Cyprus is not the only major concern for the European Union. The purchasing managers index (PMI) for the region plunged in March as more evidence came in that austerity may widen deficits rather than shrink them because of contraction of gross domestic products (GDPs). Markit reports:
The Markit Eurozone PMI Composite Output Index fell from 47.9 in February to 46.5 in March, according to the flash estimate. The decline signalled an acceleration in the rate of contraction of business activity for the second consecutive month to the steepest experienced for four months.
With the exception of a marginal increase in January of last year, business activity has fallen continually since September 2011. Manufacturing output fell in March at the fastest rate since December, while business activity in the service sector suffered the steepest decline since October.
Companies also reported that new business levels fell at the strongest rate for three months, dropping at the fastest rates since December and September in manufacturing and services respectively.
Employment fell for the fifteenth successive month, reflecting the need to reduce capacity in line with the ongoing deterioration in inflows of new orders and a further marked decline in backlogs of uncompleted orders. The rate of job losses eased slightly for the second month in a row, and was broadly in line with the average seen throughout last year. Rates of job losses eased in both manufacturing and services.
Financial Future of Cyprus
Cyprus is in the midst of trying to keep capital in the country, as smart individuals, companies and investors pull money from the troubled nation. The notion that savings could be taxed as a means to raise money was destroyed in parliament. An idea to tax pensions is probably dead on arrival. Aid from Russia, which was the last best hope for Cyprus, has not materialized. MarketWatch reports:
Doubt over Cyprus’ financial future showed no sign of lifting Thursday, with officials reportedly set to introduce new legislation to try to prevent capital exiting the country, amid negotiations to shore up the country’s finances.
Laws to impose capital restrictions to stem deposit flight from the country and to set out new rules for insolvent banks will likely be put before the country’s parliament on Thursday.
The laws would be needed before the banks reopen their doors to customers — an event now reportedly to take place next Tuesday.
Mark Hurd and Dell?
If Blackstone Group L.P. (NYSE: BX) can top an buyout offer by Michael Dell and Silver Lake Partners to buy Dell Inc. (NASDAQ: DELL), the private equity firm may have found an attractive candidate to become chief executive officer — defrocked Hewlett-Packard Co. (NYSE: HPQ) CEO Mark Hurd. Hurd is currently a co-president of Oracle Corp. (NASDAQ: ORCL). Oracle founder Larry Ellison mocked the HP board as it let Hurd go because of a modest indiscretion with a female contract workers. Ellison’s praise may be part of the reason Blackstone wants him. The decision of HP’s board was followed by a collapse of that company’s fortunes. According to Reuters:
The New York-based private equity firm is carrying out due diligence on Dell ahead of the March 22 expiration of a so-called “go-shop” period that offers interested parties the opportunity to outbid a consortium led by founder Michael Dell and Silver Lake Partners that has agreed to take the company private for $24.4 billion.
Blackstone approached Hurd as part of its deliberations on whether it will submit an offer for Dell, the person said on condition of anonymity. It remains unclear whether Blackstone will make an offer.