In attempt to stabilize the economy and ease the effects of the financial crisis, the European Central bank purchased 2.667 billion in government bonds over the week ending in December 10. Since the 110 billion financial bailout of Greece, the European Central bank has bought 72 billion in government bonds. In its first week, the ECB bought more than 16 billion with a weekly rate of less than 2 billion since July, making this December’s purchase the largest in approximately five months.

The intention of purchasing government bonds from economically weak countries, including Greece, Ireland, Spain, and Portugal is to steady interest rates, inflation, and prices. Market participants credit this month’s European debt market stabilization to the ECB’s most recent purchase. But analysts worry that the scale of bond-buying was not enough. “I would imagine that the market will see this as a bit of a disappointment,” stated Jonathan Loynes of Capital Economics in London. “It’s helping a little bit at the margins, but it doesn’t look like the kind of action that would solve the crisis on its own.”

It was not difficult for the European Central Bank to find depositors while paying a weighted average interest weight of .49%, juxtaposed with the previous week’s .65%. Fifty-seven banks provided funds to be deposited.

On the other side of the Atlantic, the United States Federal Reserves has released its own plan to purchase $600 billion in government bonds over the next months.

The ECB has the right to purchase both government and corporate bonds but the organization has not disclosed a financial or time limit on its spending.

The European Union in comparison with the International Monetary Fund approves financial help for Ireland. The total amount, which is lent to the country in debt, embraces 85 billion Euros within three years. On top of it, Ireland takes his own pension reserves and contributes 17,5 billion Euros to the bank saving plan. Furthermore Ireland has to pay an interest rate of 5,8% to the creditor.

- Irelands walk into bankruptcy -

During the financial crisis, the government helped banks in Ireland with billions of Euros to avoid the collapse of the banking system. The financial institutes speculated at the housing market and lost their investments. Approximately 50 billion Euros are in need to plug the financial holes. The gross domestic product of 160 billion Euros is alarmingly small compared to the money needed. The budget deficit will be around 32 percent of Ireland’s economic performance in 2010. In addition Ireland’s tax income is shrinking continuously. Even without the 50 billion Euro help, Ireland would have had a budget deficit of 12 percent this year.

- Where is the money going? -

The loan doesn’t get transferred directly to the banking system, because the EU money pool is only available for states. It is now up to Ireland how they spread the 85 billion Euros within their economy.
A big part of the sum will be spent to Ireland’s financial institutions. The amount left will be used to rehabilitate the budget plans of the state.

- Savings plans of Ireland -

On 27th of November 50.000 Irish citizens gathered together in Dublin, to demonstrate against the drastic budget plans by Ireland’s government. The authorities want to save 15 billion Euros within 4 years and shrink the budget deficit from 32 percent to 3 percent in no time.

Just some days ago China signed in France the contract for the building of over 100 Airbus planes. China ordered planes from the types A320, A330 and A350 from the European plane- constructor. After the bad news of the emergency landing of an Airbus A380 the news of this order come to the very right moment.
When the Chinese president Hu Jintao stopped by in Paris for his state visit, Li Hai, president of the China Aviation Supplies Holding Company (CAS), and Tom Enders, president and CEO of Airbus, signed the contracts of the mega deal. Hu Jintao and Nicolas Sarkozy joined and supervised the ceremony.
The deal concerning the Airbus planes costs China about 14 billion dollar (calculated with catalogue prices) which lets relax the stock of the European Aeronautic Defence and Space Company (EADS) a little bit. The stock crashed after the emergency landing of the A380 in Singapur, whereupon the Australian airline cancelled for now all flights with these jets. There were no statements given to the factual price of the order.
BOC Aviation, which ordered the planes, is a plane-leasing-daughter of the Bank of China with registered office in Singapur. The company is by his own account the biggest plane-lease provider of Asia.
Additionally some other contracts were signed at the state visit of Hu Jintao in Paris. For example the French atom concern Areva must be mentioned, which received a big request about the long-term uranium delivery to China. This request is about 3,5 billion dollars.
The European, and especially the French, economy might thank it.