Fate of eurozone rests in the hands of German
judges. The decision is likely to give financial rescue fund the go-ahead against a
background of German disillusion with single currency. They have the potential to
throw the stock exchange into turmoil, trigger frenzy on bond markets and bring
down the German government. So the eyes and ears of the eurozone will be on the
eight red-robed judges of Germany's
highest court this week when they deliver a long-awaited verdict over whether a
financial rescue fund considered crucial to the future of the euro gets the green light.
The constitutional court is under international pressure to rule in favour of
the European stability mechanism and fiscal pact. A dissenting ruling from the
court, based in Karlsruhe, southwestern Germany, would probably cause havoc on
money markets and cast doubt on the future of Europe's single currency. "The German constitutional court cannot afford to be seen as not being
independent, but it also cannot afford to be seen as the court that brought down
the government," said Constanze Stelzenmüller, a senior transatlantic fellow at
the German Marshall Fund in Berlin. "They're going to have to try to square the
circle; in other words, not bring down the government at the same time as
asserting their independence."
The ruling, due on Wednesday, is expected to give the go-ahead to the ESM, a
permanent bailout mechanism, and the fiscal pact, but with caveats such as
constraints on future decision-making or a ruling that Germany's basic law has
to be rewritten if there is to be further EU integration.
A government insider told the Observer, on condition of anonymity,
that the court "is very independent and always good for a surprise. Nobody knows
what will happen on 12 September." A poll published on Friday on Spiegel
Online showed that 54% of Germans were in favour of the court blocking the
legislation, reflecting the degree to which public opposition to bailouts is
increasing.
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PARIS, Sept 9 (Reuters) - French President Francois Hollande could outline 20 billion euros ($26 billion) in tax hikes and may lower the country's growth forecast forecast for 2013 to a maximum of 1 percent when he speaks on national television on Sunday evening, a French newspaper said.
Weekly newspaper Le Journal du Dimanche said Hollande's government had finalised the "budgetary effort" required as France tries to hit its public deficit target of 3 percent of gross domestic product (GDP) next year or risk losing investors' trust.
The budget will be presented at a Sept. 28 cabinet meeting, pushed back by two days to allow for Hollande's trip to the United Nations' General Assembly in New York and is expected to be the most austere budget in 30 years.
Hollande said last week that by holding state spending steady next year in nominal terms, excluding debt servicing and pension payments, his government would save 10 billion euros in inflation-adjusted terms.
However, that would amount to just one third of the more than 30 billion euros in savings which Hollande says are needed to hit next year's deficit target and stay on course to balance the budget by the end of his five-year mandate.
With his government refusing to cut staffing levels, the bulk of the adjustment will have to come from tax rises.
The increase in taxes would be "between 15 to 20 billion euros," the paper said citing an unidentified source. It added the rises would target firms, wealthy households and savings.
Hollande may also lower the 2013 growth forecast to a maximum of 1 percent if it is finalised ahead of the television interview at 8 p.m. (1800 GMT), the paper said.
The French government is sticking with its 2013 economic growth forecast of 1.2 percent for now but could still trim it in an upcoming budget bill given gloomier estimates by economists, the prime minister's office said on Sept. 5.
"I don't expect much tonight," Marine Le Pen, president of the far-right National Front, told reporters on Sunday. "When the plane crashes on take-off there's little chance of flying. This government crashed on take-off."
Four months into Francois Hollande's presidency, tumbling ratings, cabinet squabbles and talk of inertia have forced him to rethink a soft-touch leadership style that has raised doubts he has the clout to revive France's economy.
Having won the May election with 51.6 percent of the vote, Hollande's ratings have slid below 50 percent in less than half the time it took Sarkozy to fall from favour.
A BVA poll published for Le Parisien on Sunday suggested that almost 60 percent of French people are "relatively unhappy" with the president's start compared with 34 percent on May 31.
In an interview with Le Monde's weekend edition, Hollande defended his style, but admitted the government needed to step up a gear.
"I continue to believe that I was right to push for a period of consultation rather than an accumulation of good or bad decisions," he said. "(But) the urgency is such that it is necessary to accelerate."
Business Insider reported that French paper Le Monde has already speculated openly about a possible motivation for the defection.
"The motivations of the owner of LVMH are not known, but it is more than probable that Mr. Arnault wants to enjoy the lower tax provided by Belgium," the article states.
A socialist president who took office in the midst of Europe's continuing economic crisis, France's Francoise Holland faces an uphill battle to get his country's finances back on track.
The government is contemplating closing many of the current tax code's 500 or so loopholes, as well increasing the tax on dividends and stock options, according to The New York Times. More than 70 percent of such increases would effect the wealthiest citizens.
Worries about a potential mass exodus of the rich have been fueled in part by Holland's campaign platform, which included a proposal to raise the marginal tax rate to 75 percent on income above €1 million per year.
While the real reason for Arnault's actions remain unclear, President Holland can rest fairly easy. According to the Associated Press, the billionaire's passport change will not affect his tax situation. In France, taxes are determined by residency, not citizenship.
I feel that Germany is in the same position as all empire builders, military or financial, find themselves in eventually. They find that the cost of maintaining their empire exceeds the revenue they extract from it.
Thats when they bail out or become subsumed within their creation.
FRANKFURT—Deutsche Bank AG's new co-chief executives are expected this week to explain how they aim to turn around the underperforming company, amid considerable investor skepticism.
The strategy presentation to investors comes just over 100 days after Anshu Jain and Jürgen Fitschen took over one of Europe's largest bank by assets. The two chiefs vowed to thoroughly review the bank's vast operations, with an eye to boosting profits amid tougher regulation and Europe's debt crisis.
With a balance sheet of €2.2 trillion ($2.8 trillion), Deutsche Bank is one of the world's largest banks, yet one of the least well-capitalized
There's not one word anywhere that the main purpose of creating the EU is so the elite and Russia have an easier time controlling the member countries with one bank and one unelected "government". The EU will not fail because the real rulers of earth will not allow it.
I hope they disallow the bailout. The idea that Europe's only functioning economy should give unlimited funds to Europe's failing countries is just Bonkers. In the long term it will help nobody as the southern states will stay bankrupt unless they learn to spend not more than they earn.
Unlimited bailouts will just lead to a bankrupt Germany which is no good to anybody. We need a successful Germany to buy our Goods and services.
"The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries" Winston Churchill
Prosperity is the key! People will put up with all the Bull that goes along with the EU, we'll even give politicians the benefit of the doubt as long as the system works and appears fair.
But its clear that it really isn't working. Worse, the treatment handed down to those who fail to comply is chilling.
What's more the only the solution on offer is more pain and lower living standards for you and your children and your grandchildren and all for some bureaucrats wet dream.
Fuking Ah!
s it any wonder mainstream politics is lurching to the left? The austerity currently being imposed on Europe is designed to save the financial services, the very cause of this malaise, while simultaneously imposing a savage new era of neo-liberalism on ordinary people - its victims.
It is virtually guaranteed to create a lost decade or even a lost generation, and has already crippled every industrialised country that has attempted to 'cut' its deficit through reductions in social services, mass job losses, and a deterioration of pay and working conditions. To the unelected bastards in the ECB, EU and IMF, this attack on workers will make Europe 'more competitive' by reducing the pay of its work force to such an extent that it will be able to 'compete' with the likes of China, India and Brazil. To those of us who couldn't give a shit about whether our country matches up to Beijing in the GDP tables, it is nothing less than a class war, an assault on people who have done nothing to warrant such callousness and cruelty and yet are being sacrificed at the altar of the financial services in the name of a handful of smarmy twats in the Square Mile.
Fuck you George Osborne, and fuck you Mario Draghi. You will both go down in history as patrons of a bygone century, disciples of a bankrupt and ruinous system that will eventually, whether it's now or after another world war, be overthrown.
A wave of deals hit the European bond market Monday, as a mix of Spanish and Italian banks and other companies raised €7.3 billion ($9.36 billion) in the busiest day for European issuances since the beginning of 2009.
The surge in issuance came as companies from weaker European economies took advantage of the improved market tone following the European Central Bank's pledge last week to support the euro-zone sovereign bond market, which has pushed down those yields and in turn reduced companies' borrowing costs.
It was also a busy day for issuance in the U.S.,
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