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Europe Risks a New Economic Downturn as Lockdowns Return

“We are completely reliant on the development of the virus,” said Sylvain Broyer, chief economist at S&P Global Ratings in Europe.The volatile growth pattern repeated itself at the national level. Germany recorded an 8.2 percent increase in G.D.P. in the third quarter compared with the previous quarter, but business surveys indicate that the pace is likely to slow markedly in months to come.France grew more than 18 percent in the quarter, according to official data published Friday. But Bruno Le Maire, the French finance minister, said a tough fourth quarter would cause the economy to shrink by 11 percent for the full year.The economic cost is particularly high in industries that depend on person-to-person contact. The longer the pandemic lasts, the greater the risk of mass bankrupt...

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Business

Eurozone growth surges, but another slowdown is probably ahead.

Growth in Europe rebounded sharply in the third quarter of the year, according to data published Friday, but hardly anyone was celebrating. Economic activity remains well below what it was a year ago as a surge in coronavirus cases and new lockdowns have raised the risk of another slowdown.Gross domestic product in the 19 countries that use the euro rose 12.7 percent from July through September compared with the previous quarter, the European Union statistics office said. But economic output was 4.3 percent lower than the same time last year — a severe recession by any standard — and could sink further as Germany, France and other countries order restaurants and theaters to close and restrict travel.European countries are increasingly desperate to contain the virus before it overwhelms ...

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The European Central Bank leaves its monetary policy unchanged for now.

The European Central Bank left monetary policy unchanged following a meeting of its Governing Council on Thursday, but signaled it could take further steps to stimulate the eurozone economy in December.“In the current environment of risks clearly tilted to the downside, the Governing Council will carefully assess the incoming information, including the dynamics of the pandemic, prospects for a rollout of vaccines and developments in the exchange rate,” the bank said in a statement.The central bank said that, following a fresh assessment of the economy in December, it would “recalibrate its instruments, as appropriate, to respond to the unfolding situation and to ensure that financing conditions remain favorable to support the economic recovery.”The outlook for the eurozone has darkened ...

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Business

France Braces for Economic Suffering as Lockdown Returns

Here’s what you need to know:Shoppers on Wednesday in Bordeaux, France. French officials expect the new lockdown will have a severe effect on many businesses.Credit...Philippe Lopez/Agence France-Presse — Getty ImagesFrance was bracing for a fresh blow to its beleaguered economy as President Emmanuel Macron reimposed a nationwide lockdown through December to prevent an alarming surge of coronavirus cases from spiraling out of control.In a televised address on Wednesday, Mr. Macron said the virus had rapidly resurfaced “everywhere” in France, and that requiring businesses to close and people to shelter at home was the only solution to curbing the pandemic. He pledged substantial financial support to prevent a wave of bankruptcies and layoffs from rippling through the eurozone’s second-la...

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Deutsche Bank reports quarterly profit as market turmoil generates trading fees.

Deutsche Bank, Germany’s largest bank, reported a profit in the third quarter of 2020 after a loss a year ago as volatile financial markets caused trading revenue to surge.The bank, which is trying to recover from years of scandals and losses, has also cut costs.It said that it earned 309 million euros, or $364 million, from July through September, compared with a loss of 832 million euros in the third quarter of 2019.Deutsche Bank has long been regarded as one of Europe’s most troubled big banks. The earnings, the third quarterly profit in a row, provided some reassurance that the bank and others like it are surviving the pandemic and are less likely to set off a financial crisis.Much of the improvement in profit came from helping clients to trade debt and currencies. Fees from trading...

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Business

Europe sells bonds for pandemic relief, challenging the dominance of U.S. Treasuries.

There’s a new gorilla in the bond market.The European Union issued debt in a big way for the first time this week to finance pandemic relief programs, generating huge demand from investors eager for an alternative to the United States Treasuries that dominate the government bond market.The bloc has issued debt before, for example to help Greece recover from a financial crisis, but never on the scale seen Tuesday. The European Commission sold 17 billion euros ($20 billion) in 10-year and 20-year bonds, the first of a series of issues that will raise a total of €900 billion during the next five years.Previously, national governments were responsible for almost all of their own financing. Countries like Germany and the Netherlands were against issuing common debt, but the pandemic changed ...

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Business

Europe Challenges U.S. Treasuries With Pandemic Bond Sale

There’s a new gorilla in the bond market.The European Union issued debt in a big way for the first time this week to finance pandemic relief programs, generating exceptionally strong demand from investors eager for an alternative to the United States Treasuries that dominate the government bond market.The bloc has borrowed from the bond markets before, for example to help Greece recover from a financial crisis, but never on the scale it did on Tuesday. The European Commission sold 17 billion euros ($20 billion) in 10-year and 20-year bonds, the first of a series of issues that will raise a total of €900 billion during the next five years.Previously, national governments were responsible for almost all of their own financing. Countries like Germany and the Netherlands opposed issuing com...

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Business

McConnell Pushes Against Stimulus Deal

Here’s what you need to know:Senate Majority Leader Mitch McConnell of Kentucky spoke at his weekly news conference on Capitol Hill on Tuesday.Credit...Anna Moneymaker for The New York TimesSenator Mitch McConnell, Republican of Kentucky and the majority leader, told Republican senators privately on Tuesday that he has advised the White House not to strike a deal with Speaker Nancy Pelosi on a new stimulus bill before Election Day, cautioning against reaching an agreement that most in the party cannot accept.Mr. McConnell’s counsel, confirmed by three Republicans familiar with his remarks, threw cold water on President Trump’s increasingly urgent push to enact a fresh round of pandemic aid before he faces voters on Nov. 3. It came just before Ms. Pelosi’s spokesman gave an upbeat assess...

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German carmakers report unexpectedly strong profit, but the pandemic still threatens.

The German auto industry is bouncing back strongly from the pandemic as customers make purchases they postponed earlier in the year, earnings reports by BMW and Daimler indicate. Strong economic growth in China, a crucial market for both vehicle makers, has also helped.But analysts say the miniboom may not last. Infections in Europe and the United States are surging, endangering sales in those two essential car markets. The profit figures “look too good to be sustainable,” Tim Rokossa, an analyst at Deutsche Bank, said in a note, referring to Daimler.BMW said late Monday that its free cash flow, a measure of profit, quadrupled to 3 billion euros, or $3.6 billion, in the third quarter compared to the same period last year. Daimler said last week that operating profit rose to €3 billion i...

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Business

Surging Euro Presents E.C.B. With a Dilemma

FRANKFURT — European policymakers appear to have contained economic destruction from the pandemic by administering a strong dose of monetary policy, government stimulus, and restrictions on travel and gatherings. But the measures came with an unwelcome side effect.The euro has risen 10 percent against the dollar since March, a vote of confidence by investors that also creates big problems for European exporters. Their products automatically become more expensive for customers who pay in other currencies, putting them at a disadvantage against foreign rivals when sales are already depressed and competition is intense.For the European Central Bank, which is meeting Thursday to discuss monetary policy, the stronger euro is yet another headache. The bank’s Governing Council is not expected ...

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