Chancellor Angela Merkel's conservatives are meeting the center-left Social
Democrats (SPD) for a second round of preliminary talks on Monday afternoon and
plan to decide by the end of the week whether to start formal coalition talks
with them or the Greens. A grand coalition between the conservatives and the
SPD -- Merkel's preferred option because it would give her comfortable
majorities in both houses of parliament -- is looking increasingly likely. So
far at least, progress has been easier than anticipated. The two parties are
finding scope for compromises on a range of domestic policy issues including the
introduction of a minimum wage, tax policy and the energy revolution. The
allocation of cabinet posts could, however, prove contentious. The SPD wants the
post of finance minister, a key position in tackling the euro crisis which is
currently occupied by veteran Wolfgang Schäuble of Merkel's Christian Democratic
Union (CDU), but Merkel doesn't want to hand it over. The SPD also wants the
labor portfolio, which would require Labor Minister Ursula von der Leyen to find
another post. Rumor has it that she would like to be foreign minister, but
sources have told SPIEGEL that Merkel may offer her the Health Ministry instead,
a less attractive position. There is speculation that Schäuble could become
Foreign Minister and that SPD member Jörg Asmussen, currently on the European
Central Bank's executive board, could replace him as finance minister. Another
difficult issue is likely to be dual citizenship. Merkel's CDU and its Bavarian
sister party, the Christian Social Union (CSU), oppose it and the current law
requires people born in Germany to foreign parents to choose by the age of 23
whether they want to be German or foreign citizens. The SPD wants to amend the
law and allow permanent dual citizenship. Merkel said last week she wants to
know which party she will be entering formal coalition talks with by
Oct. 22, when the newly elected Bundestag, Germany's lower house of
parliament, assembles for its first session. That doesn't mean a new government
will be in place by that date, though. It means she wants to be sure who her
likely coalition partner is going to be. 'New Government by
Mid-November' Schäuble told reporters that a new government could be formed
quite quickly. "I think we'll have a new government by around the middle of
November," he said Saturday on the sidelines of international financial talks in
Washington. Merkel, who led her conservatives to their best
general election result since the heady days of reunification in 1990, is
just five seats short of an absolute majority. Some observers said in the
immediate aftermath of the election that the coalition talks could drag
on to the end of the year or even into January. Germany may have a
government a lot sooner than that.
Showing posts with label Media Trust. Show all posts
Showing posts with label Media Trust. Show all posts
Friday, October 18, 2013
Monday, September 30, 2013
Officials in the European Commission are for the first time discussing the
possibility of creating a contingency fund for banks and financial institutions
outside the eurozone.
Under Brussels’ current rescue mechanisms, which include bail-out funds with
€700bn of firepower, banks in non-eurozone countries are not protected.
Officials are discussing the possibility of extending an existing fund that is
currently used as a backstop to help any member state that has a balance of
payments crisis.
Simon O’Connor, a spokesman for the European Commission, said that the ideas
being discussed were about “providing a credible public backstop at the European
level, capable of reassuring supervisors and market participants that financial
stability will be assured”.
According to the Commission, the idea would be to take the existing Balance
of Payment Facility and “within it create an instrument for the financial
sector”. Details are hazy but under the current rules Britain would be liable for 14pc
of the fund - or €7bn. Britain could also be on the hook for any liabilities for
failed banks.
France, Spain and Italy are more likely to support the plan, arguing that the
EU must show investors it is able to deal with any problems that emerge after
bank reviews taking place next year.
"Details are hazy but under the current rules Britain would be liable for
14pc of the fund". And which rules would those be? I hope it wasn't written in the "tidying up
treaty" that was Lisbon?
If it wasn't Lisbon I would love to know what rule it falls under and how the
British population were informed of the risks of signing up to these rules....
or is that too much to ask for in a "democracy". "... Brussels’ current rescue mechanisms, which include bail-out funds with
€700bn of firepower"
What they actually have is nothing. They plan to take some of the €700bn
from Eurozone members (as no Eurozone member is in credit, the EZ member
governments would all have to borrow it from the markets, at market rates). The
chumps at the EC plan to use this cash as a basis on which to borrow a whole
load more money from the markets, at market rates. They would then lend this
money at preferential rates to EZ members who need to bail out their banks.
Now substitute "banks" for "markets" and it becomes apparent that the grand
plan is to borrow a shed load of money from the banks and use that money to bail
out the banks. What could possibly go wrong?
Added to all of this is the dodgy oversight of those who run the scheme, the
lack of oversight/control over how they distribute the €700bn and that they can
choose their own mates to be their auditors.
Saturday, September 21, 2013
Merkel does put German interest above European interest. But that's not the
whole story. She also puts German corporate interest above German public
interest. And most of all, her own interest above anything else.
I understand people in Germany being upset about everyone in Europe wanting
their tax money. But that's only half the truth. The other half is, Germany
profits from investors taking back their money from other European countries,
and now investing it in the much safer and quite profitable Germany. Our
interest rates in Germany have reached an all-time low in the crisis, so German
economy profits from this crisis. And we still live from exports, and so from the EU. German economic interest
is: try to keep up the status quo as long as possible, and that is what Merkel
does.
Problem is, in my opinion, that will be disastrous for Europe. Polemics
aside, the south europeans have a point. There's need for reforms, there's need
for savings, but there also needs to be a perspective. You can't just close
schools, hospitals, stop investments in infrastructure and deny people their
healthcare for nothing in return but a lack of perspective. Just fire everyone
from public service and don't offer any alternative for them. You can't just
sacrifice the future of countries and societies for nothing but the need to save
money.
It almost seems like Britain was right in its Euro-scepticicm. And everyone
who was afraid of a too strong Germany after its reunion. That doesn't mean we
should split up. In present and future, we simply have no choice but to work
together in Europe. We're all in the same boat. If Britain wasn't in the
European boat, few would care about it anymore. UKIP is wrong, British interest
has to be in a strong Europe, not in a lone Britain.
Our unpopular former chancellor Gerhard Schröder made the reforms that led to
present German economic strength. He risked his chancellorship, against his own
party, to put through inevitable reforms. He turned the inert giant into an
economic powerhouse. Merkel hardly does anything, the economic success she rests
on was caused by her predecessor who took great risks. Risks that Merkel would
never take. She's not the risky type. Schröder made reforms that were in parts
flawed, but his own party, the SPD, is willing to work with and against the
flaws today. Merkel is nothing like that. Her own influence is everything, and
everything else plays second role, be it Germany, be it Europe.
Chancellor Schröder would have forced similar reforms on those countries, but
he would have tried to convince them. Something like "it's going to be hard, but
we're in the same boat, and we need to work together to get out of the crisis
with greater strength". Even if it would damage his reputation in Germany.
Merkel doesn't care about that. She simply says: "it's inevitable, deal with it.
German savings are secure, I don't care a lot about the rest of Europe". She
only cares about her position. And her position doesn't depend on Greece, Italy,
Spain, or Britain. It only depends on Germans wanting to keep their money, and
German economy, which is, again, profiting from the Euro crisis.
I am convinced that will destroy Europe, and I will vote for her adversary
this month, but I have very little hope in a regime change. My hope is for a
large coalition in which the SPD will have a little bit of influence on her
Europe policy. A Europe policy, that is, contrary to her claims, careless and
heartless.I find the idea that a German chancellor is responsible for solving
the European economic crisis quite ridiculous. It is not in her powers to do so
as she is no monarch but the democratically elected head of the German
government. To all those moaning about her putting Germany's interest first -
well that's actually her job description. That means, that she will, quite free
of any ideological leaning decide hand in hand with the German industry what
should be pursued for Eurozone. Be the next chancellor Steinbrueck or Merkel,
nothing will change that.
Sunday, September 8, 2013
The head of the European Central Bank has ruled out handing Greece a debt relief lifeline, hours after the head of the eurozone finance ministers admitted that Athens will need additional aid next year.
ECB president Mario Draghi was adamant that the ECB would not participate in any debt restructuring, despite growing speculation that Greece will be unable to fully return to the financial markets when its current bailout ends in 2014.
"It is pretty clear that we cannot do monetary financing," Draghi told reporters in Frankfurt on Thursday, insisting that the ECB's own treaty made it impossible. Asked directly if the ECB would take part in any Greek debt relief, he said: "No", adding that any future assistance for Greece must also come with strings attached, or "conditionality". Greece faces a funding gap of up to €11bn in the second half of 2014, according to figures from the International Monetary Fund. Rumours that a third bailout will be needed have swirled through the financial markets in recent weeks.
Dutch finance minister Jeroen Dijsselbloem, who also chairs the eurogroup of finance ministers, left MEPs in little doubt that euro governments will have to consider some extra help for Greece soon. Appearing at the European parliament, Dijsselbloem said it was "realistic to assume that additional support will be needed" when the existing bailout concludes at the end of next year.
"As far as the potential need for a third programme for Greece is concerned, it's clear that despite recent progress, Greece's troubles will not have been completely resolved by 2014," said Dijsselbloem, who warned that Greece would probably not be able to return to borrowing from the financial markets when its bailout ends. Dijsselbloem said the Eurogroup "stood ready" to help Greece, while rejecting suggestions that a full-blown third bailout package would be needed. He argued that officials would not be able to assess Greece's progress until next April. But according to Reuters, Euro officials may need to take a decision this November.
Saturday, August 17, 2013
Olli Rehn (the incompetent idiot), Europe's economic commissioner, welcomed news that the 17 nations that use the single currency had expanded collectively by 0.3% in the three months to June – the first pick- up in activity since the autumn of 2011.
But Rehn said celebrations should be put on hold given Europe's jobs crisis and the wide disparity in economic performance across the eurozone. "Yes, this slightly more positive data is welcome – but there is no room for any complacency whatsoever", Rehn said. "I hope there will be no premature, self-congratulatory statements suggesting the crisis is over. For we all know that there are still substantial obstacles to overcome: the growth figures remain low and the tentative signs of growth are still fragile."
Rehn (the conventional idiot) said the average number for the bloc hid substantial differences between states, with Germany's positive performance outstripping that of Spain and Italy, who remain in recession. He added that some member states still have unacceptably high unemployment rates, with economic reforms still in their infancy, leaving the region with a "very long way to go."
"A sustained recovery is now within reach, but only if we persevere on all fronts of our crisis response: keep up the pace of economic reform, regain control over our debt, both public and private, and build the pillars of a genuine economic and monetary union," he said. Figures released by Eurostat, the EU's statistical agency, showed that a stronger than expected performance by the single currency's two biggest economies - Germany and France - helped haul the eurozone out of recession. Financial markets had been braced for a rise in eurozone GDP following the increase in industrial production reported on Tuesday but were surprised by news that Germany grew by 0.7% in the second quarter and that France grew by 0.5%. Along with the rest of the world, the eurozone fell into a deep slump in the winter of 2008-09 before recovering in 2010 and early 2011. But a second leg of the downturn then commenced as a result of the eurozone's sovereign debt crisis, which hit confidence, led to a mothballing of investment and resulted in the imposition of hardline austerity programmes.
Despite the growth in the second quarter, the European Commission still expects the eurozone to suffer a second full calendar year of falling output in 2013, with growth resuming in 2014.
Eurostat's figures showed that Italy and Spain - the single currency's third and fourth biggest economies - both remained in recession in the second quarter of 2013. Spain's economy shrank by 0.1% percent on the quarter, while Italy posted a 0.2% decline.
The Dutch economy also contracted by 0.2% but Portugal – one of the three countries that required a financial bailout – recorded the fastest growth of any eurozone country with 1.1% quarterly growth.Funny - some friends just returned from France on a hunt for bargain property - looked at a 3.5M Euro estate that was asking 1.2M. They passed because as they stated, "you could smell desperation in the air - shops in the nearby town were shuttered - there was no activity on the street"... Can someone explain how France is growing? The MSM is getting very desperate trying to create "green shoots"... Do you think we are stupid enough to believe this BS?....am so disillusioned with this its incredible. It's just a cycle which lasts 10-15 years. Growth-Depression, Growth-Depression. Couple this with increasing house prices which are doomed to crash again we have the same thing happening. Europe obviously hasn't learned and as the saying goes they will be doomed to repeat the past.
Saturday, August 10, 2013
Greek unemployment rises to record 27.6%
The Greek jobless rate rose to 27.6% in May from 27% in April as austerity and recession continued to weigh on prospects.
It was the highest since the country's statistics agency started publishing the data in 2006, and more than twice the 12.1% eurozone average in June.
The number of unemployed people in the country is now 1.38m, an increase of 30,558 compared with April.
A breakdown of age groups shows unemployment among 15-24 year olds hit 64.9% in May:
15-24 - 64.9%
25-34 - 37.7%
35-44 - 24.7%
45-54 - 20.9%
55-64 - 16.2%
65-74 - 9.6%
Welcome to the USA Mr Samaras - where the FED (the cause of the Great Depression of 1929 and the rise of Fascism in Germany and Italy) resides and prospers! We really have a lot of sympathy for your poor downtrodden masses because the Fed-backed ECB and IMF have created the un-ending debt that caused them! We hope our little "media show" of sympathy will put food on everyone's plate in Greece real quick!
It is time to open central banking books for two overall reasons: either they are totally incompetent imbeciles or this depression is being orchestrated for financial gain and control of sovereign nations. Whatever the answer may be, banking officials need to be reviewed by independent government panels and then removed for crimes against humanity.
After all, these bankers have steeled themselves to loss of life and livelihood for generations – the rest of us need to steel ourselves to getting rid of them pronto before their scheme for ultimate control is finalized. For a start, fair referendums need to be allowed in all EU nations for an end to this “Euro Madness” and a return to individual currencies printed directly by government treasuries.
Monday, July 22, 2013
In Italy - The Bank of Italy says it expects Italy's economy to
shrink 1.9pc. That is significantly down from its previous
estimate of a 1pc contraction. However, it did say growth would return next
year and it expects that economy to grow by 0.7pc in 2014. There are
downside risks around the recovery in activity between the end of 2013 and the
beginning of 2014, linked mainly to prospects for the global economy, liquidity
conditions for companies and credit supply. It added that
improvement in the economy depended on "the full and efficient implementation of
economic policy measures" and said the recovery could be at risk if a loss of
investor confidence led to a rise in Italy's borrowing costs. The central bank
also said there was little prospect of an improvement in Italy's
unemployment rate, which it said would rise from some 12pc in 2013 to
nearly 13pc next year, with no improvement until the second half of 2014.
In Greece - the vote in the Greek
parliament is expected to be close. MPs will vote on
more than 100 articles contained in a multi-bill of reforms that paves
the way for sackings and job transfers in the civil service. Prime Minister
Antonis Samaras and Deputy Prime Minister
Evangelos Venizelos met yesterday to discuss
the mood in their respective parties, New Democracy and PASOK. The coalition
has 155 MPs, giving it a slim majority in the 300-seat Parliament but there was
relative confidence among government officials that any defections would be kept
to a minimum. However, it would seem that the government is more concerned
about keeping the country's 325 mayors happy, as ekathimerini.com
reports. The government appears more concerned about the long-term
impact of alienating the country’s 325 mayors, especially since local elections
are due next year. Mayors have expressed opposition to a range of reforms,
particularly the fact that many local authority workers will be among the 25,000
civil servants to be placed in a job transfer scheme by the end of the year.
The government conceded some ground on Tuesday by agreeing not to move
municipal police officers or school caretakers if they had postgraduate degrees.
More importantly, though, the coalition decided to withdraw a provision that
would have led to mayors facing disciplinary action for not keeping within their
budgets. It also backed down on the powers that an observatory set up to monitor
municipal finances would have. The watchdog will not have the right to
intervene in the drawing up of municipal budgets, as had previously been
planned.
Monday, July 8, 2013
...the German model is really a "beggar thy neighbor"
Schröder's economic "reforms" entailed gutting social security and unemployment benefits and eliminating the minimum wage in order to force young/unemployed Germans to go to work for one euro an hour (literally). Has this worked? Only sort of. True, the dramatic reduction of labor costs has been one of the keys to Germany's phenomenal export-oriented growth over the last decade. Combined with the artificial deprecation brought about by the adoption of the Euro, it's helped Germany maintain an extremely favorable balance of trade vis à vis other members of the Eurozone. What this means is that Germany's "success" has been built by selling more to their neighbors than their neighbors sell to them. (Internal demand on the other hand has flat lined; the German "model" is entirely predicated on exports.) Here's the thing though: it's impossible for all Eurozone members to maintain a trade surplus towards each-other; for one country to maintain such a surplus, another must have a deficit. Calls for the Mediterranean states to emulate the German model are thus deeply paradoxical; were the PIGS to run such a surplus, who would eat the deficit?
In other words, the German model is really a "beggar thy neighbor" policy, one which literally requires the impoverishment of the Mediterranean states. For ten years this kind of worked: Germany sold more to Spain et al than it purchased, then recycled those profits back to the periphery in the form of lines of credit, allowing those countries to purchase even more goods yielding greater profits, etc, etc. (Rinse and repeat.) Eventually the imbalance grew too deep for anyone to ignore and hey presto we had the start of the Eurozone crisis.
So, with shades of Plato's pharmakon, what the author is here calling for is to treat Europe with more of the poison that caused it's illness in the first place. What he identifies as Germany's "successful example" is actually the source of the crisis, not its resolution. A real solution would require the Germans to adopt a new policy based on internal demand, increasing domestic purchasing power by (for example) establishing a minimum wage and strengthening the working classes... Yes, the German mercantilist strategy cannot be maintained indefinitely and they do need to switch from an export driven economic strategy to one more balanced by domestic demand. And yes, the internal disparities and inconsistencies within the Eurozone make escape much more difficult (if not impossible) for the Southern periphery, including possibly France also.
But there are two further problems which are really at the genesis of the Eurozone's economic difficulties - one of which is shared with the UK. First, most of Europe (including the UK) has been running consistent deficits (trade and budget), and while one can argue about when and how and how fast these deficits are reversed, ultimately they will need to be for sustainability. It was not the economic disparities of the Eurozone per se which created their current difficulties, but the lack of flexibility to respond to the credit crisis. The other major problem is the sclerotic nature of a lot of Eurozone economies (eg France, Spain), with myriad obstacles and costs put in the way of enterprise and real job creation, and the disincentives to employment and inward investment.Tuesday, July 2, 2013
Experts "travaille" sur les "eurobonds" à Strasbourg - we are screwed !
Les "eurobonds" reviennent. La Commission européenne a annoncé mardi 2 juillet à Strasbourg la formation d'un groupe d'experts pour évaluer les avantages et les risques d'une mutualisation partielle de la dette au sein de la zone euro, vue comme une première étape vers la mise en place d'obligations communes (euro-obligations).
La Commission avait décidé de mettre en place ce groupe d'experts en contrepartie d'un renforcement de la discipline budgétaire décidée au printemps, et sous la pression du Parlement européen. Onze experts font partie de ce groupe, dont l'économiste française Agnès Benassy. Ce groupe devait initialement présenter ses conclusions d'ici mars 2014, mais aucune indication calendaire n'a été fournie mardi.
Le rôle de ce groupe est d'analyser les avantages et obstacles à la mise en place d'un fonds d'amortissement, qui permettrait de mutualiser une partie de la dette de la zone euro, ou la mise en place d'"eurobills", des titres de dette communs à court terme.
PRESSION DE BERLIN - Le sujet est particulièrement délicat car l'Allemagne, qui emprunte à très bas coût sur le marché de la dette, refuse toute forme de mutualisation de la celle-ci au sein de la zone euro. Le sujet a été maintes fois évoqué, et toujours repoussé à plus tard, sous la pression de Berlin.
Pendant la partie la plus aiguë de la crise, de nombreux responsables politiques et économistes plaidaient pour la mise en place d'euro-obligations, afin de faire baisser la pression sur les pays les plus fragiles de la zone euro, dont les taux d'emprunt atteignaient des niveaux insupportables.
"Les membres de ce groupe d'experts, dirigé par Mme Gertrude Tumpel-Gugerell, ancienne membre du directoire de la Banque centrale européenne, possèdent une expertise impressionnante et ont des parcours variés. Je leur fais confiance pour donner des conseils précieux sur ces questions très complexes d'un point de vue politique, économique et juridique", a affirmé le président de la Commission, José Manuel Barroso, qui s'exprimait devant le Parlement européen.
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Monday, June 24, 2013
The Shibor overnight lending rate in Shanghai spiked violently to 29pc, with
wild moves in seven-day and one-month money. The central bank refused to
intervene to calm markets, apparently determined to purge excess from the credit
system.
China Securities Journal, a voice of the regulators, said: “We cannot
use a fast money supply growth as in the past, or even faster, to promote
economic growth.”
“I am extremely concerned about China,” said Lars Christensen from Danske
Bank. “They are overdoing it and are on the verge of making the same mistake as
the Fed and the European Central Bank before the Lehman crisis in 2008, when
they failed to see how much the economy was slowing.” Mr Christensen said the world now risks a “perfect storm” as the Fed prepares
to taper its bond purchases (QE) at the same time as tightening the spigot of
worldwide dollar liquidity.
The twin effects are cascading through emerging markets, pummelling commodity
exporters such as Brazil, South Africa and Russia that sell to China, but also
tripping up Turkey, Ukraine, Hungary and others that rely on external funding.
“Everything is being hit indiscriminately,” said Neil Shearing from Capital
Economics. The Turkish lira and the Indian rupee both fell to record lows as investors
pencilled in Fed tapering for September. “The party is over,” said Ceros
Securities in Istanbul.
Fed chairman Ben Bernanke has brought forward his QE exit by lifting the
unemployment target from 6.5pc to 7pc. He dismissed the looming threat of
deflation as a “transitory” effect.
Brazil’s real weakened to a four-year low of 2.26 against the dollar, down
15pc since April, while the cost of credit default swaps gauging risk in
Indonesia and Vietnam jumped more than 40 points. The Kremlin said Russian
companies may have to delay bond issues, but denied immediate credit stress.
The latest country moving onto the radar screen is Poland, where construction
crashed 28pc in May, “Poland is suddenly stalling, something we haven’t seen in
almost two decades. The central bank has been way too hawkish,” said Bartosz
Pawlowski from BNP Paribas.
Benoit Anne from Societe Generale said the “second leg” of the emerging
market sell-off is just starting, warning that there is a “long way” to go
before investors wake up to the full impact of Fed tightening. Latin America’s debt crisis of the early Eighties and East Asia’s crisis in
the Nineties were both triggered by turns in the US credit cycle, though
emerging markets have ample foreign reserves to defend themselves this time.
Mr Shearing said the BRICS quintet will be much weaker than assumed over the
next two years for their own structural reasons, but there is now the risk of a
“mutually reinforcing” effect as dollar stimulus drains away. The latest ructions in China came after premier Li Keqiang omitted mention of
the liquidity strains in a speech this week, instead dwelling on rampant excess
in the shadow banking system and overcapacity in obsolete areas of the economy.
Though Deutsche Bank said the unwinding of hot money inflows disguised by
over-invoicing may also be to blame.
Mr Li’s comments were a signal that the new leadership intends to prick the
credit bubble, even though the hard line has already led to industrial
recession. China’s HSBC manufacturing index fell sharply in June, dropping
further below the “boom-bust line” to 48.3. Zhiwei Zhang from Nomura said Beijing aims to crack down on a plethora of
trusts, wealth products and offshore vehicles intended to evade loan curbs.
These have accounted for half China’s credit growth over the past year. It is willing to “tolerate short-term pain” to wean China off
over-investment, and is less worried about social instability now that its
workforce has begun to contract and the rate of migrants from rural areas is
slowing.
The strategy is to tighten before the Fed winds down QE in order to “avoid
two negative shocks occurring simultaneously”, but this may be hard to manage
given the scale of the boom. “We expect a painful deleveraging process in the
next few months. Some defaults will likely occur in manufacturing industry and
in non-bank financial institutions,” he said. Fitch Ratings said total credit has jumped from $9 trillion to $23 trillion
over the past five years, surging from 125pc to 200pc of GDP. This is a bigger
rise than in any of the major bubbles worldwide over the past half century.
China has the firepower to cope with any crisis and will not let the state
banking system collapse. Keeping growth on track now that credit has reached
saturation point is a tougher challenge. Source telegraph.uk
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Friday, June 21, 2013
Christine Lagarde, one of the most powerful women in the world as head of the
International Monetary Fund, is facing acute embarrassment after a letter in
which she urged former French President Nicolas Sarkozy to "use me" was found
during a police raid on her Paris flat. An undated copy of the letter was found at Mrs Lagarde’s flat in Paris during
a raid by police investigating a spiraling
financial scandal surrounding payments to businessman Bernard
Tapie.
"I'm on your side to serve you and serve your projects for France," she said
in the letter.
"Use me during the time that suits you best and fits your action and your
cast....If you decide to use me, I need you as guide and supporter: without
guide, I might be ineffective, without support I might be implausible."
She signed off: “With my immense admiration, Christine L.”
She also claimed that she does not have "personal political ambitions" and
remarked she does not want to become "an ambitious servant", referring to some
members of Sarkozy's entourage.
The letter was leaked to French newspaper Le Monde, and its
publication has caused acute embarrassment for the head of the IMF.
Ms Lagarde was finance minister during Mr Sarkozy's term as President, before
stepping down to become managing director of the Washington-based IMF in 2011.
Her Paris flat was raided as part of an investigation into her handling of a
2008 compensation payment to a businessman supporter of ex-president Nicolas
Sarkozy, her lawyer said.
Police are investigating claims that Lagarde, when French Finance Minister
under Sarkozy, acted illegally in approving the €285m arbitration payout to
Bernard Tapie. Ms Lagarde denies any wrongdoing.
Monday, June 17, 2013
Initially the €Z and EU were the major players when Greek problems started in
2010. DSK offered quite meaningful assistance in terms of liquidity from what
he now called BRICS whom he had previously helped progress in the global
economy. DSK had also indicated that a larger BRIC role in IMF should be put in
place such that European directorship should not be automatic within 10 years.
DSK even promised to renegotiate the World Bank = USA; IMF = Europe convention
as best he could and to ensure that there would be at least 1 BRIC deputy
director ASAP and the First Deputy director would be a BRICie within 5 years
along with non-Europeanization of senior posts like Chief Economist and Head of
Research and Statistics as quickly as possible. DSK made quick progress as
China’s ZhiMin was appointed one of the 3 deputy directors and the stage set for
the appointment of a second from Japan, I think, but forget – something like
Saratonago. Needless to say BRIC investment was really useful as although all
the money is promissory notes to the IMF, BRIC money is the result of growing
economies not governmental borrowing at more and more punitive rates. DSK was a
private and I believe seriously mentally ill, disaster but probably the best IMF
director in 2 decades. So DSK had ensured IMF power through new BRIC money and
in return increased BRIC power and influence. Then lots of things happened
together. Sokrazy realized his UMP candidacy for 2012 presidency was endangered
by his FinMin – Laggard. The size of the French exposure to Greece, around 80bn
was seen. Clever semantics on the reporting request and use of French banks
outside France allowed a much less €40-50bn to be reported, but it was clear
that Greek default could not be allowed or France would fail. DSK had to go. May
2011. An opportunity to get rid of an election threat and relieve pressure on EU
institutions and on the basis of exhibited Greek ‘attitude’ shown already, ‘une
carte blanche’ to drive a country to an economic wasteland and political slavery
exactly what the € was devised for, whilst defending France and perhaps
persuading Germany to pay for the economically protectionist, anti-democratic,
utterly globally non-competitive paradigm again. Sarkozy sowed the seed and got
what he wanted even to the point of getting agreement that an €Z director was
the logical European choice. Next: Laggard insults and threatens RSA’s brilliant
Trevor Manuel out of directorship contest, then gets Mexico’s Carsten disbarred
through NAFTA links and David Lipton the first deputy because he’s American.
Laggard installed June 2011. Olivier Blanchard becomes chief economist as well
as his existing job of Head of Research and Statistics which gives him both
dataflow and data interpretation control throughout the IMF – no need for
anybody else. Laggard now able to impose her troika dominance over a blackened
EU duo. She picks AH Thomsen, already versed in Ireland, to lead in Greece. She
promises to furnish lots of BRIC money – much more than the ECB and EU and thus
gets voting control of the Greek troika. She fails to get most of the BRIC money
for Greece and has managed to divide a global rescue actor called the IMF into
BRICS and mates like OZ versus the rest with a USA in the inert middle. She must
go. In summary all three troikista have failed the Greeks and others. The ECB
and EU started it: the Laggard IMF has finished it in truly feudal robber baron
fashion.
Friday, June 14, 2013
Oskar
Lafontaine, the German finance minister who launched the euro, has called for a
break-up of the single currency to let southern Europe recover, warning that
the current course is "leading to disaster". "The economic situation is worsening
from month to month, and unemployment has reached a level that puts democratic
structures ever more in doubt," he said. "The Germans have not yet realized that
southern Europe, including France, will be forced by their current misery to
fight back against German hegemony sooner or later," he said, blaming much
of the crisis on Germany's wage squeeze to gain export share. Mr. Lafontaine said on the parliamentary
website of Germany's Left Party that Chancellor Angela Merkel will "awake
from her self-righteous slumber" once the countries in trouble unite to
force a change in crisis policy at Germany's expense. His prediction appeared
confirmed as French finance minister Pierre Moscovici yesterday proclaimed the
end of austerity and a triumph of French policy, risking further damage to the
tattered relations between Paris and Berlin. "Austerity is finished. This is a
decisive turn in the history of the EU project since the euro," he told
French TV. "We're seeing the end of austerity dogma. It's a victory of the
French point of view." ... Lafontaine is widely regarded as a joke and a
failed politician in Germany, so its only fitting when AEP is basing his
arguments on him .... The immediate problem with the Euro is essentially in not
having a single borrowing authority issuing Euro bonds - as I argued. This does
not require a single European government, just better financial
coordination. The big problem with "Europe" is the need for a unanimous vote on big
issues - and that's hard to overcome in the fractious atmosphere caused by the
counter-productive austerity a outrange mind- set currently in fashion. But
there are signs that this suicidal approach to finance and economics is coming
to an end in Europe at least. But where is the European leader (or couple of leaders) we need to push (for
reducing waste of course) for investing in the future and making sure any
"easing" goes to lending to those, government and private, entities
that are investing and providing knowledge and jobs for the future? Investing
in education, job training, research and development will bring in private
investment. But when people spoke of a president for Europe Tony Blair's
name was bandied about! We in Europe need politicians who aren't smeared with
the past or chained by ideology, but look out with clear eyes on what went
wrong and how to put it right. The next generation must be given a chance
towards meeting the immense challenges faced not just by Europe but by all
humanity.
Tuesday, June 11, 2013
Earlier this year, the Pentagon publicly accused China for the first time of being behind attacks on the US. The Washington Post reported last month that Chinese hackers had gained access to the Pentagon's most advanced military programs. The director of national intelligence, James Clapper, identified cyber threats in general as the top national security threat. Obama officials have repeatedly cited the threat of cyber-attacks to advocate new legislation that would vest the US government with greater powers to monitor and control the internet as a means of guarding against such threats. One such bill currently pending in Congress, the Cyber Intelligence Sharing and Protection Act (Cispa), has prompted serious concerns from privacy groups, who say that it would further erode online privacy while doing little to enhance cyber security. In a statement, Caitlin Hayden, national security council spokeswoman, said: "We have not seen the document the Guardian has obtained, as they did not share it with us. However, as we have already publicly acknowledged, last year the president signed a classified presidential directive relating to cyber operations, updating a similar directive dating back to 2004. This step is part of the administration's focus on cybersecurity as a top priority. The cyber threat has evolved, and we have new experiences to take into account. "This directive establishes principles and processes for the use of cyber operations so that cyber tools are integrated with the full array of national security tools we have at our disposal. It provides a whole-of-government approach consistent with the values that we promote domestically and internationally as we have previously articulated in the International Strategy for Cyberspace. "This directive will establish principles and processes that can enable more effective planning, development, and use of our capabilities. It enables us to be flexible, while also exercising restraint in dealing with the threats we face. It continues to be our policy that we shall undertake the least action necessary to mitigate threats and that we will prioritize network defense and law enforcement as the preferred courses of action. The procedures outlined in this directive are consistent with the US Constitution, including the president's role as commander in chief, and other applicable law and policies."
Wednesday, May 29, 2013
Christian Noyer, governor of the Bank of France, said the FTT posed a very
real “risk” to the economy if not implemented correctly. France was one of a
splinter group of 11 European Union countries to decide to press forward
independently with a so-called Tobin tax earlier this year. The UK has opposed the move, which Sir Mervyn King, Bank of England Governor,
said earlier this month does not even have the unqualified backing of the 11
members adopting the levy. He claimed there was “enormous scepticism” even among
politicians in countries signed up to it, adding that he could “not find anyone
within the central banking community who thinks it is a good idea”. Mr Noyer’s comments appeared to confirm Sir Mervyn’s analysis. Mr Noyer, who
is also on the European Central Bank board, said: “It will be essential to
define the base, interest rates and scope of a possible financial transaction
tax in order to prevent the risk of destroying entire segments of our financial
industry or the offshoring of jobs, as well as the highly counterproductive
effects on government borrowing and the financing of the economy.”
Under the current plan, a 0.1pc levy would be charged on equity and debt
transactions and a 0.01pc tax on derivatives. Germany, France, Italy and Spain
are among those that have agreed to the plan, which the European Commission
expects will raise €35bn (£30bn) a year and hopes will be in force by 2014.
To prevent business moving abroad, the FTT carries an “extra-territoriality”
clause that would see the levy imposed on any euro-denominated transaction, even
in countries that are not signed up to the FTT. The UK is challenging the
decision in the European courts, and the US and other countries have vowed to
block it – which would almost certainly make the FTT unworkable.... Well...
Monsieur Noyer .... most of us (being of sound mind if not body) have been
saying this since the idea was first mooted. The concept of a financial tax
applying only to Europe is hilarious. The progenitors must have shares in
Singapore, NY and Shanghai.
It is of course barmy. All the French political elite knows how to do is
impose more taxes. I am astonished theyhaven't yet got their grubby hands on
e-mails! Imagine that - a 1p tax on all e-mails .... that would allow them for a
while to continue with their insane spending before running out of money agfain
and looking for another Milch Kuh..... Even the French socialists couldn't tax
sex, could they?But better late than never, Mr Noyer, and GOOD LUCK with passing on your
message to your President .... however, given A) his reception to new ideas and
B) his general understanding of what is going on, I am not that optimistic. No,
I'll rephrase that; you are belching into the face of a hurricane ....
Wednesday, May 15, 2013
TARGET2 - Legal base - A Decision of the ECB of 24 July 2007 concerning the terms and conditions of TARGET2-ECB (ECB/2007/7)
The Governing Council of the ECB decided to legally construct a multiple
system with the highest degree of harmonization of the legal documentation used
by the central banks within the constraints of their respective national legal
framework, named TARGET2. All ECB legal acts related to TARGET2 can be found
on a dedicated website.
TARGET2 is the real-time gross settlement (RTGS) system owned and operated by
the Euro system. TARGET stands for Trans-European Automated Real-time Gross
settlement Express Transfer system. TARGET2 is the second generation of TARGET.
Payment transactions are settled one by one on a continuous basis in central
bank money with immediate finality. There is no upper or lower limit on the
value of payments. TARGET2 mainly settles operations of monetary policy and
money market operations. TARGET2 has to be used for all payments involving the
Euro system, as well as for the settlement of operations of all large-value net
settlement systems and securities settlement systems handling the euro. TARGET2
is operated on a single technical platform. The business relationships are
established between the TARGET2 users and their National Central Bank. In terms
of the value processed, TARGET2 is one of the largest payment systems in the
world.
- TARGET2 had 999 direct participants, 3,386 indirect participants and 13,313 correspondents;
- TARGET2 settled the cash positions of 82 ancillary systems;
- TARGET2 processed a daily average of 354,185 payments, representing a daily average value of €2,477 billion;
- the average value of a TARGET2 transaction was €7,1 million;
- two-thirds of all TARGET2 payments (i.e. 68%) had a value of less than €50,000 each; 11% of all payments had value of over 1 EUR million each;
- the peak in volume turnover was 29 June 2012 with 536,524 transactions and peak value turnover was on 1 March 2012 with €3,718 billion;
- TARGET2’s share in total large-value payment system traffic in euro was 92% in value terms and 58% in volume terms;
- the SSP technical availability was 100%;
- 99.98% of TARGET2 payments were processed in less than five minutes.
Europe just went through a debt crisis that was entirely avoidable. Iceland showed us the way in 2008, no sovereign debt crisis there.
Unemployment below 5%, 7 consecutive quarters of growth averaging 2.5% per annum as of January this year. More GDP growth than other Nordic countries.
No wonder the rest of Europe is disillusioned. People are fed up with paying through the nose for debts that don't belong to them.
The burden of banking debts is tearing apart social cohesion.
Sunday, May 12, 2013
Commission published a web-based information guide....
Small and medium sized enterprises (SMEs) will drive the recovery in Europe, but
they need improved and easy access to finance. Over the last few years the
European Commission has been constantly working to improve their situation.
This commitment is reiterated in a joint European Commission/European Investment
Bank (EIB) Group report published today. At a time when the situation remains
difficult, the EIB Group's support for SMEs reached €13 billion in 2012. In
addition, with a budget of €1.1 billion, Commission-funded guarantees helped to
mobilize loans worth more than €13 billion, boosting nearly 220 000 small
businesses across Europe. Today´s report covers the results of the current
funding schemes as well as the new generation of financial instruments for SMEs.
Financial resources for SMEs will be significantly enhanced through the €10
billion increase in the EIB’s capital. As part of the Commission’s continuing
efforts to support SMEs, European Commission Vice President
Antonio Tajani, responsible for enterprise and industry policy, today also
launched a new single online portal on all EU financial instruments for
SMEs as well an information guide to promote SME stock listings, at a meeting of
the SME Finance Forum on the eve of an Informal
Competitiveness Council on 2 and 3 May in Dublin. European Commission
Vice President Antonio Tajani, Commissioner for Industry and Entrepreneurship,
said: "
Access to finance of SMEs remains difficult and is one
of the main reasons for the current economic downturn. Therefore we intend to
enlarge our loan guarantees to SMEs under the new COSME programme as of 2014.
Each euro dedicated to our guarantees has the power to stimulate - on average –
30 euros in bank loans. This is crucial to help Europe's jobs engine, our small
enterprises, to run smoothly again. It is they who create 85% of all new
jobs."
The European Commission also launched today a
targeted information campaign to promote SME listings and stimulate investors’
interest in SMEs and mid-caps. To this end the Commission published a web-based
information guide for SME stock listings. This tool provides advice to small and
medium-sized businesses on how to go public.
It will be combined with the creation of an
award for the best European stock market listings among small and mid-cap
companies.
Friday, April 19, 2013
EU Parliament adopts
"most comprehensive and most far-reaching banking regulation in European
history" with overwhelming majority
"Today's decision makes European banks more
resilient, so that no more taxpayers' money has to be used to prop them up",
explained Othmar Karas MEP, Vice-President of the European Parliament. The new
set of rules for banks, which was adopted with an overwhelming majority,
comprises more than a thousand pages and is the basis for the planned banking
union. "The new single rule book for all 8200 banks in the EU is the foundation
on which the house of the Banking Union is to be built. The single supervisory
mechanism will be the roof. As walls to the house, we must now feed in the
Resolution framework for banks and the deposit guarantee schemes. The new set of
rules is the most comprehensive and most far-reaching banking regulation in the
history of the EU", he said. Karas was Parliament's negotiator for the law known
as the CRD (Capital Requirements Directive) or Basel III....Part of the new rules is that for the first time,
there will be a cap on bankers' bonuses. Bonuses may not be higher than the
salary. Only in exceptional cases, the shareholders of a bank may decide that
bonuses may amount to a maximum of twice as much as the fixed salary. "The rules
concerning bankers' bonuses do not regulate the amounts of the salaries. As
legislators, we do not regulate salary levels. But we install fairness and
transparency and we contribute to a change in culture", said Karas. The most
important part of the new rules is tightened capital requirements for banks.
From 1 January 2014 onwards, European banks have to put aside more and better
capital to be prepared for possible crises. Unprecedented is the new rule that
banks have to publish, country by country, what their profit is, how much tax
they pay and how much they receive in subsidies. This increases
transparency.
"The new capital requirements are key to an
efficient banking supervision and therefore a crucial condition for the banking
union", said Marianne Thyssen, EPP Group MEP responsible for the negotiations on
the new single European banking supervision. "Today's large majority for the new
banking regulation is a major success for Othmar Karas and an important step on
the road to a safer banking sector. Both the new capital requirements and the
reinforced European banking supervision will help to avoid crises. Prevention is
better than cure", said Thyssen. For the first time, criteria for the liquidity of
bank capital are being introduced. Banks have to be able to fulfill their
liabilities in stress situations for a period of at least 30 days. Particularly
important to Othmar Karas has been making loans to Small and Medium-Sized
Enterprises (SMEs) easier: "Banks must focus on their core business, which is
financing the real economy." The new law reduces the capital requirements for
loans to SMEs and business start-ups. Granting loans become easier this way. In
addition, continental European banks are being strengthened in their competition
with Anglo-American competitors by recognizing the characteristics of European
banks as decentralized structures and loss-sharing agreements. "Our aim is to
make European banks as firm as a rock on the global financial markets",
concluded Karas.
Wednesday, April 10, 2013
As the Süddeutsche itself reports, news that Deutsche Bank conducts offshore operations isn't new. As the paper notes, such activities aren't as prolific at Deutsche as at Switzerland's UBS, where the records traced at least 2,900 offshore entities. Back in 2009, it was already public knowledge that Deutsche Bank had some 500 subsidiaries in places known to be tax havens.
Still, the paper claims, the government has done little to stop a German firm from engaging in the kind of financial behavior Berlin has been aggressively combatting in countries like Luxembourg, Switzerland and Cyprus. The paper quotes the financial policy point man in parliament for the Green Party, Gerhard Schick, criticizing both the government and the business model of firms like Deutsche Bank. He alleges the banks may be contributing to the shielding of money laundering activities, tax evasion and money linked to corruption. He also alleges that Chancellor Angela Merkel's conservative government "at the very least tolerates these illegal structures and is possibly protecting them." In an interview with SPIEGEL ONLINE published on Friday, the head of Germany's Federal Financial Supervisory Authority (BaFin), Elke König, said her authority, although not responsible for taxes, would investigate if banks appeared to be systematically violating or helping people to violate tax law. "Banks have a special responsibility," she said.
For Deutsche Bank, Germany's largest bank, the revelations are creating a second wave of unwelcome scrutiny this week. On Wednesday, the Financial Times reported that Germany's central bank, the Bundesbank, has launched an investigation into claims the bank hid billions of dollars of losses on credit derivatives during the financial crisis. Bundesbank investigators plan to fly to New York next week as part of the inquiry into claims that the bank miss valued credit derivatives in order to hide losses as high as $12 billion and avoid a government bailout.
Saturday, March 30, 2013
Waiting for poverty to strike is no game. It makes ordinary men and women helpless, desperate and scared. "If you look at it mathematically, there is no way out: we will just never be able to repay our bills to the EU and IMF," said Haris Christou, one young Cypriot speaking for his compatriots. "Am I afraid? Of course I am afraid. Everybody knows everything in Cyprus is going to get bad, really bad. And nobody knows where exactly we are headed."
On Wednesday night men and women, some young, some old, gave voice to that fear. They gathered outside the offices of the European commission, and then lined the road that leads up to Cyprus's colonial-era presidential palace, to protest against a rescue programme that, wittingly or not, will destroy their country's banking sector and bring its economy to its knees.
"Out with the troika", "Fuck the troika", "Go home Troika", said the placards. "No to the policies of austerity." "No to privatisations." "No to the memorandum of catastrophe."
But more than words, or any amount of hoarse chanting, it is uncertainty that now speaks loudest in Cyprus. The uncertainty that has come with the knowledge that the island's economic output will shrink dramatically as a result of the austerity now being demanded in return for €10bn in aid. The uncertainty unleashed by policies that will see many Cypriots wake up with much less than they once had in the bank. And the insecurity of suddenly being the subject of capital controls that possibly could change Cypriots' lives for years....I, too, would be inclined to withdraw all my funds from any Cyprus bank and I suspect there will be a run on them. There are 'policies in place' to restrict such a run but I don't see how they can prevent people taking out what is their own money. That is the worry. The Russians called it theft and so would any Cypriot who cannot access savings. The safest place to deposit money is still the UK and I'm surprised that London has not offered to make itself a safe haven for Italians, Portuguese and the Spanish to place their life savings. That's what I'd do if I were a Mediterranean saver. The GBP and USD have their moments but nobody will lose a penny by keeping their money in those currencies which are trusted around the world. I don't know how any Cypriot would be able to do a SWIFT transaction to get cash out of harm's way but surely it can be done.
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