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There's just one stage of grief in euro zone: Denial

These are stories Report on Business is following Friday, May 25, 2012. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.

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Europe's one stage of grief There are supposed to be five stages of grief but there's just one where the euro zone is concerned: Denial.

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Denial has been a way of life in the 17-member monetary union for more than two years now, since Greece first said it didn't need a bailout.

Billions in rescue funds later, Athens is still on the edge and divisions run deep. Yet officials continue to pledge they're going to keep the group intact.

There are several issues at the heart of the crisis, though Greece's political troubles and the divisions over the idea of euro bonds are the talk of the moment.

"With little in the way of data out of Europe today the main news flow is likely to be confined to the continued disagreements between EU leaders as to the way forward for Europe as Greece teeters on the brink," said senior analyst Michael Hewson of CMC Markets.

"Yesterday's abysmal economic data highlighted the need for urgent action to address the core issues that continue to weigh on Europe, however the various countries positions are likely to remain as polarized as ever," Mr. Hewson said in a report.

"On the one hand we have the new French President François Hollande who insisted that euro bonds are the only way forward, while at the same time thumbing his nose at Germany by partially repealing the pension age increase for older workers back to 60 and increasing the minimum wage. In conjunction with Italian Prime Minister Mario Monti, Hollande has continued to increase the pressure on German Chancellor Angela Merkel raising support for the idea of euro bonds amongst all the debtor nations."

Markets are also closely watching the opinion polls in the run-up to Greece's second election in mid-June. The first election left no clear winner, but gains by the forces who want to ease off on austerity and change the terms of Greece's bailout. This has led to increasing talk of Athens quitting the euro zone, despite the promising comments of its leaders.

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And it promises continued turmoil in global markets.

"In Europe, while Greek exit discussions have become more commonplace, the uncertainty over just how that situation might play out will keep markets on edge in the near-term," said Carl Campus of BMO Nesbitt Burns.

"As expected, polls continue to fluctuate, with the latest set giving an edge to the anti-austerity Syriza party, though keep in mind there still remains a large contingent of undecided voters who may be watching to see how events unfold between now and June 17."

Consumer confidence climbs The rest of the world may be angst-ridden, but Canadian consumers appear to be a more upbeat mood.

The Conference Board of Canada said today its consumer confidence index climbed 5.8 points to 80.8 this month, rebounding from a "relatively poor performance" in April.

"However, despite recording an increase in four of the first five months of 2012, the national index remains significantly below where it was at this time last year - again highlighting the challenges the Canadian economy still faces going forward."

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Cnooc, Husky to speed up project Canada's Husky Energy Inc. and China's Cnooc Ltd. are speeding up their Liwan project in the South China Sea.

Cnooc's chiarman Wang Yilin told the company's annual meeting in Hong Kong today that the two players confidence about the natural gas development, according to Bloomberg.

The government believes that Liwan, which is some 300 kilometres from Hong Kong, could hold China's largest offshore development.

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About the Author
Report on Business News Editor

Michael Babad is a Report on Business editor and co-author of three business books. He has been with Report on Business for several years, and has also been a reporter and editor at The Toronto Star, The Financial Post and United Press International. His articles have appeared in major newspapers around the world. More

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