Greek finance minister: Bankruptcy is still a risk - Greece's finance minister has slightly deflated the sense of optimism as we ease into the Christmas break, by warning that the country faces another very difficult year.

Yannis Stournaras has cautioned against getting carried away by recent progress, pointing that things could unravel next year "if the political system finds the situation too difficult to handle".

He made the comments in an interview with the Financial Times, published just a day after Greece's credit rating was upgraded.

Stournaras is not all doom and despair, arguing that 2013 will be crucial:

We can make it next year if we can stick to the programme agreed with the EU and IMF.

But only if the Greek people accept the job cuts and austerity measures that were contained in the 2013 budget. Stournaras warns that this is far from guaranteed:

What we have done so far is necessary but not sufficient to achieve a permanent solution for Greece...The issue now is implementation.

As such, there's a 'possible risk' of Greece leaving the euro, he added, despite Athens having now received its latest aid tranche.

With bond yields falling sharply, and yesterday's general strike passing off peacefully, Greece has reached a calmer state. But it's going to be a grim winter for many Greeks - and Stournaras is clearly concerned that he may struggle to hit his deficit targets and improve the competitiveness of the battered Greek economy.

As he put it:

We still face the possible risk of bankruptcy.

But get through 2013, and the future will be brighter, he added.

A political and economic system in which underachievers forcibly redistribute their mediocrity to the rest of society

E.U = Socialism: A political and economic system in which underachievers forcibly redistribute their mediocrity to the rest of society...or is it ???....Liberal bloggers always point to socialist Europe as a shining example of how wonderful life can be? Oliver Stone is coming out with a documentary about how Hitler and Stalin were just misunderstood. I read daily about how Europe is in economic free fall and see the same in the tea leaves for America. So death and destruction are goals to admire now??? God help us! Oh yeah, god is dead according to these nihilist lunatics. Oh yeah, I can't say lunatic anymore now that Congress has voted to ban that word. I'll stick with God help us.

Life is actually much better for European working class than in the US. US workers are more and more like obedient little slaves, working two jobs just to earn enough for living. 10-12 hour days and maybe two weeks holiday per year. Then they eat shit food which basically poisons them over the decades slowly but surely, causing high cholesterol, hypertension, diabetes and all sorts of other sicknesses. When they got sick, their health insurance is a form of financial torture, designed to find ways to not to pay. Public education is quite crappy and social safety nets are mostly missing.

The creation of the EU and the common currency was never anything more than a thinly veiled campaign to force European nations into a monolithic Socialist union and help the new Soviet Union (EEC) acquire the production and energetic capacities of Europe, while Germany gets to "administer" the EU states. Economists around the globe warned of the consequences and kept on warning over the last 15 -20 years. The voters in Europe ignored the harsh facts and instead chose bread and circus... and now they reap the benefits of their stupidity and greed. The Forth Reich is ruling Europe since the "independent union nations" budgets have to be approved by the Bundestag before being implemented !!! Deucland uber ales !!!

In a dramatic about-turn, German Finance Minister Wolfgang Schaeuble ditched his earlier objections that had led him to clash openly with his French counterpart, Pierre Moscovici, last week over the ECB's role in banking supervision.
With time running out to meet a year-end deadline, both sides managed to settle their differences and Germany won concessions to temper the authority of the ECB's Governing Council over the new supervisor.
Agreement on bank surveillance is a crucial first step towards a broader "banking union," or common euro zone approach to dealing with failing banks that in recent years dragged down countries such as Ireland and Spain.
The next pillar of a banking union would be the creation of a central system to close troubled banks.
The decision also sends a strong signal to investors that the euro zone's 17 members, from powerful Germany to stricken Greece, can pull together to tackle the bloc's problems. 

In a statement issued just after the London markets closed, S&P warned there was a one-in-three chance that it would strip the UK of its cherished AAA status within the next two years. "We believe this could occur in particular as a result of a delayed and uneven economic recovery, or a weakening of political commitment to consolidation," it said. S&P did not call for the government to abandon its austerity plans, but it warned that the deficit-cutting strategy will continue to undermine growth. "We continue to believe that government's efforts over the next few years to engineer the planned correction in the UK's fiscal accounts will likely drag on economic growth." It added that belt-tightening by debt-burdened consumers and weak investment by anxious firms were likely to continue to depress demand. Ministers, including chief secretary to the Treasury Danny Alexander, have played down the significance of a ratings cut in recent days; but the chancellor has pinned his political reputation on maintaining Britain's reputation as a "safe haven" for foreign investors. S&P's announcement came after Osborne was forced to announce in last week's autumn statement that economic growth has been far weaker than he hoped even in his March budget; and he now expects to flunk his self-imposed rule of cutting the public debt burden by 2015-16. S&P said its own calculations suggested the debt-to-GDP ratio, forecast by the independent Office for Budget Responsibility to peak just below 80% of GDP, could actually hit 100% of GDP - on its own definition - if the economic recovery continues to disappoint. Standard & Poor's rating agency announced it is downgrading Britain's economic outlook from stable to negative, hours after the chancellor defended his Autumn Statement before MPs. The ratings agency said it placed a negative outlook on the British economy to reflect its view that it could lower the country's rating within two years if fiscal performance weakens beyond current expectations. It cited "a delayed and uneven economic recovery, or a weakening of political commitment to consolidation" as possible causes for a future downgrade. S&P warned "if economic growth recovers more slowly than we currently forecast, due to domestic factors or waning economic performance by the UK's main trading partners, such slow recovery could result in net general government debt approaching 100pc of GDP, by our calculations, from its current estimated level of 85pc of GDP in 2012". The downward revision came just hours after chancellor George Osborne, speaking before the House of Commons Treasury Select Committee, downplayed the importance of the UK's treasured top credit rating, describing it as just "one test" and not the key symbol of an economy's strength. “It’s one test alongside others and the ultimate test is what you can borrow money at,” said Mr Osborne.

BRUSSELS - Greece is to get €49.1 billion worth of bailout funds after eurozone finance ministers in Brussels agreed the latest tranche of emergency funding on Thursday (13 December). Athens will receive €34.3 billion "in the following days", with the remaining funds, some of which will fund overcapitalization and resolution costs of Greek banks, to be paid out in the first three months of 2013. The money will be paid out by the European Financial Stability Facility (EFSF). The decision, which was taken after a meeting lasting under two hours, follows months of marathon talks between Greece and its creditors. It also comes at the end of a successful week for Athens after a debt buy-back which saw the government buy €31.9 billion of bonds at just over a third of their face value. Speaking with reporters following the meeting, Economic commissioner Olli Rehn said that the deal marked the end of an "odyssey" for Greece. He commented that the debt-laden country had confounded the "Cassandras" who had been "convinced that the game was up for Greece in the euro area."

BRUSSELS - The 2013 EU budget has been agreed after MEPs signed off on a deal worth €132.8 billion in Strasbourg on Wednesday (12 December). The agreement breaks months of deadlock between MEPs, the commission and national governments.  It increases EU spending next year by just €3.8 billion, over €5 billion less than the sums demanded by MEPs and the EU executive. It also includes a controversial deal providing just €6.1 billion of emergency funding to the European Commission to cover outstanding bills from 2012.  In October, the commission tabled an emergency budget worth €9 billion, with the EU's student exchange Erasmus programme and the European Social Fund among items facing a cash-flow crisis.  However, with member states refusing to stump up the extra cash in full, the EU executive will now roll over 2012 payments worth roughly €2.5 billion into 2013. Speaking in Strasbourg, Alain Lamassoure, the centre-right chair of the assembly's budget committee, complained that by rolling over payments the deal "respects the treaty but betrays its spirit."  Green budgetary spokesperson Helga Trupel said the agreement would "lead to a budget hole of at least €9 billion at the end of next year."  For his part, Italian conservative Giovanni La Via, who drafted the parliament's position on the budget, said that the funds would "guarantee investment in growth and job-creation."  Following the vote, the EU's budget commissioner warned that a repeat cash-shortfall would probably occur in 2013.
"The approved budget will in all likelihood not be sufficient to pay the incoming bills ... the pressure on the 2013 EU budget will be tremendous. There is a serious risk that we will run out of funds early in the course of next year," warned Janusz Lewandowski.
He added that "by systematically cutting the commission's estimates, the Council transforms the EU annual budget in a budget for nine to 10 months; last year we ran out of cash to pay all the claims in November, this year was in October and next year I expect this to happen even earlier."  The budget includes a 6.4 percent increase for EU research and development funding, alongside a 6.3 percent rise for the trans-European transport network.  The foreign aid budget also rises by 1.9 percent to cover extra funds to support Palestine. The EU's three main institutions will see a real terms cut.

Peace and prosperity has been guaranteed by nuclear weapons, not the EU....

Germany tried to conquer Europe in WWII using bombs and bullets. That effort cost them four million lives, untold numbers of wounded, one fifth of all the nation's housing destroyed, millions of their women raped, many of their cities reduced to rubble....and the nation's wealth and productivity wiped out. Their war was a total, abject failure, and an unprecedented human disaster. Someone correctly imagined that Europe could be conquered far more cheaply and easily.A masterplan for “completion of economic and monetary union” has been set out in a confidential document to be discussed by EU leaders at a Brussels summit next week. In the nine-page paper, seen by The Daily Telegraph, Herman Van Rompuy, the president of the European Council – the monthly summits of EU leaders – charts a series of steps from ongoing financial reforms to overall political union for the eurozone. “The general objective will be to aim for a progressive pooling of economic sovereignty at the European level,” the paper states. Mr Van Rompuy expects the EU to have agreed an “operational framework” to give the European Central Bank (ECB) the role as single eurozone banking supervisor by March next year, despite continuing splits between France and Germany over the policy. The EU president then sees a second phase to a full “banking union” with legislative proposals next year for a shared bank bail-out fund and a euro-wide deposit guarantee scheme, proposals that are even more controversial than giving the ECB a supervisory role. Then, by 2014, the plan requires all eurozone countries to “enter into individual arrangements of a contractual nature with EU institutions on the measures and reforms they commit to undertake and on the means for their implementation”. ...Karl Marx could not balance his own household accounts, yet his theories are still hailed today as the solution to economic ills all over the world. The EU cannot get its accounts audited they are in such a mess and now they want to take economic sovereignty away from member states. Many years ago my parents taught me something valuable: If you are in a financial hole, stop digging it deeper. Someone take away the spades from these lunatics, please! Effin politicians, lying corrupt thieving and with a botched useless totalitarian plan tried to force this on people who deep down resent it. And Greec ena Spain and Portugal and Ireland are still saddled with a currency that violates all mathematical concepts of what is needed to gain competiveness, unless you pay them 50 euros a month and they all live in squalour. Either way the currency, the coupon, the filthy euro voucher is the problem now from the start and always will be. Only the dumbest halfwit cannot see that. Even if it was congealed under a stalinesque plan it STILL will not stop the imbalance .

German Finance Minister Wolfgang Schäuble is a clever orator. In comments to the press on Tuesday, he first made sure to praise Greek reform efforts before turning to the most recent measures passed to prop up the heavily indebted country. Then he said that the new aid package, aimed at reducing Greece's overall debt load and giving the country two extra years to meet its budget deficit reduction targets, won't cost German taxpayers a penny. It is a bold statement. And one that leaves plenty of room for interpretation. Particularly given Schäuble's follow up. Berlin, he said, will suffer a "reduction of revenues." It is a typical Schäuble formulation: a bit ambiguous and slightly misleading. But the numbers are clear enough. Germany will forego some €730 million ($944 million) in revenues in 2013 as part of the deal hashed out on Monday night in Brussels between euro-zone finance ministers and the International Monetary Fund. It is a compromise that avoids, for now, the kind of debt haircut that Berlin had been so opposed to. But it marks the first time that the crisis in Greece will have a direct effect on the German budget. The deal clears the way, finally, for the payout of the long-awaited next tranche of emergency aid for Athens. Whereas that tranche was originally to be €34.4 billion, euro-zone finance ministers lumped it together with the next chunk of aid due and approved the payout of €43.7 billion. Before it can be delivered, however, German parliament must approve the plan pushed through on Monday night, which it is expected to do on Friday. Parliaments in Finland and France also have to clear the deal, but neither is expected to block it.

Greece's national debt is €301 billion. Population is 11 million - so a family of four owes €109,500.

Average net salary is €14,000 - so (assuming a family of four has one average earner) that debt is 7.8x annual income. This is their share of the national debt only - it does not include their own mortgage or personal debt.

Sustainable? My arse...... Even if the haggling to knock off €20 billion succeeds, the result is still bullshit.

How many times does the obvious have to be said?The Greek debt is so great that there is no realistic prospect of it ever being repaid. Creditors and creditor governments and institutions are just trying to buy time until some further write down or orderly default can be implemented that will not be too politically damaging to them. All the time hoping that Greece's current account balance can be kept moving into the black so that further bailouts to cover current government spending can be avoided.
All this fancy financial footwork has one goal only, to save the Euro. No one gives a damn about the mess the Greeks have got themselves into and for which they will pay dearly, and rightly so.But for how long can Greece avoid social and political explosion while they are the guinea pigs for a heroic surgical experiment designed to save the architects of the Euro from the folly of their creation.

The feeble EU will....

European banks have asked the European Commission to postpone the introduction of tougher global bank capital rules by a year to 2014 after U.S. regulators told lenders they did not expect the new regulations to take effect in 2013......The feeble EU will almost certainly cave in. Europe is SO bust that it needs the bankers, more than the bankers need the EU. This would show that the EU is no more than a grubby little exercise (or project) to allow politicians to borrow "however much it takes" to get as many European people "hooked for good" on Europe's spend, spend, spend socialist politicians as possible. And, later on, if US banks decided to play by less strict rules, then don't let them trade in Europe? The new Basel rules are not that strict anyway. They are only designed to try and make it a bit more difficult for banks to go bust when the next crash happens. It tries to raise the cover provided for banks debts turning bad from 2% to 7%. Meaning if more than 2% of the loan book goes bad now - the bank goes bust. The authorities have plucked a 7% figure out of the air as being sufficient cover for all future banking crises.

BERLIN—Germany's opposition Social Democrats and Greens are set to block passage Friday of a Swiss-German tax accord, scuttling a controversial deal to get Swiss banks to hand over taxes owed by German citizens with secret bank accounts there.

The bilateral treaty was passed by Chancellor Angela Merkel's center-right coalition parties in the lower house of parliament, but the upper house, which represents Germany's 16 states, must still ratify the treaty for it to become law. The left-leaning Social Democrats and Greens, the main opposition in the lower house, have an effective majority in the upper house and can block the initiative.

Peer Steinbrück: Greece in worse shape than Merkel admits

Peer Steinbrück, head of Germany's opposition Social Democrats, has urged Angela Merkel to delay Germany's next budget until the uncertainty over Greece has been resolved.

Steinbrück (who could potentially form a grand coalition with Merkel after next autumn's elections) added that Greece will require assistance until the end of this decade.

He also warned that German taxpayers will ultimately pay the price.

Reuters has the news snaps, and now you do too:

• GERMANY'S STEINBRUECK SAYS CLEAR THAT GREECE WILL NOT BE ABLE TO RETURN TO CAPITAL MARKETS IN THIS DECADE

• GERMANY'S STEINBRUECK SAYS MERKEL'S GOVERNMENT SHOULD PUSH BACK VOTE ON GERMAN BUDGET UNTIL THERE IS CLARITY ON GREECE

• GERMANY'S STEINBRUECK SAYS CANNOT FILL GREEK FINANCING HOLE WITH MIX OF PIECEMEAL MEASURES

This EU budget stuff can come across as pretty dull and confusing. To lighten things up a bit, we will turn to the universal language of football. So meet the EU budget 'Veto Team' - the eleven EU leaders that so far have threatened to veto the EU budget unless they get a better deal. Needless to say, given that this is its first outing, the eleven-man team is far from a cohesive unit - with lots of big egos and players who play for themselves.

·       David Cameron leads the line, ready to strike and seen as the most likely to pull the trigger on any veto.

·       Swedish Prime Minister Fredrik Reinfeldt at right winger hugging the line (sticking to his guns), happy to put in a shift for the team and more likely to offer an assist/support for Cameron than to deliver the final blow himself.

·       French President François Hollande is the mercurial trickster playing between the lines but not quite sure of his role or his aims. Ultimately a selfish player (as are many of the others) but who’s own personal gain could ultimately be detrimental to the rest of the team.

·       Italian Prime Minister Mario Monti is playing the stoic holding role, refusing to budge and occasionally gesticulating wildly at the referee, although never actually getting into the danger zone at the forefront of the action. More likely to break up play and provide a stumbling block than deliver a knockout blow to the opposition. Unlike the rest of the team, not here on merit (elected) but parachuted in by the powers above.

·       Portuguese Prime Minister Pedro Passos Coelho takes on the Cristiano Ronaldo role as a marauding left winger and not just because of the nationality. His red line that Herman Van Rompuy's proposal is unacceptable makes him more of a threat than many expected. Under pressure to perform from his home fans (electorate) he needs to put in a big showing – the question remains though whether he will rise to the challenge or crumble under the pressure.

·       Dutch Prime Minister Mark Rutte is playing the 'box-to-box midfielder' role, akin to the days of Johan Cruyff's 'total football'. Usually more inclined to side with Germany (the opposition), Rutte finds himself dragged end-to-end with action not quite sure where he should be or where he is best suited. One things for sure, his hometown team (the VVD party) would love to see him score.

·       Belgian Prime Minister Elio Di Rupo, naturally inclined to the left, find himself at left back. His demands are relatively minor and he’s not a regular in this team (usually part of the core EU group who’s views align closely). He’ll put up a fight for a bit but he’s not a star player in this game.

·       The towering centre-back, Danish Prime Minister Helle Thorning-Schmidt provides a solid spine to the team. Not one of the more flashy players but they know their job and what they want out of it (a clean sheet). Unlikely to score (pull the veto) but will definitely provide a blocker against any increases in the budget.

·       Austrian Chancellor Werner Faymann is another unfamiliar member of the team. Stuck in at centre back because of its experience in the eurozone crisis and playing a key blocking role in minimising the liabilities. Unfortunately, its aims are different in this game and as with Hollande its may end up scoring an own goal (getting more spending in the budget).

·       Romanian President Traian Basescu, at right back, is there as a late replacement and now a token entry. The previous incumbent (Romanian Prime Minister Victor Ponta) looked set for an interesting game, but after the substitution this role is unlikely to provide much action.

·       Latvian Prime Minister Valdis Dombrovskis is in goal because, well, the smallest kid always gets stuck with the worst job.

THE WALL IS BEING REBUILT...

THE WALL IS BEING REBUILT...we, the Romanians, as well as England seriously have to get out NOW...the fact that they are even THINKING about asking why someone would want to move is sickening!!!!

It would be far better to leave the EU than to keep saying 'no' to everything. Of course, we could just say 'yes' instead but that would be anti-democratic, as the British people, via Parliament, have decided not to.
This is the crux of the matter; the EU is an inherently anti-democratic machine and has nothing whatsoever to do with trade. It is time that this 'red herring' was netted and gutted. Then again, the Common Fisheries Policy doesn't allow us the freedom to catch this type of fish as and when we want to in our own waters.

A google translation of news from today from germany:

"Handelsblatt": European Commission wants to prevent legal tax avoidance
For "anti-abuse clause" in national tax laws...The European Commission wants to press action against it that companies and wealthy citizens escape by moving within the EU taxation. The EU member states would have to an "anti-abuse clause" in their national tax laws add to remedy the situation, told the newspaper "Handelsblatt" (Wednesday edition) of Commission circles. The clause is intended to enable the tax authorities to check migration willing companies or individuals. Affected businesses and citizens would have to show that there is in addition to the tax or otherwise, for their move to another country. The complaint about the lack of tax compliance by companies and wealthy citizens by moving to another country is widespread.

A country isn't a business...

A country isn't a business, even though there are politicians who like to treat their voters as if they were employees. Politics is the art of mediating between the political and economic markets, convincing parliaments and citizens that economic policy promotes their prosperity and the common good, and convincing markets and investors that nations cannot be managed in as profit-oriented a way as companies.

After four years of financial crisis, this balance between democracy and the market has been destroyed. On the one hand, governments' massive intervention to rescue the banks and markets has only exacerbated the fundamental problem of legitimization that haunts governments in a democracy. The usual accusation is that the rich are protected while the poor are bled dry. Rarely has it been as roundly confirmed as during the first phase of the financial crisis, when homeowners deeply in debt lost the roof over their heads, while banks, which had gambled with their mortgages, remained in business thanks to taxpayer money.

In the second phase of the crisis, after countries were forced to borrow additional trillions to stabilize the financial markets, the governments' dependency on the financial markets grew to such an extent that the conflict between the market and democracy is now being fought in the open: on the streets of Athens and Madrid, on German TV talk shows, at summit meetings and in election campaigns. The floodlights of democracy are now directed at the financial markets, which are really nothing but a silent web of billions of transactions a day. Every twitch is analyzed, feared, cheered or condemned, and the actions of politicians are judged by whether they benefit or harm the markets.

Opinion....

What I love about forecasts is the certainty with which they are delivered. Nothing is certain. Whether the BRICS are trapped in the middle income trap is entirely in their own hands; the USA always bounces back; technology never stops.
The reforms that are required to make BRICS like China continue its growth and the improvements in India, are well known and in their own hands. Obviously vested interests who have done well to date, will do their damnedest to stop such reforms but it is by no means certain they will; indeed the worse the global slowdown the more likely that we will see the required reforms. This is to say nothing of the new BRICS in Africa and Asia. The explosive growth that we have seen to date pushed the price of materials to record highs as capacity could not be brought on stream to cope, slower growth should enable productive capacity to increase accordingly, reducing raw material prices. With the huge surge in oil production I expect to see a fall in the price of oil and a transfer of wealth from the oil producers back to consumers. I believe that the USA is on the cusp of an economic boom. Manufacturing is heading back home as prices in the Far east rise, gas prices have tumbled to record lows reducing the costs of basic raw materials, the banks can lend as they are clean and healthy, people have de-leveraged massively, companies are sitting on records amounts of cash and the country is angry and determined. When the USA rocks the world rocks.I also believe we are on the cusp of a massive technology boom. New materials such as graphene promise whole new ranges of products, new manufacturing techniques such as 3d printing are threatening to revolutionise production and consumer choice, new energy sources such as oil from Algae will tear up any nonsense about peak oil, new drugs from genetic research are becoming a reality, new technologies such as driverless cars are here. The only place that remains a problem is Europe but the Euro is forcing countries to reform key pillars of the socialist model that have held back economic development in southern European countries for years; even socialists in France are reforming. The Euro could be the best thing that has happened to Europe.See, I can predict an opposite future with equal reason and certainty. On a side note Schumpter, drawing from Marx, predicted that capitalism would destroy wealth continually and hence itself. It was Werner Sombart who used the term to mean that economic growth can evolve from the destruction of an previous economic order.
Angry Germans have filed a lawsuit at the European Court of Justice in an attempt to block the European Central Bank's latest plan to buy-up the debt of struggling countries.
Around 4,800 people are represented by the lawsuit, filed by German protest group Zivile Koalition e.V., which claims that the ECB’s OMT programme violates the central bank’s own statutes and has an "immediate influence on monetary stability in the euro area".
For the German speakers among you, you can find out more about the Zivile Koalition here. Beatrix von Storch, the group’s spokeswoman, has even put together a video message.
The press office of the EU court in Luxembourg declined to comment to Bloomberg 

Francois Hollande will travel to Berlin with leaders for crisis talks on Tuesday after Germany said a Greek sovereign debt restructuring was “out of the question”.  On Monday, the French president met with Jim Yong Kim, head of the World Bank, and IMF chief Christine Lagarde, as well as leaders of the World Trade Organisation and the OECD, to discuss solutions for Greece, including a debt buy-back. The group will talk about the ideas with Ms Merkel on Tuesday.

European markets dropped ahead of the pivotal talks amid worsening bank problems gripped both Greece and Spain. Greek banks plunged almost 16pc after the finance ministry in Athens said that Brussels’ bail-out fund would not recapitalise the banks. The collapsed dragged the Athens exchange down 6.3pc.-- Are the German public finally being told the truth ?"For German finance expert Max Otte, such a debt haircut is nothing but an orderly insolvency and an acknowledgement of bankruptcy. "It's two words meaning the same thing," Otte said, "but there's no denying that Greece is bankrupt." So far, Germany has lent Greece some 80 billion euros by granting emergency credit lines or buying up sovereign debt through the ECB. A 50 percent debt cancellation, then, would leave Germany with a loss of 40 billion euros. It would be the first time that German taxpayers would actually lose money in an attempt to rescue Greece from bankruptcy. "Up until now, Germans have been told that their country was only assuming liability for a certain sum without taxpayers actually facing any costs," said Johann Eekhoff, the director of the Cologne-based Institute for Economic Policy".... 

A United States of Europe would serve no purpose other than the self-agrandisment of politicians.
The issue is for the different Euopean tribes to avoid the pitfalls of fiscal union and its necessary prerequisite the ballot box.
Fiscal union does not work. You only have to look at the post-industrial parts of the UK and US to see that. make believe jobs created out of ever increasing and ulitimately unsustainable government spending do not work. Ballot boxes are fine for issues of social importance, abortion, same sex marriage etc. Anything of importance has been long recognised as being dangerous to be decided by the population at large, be that by Plato, John Adams or James Madison. The USA is a country of individuals who chose to leave their home country. Europe is the complete reverse, so pyschologically very different. Better to have national politicians who act as lightning rods for popular discontent and have supra-national bodies of technocrats pulling the strings. Italy has rarely been run so well....

"The path toward joint liability is far more likely to lead to a deep rift within Europe, because turning the eurozone into a transfer and debt union that can prevent the insolvency of any of its members would require more central power than currently exists in the US."

Who cares what they do in the US? Since when has that been the benchmark by which European leaders are expected to measure themselves? If these are unprecedented times then maybe they require unprecedented responses? This article appears to argue that because the US doesn’t have such powers, then the EU shouldn’t have them either. I repeat, who cares what powers the US does or doesn’t have?

The great thing about mainland Europe, is that “closer integration” is practically meaningless on the ground. In the average European home, I doubt if many people care how many additional layers of governance are added to the top ('Intergalactic president’ anyone?) as long as those layers have a legitimate governing role and as long as the people still feel connected to the system at a local level. In most European countries in which I’ve had the privilege to live, this has very much been the case – (the major exception being, regrettably, my homeland; the UK. Westminster already feels remote and leaves the UK regions feeling pretty disconnected from any meaningful power or influence. Additional layers at the top – like Brussels – just add to the feeling of isolation.)

At the other end of the scale, the problems faced by people in their daily lives are increasingly less respectful of national boundaries – environment, business, social responsibility and resources - hence the enthusiasm for European level co-operation.

As I said, the number of layers of governance are not the issue; peoples feeling of ‘connectedness’ at the bottom is what really matters, and in this respect, it doesn’t matter how many regions, languages, identities and cultures co-exist under the umbrella of a single entity, with specific inter-national / inter-regional responsibilities …. as long as it is felt to be doing a useful job!

HELSINKI—The Finns Party, which advocates Finland's exit from the euro zone, is expected to make strides in local elections on Sunday, likely widening a political divide in the small Nordic state about how to approach the euro-zone debt crisis.

Formerly called the True Finns, support for the fiercely nationalistic party swelled during national elections in 2011, and is poised to nearly triple on the municipal level, according to a new opinion poll. The survey by Finland's largest newspaper, Helsingin Sanomat, predicts the euroskeptic Finns will take 15.6% of the local vote, up from 5.4% in 2008....GDP is a very poor indicator of the actual health of an economy. Such a fractional rise (which appears to be dependent to a large extent on the one-off effect of the Olympics e.x england) is set against a backdrop of declining full-time employment, falling living standards, intolerable inflation on essentials, the growing VAT-ability of almost everything, wage stagnation, a complete lack of any business financing streams for SMEs, company closures, mass under-employment among highly qualified graduates and (I suspect ex-)professionals, a frozen housing market, crippling rents for younger people, the slow diminution of public services, completely frozen social mobility and a general sense of resignation and malaise about the economic future of any country.

MADRID—Spain's central bank said Tuesday the Spanish economy contracted at a faster pace in the third quarter and the country may miss its budget-deficit target because of tax-revenue shortfalls.

The euro zone's fourth-largest economy contracted by 1.7% from the same period last year, compared with a 1.3% contraction in the second quarter, the central bank said.

In the first estimate of Spain's economic performance during the July-to-September quarter, the Bank of Spain said that on a quarterly basis gross domestic product likely contracted 0.4%, the same as in the second quarter. The central bank's estimates are often very close to or in line with final government estimates issued later. The government's first third-quarter GDP estimate is due Oct. 30.

The central bank also said that "it can't be ruled out" that Spain's government would miss its budget deficit target for this year, currently at 6.3% of GDP after a series of revisions, largely because of tax-revenue shortfalls. Last year, Spain's deficit stood at 9.4% of GDP, more than three percentage points above the target.

"The efforts to lower spending at the public sector have had a net contracting effect (on the economy) in the central months of the year," the Bank of Spain said. "We see drops in consumption and investment by all levels of government above those seen in previous quarters."

....“impossible for Germany to pay everybody’s bills,”

While Germany and the other euro members will “stick to the monetary union,” every euro state has to fight the problems it faces as it’s “impossible for Germany to pay everybody’s bills,” Schaeuble said. Germany “would be destroyed” if it overstretched its resources, he said. ....Turning to Spain, the German minister said financial markets have yet to appreciate efforts made by the country’s government, led by Prime Minister Mariano Rajoy, to return to sustainable public finances. Standard & Poor’s cut Spain’s sovereign-debt rating by two levels to BBB- on Oct. 10, citing the backtracking of euro-region peers on a pledge to sever the link between the sovereign and its banks. “Since Spain is under the pressure of markets, Spain had to take decisions on reducing its deficit, to increase its competitiveness, but Spain is delivering since the Rajoy government is in place,” Schaeuble said. “They’re doing very well but it takes time until markets believe them.”

Swedish Finance Minister Anders Borg said yesterday it’s“most probable” that Greece will quit the common currency and such an outcome shouldn't be ruled out over the next six months. Schaeuble told the Singapore-German Chamber of Industry and Commerce that a Greek exit would create “huge” problems and wouldn't happen. .... “If you look at how much interlinked we are in the European Union and in the currency union, to leave it would create huge, incredible difficulties for everyone,” Schaeuble said. “Therefore the better way is to solve it, but of course it has to be solved.” Euro-area finance ministers on Oct. 8 backed Greece’s plan to trim its budget and reshape the economy, while demanding that the government in Athens commit to a list of 89 policy steps before the summit. They didn't commit on whether the next 31 billion-euro aid installment will be paid out in one go or released in smaller chunks. “Everyone is trusting that Samaras and his government is really decided to do what is needed,” Schaeuble said.

Amusing - This man is a deluded clown.

"Mr Van Rompuy – who said the EU was the “biggest peacemaking institution ever created in world history"....Amusing - This man is a deluded clown. Now the EU is working out how to pillage wealth whoever it can to keep the half baked plans of domination alive. There is no heart in the eyes of these arrogant, anti democratic creators of a systematically ignorant European rule and ruling class. The final triumph of ignorance is economic collapse, waste, decay and chaos. The best system of government to ensure well informed executives and to motivate rulers to listen is Democracy. The further rulers stray from Democracy the more arrogant, ignorant and arbitrary they become. The EU has not gone all the way but it is on an irreversible downward slide. We must let go of these nasty losers and leave them to slide, alone, into the chasm of failure and self created ignorance. So far our craven politicians neither see nor care because they are blinded by their small minded immature and childish careerist ambitions and selfishness. Well....Doubtless ,the German people will feel much the same when the grim reality of the extent of betrayal hits them with the force of an express train......Stalin, Hitler, Pol Pot and Genghis Khan were similarly deluded, but they weren't anywhere near so comical as Rumpy.The EU needs money, lots of it, and fast, so expect Rumpy and his evil elves to keep proposing more and more of their madcap money making schemes. Having seen a little of what Irish and Greek banks were up to before they fell in to a heap I don't rate the chances of forming a banking union very highly, and trying to pool budgets and debt without the banks in a stable condition is utterly hopeless. None of this is ever going to get Merkel's seal of approval.

A pathetic gesture by a group of Nordic Europhiles intended to boost EU morale in dark times.

Has the committee which runs the Nobel Peace Prize been infiltrated by satirists or opponents keen on discrediting the organisation? Norwegian radio reports this morning, carried by Reuters, suggested that the European Union is to be awarded the prize for supposedly keeping the peace in Europe for the last sixty years. Was this a Nordic spoof? Apparently not.

It is only a few years since President Obama was ludicrously awarded the Nobel peace prize for winning the 2008 election and not being George Bush. Since then Mr Obama has continued the war in Afghanistan, stepped up drone attacks and got America involved in Libya's bloody revolution, suggesting that it is better to hand out baubles after someone has finished their job rather than when they are just getting started or are half way through. Incidentally, the same stricture should have applied to bankers honoured by New Labour when they were still running banks which later blew up.

Giving the EU a peace prize is at best premature, like knighting Sir Fred Goodwin in the middle of the mad boom. We have no idea how the experiment to create an anti-democratic federation will end. Hopefully the answer is very peacefully, but when Greek protesters are wearing Nazi uniforms, and Spanish youth unemployment is running at 50 per cent, a look at history suggests there is always the possibility of a bumpy landing.

Daftest of all is the notion that the EU itself has kept the peace. It was the Allies led by the Americans, the Russians and the British who defeated and disarmed the Germans in 1945. The German people then underwent the most extraordinary reckoning, transforming their country into an essentially pacifist society. The EU had very little to do with it. Throughout that period it was Nato, led by the Americans and British, which kept the peace in Western Europe. The American taxpayer picked up most of the resulting tab, and the British paid a significant part of the bill too.

Under this defence umbrella, the federalists who wanted to reconstruct the notion of Carolingian Empire which dominated 9th century Europe, created what we have come to know and love as the EU. Of course there are advantages in what they constructed – the single market and easier travel, making the South of France and Tuscany more accessible. But they also built an appallingly designed single currency, a horlicks of an agricultural policy and rapacious bureaucracy determined to stifle the nation state in the name of utopian, unachievable continent-wide homogeneity. And at every turn those driving it looked for ways to outwit the democratic will.

It is said that those in charge of the Nobel Peace Prize have made their latest award to distract attention from the eurozone crisis, which only adds a further surreal twist. The last year or so in Europe has been marked by demonstrations and extensive European rioting. There are words one can use to describe what is going on, but "peaceful" isn't one of them.(By Iain Martin)