Relatives of the 12 people killed in December when a truck ploughed into a Christmas market in Berlin have expressed their dismay at the negligent way they say they have been treated by German authorities. About 50 people who lost loved ones in the Islamic State-claimed terrorist attack reportedly told a private meeting called by Germany’s outgoing president, Joachim Gauck, and the interior minister, Thomas de Maizière, they felt abandoned at a deeply upsetting time. Relatives said the first official communication they had with authorities was a bill sent to them by the coroner’s office. The letter reportedly included a warning that if the bill was not paid within a certain timeframe, the recipients would face legal action. One relative told Der Tagesspiegel and Die Welt newspapers that when she received the letter she had thought at the very least it would be a letter of condolence from Berlin’s mayor. Those who were certain that their family members were among the dead said they were prevented by security personnel from entering the Kaiser Wilhelm Memorial church on Breitscheidplatz for a religious service held the day after the attack on 19 December. The reason they were given was that high-ranking German politicians – including Gauck – were among the guests. According to the papers, which reported on the four-hour meeting at Gauck’s Bellevue Palace, the president told the relatives he was distressed to hear they had been unable to enter the church and that he had not known about it at the time.
Wednesday, February 22, 2017
Wednesday, October 28, 2015
The Eurozone has no fire-power to strengthen. QE has failed because they are already mired deep in a Japanese style deflation trap to which there is no easy escape. Draghi's peashooter has allowed them to standstill for a few months and nothing more. The only thing to be done now is to forcibly devalue the currency and drive it through dollar parity as policy. This is what is necessary to re-establish inflation and growth on the continent. This would be European style economics but may be the only way to save the euro. It must be done now though. The alternative is a slow death and definitely lose the euro. My bet is that the Europhiles cannot face up to what they have done and will therefore opt to do nothing. So it will be the slow death then...the Central Banks are in trouble...and relying on Draghi's monthly or quarterly QE payroll. It's as simple as that. Deflation will hit their books hard. Notice the pressure on Banks to impose charges, more now than ever before. As for Deutsche Bank; it's all their satellites that will feel the pinch....something that Merkel has overlooked at her peril....There is no money. Nobody can buy anything so nobody can sell anything so there is no growth and all kinds of social bills still to be paid through more borrowing along with all the previous debt service costs. Reciprocal debt forgiveness: for some nations temporary retreat from an utterly inappropriate €conomic instrument used as a political weapon that has failed on both battlefields: sustainable, as equable as possible, benefit reduction and an opening of the democracy door to all of the peoples with the same voting weight at all levels are the only answers now. But I think the burden is too great and it is too late, especially with the utterly divisive irritant of the imperial court's decrees on immigration to add to the stew....The ECB printing up more trillions of fiat currency to lavish on their .1% cronies in the financial sector "to combat deflation" (and buy up the distressed assets of the increasingly pauperized middle and working classes at fire sale prices) - my, how groundbreaking. Remind me again of the clinical definition of insanity.
Sunday, May 3, 2015
The US recovery suffered a severe setback at the start of the year with the rate of economic expansion far slower than economists had anticipated, according to data released on Wednesday.
US GDP rose by just 0.05pc in the first quarter, well below the 0.2pc expected by analysts and far weaker than the previous quarter's 0.54pc increase. Analysts blamed the strengthening dollar for the poor performance, as the currency's strength hit exports for a fourth consecutive month. The growth data is likely to stay the Federal Reserve's hands in raising interest rates later this year. The FTSE 100 and dollar both lost ground as the data were released. Chris Williamson, chief economist at Markit, said: "A stalling of US economic growth at the start of the year rules out any imminent hiking of interest rates by the Fed. "The slowdown looks temporary, as a rebound from the first quarter weakness is already being signalled by forward-looking survey data, but the sustainability of any upturn is by no means convincing yet." Ahead of the release, analysts at Deutsche Bank said: "The first quarter of the year has been the weakest in recent years, and 2015 is likely to be no exception”. A string of weak first quarter performances has led some economists to question whether the Commerce Department, which releases the figures is "seasonally adjusting" the data correctly. As a result, some believe that the performances in the second to fourth quarters have been overstated. If that proves to be the case again this year, US growth figures should bounce back
Tuesday, May 6, 2014
The International Monetary Fund (IMF) has approved a $17.1bn (£10.1bn) bailout for Ukraine to help the country's beleaguered economy. The loan comes amid heightened military and political tension between Ukraine and neighbouring Russia.
The loan is dependent on strict economic reforms, including raising taxes and energy prices.
The money will be released over two years, with the first instalment of $3.2bn available immediately.
The head of the IMF, Christine Lagarde, said the IMF would check regularly to ensure the Ukrainian government followed through on its commitments.
In March Ukraine put up gas prices by 50% in an effort to secure the bailout.
The government has also agreed to freeze the minimum wage.
The bailout had to be approved by the IMF's 24-member board, which includes a Russian representative.
The IMF loan will also unlock further funds worth $15bn from other donors, including the World Bank, EU, Canada and Japan.
In December last year, Ukraine agreed a $15bn bailout from Russia, but this was cancelled after protests forced out pro-Russian President Viktor Yanukovych....The IMF bailout will also make available $1bn in loan guarantees from the US, which was recently approved by Congress.
"Today's final approval for the $17bn IMF programme marks a crucial milestone for Ukraine," said US Treasury Secretary Jacob Lew in a statement.He added that the bailout will "enable Ukraine to build on the progress already achieved to overcome deep-seated economic challenges and help the country return to a path of economic stability and growth".
Earlier on Wednesday, an international conference in London ended with a commitment to help Ukraine recover tens of billions of dollars worth of assets which were allegedly stolen by the ousted President Yanukovych and his allies.
The IMF warned that Russia was "experiencing recession" because of damage caused by the Ukraine crisis.
Friday, January 10, 2014
The US President, has nominated former Bank of Israel Governor Stanley Fischer as vice chairman of the Federal Reserve. He will take over from Janet Yellen, who becomes the first female chairman of the central bank when Ben Bernanke's term finishes at the end of the month. The appointment comes as the central bank starts to withdraw its historic stimulus. Mr Fischer is regarded as one of the world's most prominent monetary economists and has taught many top economist, including Mr Bernanke and European Central Bank President Mario Draghi. "Stanley Fischer brings decades of leadership and expertise from various roles, including serving at the International Monetary Fund and the Bank of Israel," Mr Obama said in a statement. "He is widely acknowledged as one of the world’s leading and most experienced economic policy minds and I’m grateful he has agreed to take on this new role and I am confident that he and Janet Yellen will make a great team." As second-in-command at the International Monetary Fund from 1994-2001, Mr Fischer played a key role in battling the Asian financial crisis. Before that he was chief economist at the World Bank. Mr Fisher, who has both US and Israeli citizenship, was more recently was credited with helping Israel safely navigate the 2007-2009 financial crisis. He stepped down as governor of the Bank of Israel in June, three years into his second five-year term. Mark Carney, Bank of England Governor, said in a statement: "I am delighted by the prospect of Stan Fischer re-joining the global community of central bankers. I had the enormous privilege of working closely with him when Governor of the Bank of Canada and as chairman of the Financial Stability Board. I have found Stan to be an immense source of insight and wisdom on issues ranging from crisis management to the conduct of monetary policy and the reform of the global financial system." Mr Obama also nominated Lael Brainard, who recently served as the Treasury Department's top official for international affairs, to serve on the Fed board and Fed Governor Jerome Powell to a new term on the board ending in 2028.
Sunday, September 29, 2013
Wednesday, August 28, 2013
When a politician is planning a campaign lie, he has to be able to rely on one thing: No one in his own party must come out with the truth prematurely. The Social Democrats adhered to this rule in the 1976 election, when then Chancellor Helmut Schmidt promised higher pensions and then announced sharp cuts after the election. And the center-right Christian Democratic Union (CDU) also closed ranks in 1990, the year of German reunification, when then Chancellor Helmut Kohl appeared on market squares throughout the country to announce that taxes would not be raised. It was a promise that, as we now know, was followed by the strongest postwar increase in taxes and other charges. Current Chancellor Angela Merkel was still an up-and-coming member of the eastern German CDU and Kohl's eager pupil, so it came as no surprise that she urged her party's executive committee to stay the course on Greece at all costs last week. "There is too much talk in Europe about debt haircuts," the chancellor told her party's executive committee at a meeting last Monday. But after SPIEGEL had reported two weeks ago that the Bundesbank, Germany's central bank, had new doubts about Greece's bailout program, the debate over additional aid packages or debt forgiveness was reignited. This would be extremely dangerous, the chancellor told CDU MPs, as it would create "uncertainty in the markets." In other words, she was saying, it was critical to maintain discipline in the debate.
Less than 24 hours later, Finance Minister Wolfgang Schäuble appeared on a campaign stage in Ahrensburg, a town in the northern state of Schleswig-Holstein, and said: "There will have to be another (bailout) program in Greece."...So there it was.
Friday, August 2, 2013
Greece's international bailout faces a shortfall of around €11 billion ($14.59 billion) by the end of 2015, the International Monetary Fund said Wednesday in a review of the country's program, adding that this could be even bigger if the fund's outlook turns out to be optimistic. Greece's international bailout faces a shortfall of around $14.59 billion by the end of 2015 and this shortfall could be even bigger if the fund's outlook turns out to be optimistic. Global economics expert Charles Forelle joins MoneyBeat. Photo: AP. According to the report, Greece's bailout faces a €4.4 billion financing gap in 2014 and another €6.5 billion in 2015. The gap could be even bigger, according to the head of the IMF's mission in Greece Poul Thomsen, if the fund's growth outlook is overly optimistic or if the country doesn't reach its privatization revenue target. "There are clearly downside risks [to the economic forecast] next year," Mr. Thomsen said during a conference call. "The assumption of a gradual recovery is based on the assumption that we have a rebound in consumption and investment and sustained implementation of policies and broad political support of the program." A group of European Union finance ministers will have to meet and make commitments for the 2014 financing gap at the next bailout review—which likely wouldn't be considered by the board until October, according to Mr. Thomsen. "I have no doubt that we will see a bottoming out and gradual recovery in output next year. The exact timing is where the uncertainty comes," the head of the IMF's mission said. The report says that Greece needs debt relief worth 4% of gross domestic product to meet a 124% debt-to-GDP ratio by 2020. Last week, a European Union official said that the country's bailout faces a shortfall of around €3.8 billion between now and the end of 2014. That gap is because of the refusal of national euro-zone central banks to buy new Greek bonds when the ones they hold mature. When the euro zone and the IMF sealed Greece's latest aid program last year, such a rollover was part of their calculations. But since then, several central banks have refused to follow through, claiming it would amount to financing a national government, which central banks aren't allowed to do under EU rules. The official said the shortfall will have to be closed this fall in order to continue with the bailout program. The EU and Greek flags flew in front of the Parthenon on the Acropolis on February 17, 2012 in Athens, Greece. A group of European Union finance ministers will have to meet and make commitments for the 2014 financing gap at the next bailout review—which likely wouldn't be considered by the board until October, according to Mr. Thomsen. "I have no doubt that we will see a bottoming out and gradual recovery in output next year. The exact timing is where the uncertainty comes," the head of the IMF's mission said. The report says that Greece needs debt relief worth 4% of gross domestic product to meet a 124% debt-to-GDP ratio by 2020.(source WSJ)
Friday, March 22, 2013
German Chancellor Angela Merkel warned Cyprus not to "exhaust the patience of its eurozone partners", reports say. The head of one of Cyprus' biggest banks urged MPs to accept a levy on bank deposits. This was rejected on Tuesday, sparking a fresh eurozone confidence crisis. The eurozone is really turning the screw on Cyprus, and it's being led by Germany. The message is crystal clear - your economic model has to change. They will no longer accept the idea of a national economy within the eurozone that is dependent on its reputation as an offshore tax haven. There is huge irritation with the way the Cypriots have handled things, and that has led to the imposition of deadlines which mean big decisions need to be taken very quickly. The cost of cleaning up the Cypriot banking system must be borne by investors in the Cypriot banking system - like it or lump it. A much-delayed emergency session of parliament is due to vote on a new package of measures to raise the 5.8bn euros (£4.9bn; $7.5bn) needed to qualify for the 10bn-euro bailout. Averof Neophytou, deputy leader of the governing Democratic Rally party, said political leaders were nearing a compromise and a breakthrough was possible on Friday. Government spokesman Christos Stylianides said the authorities were engaged in "hard negotiations with the troika", referring to the EU, the European Central Bank and the International Monetary Fund, the AFP news agency reports. The BBC's Chris Morris in the Cypriot capital, Nicosia, says it is possible that the vote may be delayed once more but he says Cyprus is running out of time to rescue its economy. Banks have been closed since Monday and many businesses are only taking payment in cash.
Tuesday, January 22, 2013
Fresh data from the Bundesbank show that Anglo-German trade in goods and services soared to €153bn in the first nine months of 2012, with both exports and imports booming at double-digit rates.
It is one of the fastest growing trade relationships in the developed world. France lagged behind at €150bn as trade stagnated, with the US at €149bn and China at €115bn.
David Marsh from the financial group OMFIF said the trade swing underlines a “sobering truth” that Germany’s fundamental interests are shifting away from the eurozone core as Berlin embraces the wider world. The EMU share of German trade has fallen from 46pc to 37pc since the launch of the euro, displaced by Asia, as well as Eastern Europe and the Anglo-sphere.
British goods exports to Germany rose 20pc over the first three quarters compared to a year earlier, despite the economic downturn. The surge was led by medical equipment, drugs, car components, and petroleum goods. The deficit with Germany narrowed slighty to €17bn, a sign that trade is becoming better-balanced. Although rarely acclaimed, British suppliers and manufacturers are deeply integrated into the German industrial machine and enjoy the follow-through benefits of German exports to the rest of the world....Now...Does anyone believe British conmpanies have won this business based on EU membership or on the timely and safe delivery of quality products at a competitive price? The UK and Germany are the two major players and net contributors in the EU. France talks it large and is extremely well represented in positions, but without the massive EU funding it receives it would struggle. The real danger here is not the UK leaving the EU and sinking, it is that we will leave and surge ahead. Weakening the EU and strengthening our own position. Add to this the repeated polls in Germany where the majority do not want to be run by the EU and also wish to leave the Euro, and the real danger is clear. The UK leaving the doomed EU project will hasten its demise and open Europe up to trade and competition with the World. The very last thing Socialist leaders want.
A thriving UK outside of the EU would prove an irrisistable pull to other net contributors to leave. This is what keeps the EU commission up at night, not wondering what Pro-EU Cameron will mumble in his speech this week.
Friday, January 18, 2013
The German economy grew by 0.7% in 2012, a sharp slowdown on the previous year, preliminary figures show. The figure was well below the 3% growth seen in 2011 and suggests the economy contracted in the fourth quarter. "In 2012, the German economy proved to be resistant in a difficult economic environment and withstood the European recession," the federal statistics office Destatis said. Some analysts believe the German economy will enter recession itself. Destatis said economic activity "slowed down considerably" in the second half of the year, and particularly in the final quarter. "The full-year growth figure [of 0.7%] implies a contraction of around half a percentage point in the fourth quarter," the office's top statistician Norbert Raeth said. Last month, Germany's central bank, the Bundesbank, cut its growth forecast for this year to 0.4% and warned that the economy may have contracted in the final three months of 2012, and may do so again in first quarter of 2013. The eurozone economy as a whole is already in recession, having contracted in both in the third and fourth quarters of last year. For 2012 as a whole, Destatis said foreign trade was "very robust", with exports up 4.1% on 2011. Imports grew by 2.3%. The positive trade balance was "once again the main driving force for economic growth in Germany". Household expenditure increased by 0.8%, while government spending was up 1%. The figures also showed that while the service sector of the economy expanded, industry and construction contracted. Destatis will publish official fourth-quarter growth figures on 14 February.
Friday, January 4, 2013
The Italian caretaker Prime Minister, Mario Monti, has promised to cut labour taxes in an interview seen as the launch of his election campaign. Mr Monti, who leads a centrist coalition while not standing as a candidate himself, also attacked conservative rival Silvio Berlusconi. In office he vowed to restore market confidence in Italy's finances. Wednesday saw him achieve his aim of halving the difference between Italy's and Germany's bond yields.
These indicate a country's cost of borrowing and reflect how nervous investors feel about lending to them. Germany is used as a benchmark as it is considered the safest bet in the eurozone.
The difference between Italy and Germany's yields dipped below 2.87 percentage points on Wednesday.
When Mr Monti took office as head of a technocratic government in November 2011, the spread had stood at 5.74 percentage points.
Mr Monti's centrist allies are in a three-way race with Mr Berlusconi's People of Freedom party on the right and the Democratic Party on the left. Speaking on radio, Mr Monti pledged to take measures to redistribute wealth in the country. "We need to reduce taxes on the labour force, both on workers and companies, by cutting spending," he said. He defended his administration's record, saying that the "light at the end of the tunnel" was "much nearer".
Since withdrawing his party's support for the government in December, Mr Berlusconi has repeatedly launched attacks against the former European commissioner. "Berlusconi has made improper attacks against me - on areas like family values," Mr Monti said on Wednesday.
"I think I need make no further comment," he added, in an apparent reference to the string of sex scandals involving the veteran billionaire politician. Mr Monti, a former economics professor, was chosen to impose financial rigour on the economy, after Mr Berlusconi quit the prime minister's job. In power, Mr Monti made some progress early on, including raising the retirement age and structural reforms. However ordinary Italians have been hard hit by the combination of tax rises and spending cuts he imposed to repair Italy's public finances. Italians are due to go to the polls over the weekend of 24-25 February....
The Euro will survive even if the ECB has to kill Europeans and recycle them into Euro notes, bit like Soylent Green only bank notes instead of food. Interesting fact on the EU today, they have ordered all the cash machines in the Vatican City to be turned off because the Vatican has failed to comply with anti money laundering regulations. Is this the shape of things to come.
The Euro will survive even if the ECB has to kill Europeans and recycle them into Euro notes, bit like Soylent Green only bank notes instead of food. Interesting fact on the EU today, they have ordered all the cash machines in the Vatican City to be turned off because the Vatican has failed to comply with anti money laundering regulations. Is this the shape of things to come.
Monday, November 5, 2012
After months of speeches, dozens of diner visits, hundreds of thousands of commercials and billions of dollars spent by the campaigns and outside groups, the race is still too close to call.
Mitt Romney promised Americans that under his leadership the country would rediscover its greatness, after languishing under Barack Obama for four years.
Under a slogan of “Real Change from Day One” – a deliberate dig at the president’s winning mantra from 2008 - the Republican contender said that his rival’s “big government” policies had failed.
“If there is anybody who fears the American dream is fading away, I have a message for you: America is about to come roaring back,” he said at his first rally of the day in New Hampshire, one of the closest swing states.
“President Obama is offering excuses, I am offering a plan. He is asking Americans to settle [for what they have got]. But Americans don’t settle, we dream, we aspire and we achieve great things.”
Democrats in Ohio and other swing states are acutely aware that with Mr Romney breathing down the president’s neck, getting out the vote on the day will be crucial.
Morris Reid, a former official in Bill Clinton’s White House who hails from the state, said: “It will come down to turnout and ground game. If we get African Americans to turn out we can get an extra two to three points in Ohio.”
A misleading TV ad by the Romney campaign which claimed local Chrysler plants were preparing to ship jobs to China has angered labour voters and women with blue collar husbands, he said. That could make the crucial difference at this late stage, by encouraging extra numbers to show up at polling stations on Tuesday.
“I believe we will win, but this is close, very close. It makes me nervous. I have never been so nervous about a race,” said Mr Reid.
Monday, September 10, 2012
The president of the ECB said the decision to unleash the new action, which will be called Outright Monetary Transactions (OMT), had not been unanimous. He refused to confirm that the “one dissenter” on the ECB’s Governing Council was Jens Weidmann, head of the Bundesbank, but repeatedly told reporters that both he and the bank were “independent”. “I am who I am,” he said. As I understand it the ECB will only buy on the secondary market therefore it won't be taking part in national bond auctions. It will also only buy the bonds of countries which have been bailed out. So currently this only applies to Greece, it doesn't solve the problem for Spain or Italy unless they ask for a bailout and get one. It is of course unclear where the money would come from for a Spanish or Italian bail out. So I really can't see how this would help Spain get away its bond auctions, the ECB can't buy at the auction ( someone else would have to buy first) and they can't buy unless a bailout is requested. Also Greece as far as I know doesn't issue new debt, it relies on bailout funding and no newly bailed out country would issue new debt either. So I can't quite see how getting involved in the secondary market will help those countries. Finally of course this doesn't do anything to either write off debts or deficits. Countries are going to have to keep cutting , cutting , cutting, their economies will continue to shrink and their debts ( via bailout funds) will continue to grow...... unless a solution is found to the deficit problem we won't find a solution to the debt problem. I'm afraid I really can't see this helping much at all in a practical sense although obviously the announcement has news value and therefore excites the market. Putting something in place that allows debt ridden nations in deficit to potentially get further into debt and further behind the funding curve is hardly something to get excited about. 'Unleashed' was it? You can't unleash something you leaked the day before. The EU propaganda machinery is in overdrive at the moment - leaking one minute and then unleashing the next. I can't wait to see Draghi doing a 'Putin' beating his beared chest to emphasise the ferocity of the whimpering mouse he has set upon the financial markets. Draghi is Merkel's puppy. He was her nominee and when she barks he whimpers. If they ever have a real conflict he would not last a second. "I am who I am" "I Am that I Am is a common English translation of the response God used in the Hebrew Bible when Moses asked for his name." It's also a gay anthem. he's off his trolley, probably because he must find a new anthem and something else to unleash next week.,,,I wait in bemused anticipation.
Tuesday, August 7, 2012
The biggest myth about current economic problems is that historical precedents have much value for understanding them. The next biggest myth is that the problems primarily have to do with difficulties in the financial system. The other big myth is that they are part of some short tem business cycle. The reality is that the post World War II era is winding down in a period of unprecedented change. Several different threads of that change that are difficult to factor are the primary agents creating global economic problems. Certainly the role of automation in ushering in post industrial society is one big factor. So is the global competition from the arrival of most of the world's population into the industrial age. Another factor is less certain, but perhaps more basic. That is the possibility that endless economic growth is not really a human priority. Japan may be the more realistic model of human behavior that is satisfied with some level of reasonable economic well being....After the goldrush: between the 1970s and now there has been almost no growth in real wages, whilst the growth in returns on capital have been almost exponential. People felt their standard of living was rising because of almost unlimited credit. That credit has gone. This has left industries, both manufacturing and service, that are in effect crack addicts. Nobody will borrow personally again until growth returns.. People need to be paid more. That way they'll spend all that money on the wonderful things the rich get richer by making and doing. Companies can either strip costs until their markets are dead, or invest in their wet skills through higher pay....
Of course we need to fix the causes of this crisis, but that is going to do bugger all in the short-medium term to fix symptoms. "The attempt to solve a crisis caused by credit with even more credit has, predictably enough, proved a failure. It has been a bit like the motorist desperately pumping air into a tyre with a slow puncture: it works for a while, but eventually the tyre goes flat again."
Nonsense. A fallacy in place of a reasoned argument. 'Debt caused the problem so debt can't solve it' is based on the fallacy that all debt is equally bad. The problem is not the amount of debt but who holds it - governments with their own currencies paying record low levels of interest vs private individuals and businesses who are depressing the economy by all de-leveraging at once. The former is absolutely sustainable at much higher levels than at present - and the use of this debt to produce stimulus the only obvious way out of this crisis that doesn't take years and condemn millions to the scrapheap. (Of course, if you're unlucky enough to be under the Euro, you are doubly screwed: not only is this path not an option - as the ECB won't back your debt sufficiently to make it sustainable - you can't even devalue.)
Friday, May 18, 2012
We are constantly told that if we don't all neoliberalize everything, screw the poor to give to the rich and destroy all civilized parts of our society then the clever wizards say that TERRIBLE THINGS will happen. The "markets" and the "euro" and other abstractions will PUNISH US. No mechanisms are ever explained. Funny how much this resembles the wizards and magical shamans of the middle ages saying that God is on their side. If we don't give our tithes to the church then God will punish us, little children. ... One estimate put the cost to the eurozone of Greece making a disorderly exit from the currency at $1tn, 5% of output. This is exactly the kind of economic prediction that I'm talking about. How on Earth can they predict this with any degree of remote accuracy? It's like trying to predict the exact results of every match at the upcoming European Championships. Still, you can be virtually certain about one thing in both the football and the economy. Greece will eventually get knocked out. ---- THE FACTS ARE :...If Greece decides to leave the euro it'll certainly make sense in the longer term-- the macroeconomic conditionality attached to the euro by the ECB is a 'one size fits all' framework designed to promote the economies of the EU's richer countries, and Greece is never going to derive any benefit from being in the euro. But for now economic catastrophe looms since Greece's current debt is denominated in euros, and the new drachma will involve a swift and drastic devaluation. There is no way Greece can pay its euro debt using the new drachma. The humane solution would be for the richer nations to cancel Greece's debt the moment it leaves the euro. To not do so would be to punish millions of ordinary people who did nothing to cause this crisis.
Outgoing PM Lucas Papademos has warned it would be "disastrous" for Greece to reject the austerity measures, which come as a condition of its bailout cash: Any modification... must be pursued in a spirit of consensus and with the full agreement of European peers. A unilateral rejection of the country's contractual obligations would be disastrous for Greece, leading unavoidably outside the euro and possible outside the European Union....The decisions we take could seal Greece's course for decades. They could lead the country to the fringe, canceling historic national achievements of the last 38 years.
Wednesday, March 21, 2012
Announcements coming out of Italy. Monti and the unions are out of talks and I'm reading Monti has said unions accepted reform of article 18 firing restrictions for workers – except CGIL. CGIL is Italy's most important union with as many as 5.5 million members.Monti said he was "worried" by CGIL's dissent, but the question was now closed and after meetings tomorrow to finalise details the government would press ahead with legislation.The labour minister Elsa Fornero said protection will be lifted for all workers, not just new hires.....Meanwhile - Day eleventh hundred and six: Good news... no default in Greece. Only 30% of the population is in or around the destitution mark and it's not expected to rise above 50 or 60% in the next couple of years. The economy is picking up nicely with only a piffling full blown depression to handle... Easily sorted though once wages hit Bangladeshi levels later this year. Prices of course still as high as Northern European countries but there is evidence to suggest that children can manage on much lower amounts of bread and milk than once thought. Malnutrition still effects development of course, but seeing as future generations only have working as waiters or farm workers to look forward to for the next 30 years or so it might actually be better that they don't have the cognitive powers to get above themselves....So nice to see light at the end of the tunnel !!
Saturday, March 17, 2012
Eurozone leaders will inject more than €250bn (£207bn) into the single currency's protection fund in a desperate effort to prevent contagion from Greece, it emerged on Friday. Finance ministers will agree the package in a fortnight, although it will still leave the insurance scheme around €1.3tn short of City estimates of the firewall needed to protect Italy and Spain from a panic that would follow if Greece went bust. Officials said the main protection fund, the temporary €440bn European Financial Stability Facility (EFSF), will be increased to around €700bn, before the introduction next year of the permanent European Stability Mechanism. The extra funds are expected to be in place by the summer to insure against a lending freeze by private investors. Brussels has dismissed estimates that a €2tn fund would be needed to provide sufficient confidence in the eurozone. Officials believe a compromise between Germany and France, which wanted to put in place a bigger firewall, will safeguard the euro's future. The German government has lobbied for the fund to be restricted to protect its taxpayers from potential liabilities, which will mostly fall on Berlin.German officials believe the scale of the fund will be sufficient to ringfence Greece and allow it to go bust without spreading fears of contagion to other countries.
Monday, January 23, 2012
A theory to "chew over" … An excess of savings over investment helps to create a credit boom in a current account deficit country and legitimizes pro-cyclical fiscal policy. And then a sovereign debt crisis in the deficit nation kicks off when the government is hit by weak growth and incurs the liabilities of the private sector. The solution requires painful exchange rate adjustments and sparks political acrimony between creditor and deficit nations. This is the current-account-imbalance argument for the global crisis – i.e. deficit US vs. surplus China – yes? Hold your horses: a consensus is emerging that the euro-zone crisis is also at its root a pure balance-of-payment crisis. Hidden behind an opaque monetary wall that requires inflation in Germany and deflation elsewhere to stem the rot. In short, without the freedom to adjust nominal exchange rates, relative price changes within the EMU — i.e inflation in Germany — is needed.
Saturday, December 31, 2011
U. S. - On the bright side, the corporate sector is surprisingly healthy. During the third-quarter reporting season, a majority of companies beat expectations and the average earnings per share reported was higher than predicted at the beginning of the season. Goldman Sachs's estimate for earnings growth next year for the constituents of the S&P 500 is down on this year's 17pc but, at 11pc, is strong enough. Businesses are also beginning to dust off spending plans again, with fixed investment by companies rising at an annualised rate of 15pc in the past two quarters. The US has been the most resilient of the world's major equity markets this year but it has still been relatively disappointing. As a consequence, shares in the biggest companies are on average trading at less than 12 times earnings. Valuations are back to where they were 20 years ago when the dotcom bubble wasn't yet a twinkle in investors' eyes. The key reason to prefer the US today, however, is the commitment of the Federal Reserve to providing economic stimulus when necessary at a time when the hope that the European Central Bank will do the same in Europe looks ever more forlorn this side of a market catastrophe. If you believe that high quality, defensive stocks with an exposure to faster-growing emerging markets will be the safest haven in a difficult investing environment then the US remains the best place in the world to go looking for them. I'm happy to call The United States MY HOME !!!