Mr Trichet’s tough monetary stance is certainly not helping, but he can’t take all the blame.The ongoing consequences of integrating East Germany have been well aired, but we should not overlook the effects of the massive expansion of the EU eastwards. The accession of the new economies – most importantly Poland, Hungary and the Czech Republic – has led to 74 million new EU citizens and sparked a boom in the East that would give the Asian tigers a run for their money.The long-term prospects for “emerging Europe” are excellent. With national GDP per capita statistics that average out at only 25 per cent of Western Europe’s, we could see catch-up growth for many years to come. The trend growth of the “Slavonic Tigers” is already 3 to 5 per cent per annum, or more than twice what mainstream Europe can manage on a good day.

This has given their immediate, anaemic neighbours a shot in the arm. Indeed, one wonders how much worse things would be without them. Pre-accession, nearly 7 per cent of Germany’s total exports were to the east (in Austria it was even higher).The problem is that, post-accession, the economic effects may be flipping over with devastating results for particular regions or indeed countries The cost of labour is a key factor. Across the EU this averages ?2.70 (pounds 15.70) per hour, and Germany is much higher at ?6.54. In the east these numbers are blown apart: ?.48 in Poland or a mere ?.35 in Bulgaria.

No wonder the German press was full of horror stories last week about the country’s manufacturers relocating.Much has been made of the effects of migration of labour from the new accession countries westwards, and politicians have reacted in different ways across the West. But it is this migration of capital that could prove much more significant.On a macro EU basis, this need not be a bad thing. It is ironic that the new president of the EU Commission, Jose Manuel Barroso, should be choosing now to throw in the towel on the “Lisbon pledge” (for Europe’s economy to overtake the US by 2010). The target date may indeed be laughable but the prospect is not impossible – backed up by our booster engines in the east.Cheap labour and massive returns on capital could raise Europe from its hospital bed, but not without some painful social and political adjustments.No wonder Mr Trichet shared my indigestion.christopher.walker tiscali.co.uk.

The number of people failing to pay debts and declaring themselves insolvent has risen by more than a third. There were 13,013 individual insolvencies in England and Wales in the three months to December last year – up by 34.6 per cent on the same period in 2003, and up 8 per cent on the previous three-month period in 2004. The figures from the Department of Trade and Industry come after a series of interest rate rises last year that saw the Bank of England base rate edge up from 3.75 per cent in January to 4.75 per cent in August. Of the insolvencies, 9,803 were bankruptcies and 3,210 recorded as individual voluntary arrangements, under which debtors work out a new repayment plan with creditors.
Property prices rose last month – but by just 0.8 per cent, according to the Halifax’s house price index. As the market continued to slow, the annual rate of house price inflation eased to 13.7 per cent, the bank says.Successive interest rate rises, and the difficulties caused by these and by soaring prices for first-time buyers, have prompted what the Halifax describes as a “measured slowdown” in the housing market.But a number of indicators suggest the decline in growth in the market could be about to level off.

These include a modest rise in the number of loans approved for house purchases in December, according to Bank of England figures. At the same time, estate agents recorded steady sales for the first time in nine months.Newcastle building society has launched a five-year fixed-rate mortgage at 4.8 per cent.The deal is available for up to 90 per cent loan-to-value but has a pounds 500 fee if you borrow up to pounds 500,000.If your home loan is for more, the fee doubles to pounds 1,000. There is also a 5 per cent redemption penalty applicable throughout the life of the loan.Contact: branch or call 0845 606 4488.. In terms of collectable cachet, the Marvel Comics anti-heroine, played by leggy glamazon Jennifer Garner, has met her match in the hideous hulk Jabba the Hutt from Star Wars.
For good looks mean nothing. The problem

A June wedding is set to wipe out the savings built up by Catherine Jankowicz and her fiance, Martin. The couple have about pounds 123,000 to pay on a flexible repayment mortgage with the Woolwich, set at a discount of 2 per cent below the bank’s 6.79 per cent standard variable rate until 2006. For the first time since records began, the US is no longer Japan’s largest trading partner – China is.