There is no German help that can solve the basic problem in Spain. Money, or
access to it, is not the problem for the Spanish sovereign. It has had quitre
literally hundreds of billions of euros thrown at it since it joined the EU a
quarter of a century ago and it has still failed to develop a sustainable and
functional economic model. Fully a third of people in Madrid are employed by the state, many in utterly
futile positions which are duplicated at regional and local model. Spain would
be better off if it offered redundancy to all such public sector workers, with a
view to cutting down numbers by say a third. Those who take up the offer should
in addition to their redundancy pay be assured of loan and equity funding for
business start ups to generate wealth that the country badly needs. And I'm not
talking about property development projects on the coast which seems to be the
default Spanish notion of entrepreneurialism. All this schlepping up and down from one European capital to another by
leaders and finance ministers is utterly futile. The fundamental problem will
not be solved by finding some ingenious way of getting "free money" funneled
from North to South. The basic problem is that, given developments in the East,
not enough wealth is being generated to sustain our current economic and social
model in both South and North. Countries such as Greece and Spain are being
picked off in the same way that we see the least fleet of foot in the herd being
picked off by the predator on those BBC wildlife programmes. But if the basic problem is not tackled, what is happening in those countries
will surely happen in countries such as France and the UK, which because of
their proud histories implicitly believe that they are somehow immune, in a few
years time. Let's stop sloganeering about bankers and tax evaders - for whom
incidentally I have not an ounce of sympathy - and stop putting our faith in the
chimera of revolution. Let us rather face up to the simple fact that if we want
to maintain our existing social model we must start to generate wealth or within
a generation we ALL will be eking out our livings on the verge of grinding
poverty.
Access Investments-Building Awareness - European Union-ROMANIA
Friday, October 5, 2012
There is no German help that can solve the basic problem in Spain. Money, or
access to it, is not the problem for the Spanish sovereign. It has had quitre
literally hundreds of billions of euros thrown at it since it joined the EU a
quarter of a century ago and it has still failed to develop a sustainable and
functional economic model. Fully a third of people in Madrid are employed by the state, many in utterly
futile positions which are duplicated at regional and local model. Spain would
be better off if it offered redundancy to all such public sector workers, with a
view to cutting down numbers by say a third. Those who take up the offer should
in addition to their redundancy pay be assured of loan and equity funding for
business start ups to generate wealth that the country badly needs. And I'm not
talking about property development projects on the coast which seems to be the
default Spanish notion of entrepreneurialism. All this schlepping up and down from one European capital to another by
leaders and finance ministers is utterly futile. The fundamental problem will
not be solved by finding some ingenious way of getting "free money" funneled
from North to South. The basic problem is that, given developments in the East,
not enough wealth is being generated to sustain our current economic and social
model in both South and North. Countries such as Greece and Spain are being
picked off in the same way that we see the least fleet of foot in the herd being
picked off by the predator on those BBC wildlife programmes. But if the basic problem is not tackled, what is happening in those countries
will surely happen in countries such as France and the UK, which because of
their proud histories implicitly believe that they are somehow immune, in a few
years time. Let's stop sloganeering about bankers and tax evaders - for whom
incidentally I have not an ounce of sympathy - and stop putting our faith in the
chimera of revolution. Let us rather face up to the simple fact that if we want
to maintain our existing social model we must start to generate wealth or within
a generation we ALL will be eking out our livings on the verge of grinding
poverty.
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With even ECB head Mario Draghi describing its monthly press conference as "boring", the FTSE 100 has finished virtually unchanged, up just 0.03% at 5827.78. Germany's Dax is down 0.23%, France's Cac is off 0.14%, Italy's FTSE MIB is down 0.15% and Spain's Ibex is 0.18% lower.
Only Wall Street is showing signs of life, with the Dow Jones Industrial Average up 0.63% following better than expected weekly jobless claims ahead of Friday's non-farm payroll numbers.
Back with the ECB, Michael Hewson, senior market analyst at CMC Markets, said:
Anyone looking for anything tangibly new from today’s ECB press conference came away with a feeling of anti-climax and not a little deja-vu with Spain remaining the main area of concern with respect to next steps in the European debt crisis. As expected the ECB left rates unchanged and President Draghi reiterated the conditionality required for countries to take advantage of the outright monetary transactions program.
And with that, we'll end for the evening. Back tomorrow for all the latest developments with Spain, Greece et al, and of course the US non-farm payrolls
Maybe shares are the only place left to go, they're not ideal but they have to make do, otherwise where does money go? A big shift into safer commodities (food etc) will cause price inflation and greater suffering for the mass of people. I suppose fictitious capital must for the moment stick with the more fluid markets, as it can hedge and insure and make on the falls too. So we get self destructive capital. It is like the cartoon where the cat sitting on the branch saws it off. But the market is Idealist (philosophically speaking) and doesn't really see this as a material problem, to its ideology everything is a matter of ideas and there are just good and bad ideas, and confidence and its lack. If it cuts off its basis, it cannot matter since it sees its base as its own spirit, and the omnipotence of capital as its chemistry. It is literally in a world of its own and believe it pulls itself up by its own bootstraps. This is the essence of the change in economic science since Marx and Smith's revolutionary materialism, the shift back to economic Idealism, especially in the form of positivism. Economics becomes a mere slave to business ideologies and marketing plans whose goal is to sell and make a profit, and which are therefore prone to self-delusion. But they pay, so call the tune.
The president of the EU received a standing ovation in the Irish parliament today for urging Europe to use the bail out fund to ease burden of the Republic's crippling domestic bank debts, Henry McDonald writes.
Martin Schulz told the Dail the EU must stick to the commitment it gave Taoiseach Enda Kenny back in June that some of the bail out cash should be given to Ireland to fund its bank rescue programme.
Praising the Irish commitment to its austerity programme, the EU president said: “You took the burden on your shoulders to avoid the crash of the system of all the other countries, also my country."
Schulz called on Germans and other Europeans to show "solidarity" with the Irish government and its people.
Earlier this autumn the three foreign ministers of Germany, Holland and Finland had cast doubts on Enda Kenny's claim that the EU bail out programme would include cash to help Ireland shore up its banks.
Today's address in the Dail is a significant boost for Kenny as he battles domestic opponents at home who had charged that he had exaggerated European offers of support regarding bank debt.
Speaking outside government buildings in Dublin this afternoon Kenny said the bank deal for Ireland was back on although he admitted it was not clear if it could be done before the Irish budget in December, which is expected to herald a fresh round of unpopular spending cuts in areas like health and welfare.
Deep recessions have already hit parts of southern Europe, pushing unemployment sharply higher, particularly for young workers. Mr. Draghi called rising youth unemployment, which is above 50% in Spain and Greece, "an incredible waste of resources," and urged governments to make labor markets more flexible.
The euro zone's prosperous northern core has started to show strains. Recent business surveys suggest France's economy contracted last quarter while Germany likely posted little or no growth, analysts said. The 17-nation bloc's economy hasn't expanded as a whole since the third quarter of 2011.
But with fragmented financial markets preventing the ECB's measures from filtering through to private credit and the economy, additional rate cuts may not have much an effect. ECB data Thursday showed small businesses in Spain face sharply higher borrowing costs than their German counterparts.
Another obstacle is inflation, which unexpectedly rose in September to 2.7% from a year ago, well above the ECB's target of just below 2%. Inflation will stay above 2% for the rest of the year, Mr. Draghi said, before falling below 2% in 2013.
ECB president Mario Draghi has cranked up the pressure on countries such as Spain, insisting yesterday the ball is now firmly in their court and they must seek help and agree conditions as the next move in the eurozone crisis.
Greek leader Antonis Samaras told a German paper in an interview published on Friday his country could not manage beyond November without the next tranche of international aid and suggested the ECB could help by easing the terms of its Greek debt holdings.
"The key is liquidity. That is why the next credit tranche is so important for us," Samaras told the business daily Handelsblatt. Asked how long Greece could manage without it, he said: "Until the end of November. Then the cash box is empty."
Staying with economics, the US will publish its latest non-farm payroll figures this evening for September.
Antonis Samaras, Greece's prime minister, has given a statement to the media in Athens.
He was short and to the point. After making an indirect reference to the storming on Thursday of Greece's defence ministry (see 13.20) the Greek prime minister said:
We will continue our struggle with courage and decisiveness for the good of this country.
I am very glad that the German chancellor has accepted my invitation. It is very positive and we will receive her as befits a leader of a great power and friend [of Greece].
Samaras also urged all Greeks to work together, saying he was "sad to see those who try to discredit the country, from all political sides."
Describing Merkel as a 'friend of Greece' could provoke some discontent in Athens. Her original insistence on hard-line austerity resulted in the occasional burning of a German flag (video here), and Merkel herself being portrayed in Nazi uniform (picture here).
But as Helena wrote earlier (see 11.55am), Merkel has softened her attitude to Greece recently. This coincided with reports that the German chancellor feared her bid for re-election in 2013 would be scuppered by a disorderly Grexit.
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