Euro fear as Spain and Italy's debt ratings are downgradedBritish banks and building societies lose rating while pressure mounts on EU to restore faith in single currencyThe eurozone crisis intensified on Friday when Spain and Italy were downgraded by the ratings agency Fitch, heightening fears over the health of Europe's banks. Fitch's move came at the end of a day which had already seen 12 UK banks and building societies downgraded by the rival agency Moody's and amid speculation about co-ordinated European action to bolster the finances of the continent's banks by next weekend. The euro fell against most major currencies, piling fresh pressure on European politicians to restore confidence in the single currency. Germany's Angela Merkel said Europe needed to find a solution for its banks by 17 October. Analysts from Capital Economics estimate the total financial package may top €200bn (£172bn). Merkel and Nicolas Sarkozy of France are due to meet in Berlin on Sunday to discuss the crisis, with bank recapitalisation expected to be at the heart of their negotiations.
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Saturday, October 8, 2011
Euro fear as Spain and Italy's debt ratings are downgradedBritish banks and building societies lose rating while pressure mounts on EU to restore faith in single currencyThe eurozone crisis intensified on Friday when Spain and Italy were downgraded by the ratings agency Fitch, heightening fears over the health of Europe's banks. Fitch's move came at the end of a day which had already seen 12 UK banks and building societies downgraded by the rival agency Moody's and amid speculation about co-ordinated European action to bolster the finances of the continent's banks by next weekend. The euro fell against most major currencies, piling fresh pressure on European politicians to restore confidence in the single currency. Germany's Angela Merkel said Europe needed to find a solution for its banks by 17 October. Analysts from Capital Economics estimate the total financial package may top €200bn (£172bn). Merkel and Nicolas Sarkozy of France are due to meet in Berlin on Sunday to discuss the crisis, with bank recapitalisation expected to be at the heart of their negotiations.
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Nicolas Sarkozy a fait un triomphe vendredi, auprès de dizaines de milliers de Géorgiens rassemblés dans le centre de leur capitale Tbilissi, en dénonçant le non-respect par Moscou des accords qui avaient mis fin en 2008 à une offensive russe en Géorgie. Si le président français n'a pas nommé la Russie dans ses critiques, la cible était limpide. «La France ne se résigne pas au fait accompli», a-t-il dit, promettant de veiller à l'application des accords conclus sous son égide et clamant son attachement à l'intégrité territoriale de la Géorgie.
Trois ans après avoir négocié un cessez-le-feu toujours contesté, le chef de l'État a profité de la dernière étape de sa tournée dans le Caucase pour rappeler fermement la Russie à ses engagements, dénonçant ses «menaces et intimidations». Il a notamment critiqué le maintien, «à rebours des engagements pris», d'importantes forces militaires «de l'autre côté des lignes de séparation», en Ossétie du Sud et en Abkhazie. Allusion aux forces que Moscou, loin d'avoir réduites, a renforcées dans ces deux provinces géorgiennes sécessionnistes, dont la Russie a reconnu unilatéralement l'indépendance. Les accords de 2008 prévoyaient pourtant que leur statut serait défini dans le cadre de négociations, aujourd'hui en panne.
BRATISLAVA, Slovakia — In a television advertisement for the popular Slovak beer Zlaty Bazant, a grinning man with a paunch stands on a sunny beach, nodding his head as the narrator says, “To want to borrow from everyone, that is Greek.” The ad then cuts to a skinny man, standing in a field, who shakes his head. “To not want to lend to anyone,” the narrator says, “that is Slovak.”
The future of the euro could well be decided next week in the Slovak Parliament, which meets in a modern building that is too small to hold offices for all its members and their staff because it was originally designed to hold only occasional sessions of Czechoslovakia’s Federal Assembly, which usually met in Prague. The Parliament building overlooks not only the Danube but also the former frontier of the Iron Curtain, which cut off Bratislava from Vienna, less than an hour’s drive upriver and the cold war gateway to the free world.
The expansion of the bailout fund is in danger because the free-market Freedom and Solidarity Party, just one member of the four-party governing coalition, has held out against it. “I am not the savior of the world,” Richard Sulik, who is both the party’s leader and the speaker of Parliament, said in a recent interview here. “I was elected to defend the interests of Slovak voters.”
The opposition Smer-Social Democracy party could bridge the gap, but its leader, the leftist former Premier Robert Fico, hopes to bring down the government and win new elections, paving the way for his return to power, and is holding out for the coalition to crack.
The situation in Slovakia illustrates how ambitious young politicians, outspoken populists and struggling small parties can hinder collective action — or even derail it. Even if a compromise is found here, as it was in Finland, by the time agreement is reached among all 17 countries, investors will have long since moved on to a new batch of fears.
The vote over the expansion of the bailout fund, the European Financial Stability Facility, and its powers, is only one step. “The E.F.S.F. is not the end of the story. We will need to have other solutions,” said Slovakia’s finance minister, Ivan Miklos. “This is the dilemma. Everyone agrees that we need more flexibility.”
Slovakia’s relationship with the European Union runs far deeper than a single debt crisis or bailout. In the 18 years since independence, few countries have experienced such unusual twists of fate and fortune. From the “black hole in the heart of Europe,” as Madeleine K. Albright described the backward, isolated state in 1997, the country transformed itself into a neoliberal champion of the flat tax.
For 500 euro you can adopt a Greek. He will sleep late, drink coffee, have lunch and take a siesta,”.
Guess, it's getting no different here in the US. Increasingly a small portion of the population is asked to pay more. The top 10% contribute more than 70% of tax revenues and are being asked to pay more by Obama. While the top 10% worked 12 and 14 hour days to get where they are, the rest have nothing to worry. The American dream is increasingly becoming one where a few work and and pay for the rest. We are heading the way way of Greece, spending are way to disaster with populist politicians like Obama and his likes in Congress. There are no ultranationalist parties in the Slovak ruling coalition, and indeed, the only ultranationalist party in Slovakia is teetering close to being ineligible for parliamentary representation (in contrast to the parliaments of many other European countries). Indeed the party that is blocking the increase of the EFSF would be considered ideologically libertarian in the US. It is not wrong-headed nationalism, but wrong-headed libertarianism that is at the root of the Slovak no-vote.
It is sad to see that the NYT, and some of it's readers have not gotten past the idea of Slovakia as a poor, backward, nationally insecure little country, and didn't look at the problem with a little more depth.
Some perspective: It was a surprise to find the land of my grandparents on the front page of the NY Times. My family came from--what was then--Austria-Hungary. I remember my grandmother telling me that in a letter from one of her sisters, that the Russians went to their farm & just 'took a cow.' My mother had mentioned that the country was poor, but I was unprepared when in February, 2009, I took a train from Vienna to Bratislava. An hour's ride revealed farmhouses the size of old one and two-car detached garages. I was enthralled to hear young girls speaking Slovak, as I grew up hearing only the adults speaking Slovak with their parents. The girls I saw resembled my daughters so much they looked liked cousins, and they well might have been. This reverie ended quickly, though, when I got off at a dirty, dilapidated rail station. My instinct was to get back on a train & return to Vienna and its more familiar world. Arguing with myself, I thought I'd at least look at the train station and buy postcards to send to my grandchildren. Stopping at the rest room, I saw something I'd never seen in my travels: there was an attendant who gave each person some sheets of toilet paper. This could only mean that labor was cheaper than toilet paper. I was being quickly shocked into the reality of that one word: poverty. Asking at information, I was unprepared for the unfriendly attitude of the locals. I wandered around the train station & found the taxi stand and a driver who spoke English, thinking I'd probably just have a one-hour tour. Congratulating myself on courage, I walked a few hours in a touristy 'downtown' Bratislava, where I found restaurants with English speaking waiters, wondering why whoever produced this tourist zone hadn't considered the train station. I was happy to find the street sculpture of a soldier peeking out of a sewer cover. On my way back on the train to Vienna, I thanked my grandparents for immigrating to Pennsylvania.
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