction in coming months, but is predicting that the average national home price will be 1 per cent higher by the end of this year.
It believes sales in the first half of this year will be slower than last year, tempering the pace at which prices have been rising, The Globe and Mail’s Tara Perkins reports.
Canada’s housing market has been cooling rapidly, notably in Toronto and Vancouver.
Japan moves on yen
Japan is taking further steps to weaken its currency, and at the same time help Europe along, but its plans aren’t working out just yet.
Finance Minister Taro Aso today unveiled plans to buy bonds from Europe’s bailout mechanism, using foreign exchange reserves to fund the purchases.
“Stabilizing Europe’s financial crisis will eventually contribute to the stability of currency including the yen, and so we plan to keep purchasing ESM bonds using foreign reserves,” he said, according to reports from Tokyo.
The yen, whose strength has been an issue for the country’s exporters, climbed, however, possibly because, according to reports, Japan’s new government is poised to unveil new stimulus measures as early as Friday.
In fact, the yen was the best-performing currency against the U.S. dollar overnight, said Bank of Nova Scotia.
“Go figure, but such is Japan’s serious problem,” said Scotiabank’s Derek Holt and Dov Zigler.
“That could be because markets became more upbeat toward Japan’s growth prospects as the government raises its policy focus upon stimulating growth,” they said in a research note.
“This includes expectations that the government will announce spending stimulus on Friday equal to about 2 per cent of the Japanese economy, or up to ¥13-trillion yen, and thus follow through on the government’s election campaign. It is believed that around ¥6-trillion will be geared toward public works spending.”
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