Moving This Blog

As my employer finally managed to upgrade its website, I will be moving much of the future posts from this blog to www.trendanalyses.sk (all articles are also in English). See, for example, our recent texts (1, 2) on distorted inflation figures published by the Slovak Statistical Office. RSS channel will soon be available for the TREND Analyses' homepage. Occasionally, however, there might be issues, links, graphs etc. that appear only in this blog, so please remain subscribed.

Unemployment Increasing Despite Season

Despite little smaller GDP decline in the second quarter as well as favorable summer season, registered unemployment in Slovakia continues to grow. In July, it reached 12.1% of labor force, and is expected to grow in the coming months as well. Current unemployment rate increase (4.6 percentage points annually) is the largest ever, and joblessness is now reaching highest levels since 2004. Strained labor market, where supply of labor abundantly exceeds the demand for it, is caused by global economic crisis, which manifests itself particularly in shrunk foreign demand for local exports. Lower production thus requires considerably fewer workers compared to times of economic boom in 2006-7.

In this context, the proposal of trade unions for increasing the statutory minimum wage by 8.1%, when consumer inflation approaches zero, must be regarded as irresponsible. Considerably increasing the minimum wage in times when many companies operate without any profits could endanger thousands more jobs in the economy.

One Central-European Stock Market?

Corporate finance in Central Europe is dominated by bank lending. However, 94 IPOs on the Warsaw Stock Exchange last year, together with Prague and Ljubljana exchanges being recently acquired by Wiener Börse, point to interesting developments.
For this year, privatization of Warsaw Stock Exchange is planned. This way, the Vienna exchange could theoretically overtake its regional rival and form Europe's eight largest market for shares. Or the acquisition can happen the other way around, with the privatized Polish exchange acquiring Wiener Börse. Nevertheless, for now both exchanges deny the possibility of allowing one to buy the other.
Largest stock exchanges in Europe according to market capitalization are: Euronext, LSE, Spanish exchange, Deutsche Börse and the Swiss exchange.