Spiegel Online's actual headline is, that a German economic think-tank suggests mandatory loans for the rich.
I think, I have a better, voluntary idea: We see crisis countries struggling to pay interest rates of around 7pc. We also see, that the ordinary private saver is struggling to find secure investment opportunities that at least pay better interest rates than the inflation rate. There are enormous amounts of wealth in the hands of the common people, ordinary savers, in all European countries, especially in Germany. And they actually get not more than 3pc from the banks even on 5 or 10 years time deposits, if the want to have the full German deposit protection. Without time deposit, the interest rates are even meandering around 0.5 - 1 pc.And from that low interest rates, they even have to pay around 28pc flat rate withholding tax (Abgeltungsteuer) on capital gains. This should be put together, the need for lower interest rates for the crisis countries, and the demand of ordinary people for save deposits at reasonable interest rates. And this, if possible, while avoiding the costs private Banks would add for their services. So, if European Countries are guaranteeing States or Banks via ESM or other measures, why don't the just guarantee the deposits of common people on something like an European Savings Certificate, issued by the ECB or another new bank like European institution....If such an institution could offer guaranteed deposit with a net profit of around 3pc, ordinary European savers would pry this certificates out of their hands. At German capital gains tax rate, that would mean an interest rate of around 4,05pc must be offered. The institution would add their bureaucratic costs, and surely could offer the so collected money of the European people, at an interest rate of around 4.3pc or so, to the crisis countries.
That would help the crisis states to get some air, meaning time to reform, and the ordinary European people. And it would even help Mr. Schaeuble's tax office, as Germany would collect more capital gains tax than today, because of the rising average interest rates. After the crisis, one could even think about keeping such a scheme, as a regular way to support private capital formation for ordinary people and financing European states.
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They came with helmets on their heads and the worried look of men with no future on their faces. But the Spanish coalminers who marched through Madrid on Wednesday were clear that they would not give up on their life-or-death struggle for the future of their collieries.
"We'll keep going and, if nothing happens, the fight will just get harder," said Jórge Exposito, a miner from Mieres, northern Spain, as fireworks crackled and twitchy riot police stood by with shields and guns loaded with rubber bullets.
A tense standoff saw occasional police charges, rubber bullets, and demonstrators hurling objects at police. At least 76 people were injured in clashes along Madrid's central Castellana Boulevard, but the march eventually ended with nothing more violent than a rousing singsong.
The miners had brought with them the dust of Castile, the sun-baked central region of Spain that 200 of them had walked through on their 250 mile (400km), three-week march to reach the capital. Many had wept when they were greeted by crowds of supporters in Madrid.
Thousands more came in buses that made on the long trip from the northern regions of Asturias and Leon or the collieries of eastern Aragon and southern Puertollano.
The European Central Bank has published its monthly bulletin today and it - perhaps unsurprisingly - reports that economic growth in the eurozone economy is weak and that "heightened uncertainty" is weighing on confidence. Its bulletin reads:
Inflationary pressure ... has been dampened. At the same time, economic growth in the euro area continues to remain weak, with heightened uncertainty weighing on confidence and sentiment.
Looking beyond the short term the Governing Council expects the euro area economy to recover gradually, although with momentum dampened
Also, the ECB's move to cut its deposit rate to zero has had an instant effect, with banks more than halving the amount of cash parked there overnight.
Reuters reports that the central bank hopes its unprecedented move, which means banks will now get nothing if they park spare cash there, will nurture a return of more significant interbank lending by encouraging banks to look for more profitable options beyond the ECB.
Today was the first day under the new set-up and figures published by the ECB showed banks held €325bn in the facility overnight, well down on both the €800bn they left there the previous day and the €700bn they deposited at the same point of the last reserves period in June.
French car maker, Peugeot Citroen, has announced plans to slash 8,000 jobs and close an assembly plant, with the business saying "the depth and persistence of the crisis impacting our business in Europe have now made this reorganisation project indispensable." It will cease production at its Aulnay site near Paris. AFP reports that unions have condemned the move:
The move sparked a fierce responsefrom the unions, which described the announcement as a "declaration of war" and an "earthquake," with the hardline stance certain to add to the problems facing the new Socialist government led by Francois Hollande.
PSA Peugeot Citroen said it expected the European market to shrink 8pc this year, and had to adjust its business in the face of a worsening outlook.
For the period 2007-12, the market is down 23pc, it said, compounding problems which left its plants operating at just 76pc of capacity in the first half of this year
The euro is underperforming this morning too. Reuters reports that on the EBS trading platform, the currency at one point fell to a fresh two-year low against the dollar, touching $1.2208.
08.52 On the markets this morning, equities are somewhat under the weather. Investors took their money off the table amid uncertainty over whether the US Federal Reserve will launch more stimulus measures as global growth worries persist.
Minutes from last month's Fed meeting, published late on Wednesday, showed the world's biggest economy would have to worsen further before the central bank took any more easing steps. A few officials thought further stimulus was justified, but the majority remained unconvinced
It's a soap opera. There's bankruptcy:
San Bernardino is the 3rd city in California to file bankruptcy in a 2 week stretch. In following Stockton and Mammoth Lakes into bankruptcy this year, San Bernardino is blaming the economic downturn, the burden of employee retirement costs, and allegations of years of falsified budget documents.
U.S. states and localities have run up more than $2 trillion of unfunded pension liabilities, Moody's Investors Service said on Monday.
There's corruption:
Bell is a city of 37,000 people with mostly blue-collar workers. A typical salary for a city manager for a town the size of Bell is around $100,000 per year. Bell City Manager Robert Rizzo earns $780,000.
The mayor of Cudahy has resigned ... accused of taking $17,000 in bribes from a marijuana dispensary owner
El Monte Police Chief Thomas Armstrong oversaw a modestly sized department, with 120 officers patrolling a city of 113,000 residents. But when Armstrong stepped down last year, he was paid nearly $430,000
There's sex:
San Fernando City Councilman Mario Hernandez resigned late Tuesday, amid a recall effort and a scandalous affair with another council member that resulted in dual restraining orders.
But the real scandal isn't that US cities are going bankrupt, that US politicians are corrupt or have affairs. What is scandalous is that day after day you're told that the US is a safe haven for your savings; an example for us all.
Looks no better than Greece to me.
an impassioned address to parliament, Mr. Rajoy called on all Spaniards to back the measures, which include a value-added tax increase to 21% from 18% and cuts to jobless benefits and public-sector wages, saying Spain's economic situation is "extraordinarily serious."
The government had previously said it would need to make no additional cuts this year to meets its budgetary targets, and had rejected the VAT hike. Previously announced measures account for most of the €65 billion target, according to a spokeswoman for Mr. Rajoy, but the precise size of the new cuts wasn't clear as the government's spending and revenue projections have fluctuated since it released its annual budget in March.
The additional measures were swiftly welcomed by the European Commission, the executive branch of the European Union.
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