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Several countries in <keyword id="28249" type="COMPANY" weightage="20" keywordseo="europe">Europe</keyword> have imposed new restrictive measures amid a second coronavirus wave in the continent. According to the European Centre for Disease Prevention and Control, the continent has so far reported a total of 8,343,983 Covid-19 cases, with 251,844 deaths. On Sunday, France, one of the worst-affected country, reported a daily record of 52,010 new cases, two days after becoming the second European nation to register more than 1 million coronavirus infections, according to the Public Health Agency. The grim second wave of the pandemic has forced the <keyword id="126030" type="ORGANIZATION" weightage="20" keywordseo="French-government">French government</keyword> to impose curfews in a majority of regions across the country, requiring more than two-thirds of the French population, or around 46 million people, to stay home between 9 p.m. and 6 a.m. for six weeks. Struggling with an explosive rebound, Italian Prime Minister Giuseppe Conte announced on Sunday that pubs, bars, restaurants and ice cream shops must shut down at 6 p.m. as part of new measures to contain the pandemic, effective through November 24. He added that the government will promote smart working in public administration and that it "strongly recommends" the private sector do the same in order to reduce crowding on public transportation. Spainish Prime Minister Pedro Sanchez has announced a state of emergency, days after the country became the first EU member to pass the 1-million-infection mark. The State of Alarm, effective from Sunday, is due to run 15 days. But the prime minister said his government aims to keep it in force until May 9 next year, a move that will need the support of a majority in the country's 350-seat congress. Also on Sunday, another 19,790 people in the UK tested positive for Covid-19, bringing the national tally to 873,800, with 44,896 death. The latest figures come as British doctors raised grave concerns about the pandemic situation in the autumn and winter period. The alert system entails the closure of pubs and bars in the region unless they serve substantial meals while different households are banned from mixing indoors and outdoors, including in private gardens. Meanwhile, cases have also risen strongly in Hungary, Croatia, Bulgaria and Lithuania, some of which have reported record daily surges in infections in recent days. Having reported record daily increases for five consecutive days as of Sunday, Croatia's National Civil Protection Headquarters announced new measures that will take effect on Monday midnight. The measures include mandatory physical distancing, a ban on all public events with more than 50 people, and a new limit on the number of people attending weddings and funerals. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/auto/news/hyundai-motors-reveals-new-hyundai-i20-design-ahead-of-its-expected-launch-in-november/articleshow/78869249.cms">Hyundai Motor reveals new Hyundai i20 design ahead of its expected launch in November</a>

Europe imposes new restrictions amid second COVID-19 wave

On Monday we got manufacturing PMI reports from <keyword id="28249" type="COMPANY" weightage="60" keywordseo="europe">Europe</keyword>.
Today we get the same reports, <a href="http://www.markiteconomics.com/Survey/PressRelease.mvc/9f5ed06473dc4a23b83e6a2eef32e2fa">but for the services industry</a>. So how are things going? The below chart and table tell a classic story. There's modest growth overall, but look where it is. Germany is kicking ass. Everyone else is doing horribly, especially France, whose industries are hitting multi-month lows.
Classic old story. Germany rules. Everyone else does not.

It's The Same Old Story In Europe Today

<ul class="summary-list"><li>Tech giant <keyword id="10875" type="CITY" weightage="60" keywordseo="IBM">IBM</keyword> plans to cut around 1 in 5 jobs across <keyword id="28249" type="COMPANY" weightage="60" keywordseo="europe">Europe</keyword>, sources close to the matter told <a href="https://www.bloomberg.com/news/articles/2020-11-25/ibm-planning-about-10-000-job-cuts-in-europe-ahead-of-unit-sale?sref=lAVQtUwz">Bloomberg on Wednesday</a>.</li><li>About 10,000 jobs face the axe, they said.</li><li>The UK and Germany will see the most <keyword id="30690" type="PERSON" weightage="60" keywordseo="Job-cuts">job cuts</keyword>, the sources said, and roles in its legacy managed-infrastructure IT services business are most at risk.</li><li>An IBM spokesperson told the publication that its staffing decisions "are made to provide the best support to our customers in adopting an open hybrid cloud platform and AI capabilities."</li></ul>Tech giant IBM is planning to cut about 10,000 jobs in Europe, <a href="https://www.bloomberg.com/news/articles/2020-11-25/ibm-planning-about-10-000-job-cuts-in-europe-ahead-of-unit-sale?sref=lAVQtUwz">Bloomberg reported Wednesday</a>.The cuts will affect around 1 in 5 staff in the region, sources close to the matter told the publication.The UK and Germany will see the most job cuts, but staff in Poland, Slovakia, Italy, and Belgium will also lose their job, they said. The jobs cuts will lower costs at IBM's services unit, which has seen sluggish growth, they added.Roles in IBM's legacy managed-infrastructure IT services business are most at risk from the cuts, the sources said. In October, <a href="https://markets.businessinsider.com/news/stocks/ibm-stock-price-plans-spin-off-legacy-business-focus-cloud-2020-10-1029661676">IBM announced plans to spin off the unit by the end of 2021</a> so it can focus on building its cloud and AI division.IBM announced the cuts during a meeting with European labor representatives in November, a union officer told Bloomberg.The job cuts should be completed by the mid-2021, one of the sources told Bloomberg.An IBM spokesperson told the publication that its staffing decisions "are made to provide the best support to our customers in adopting an open hybrid cloud platform and AI capabilities.""We also continue to make significant investments in training and skills development for IBMers to best meet the needs of our customers," the spokesperson added.IBM did not immediately respond to Business Insider's request for comment.In the quarter to September 30, IBM recorded $17.6 billion in total revenue, a drop of around 2.5% year-on-year.

IBM reportedly plans to cut around 10,000 jobs in Europe, with staff in the UK and Germany the worst hit

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">Apple</div></div></div>NEW YORK (Reuters) - <keyword id="28249" type="COMPANY" weightage="60" keywordseo="europe">Europe</keyword>, long a scapegoat for weak earnings at U.S. multinational companies, is now looking like a more dependable source of profits, and that could make some stocks that have lagged this year's rally more enticing to investors.
Big players in the technology sector, which has the highest exposure to Europe, are among those best positioned for a boost to the bottom line from the region's gradual recovery.
On a price-to-earnings basis, tech as a group is nearly 8 percent cheaper than the benchmark S&amp;P 500 index, now at its most expensive since late 2008, suggesting some tech stocks may have room to catch up.
Tech names with some of the highest exposure to Europe, based on Bank of America Merrill Lynch data, have mostly underperformed this year. IBM <IBM.N> is down 8.5 percent on the year, while Oracle <ORCL.N>, is up just 3.7 percent. Both derive at least 32 percent of their sales from Europe. Meanwhile the S&amp;P 500 &lt;.SPX&gt; is up 25 percent.</ORCL.N></IBM.N>
Energy, which also has high exposure to Europe, lags the S&amp;P 500's gains as well.
The euro zone, a source of weak sales for S&amp;P 500 companies for several quarters, emerged from its recession earlier this year. If its recovery persists, the region could help U.S. earnings get off their own path of lackluster growth.
"It's important for investors to realize Europe doesn't have to be a hole anymore in earnings," said Joseph Quinlan, managing director and chief market strategist at U.S. Trust, Bank of America Private Wealth Management in New York. "Even a little growth in Europe is going to go a long way to help boost the profitability of U.S. multinationals."
To be sure, a rebound in Europe is expected to be slow and spotty, much like the U.S. recovery, and many argue optimism about the improvement is premature.
While the European Commission has forecast 1.1 percent GDP growth in 2014 after a 0.4 percent contraction this year, the European Central Bank last month surprised investors by cutting interest rates to help spur its tepid growth.
<h3>NO PREMIUM FOR FOREIGN EXPOSURE</h3>
Relative enterprise valuation data on companies with the most foreign exposure are trading close to their steepest discount to more domestically oriented names in the last decade, BAML data showed, while its global fund manager survey showed managers are overweight U.S. and U.S.-centric stocks and underweight more foreign-exposed ones.
The tech sector's forward PE is 14.1 times expected earnings, among the lowest of the 10 S&amp;P sectors, Thomson Reuters StarMine data shows. The PE for energy, which has the third-largest exposure to Europe after materials, is 13.1, lowest of any sector.
Meanwhile, one of the least-exposed sectors to Europe, consumer discretionary, sports a multiple of 18.2. The overall S&amp;P 500 is trading at 15.3 times forward 12-month earnings, the most expensive it has been by that measure since the fourth quarter of 2008.
Within tech, IBM's PE is 9.9, and Oracle's is 11.7. Hewlett-Packard's forward PE is 7.5, expanding from around 4 in January, as its stock is up nearly 90 percent this year.
As a region, Europe accounts for the biggest part of overseas sales for U.S. companies, representing about 10 percent of S&amp;P 500 company sales, S&amp;P data shows.
"I would say there's still upside in these global cyclical companies," Quinlan said. "There's room to put money to work still."
<h3>THE TIDE IS TURNING</h3>
Results from U.S. companies generating the bulk of sales overseas turned the corner in the third quarter, and fourth-quarter results for that group are expected to improve more, thanks largely to Europe, according to Mizuho Securities USA.
"What we began to see in the third quarter was some evidence that the improvement in Europe is filtering through profits here in the U.S.," said Carmine Grigoli, chief U.S. investment strategist at Mizuho Securities USA in New York.
Based on results from 83 S&amp;P 500 companies that generate 60 percent or more of revenue from overseas, year-over-year earnings declined 10 percent in the first half of the year and were down 0.4 percent in the third quarter. They are expected to rise 3.3 percent in the fourth quarter, Mizuho's data showed.
That compares with the S&amp;P 500's 2.5 percent profit gain in the first half and 4.5 percent gain in the third quarter.
Revenue for those 83 companies fell 5.3 percent in the first half and rose 0.3 percent in the third quarter, while it is forecast to increase 1 percent in the fourth quarter.
Moreover, U.S. companies have begun to talk about Europe in a more positive light. Federal Express <FDX.N> and Ford Motor Co <F.N> were among companies citing an improving picture for the region in the latest reporting period.</F.N></FDX.N>
Ford in October posted stronger-than-expected quarterly results and boosted its full-year global profit forecast based on its European outlook and overseas demand. It said its European unit will be profitable in 2015, earlier than previously expected.
"It's been a huge shift in the rhetoric and the outlook over the past couple of quarters," in terms of Europe, said Dan Suzuki, equity strategist at Bank of America Merrill Lynch in New York.
(Reporting by Caroline Valetkevitch; Editing by Dan Burns and Bob Burgdorfer)

Europe Is No Longer The Bane Of U.S. Corporate Profits

<div class="KonaFilter image-container float_right"><div class="image on-image">REUTERS/Juan MedinaPeople wait in a queue to enter a government-run employment office in Madrid July 25, 2013. Spanish unemployment fell for the first time in two years in the second quarter, surprising markets and supporting the government's contention that the worst of the country's economic slump may be over.</div></div>New data is out from <keyword id="28249" type="COMPANY" weightage="60" keywordseo="europe">Europe</keyword> and it's ugly.
Eurozone unemployment was <a href="https://twitter.com/EU_Eurostat/status/395853343660052480">a record-high 12.2% in September</a>. August's number was revised up to 12.2% from an earlier estimate of 12.0%
Economists were hoping for a 12.0% rate.
Spain's unemployment rate stood at a horrific 26.6%, and Italy's climbed to 12.5%.
Germany, on the other hand, saw its unemployment rate slip to 5.2%.
The youth unemployment rate climbed to 24.1% from 24.0%.
Meanwhile, inflation in the area came in at 0.7% year-over-year, which was much lower than the 1.1% expected by economists.

Europe Just Released A Horrific Set Of Unemployment Stats

<div class="image-container float_right" style="width:480px"><div class="image"><a href="http://pictures.reuters.com/C.aspx?VP3=SearchResult_VPage&amp;VBID=2C0BXZ62XVHO8&amp;SMLS=1&amp;RW=1285&amp;RH=800#/SearchResult_VPage&amp;VBID=2C0BXZ62XVHO8&amp;SMLS=1&amp;RW=1285&amp;RH=800&amp;PN=10">REUTERS/Arnd Wiegmann</a></div></div>Economic data out of <keyword id="28249" type="COMPANY" weightage="60" keywordseo="europe">Europe</keyword> has been improving, <a href="http://www.businessinsider.com/global-manufacturing-pmis-2013-7">showing that the eurozone is stabilizing. </a>
And concerns of a major European crisis have been fading.
The OMT program, open market transactions, a bond buying program the ECB launched following Mario Draghi's promise to do <a href="http://www.businessinsider.com/european-market-update-26-2012-7">"whatever it takes,"</a> has not yet been tested.
But Nomura's Alastair Newton thinks that the time could come in the fall when the OMT will come into play.
"We think that it would probably take several ‘bad’ events occurring simultaneously for there to be a significant possibility of OMT having to be activated," said Newton. "The multi- dimensional nature of the eurozone crisis appears to allow for this possibility, as illustrated by the following non-exhaustive list of ‘issues’ which could flare up in September/October."
Here's a quick look at what Newton's worried about:
<ul>
<li>France - The government commission on pension reform will report at the end of July, this is ahead of the introduction of new legislation in August. "With left-wingers in President Franc¸ois Hollande’s Parti Socialiste threatening a revolt and the unions girding themselves to take to the streets, the government is facing what markets see as an acid test of its ability to deliver reform," Newton writes. Meanwhile, if France fails to do more to reduce the deficit, it risks criticism from Berlin and Brussels and from peripheral European countries pointing out double standards.</li>
<li>Germany - German policy isn't expected to soften after the general elections scheduled for September 22. But "pressure from the peripherals and from France for a shift may increase, risking open disagreement between Berlin and other eurozone capitals,' warns Newton.</li>
<li>Greece - The troika — European Commission, IMF, and the ECB — will review Greece in October, and talks of foreign debt restructuring may surface again. "Although this would hardly come as a surprise to markets or German voters, the prospect of official creditors (including Germany) taking a hair-cut over Greece could raise concerns over similar steps proving necessary for Cyprus and already troubled Portugal."</li>
<li>Italy - The ruling coalition in Italy should struggle but stay in power going into 2014. But if there are still differences going into fall, the property tax will complicate "what promises in any case to be a contentious 2014 budget process."</li>
<li><keyword id="6363645" type="COUNTRY" weightage="60" keywordseo="Spain">Spain</keyword> - An upward shift in Italy's yield curve could cause a similar move in Spain's yield curve. Spanish prime minister Mariano Rajoy is still caught up in a slush fund scandal, former People's Party treasurer <a href="http://www.euronews.com/2013/07/23/rajoy-to-appear-before-parliament-over-slush-fund-scandal/">Luis Barcenas is said to have run a slush fund</a> and sent money to party officials including Rajoy. All of this could see Spain being pushed to a bailout.</li>
</ul>
Amid all these, the 2014 European Parliament elections will also be weighing on Europe's biggest players. Newton thinks "conditions are ripe for extremist parties to make significant gains in these elections," making policy decisions even harder.

Europe Looks Fine Now, But A Political Perfect Storm Is Brewing

<div class="image-container float_right"><div class="image">REUTERS/Ralph OrlowskiThe euro currency sign sculpture with a damaged star stands in front of the headquarters of the European Central Bank (ECB) prior to the monthly ECB news conference in Frankfurt, August 1, 2013.</div></div><keyword id="31671" type="CITY" weightage="60" keywordseo="markets">Markets</keyword> have closed in <keyword id="28249" type="COMPANY" weightage="60" keywordseo="europe">Europe</keyword>, and stocks ended deep in the red.
Britain's FTSE 100 fell 0.6%.
France's CAC 40 fell 2.1%.
Germany's DAX fell 2.0%.
Spain's IBEX fell 2.7%.
Italy's FTSE MIB fell 2.0%.
The sell-off comes as tensions rise in Syria.
Yesterday afternoon, <a href="http://www.businessinsider.com/american-policy-on-syria-turns-hawkish-2013-8">Secretary of State John Kerry condemned</a> the actions of Syria in the wake of chemical weapons attacks.
"Make no mistake: President Obama believes there must be accountability for those who would use the world's most heinous weapons against the world's most vulnerable people," <a href="http://www.latimes.com/world/middleeast/la-fg-us-syria-20130827,0,1792498.story">he said</a>.
<a href="http://www.businessinsider.com/dubai-and-saudi-stock-markets-getting-totally-smoked-2013-8">Markets in the Middle East</a> got punished amid the regional uncertainty.
Meanwhile, the <a href="http://www.businessinsider.com/morning-markets-august-27-2013-8">Emerging Markets continue to crumble</a> led by India and Indonesia.

Europe Got Crushed Today

Quick note, earlier we mentioned that there was a <a href="http://www.businessinsider.com/morning-markets-april-15-2013-4">selloff in Asia and anything related to commodities</a>.
Now <keyword id="28249" type="COMPANY" weightage="60" keywordseo="europe">Europe</keyword> is feeling the heat too.
European markets have gone into the red.
<keyword id="21474" type="COUNTRY" weightage="60" keywordseo="Italy">Italy</keyword> is down 0.9%.
<div class="image-container" style="width:605px"><div class="image"></div><a href="http://www.borsaitaliana.it/borsa/indici/indici-in-continua/dettaglio.html?indexCode=FTSEMIB&amp;lang=it">FTSE MIB</a></div>

Europe Is Now Breaking Down Too...

<keyword id="11951527" type="General" weightage="20" keywordseo="james-heappey" source="Orion">James Heappey</keyword>, the UK's Parliamentary Under-Secretary of State for the Armed Forces, said that he believes <keyword id="28249" type="General" weightage="20" keywordseo="europe" source="Orion">Europe</keyword> is closer to war than it has been for 70 years, the <keyword id="60684" type="General" weightage="100" keywordseo="bbc" source="Orion">BBC</keyword> reported. "There's 130,000 Russian troops around the borders of <keyword id="6355101" type="General" weightage="50" keywordseo="ukraine" source="Orion">Ukraine</keyword>, thousands more on amphibious shipping in the Black Sea and the Azov Sea," he told the BBC. "All of the combat enablers are in place and my fear is that if all of this was just about a show to win leverage in diplomacy that doesn't require the logistics, the fuel, the medical supplies, the bridging assets, the unglamorous stuff that actually makes an invasion force credible, but doesn't attract headlines. Yet all of that is now in place too. "That's why there's real urgency to the diplomatic negotiations that continue," he says. But he adds there are still "lots of opportunities" for "compromise" and "diplomacy". Ukraine is calling for a meeting with <keyword id="6358826" type="General" weightage="50" keywordseo="russia" source="Orion">Russia</keyword> and other members of a key European security group as tensions grow. It says Russia has ignored formal requests to explain the build-up of troops, the BBC reported. Russia has denied plans to invade despite massing 100,000 soldiers on Ukraine's borders. Some nations warn an invasion could be imminent, with the US saying aerial bombardments could begin "at any time". More than a dozen countries have urged their citizens to leave Ukraine, and some have pulled embassy staff from the capital, the report said. SEE ALSO: <a href="https://www.businessinsider.in/tech/news/experts-fear-possible-cyber-attacks-by-russia-against-ukraine-amid-ongoing-tensions/articleshow/89565011.cms">Experts fear possible cyber war by Russia against Ukraine amid ongoing tensions</a> <a href="https://www.businessinsider.in/stock-market/news/indian-stock-market-is-bummed-out-for-at-least-three-reasons-and-none-of-them-are-going-away-in-a-hurry/articleshow/89561390.cms">The market in India is bummed out for at least three reasons and none of them are going away in a hurry</a>

UK's James Heappey says Europe is closer to war than it has ever been in the last 70 years

<keyword id="28249" type="General" weightage="100" keywordseo="europe" source="Orion">Europe</keyword>an countries are investigating three mystery leaks in two major gas pipelines between <keyword id="6358826" type="General" weightage="80" keywordseo="russia" source="Orion">Russia</keyword> and Europe, a media report said. The cause of the damage to <keyword id="1660673" type="General" weightage="80" keywordseo="nord" source="Orion">Nord</keyword> Stream 1 and 2 is unclear, but authorities have not ruled out sabotage. The operator of Nord Stream 1 said the undersea lines had simultaneously sustained "unprecedented" damage in one day, the BBC reported. Both pipelines have been flashpoints in the <keyword id="15108296" type="General" weightage="20" keywordseo="Energy-tussle" source="Orion">energy tussle</keyword> between <keyword id="6356806" type="General" weightage="20" keywordseo="moscow" source="Orion">Moscow</keyword> and Europe. Whatever the cause of the damage, it won't immediately affect the supply of gas to Europe as neither pipeline was operational. The European Union has previously accused Russia of using a reduction in gas supplies to blackmail Europe, but Moscow denies this. It says sanctions against Russia make it impossible to properly maintain the gas infrastructure. Unconfirmed reports in German media said authorities are not ruling out an attack on the undersea gas network, the British broadcaster reported. Denmark's Prime Minister, Mette Frederiksen, said it was too early to come to conclusions, but that it was hard to imagine the multiple leaks could be a coincidence. A Kremlin spokesperson, Dmitry Peskov, said he was "extremely concerned" about the incident, and the possibility of a deliberate attack could not be ruled out. The Nord Stream 1 pipeline - which consists of two parallel branches - has not transported any gas since August when Russia closed it down for maintenance. It stretches 1,200 km under the Baltic Sea from the Russian coast near St Petersburg to north-eastern Germany. Its twin Russian-owned pipeline, Nord Stream 2, was halted after the Russian invasion of Ukraine began. Although neither pipelines are in operation, they both still contain gas. German, Danish and Swedish authorities are all investigating the incidents. The operators of Nord Stream 2 warned of a loss of pressure in the pipeline on Monday afternoon. That led to a warning from Danish authorities that ships should avoid the area near the island of Bornholm. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/sports/india-vs-south-africa-bilateral-t20-series-check-date-venue-squads-live-streaming-details-and-more/slidelist/94502049.cms">India vs South Africa Bilateral T20 series: Check schedule, squads, live streaming details and more</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/news/foreign-tourist-arrivals-dipped-by-44-5-in-2021-tourism-ministry-report/articleshow/94500409.cms">Foreign tourist arrivals dipped by 44.5% in 2021: Tourism Ministry report</a>

Mystery leaks in gas pipelines between Russia and Europe

A British entrepreneur is selling his yacht that was designed like a barge so it could cruise shallow canals in Europe. Look inside the $2.7 million 'barge-yacht.'

<div class="image-container float_right" style="width:480px"><div class="image">REUTERS/Lehtikuva Lehtikuva</div></div><keyword id="28249" type="COMPANY" weightage="60" keywordseo="europe">Europe</keyword>'s new purchasing managers index (<keyword id="104215" type="ORGANIZATION" weightage="60" keywordseo="PMI">PMI</keyword>) figures <a href="http://www.businessinsider.com/european-recession-ending-2013-7">paint a rosier picture</a> of the beleaguered continent's economy.
With French manufacturing output reaching a two year high and German Flash PMI beating expectations, business confidence in Europe is on the rise.
From new analysis from Societe Generale:
<div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
All in all, the PMIs developments since April have been impressive in the euro area. The PMI composite of the euro area has increased from 46.9 in April to 48.7 in June and 50.4 in July. In July, the manufacturing index rose to 50.1 from 48.1 while the services index increased to 49.6 from 48.3 It seems that PMIs indexes were too low during the spring when compared to hard data and that business sentiment has been catching up for the last three months.
<div class="image-container" style="width:800px"><div class="image">SocGen</div></div>Credit conditions are another story though, with banks continuing to tighten. 
"Although details are not available for each country yet, this survey suggests that financial fragmentation remains a major headwind for the region as a whole, and prevents the monetary conditions set by the <keyword id="60971" type="CITY" weightage="60" keywordseo="ECB">ECB</keyword> to pass through the real economy," according to the report.
But the rate of tightening is slowing. And this is reason to be optimistic.
"In prior surveys, banks had remained cautious, mainly as they were still concerned about the economy and loan losses," <a href="http://www.businessinsider.com/european-recession-ending-2013-7">said JPMorgan's Greg Fuzesi</a>.
"Economic data suggest that the Euro area economy is finally emerging from recession."
<div class="image-container" style="width:800px"><div class="image">SocGen</div></div> 
</div>
</div>
</div>

2 Charts That Have Economists Feeling Optimistic About Europe Again

Earlier this month, private equity behemoth <keyword id="6354544" type="CITY" weightage="60" keywordseo="KKR">KKR</keyword> published its <a href="http://www.businessinsider.com/kkrs-2013-market-outlook-2013-1">outlook for 2013</a>. Among their theses was the expectation that global inflation remains low as <a href="http://www.businessinsider.com/kkr-deleveraging-forecast-for-europe-2013-1">Europe continues to delever</a>.
Henry McVey of KKR wrote about <keyword id="6451751" type="UNKNOWN" weightage="60" keywordseo="austerity">austerity</keyword> in <keyword id="28249" type="COMPANY" weightage="60" keywordseo="europe">Europe</keyword> and noted how fiscal austerity in the form of deficit reduction was slamming GDP growth:
Fourth, the European fiscal multiplier is now larger than in the past, which we believe means below-consensus growth in the region again this year.
Having been to Europe multiple times in 2012 to assess the macro situation, it has become increasingly clear to me that “this time is different” when it comes to the relationship between fiscal contraction (the independent variable) and GDP growth (the dependent variable). Specifically, over the past twenty or so years, a one percent contraction in the fiscal deficit traditionally led to only about a 50 basis point contraction in GDP5. Today, by comparison, the multiplier in Europe is closer to 1.25-1.75x, we believe (Exhibit 20). As a result, aggressive monetary policy is less effective in offsetting current fiscal headwinds. As the exhibits above show, we link a significant portion of this relationship shift to <a href="http://www.businessinsider.com/kkr-deleveraging-forecast-for-europe-2013-1">excessively high bank leverage</a> as well as some of the structural rigidities imposed by a common currency.
<table class="image-container" width="200"><tr><td><div class="image"></div><a href="http://www.kkr.com/company/insights/global-macro-trends-14">KKR</a></td></tr></table>
 
<div id="see-also-links">
SEE ALSO: KKR's Outlook For The Markets And Economy In 2013 &gt;
</div>

You Searched For "europe" and got 13 results

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