EU to cut steel import quotas after industry protests

EU bank share meltdown brings prices to 80s

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LONDON/BRUSSELS

The European Commission has proposed boosting measures to protect against a rise in imports spurred by U.S. tariffs after steel companies said the European industry was under threat. MThe Commission said in a statement on Wednesday it planned to cut an increase in import quotas to 3% from 5% effective from Oct. 1.

In June, senior steel executives including from Outokumpu <OUT1V.HE>, Salzgitter <SZGG.DE>, and a division chief at ArcelorMittal <MT.AS>, urged the Commission to scrap or postpone the 5% increase which took effect on July 1. EU quotas had been set at the average level of imports in 2015-2017 plus 5%, with further 5% hikes on July 1 and a year later.

The EU steel industry in 2018 was hit by a 12 percent increase in imports of finished steel products in a market that grew by only 3.3 percent, industry body Eurofer has said. The increase in imports happened despite safeguard measures designed to limit incoming steel following Washington’s 25% import tariffs, which have effectively closed the U.S. market.

 

The proposals will be discussed with affected World Trade Organisation members and submitted to EU members for approval ahead of the planned October implementation, the Commission added. The Commission also plans to curb any one country of exceeding a 30% share of imports of hot rolled flat steel during a quarter.

 

Negative interest rates, toppling bond yields, greater regulation and rising recession signals have wiped out most of the value of European banks, with their shares now at meltdown prices approaching the days of the Berlin Wall. The index of the bloc’s big banks <.SX7E> plunged on Thursday to the level it hit in 2012 at the peak of the euro zone debt crisis.

 

That means the banks are worth now what they were when Greece, Ireland and Portugal needed bailouts, Cyprus ordered its banks to seize some deposits and Spain’s banks were saved from collapse only by a government rescue. Though it still hasn’t quite matched the bottom of the 2008 financial crisis, the index has lost 84% of its value since its peak in 2007.

 

It is now a few points away from hitting levels seen in the 1980s, when the euro was barely a dream and some of the countries that now use it were still using Soviet roubles. The wider banking sector for the bloc is now worth less than half a trillion dollars — about half the size of Microsoft. It was down nearly 3% on Wednesday after Germany’s economy shrank and the U.S. bond market showed red flags pointing to recession. At their 2007 peak, euro-zone banks were worth $1.7 trillion, well above the value of their U.S. peers. Today, they are just one-third the size of banks on the other side of the pond.

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