Out of a moment of extreme crisis has come an opportunity-now it's up to all sides to seize "IT" with both hands.

We can write a new chapter in the diplomatic handbook, dedicate it to the off-the-cuff remark – the gaffe even – which averts a war.

"We don't yet know if John Kerry's apparently unplanned comment in London, suggesting Syria could avoid a US military strike by turning over its stash of chemical weapons, has set in train a process that will ultimately prevent armed American action. But Barack Obama described it as a "possible breakthrough" and the relief can be felt across multiple world capitals.

Of course the practical problems are legion – one report claims that getting rid of Syria's chemical weapons stockpile could take not weeks or months but "years". Nevertheless, this latest initiative deserves to be taken seriously because it gives all the key players something they need. Crucially, it would allow the antagonists to step back from the brink without losing face.

For Bashar al-Assad, the prize is obvious. If he agrees to ban the banned weapons, to use the vocabulary of the Northern Ireland decommissioning process, he can dodge the US bullet that was perhaps coming his way. Even with Kerry promising on Monday that any attack would be "unbelievably small", Assad would still prefer to avoid an American attack if he can.

For Russia, whose foreign minister, Sergei Lavrov, seized on Kerry's rhetorical flourish and turned it into an initiative, there is a double benefit. First, Vladimir Putin gets to pose as the global statesman who stayed the hand of the mighty American hyper power. Second, Russia has its own reasons for wanting to see Syria's toxic arsenal put beyond use. Moscow has long worried about such weaponry falling into opposition jihadist hands should Assad fall. Spiriting it out of Syria dampens that danger. (Tehran is said to support the latest Russian plan for similar reasons.)"(source: guardian.uk)



Let's be honest about this. This is good for a public that does not want to be embroiled in war, but this is a victory for Assad, and unlikely to end the war. The revulsion produced by his use of chemical weapons (and before someone's knee-jerk response about definite proof, it doesn't really matter for the point I'm trying to make) shows Assad what a poor part of his arsenal chemical weapons really are. He can't use them without risking a western response. So he's giving up something e can't use, for what is in effect a free hand in dealing with his opponents. 100,000 have died before chemical weapons were used, and no one is going to lift a finger as long as he uses conventional weapons. The west has nothing on him, no cards to play, why would he make the slightest concession...
This gaffe will not stop war, because we are already at war with Syria (thanks to the terrorists we have sent in), and because the US wants hegemony over the Middle East to offset the decline of its empire....The suggestion that Assad did this is laughable.
If CW were launched, then there would be satellite imagery from just before the attack, showing a missile launched from within regime held areas. The numerous US geo-stationary satellites that are currently hovering over Syria are designed to spot these things. They've been doing it for decades.
This evidence doesn't exist because it never happened. We know the terrorists are in possession of CW, we know that they have already used them, and we know they had the most to gain from the use of CW...So who do we think used them?
Apparently it's whoever the Botox bandit (Kerry) plucks out of a hat FFS!!!

The UN report will not reveal anything not already known to Washington.

UN inspectors investigating the use of chemical weapons in Syria are not expected to complete their work for another two to three weeks, increasing the likelihood that any US-led attack may take place before they have delivered their report.

The UN team left Syria with biological and other samples last Saturday and has been asked by the UN secretary general, Ban Ki-moon, to speed up its work. But according to an unnamed western diplomat quoted by the Associated Press in New York on Wednesday, the accelerated timetable will only shave about a week off the original processing time.

John Kerry, the US secretary of state, has already said the UN report will not reveal anything not already known to Washington. Britain's position is similar. The US, France and Britain have all produced declassified intelligence assessments blaming the al-Ghouta attacks on 21 August on the Syrian government and arguing that the rebels were not capable of carrying them out.

Syria's president, Bashar al-Assad, and Russia have blamed the opposition but have produced no evidence in support of their claim.

On Wednesday Russia's foreign ministry issued a report claiming to show that a chemical substance used in fighting at Khan al-Assal near Aleppo in March was not fired by standard Syrian army ammunition. The shell was similar to those made by a rebel group, the ministry said.

Khan al-Assal, where 26 people were killed, was one of the incidents the UN team was supposed to be investigating before the al-Ghouta attacks. The Russian report thus establishes a link between rebel forces and chemical weapons.

Russia had previously described the use of "cottage industry" quality sarin nerve gas delivered by a crudely made rebel missile. Western officials have characterised Moscow's submissions on chemical weapons as shoddy and incomplete.

HAHAHA...Francois Hollande, said its troops “have been put in a position to respond."

Britain is now in the German camp and the French, once decried as "surrender monkeys" over Iraq are stepping up to the plate...It sounds like The French are getting ready to invade Syria...they plan on firing "Troops" at the country, instead of cruise missiles.
Let me see how this goes. France, which has banned women from wearing the burka, intends to provide Military support to The Syrian Rebels while extremist elements of their numbers that are killing people indiscriminately for their religions beliefs, to get the people's mind of the mass unemployment in France.

Obama proceeds with an attack on Syria as soon as UN weapon inspectors leave, and somehow in the mix, British forces providing "consultation" and support to our allies, find themselves under attack with no option but to "retaliate".
Britain is left with "no alternative" but to respond to these "acts of aggression" carried out by Assad in response to a US Bombardment of his country, and  The Prime Minister, David Cameron makes an emergency statement saying Britain has begun bombing Syria as a "humanitarian peace effort"....
The German government however, says it currently has no plans to join military action against Syria. Government spokesman Steffen Seibert told reporters in Berlin today that "we haven't considered any German military participation and still aren't doing so". His comments follow an interview Foreign Minister Guido Westerwelle gave to the daily Neue Osnabruecker Zeitung in which he said Germany hadn't been asked to contribute to military action against the regime of Syrian President Bashar Assad following the alleged chemical attack that killed hundreds of civilians last week.

They're not going to stop are they?.
They're really going to try and find a way to try and Start World War III.  
These Maniacs are going to try and start World War III.

 

History teaches us that politicians never learn from history.

If Arabs want to go around slaughtering each other it is best to let them get on with it. They been doing it forever, and will continue to do so.  They will turn on us if we intervene, and when we give it up as a  hopeless task (Iraq ?) they will go back to killing themselves again. They all hate us in the West because we have what they do not. Let them get on with it...
The Kremlin has welcomed the British parliament's rejection of a military strike against Syria...
The US military have deep doubts about the impact and wisdom of a US strike on Syria, writes the Washington Post (which, incidentally, has been very hawkish editorially on Syria). It says:Former and current officers, many with the painful lessons of Iraq and Afghanistan on their minds, said the main reservations concern the potential unintended consequences of launching cruise missiles against Syria. Some questioned the use of military force as a punitive measure and suggested that the White House lacks a coherent strategy. If the administration is ambivalent about the wisdom of defeating or crippling the Syrian leader, possibly setting the stage for Damascus to fall to fundamentalist rebels, they said, the military objective of strikes on Assad’s military targets is at best ambiguous. “There’s a broad naivete in the political class about America’s obligations in foreign policy issues, and scary simplicity about the effects that employing American military power can achieve,” said retired Lt Gen. Gregory S. Newbold, who served as director of operations for the Joint Chiefs of Staff during the run-up to the Iraq war, noting that many of his contemporaries are alarmed by the plan ...A young army officer who is wrapping up a year-long tour [in Afghanistan]...said soldiers were surprised to learn about the looming strike, calling the prospect “very dangerous.” “I can’t believe the president is even considering it,” said the officer, who like most officers interviewed for this story agreed to speak only on the condition of anonymity because military personnel are reluctant to criticize policymakers while military campaigns are being planned. “We have been fighting the last 10 years a counterinsurgency war. Syria has modern weaponry. We would have to retrain for a conventional war.”

I am going to ruffle a few feathers, but let me still say it – We had a dream run from 2003-2008 and now it is over. The days of 20% salary hikes and 30% stock returns are gone (at least for now) for the masses.

If you are really good at your job or in investing, you may get above average raises or returns, but that is not going to be the norm for everyone

If you entered the workforce in 80s or 90s, you may have seen tough times yourself (or maybe your family did). The reason why the current slowdown feels horrible is because our expectations are high now. Don’t get me wrong – I am equally angry with the government for running the economy to the ground.

I  faced a similar market from 2000-2003, when the market dropped by around 50% over a three year period. At the market bottom in April 2003, capital goods companies like BHEL, Blue star were selling at 5 times earnings. The current market darlings like Asian paints (15 times PE), Marico (around 5-7 times PE) and other consumption stocks were selling a very low PEs too.  At the risk of getting philosophical, I can think of the following things to do this time around.

- Assess your risk tolerance:  If you have trouble sleeping in the night after seeing your portfolio drop by 10-15% ,  you should reduce your level of equity holdings.  My thumb rule – will I be able to sleep well if my portfolio dropped by 40%+ ? 

- Clean out the trash: Now is a good time to clear up junk from the portfolio. A bear market and 40% loss on weaker ideas concentrates your mind. One should evaluate each position closely, sell the weaker ones and redeploy the cash in the better ideas.

- Have faith:  There is no data or logical argument which can make you hold on to your stocks or add money to it. You need to trust that the markets will recover in time and so will your portfolio.

It is easy for people to say that they want to think independently and stand apart from the crowd. Now that that we have a blood on the streets and no end in sight, you will know whether you can truly do that.

In functional terms, a food blogger who writes about the opening of a new restaurant is a journalist because he or she is communicating information of interest to the section of the public that likes to eat out. Whether the blogger is formally paid by an accredited "news" organization or does it for love, the communication process is identical. All this talk of accreditation or seeking particular qualifications for the status of journalist is a way for commercial organizations to protect their market or other interested parties to seek control over the news dissemination process..."shield law" that will give reporters some protection when government and its agencies seek to bug, arrest or demand to know sources. Its embryo bill says that a journalist is someone "who has a primary interest to investigate events and procure material", informing the public through interviews and observation. He or she sets out to report the news; he or she must intend to publish that news.   But, asks one senator, is that protection for WikiLeakers? Surely we only want to help "real reporters", who draw salaries for their work, says another. The congressional equivalent of our own dear Westminster lobby system insists that the correspondents it grants passes to are full-time on some corporate payroll.  Best of luck with that, and enjoy it while it lasts....The term citizen journalism has been in the news recently because of a recent ruling against Apple Computer by an appeals court in the USA. Apple tried to get bloggers who had revealed trade secrets to hand over their sources, but the court said that bloggers were covered by the same shield law as journalists and by the First Amendment protections of the press. “We can think of no workable test or principle that would distinguish ‘legitimate’ from ‘illegitimate’ news,” the opinion said.

The funds to back

For brave investors, Mr Fahy has previously recommended Artemis European Growth, up 42pc over the past year but he added: "If investors are looking for ‘cheap’ – then the obvious market to be dripping money into is China."

Ben Yearsley of Charles Stanley Direct, a low-cost fund supermarket, is also lukewarm on European stock markets but said: "Looking for the positives, Europe doesn't look expensive and the dividend yield from equities is good so it could be bought and tucked away for the long term."  He favors Henderson European Special Situations (with a typical historic annual cost of 1.76pc), managed by Richard Pease, and Jupiter European fund (1.79pc) and Jupiter European Opportunities investment trust (1.12pc), both managed by Alex Darwall. Blackrock European Dynamic (1.68pc) is another favorite. "All are run by good quality, long-term managers," added Mr Yearsley.

Cheap tracker funds

For cheaper options, consider a fund that only tracks the market. The Vanguard FTSE Developed Europe fund charges 0.25pc a year and yields 2.6pc.  A year ago, the dividend yields, which give a rough indicator of value, were stunning on some European stocks with Swiss drugs maker Novartis paying nearly 5pc and German insurer Allianz at 4.6pc. Today they pay 3.6pc and 2.8pc, respectively. Investors have certainly missed the buying opportunity of a year ago. Those who want to back only high-yield stocks could consider the iShares DJ Euro STOXX Select Dividend 30, an exchange traded fund that can be brought through a stockbroker. Its annual cost is 0.4pc and it yields 6.2pc.

Cheap shares

David Dudding, who runs the Threadneedle European Select fund, which has returned 91pc over five years compared with an average 35pc for the sector, said: “Pricing power is everything in share investing.” Two examples he cites are Nestle, the food giant, and Kone, a lift manufacturer. “The market sees Nestle as a boring dividend payer,” he said. “I see it as an attractive growth stock. Meanwhile the lift market is very hard to break into. It takes a long time to build up significant scale, so there’s little downward pressure on prices and firms have great repeat business from maintenance contracts.” Advisers say long-term investors should have some exposure to Europe to keep a balanced portfolio, although this could also be achieved through a global fund. Mr Fahy tips Artemis Global Income which has 23pc of investors money in Europe. He added: “If you believe the eurozone can continue to muddle through for the remainder of 2013, then hold your nose and stay on your toes, ready to take profits.”

....Move on, nothing to see here....or is it ?

At least the French have a convincing politician to whom they can turn.  She also doesn't pull her punches on the unmitigated and undeniable social and cultural disaster that is mass immigration.  All we have in our political class are varying degrees of effete, self serving liars, traitors and multi-cult fetishists.

Mrs Le Pen said her first order of business on setting foot in the Elysee Palace will be to announce a referendum on EU membership, "rendez vous" one year later. "I will negotiate over the points on which there can be no compromise. If the result is inadequate, I will call for withdrawal," she said. It is no longer an implausible prospect. "We cannot be seduced," she said, brimming with confidence after her party secured 46pc of the vote in a by-election earthquake a week ago. Her candidate trounced the ruling Socialists in their own bastion of Villeneuve-sur-Lot.  "The euro ceases to exist the moment that France leaves, and that is our incredible strength. What are they going to do, send in tanks?" she told the Daily Telegraph at the Front National's headquarters, an unmarked building tucked away in the Paris suburb of Nanterre. Her office is small and workaday, almost austere. "Europe is just a great bluff. One side there is the immense power of sovereign peoples, and on the other side are a few technocrats," she said. For the first time, the Front National is running level with the two governing parties of post-War France, Socialists and Gaullistes. All are near 21pc in national polls, though the Front alone has the wind in its sails. Yet it is the detail in the Villeneuve vote that has shocked the political class. The Front scored highest in the most Socialist cantons, a sign that it may be breaking out of its Right-wing enclaves to become the mass movement of the white working class....

Asked if she intends to pull France of the euro immediately, she said: "Yes, because the euro blocks all economic decisions. France is not a country that cannot accept tutelage from Brussels," she said. Officials will be told to draw up plans for the restoration of the franc. Eurozone leaders will face a stark choice: either work with France for a "sortie concertee" or coordinated EMU break-up: or await their fate. Mrs Le Pen fears that other EMU states will resist and let "financial Armaggedon" run its course, but it is a risk that has be taken. Her plan is based on a study by economists from l'École des Hautes Études in Paris led by Professor Jacques Sapir. It concludes that France, Italy, and Spain would all benefit greatly from EMU-exit, restoring lost labour competitiveness at a stroke without years of depression. They say the eurozone's North-South imbalances have already gone beyond the point of no return. Attempts to reverse this by deflation and wage cuts must entail mass unemployment and loss of the industrial core. The current strategy of internal devaluation is self-defeating in any case, since recession causes debt ratios to climb faster. 

No mention of this Euro bombshell in: Der Spiegel, El Pais, BBC
and very little in Le Monde....Move on, nothing to see here.

There is hope, real hope, that the Euro monster will implode.

And before you call me racist, I love Europe, the culture and the people. I am a European....Please don't get me wrong. I deplore the EU and all it claims to stand for (itself)!!

Greece's coalition leaders are due to sit down in two hours time to discuss the way forward, following the row over state broadcaster ERT's closure. The Junior partners, Evangelos Venizelos of Pasok and Fotis Kouvelis of Democratic Left, have already held a meeting to agree a joint position ahead of their crunch talks with PM Antonis Samaras. Could the government collapse? Mujtaba Rahman, European director at Eurasia Group, reckons not.Here's highlights from Rahman's latest analyst note: Importantly, neither PASOK nor Democratic Left have threatened to leave the government. Instead, they have been looking to extract certain concessions. Venizelos wants a cabinet reshuffle to actually increase his party's participation and visibility in the government (his original strategy was to shadow the government in case things went wrong; however, as the program has performed Samaras has been swallowing all of the credit). In terms of specifics, the current speculation is that PASOK is targeting the ministry of administrative reform as well as some deputy minister positions in the health and labour ministries. Likewise Kouvelis does not object to a reshuffle. Venizelos's and Kouvelis also keep repeating their desire for a renewal of the government's agreement and better "coordination of the government". In the aggregate, these statements should be interpreted as a warning to Samaras that he cannot decide on big policy issues without more active involvement and agreement of the coalition heads. Of course, the latest opinion polls show that Pasok and Democratic Left would be big losers if an election was held soon. Both are currently polling around the 4-7% mark, compared to New Democracy at 29-30%....Rahman adds: Samaras personally comes in around 43% compared to Syriza's Tsipras at 37%, depending upon the poll). And government collapse would almost certainly lead to an internal leadership challenge within PASOK.

Gas-land and the EU goons

Guvernul României a concesionat suprafețe mari din unele dintre cele mai frumoase zone ale țării, pentru începerea fracturării hidraulice în vara lui 2013. Locuitorii acestor zone au protestat vehement, dar toate aceste proteste au fost până acum ignorate de presă și de autorități.

• Fracturarea hidraulică e o metodă extrem de periculoasă de extragere a gazelor naturale, care ne poate otrăvi apa, aerul și solul.

• Chimicalele (peste 500 de substante chimice ce pot provoca diverse tipuri de moarte) folosite pentru forare sunt toxice și pot contamina apa în urma unor scurgeri sau accidente; pentru foraj sunt necesare milioane de litri de apă, ceea ce poate epuiza rezervele locale.

• Apa reziduală rezultată în urma fracturării conține substanțe radioactive și chimicale toxice și este extrem de periculoasă, ceea ce face depozitarea ei extrem de dificilă și riscantă.

• În urma fracturării hidraulice, gazul natural poate “migra” în rezervele de apă potabilă, punând locuințele și fântânile din vecinătate în pericol de explozie. În SUA au fost documentate peste 1.000 de cazuri de contaminare a apei în apropierea zonelor de extracție.

• Fracturarea hidraulică accelerează schimbările climatice și este asociată cu alunecări de teren și cutremure (sursa: http://www.avaaz.org/ro/spune_nu_fracturaerii_hidraulice_an_romania/?pv=13)

Mai multe state – printre care Franța, Bulgaria și câteva landuri germane și cantoane elvețiene – au interzis fracturarea hidraulică sau au instituit moratorii împotriva acestei metode.

 

FRANKFURT—Germany's central bank Friday cut its growth forecast for Europe's largest economy this year and next, tying the nation's fate to whether the euro-zone emerges from recession. "Much will depend on whether the economic situation stabilizes in the euro-area crisis countries," Jens Weidmann, president of the Deutsche Bundesbank, said in a statement. In its semiannual economic projections, the central bank lowered its growth forecast to 0.3% this year from its December estimate of 0.4% expansion, and reduced its forecast for 2014 growth to 1.5% from 1.9%. Germany has managed ride out the euro-zone crisis while many other European economies have floundered, but weak investment and sagging exports amid recession in some euro-area countries and the slowing global economy caused Germany's economy to contract sharply in the fourth quarter. Germany narrowly escaped recession in the first quarter, when its gross domestic product, a measure of economic growth, increased just 0.1%, on the back of robust private consumption. The Bundesbank's forecasts follow those of the European Commission, which last month lowered its 2013 growth outlook for Germany to 0.4% from a previous estimate of 0.5%. Earlier this month, the International Monetary Fund also cut its estimate for German growth in 2013 to "around 0.3%" from 0.6%. Despite the dulled forecasts, the Bundesbank said Germany's economy is slowly picking up again, as other euro-zone economies bottom out and the world economy gains momentum. A solid labor market, wage increases and a general easing of inflation are supporting private consumption in Germany, Mr. Weidmann said. According to the Bundesbank, consumer price inflation, as measured by the Harmonized Index of Consumer Prices, is set to accelerate modestly this year to 1.6% from its December forecast of 1.5%. Next year, it will slow to 1.5%, the central bank said.

The subway workers were on strike in Lisbon on Thursday. Next month it will be the turn of the teachers. Portugal's blue-collar trade unions are gearing up to bring almost a million workers out later in the summer as the country's protest against austerity intensifies.

It is a similar story across large parts of the eurozone. There have been mass protests in Madrid, Dublin and Athens against policies designed to reduce budget deficits and bring about economic reform. Now, after six successive quarters of recession, it seems the protesters have something to cheer about. Austerity in the eurozone is in retreat.  The European commission has told six countries – France, Spain, Portugal, Poland, the Netherlands and Slovenia – that they will have up to two extra years to put their public finances in order. In truth Brussels had little choice, because weak growth had reduced tax revenues and made it impossible for exacting budget targets to be met.

What's more, the commission found that it was one thing to dictate terms to the small countries on the periphery of the eurozone, but quite another to lay down the law to France, where François Hollande's loss of popularity in his first year in office surpasses that of any previous president.

Who gives these people the right to change the rules that many signed up for years ago? Nothing is sacred anymore and no one can be sure that their investment in making provision for retirement and their families is safe. Unelected mad men hell bent on creating more and more regulation and more and more control of the individuals rights to care for themselves. This one might have been stopped or delayed but you just know they are working on other ways to screw the little man.  I am in the US but more than half of my retirement funds are in UK investments that I toiled for, for years and its already been f####d over by the Brown government. Worse that it's my money but I can't take it out of the UK because of punitive rules it is still vulnerable to these  idiots in Brussels. Where did the people give the right to have this controlled outside of British sovereignty? The rules, known as "Solvency II", would have required schemes to hold more much money in reserve. Experts say that their introduction would have caused every remaining pension scheme in the private sector to close.  The European Commission announced today that it would not include solvency rules in a new pensions directive, effectively kicking Solvency II into the long grass.  It said: "Commissioner Barnier has indicated his intention to come forward with a proposal for a directive to improve the governance and transparency of occupational pension funds in the autumn of 2013.  "At this stage, and as long as more comprehensive data is needed and Solvency II is not in force, the proposal for a directive will not cover the issue of the solvency of pension funds. In light of the differing situations in member states regarding retirement products and pension funds, it is necessary to continue technical work on the issue of solvency."  The National Association of Pension Funds (NAPF) said this meant the Solvency rules had been postponed indefinitely and would become a task for the next commissioner, who will take office in November 2014.

The ECB's governing council on Wednesday announced the first cut in borrowing costs since July 2012, reducing interest rates to a record low of 0.5%. The bank's policy meeting in Bratislava came to its decision against a backdrop of weak economic data, including unemployment across the 17 member countries of the single currency hitting a record high of more than 12%.

The euro fell more than 1% against the dollar to $1.304 in the wake of Draghi's comments. The ECB president also suggested that the ECB would consider imposing a negative interest rate on deposits held at the central bank, to prevent banks parking money at the ECB instead of lending it out to companies. The ECB's deposit rate already stands at zero.

Explaining the bank's decision to cut rates in his regular press conference, Draghi pointed out that GDP across the eurozone has now declined for five consecutive quarters, and that "weak economic sentiment has extended into spring of this year".

However, Draghi urged policymakers to keep faith with austerity amid a fierce debate in Europe about whether crisis-hit countries should be allowed to ease up on their drastic deficit-reduction plans.

"In order to bring debt ratios back on a downward path, euro area countries should not unravel their efforts to reduce government budget deficits and continue, where needed, to take legislative action or otherwise promptly implement structural reforms, in such a way as to mutually reinforce fiscal sustainability and economic growth potential," he said.

David Brown of New View Economics said: "The ECB rate cut is no surprise as it was well flagged by Draghi at last month's meeting. Is it enough? No. The marginal effect of the cut is very limited, but at least it should have some symbolic rallying effect on economic confidence".

However, the ECB dashed hopes that it would announce a detailed set of policies to unblock lending to small businesses, which are often unable to access bank lending at affordable rates, particularly in the eurozone's bailed-out peripheral economies.

The writing is on the wall! With Weidermann's  Bundesbank opening battle lines against Draghi's ECB its now clear that further state bail-outs, debt  naturalization and fiscal transfers are off the menu. Spain and other debtor EMU nations are obviously being lined up for the ultimate solution; a Cyprus style write-down of private bank deposits. Watch the Spanish Euro denominated money supply collapse as funds deluge northwards  into Deutche Euros and Sterling, the latter possibly becoming an alternative currency for individuals and business fleeing from monetary persecution and financial ruin.  Germany’s constitutional court will rule on the legality of the bond rescue plan on June 12. It gave a provisional go-ahead last September for other parts of the EMU rescue machinery, but limited Germany’s bail-out share to €190bn (£160bn). Crucially, it warned that the Bundestag may not alienate its tax and spending powers to any supra-national body or be exposed to “unlimited” liabilities.  “If the court rules against OMT, it means the end of the euro. The stakes are so high that I don’t see how they could just pull the trigger,” said Mats Persson from Open Europe.  He said the Draghi plan is a legal hot potato because it is, by definition, unlimited. “The previous rulings by the court have all been predicated on this point.”  German historian Michael Stürmer said the tough report is a bid by the Bundesbank to “reassert its primacy”. “They have told the ECB in no uncertain terms that it is exceeding its mandate. Angela Merkel may be smiling because this helps her set limits in Europe.” Prof Sturmer said the forthcoming ruling - wider than just the Draghi plan - is “much more serious” than last September’s judgment, limited to an injunction brought by eurosceptic groups. “This is about issues of sovereignty. I don't think the Court will dare to issue a ruling before the elections in September. They will procrastinate,” he said. The court has some jurisdiction over ECB policy because it intrudes on the German Grundgesetz, or Basic Law. “Once the ECB starts bailing out states it is moving into dangerous waters,” he said. The court made a glancing reference to OMT in September, stating that ECB bond purchases “aimed at financing the members budgets is prohibited, as it would circumvent the ban on monetary financing”. The bond markets ignored the leaked report on Friday, confident that the court will once again find some formula to avert a crisis. It could cite a clause in the Lisbon Treaty stating that the ECB has a duty to “support the general economic policies in the Union”, which would include saving the euro. “They might refer the case to the European Court but that would leave the Sword of Damocles hanging over the market for another two years,” said David Marsh, author of books on the Bundesbank and EMU. “I think use of OMT is practically impossible until this is resolved.”   Sovereign bond strategist Nicholas Spiro said markets are “sick and tired” of the eurozone debt crisis and have stopped paying attention to the detail. “There is this ravenous hunt for yield and they think there is all this money coming from Japan. But it has long been unclear whether OMT is real or just a myth, and the eurozone’s underlying economic crisis is still getting worse. The window of opportunity created by Draghi has been wasted.  “If the court sides with the Bundesbank in any way the whole house of cards could come crashing down.”  “If the court sides with the Bundesbank in any way the whole house of cards could come crashing down.”   Although I believe the Court should do so, in no way means that it will, far more likely the can gets kicked farther down the road, such is the nature of the beast we are dealing with. Drahgi, Rumpoy and Barosso sit there smugly in their ivory towers secure in the knowledge that they have the world by the short hairs so to speak, well I fear the world has had enough of the troublesome eu and it will all end sometime soon, for my part the sooner the better......Kill the euro and the EU !!!!

I quoted  Spiegel and refer to the ECB study claiming that the average Germans pay for the rich Greeks in this crisis, but to me this is all coordinated pro-Troika propaganda aimed at perpetuating the current status quo in Europe.

a) The Spiegel speaks about the euro-bailouts as if they were gifts - i.e. free transfers - while in fact they are loans

b) The research which supposedly shows that Southern Europeans are wealthier than Germans is dubious to say the least.

- It counts houses and property, i.e. assets the value of which was hugely inflated at the time of research (for Spain data is from 2008 and for most other countries 2010). These values have since collapsed and can go further down since the research has been done. Since 2008 house prices in Spain decreased by 50% . 2010 was the year that the Eurocrisis has started, Since then the GDP of Greece has dropped by 20%+, labor cost in Greece has dropped by 40% and houses have lost substantial value. Do you believe that the average Greek is as wealthy as in 2010?  Even if we assume that the methodology of the research was correct (it is certain not), are the findings of this research still valid? Obviously not.

- The ECB does not count transfers by the state, i.e. provision of good education, health, help with childcare, tax credits, housing and other benefits. These add to an individual's wealth and are much higher in Germany than Greece for example. The research should have measured the average income in each country. State transfers boost low incomes and contribute to raising the average. So the results hide some of the average German wealth.

- To my understanding, this research measures the wealth of households - not individual wealth, and the research admits that in Germany households are smaller than in Southern Europe on average. If you have more people in the household, the wealth is less per individual. But the emphasis was deliberately placed on household income because this makes Southern Europe look richer. Importantly, there is a fundamental question here: how countries like Spain and Greece with consistently lower GDP per capita since time immemorial people can be richer than Germany on average?. Shall I suggest that Germans, instead of saving to buy a house, they squander their money sailing on the frozen lakes of Finland or doing archaeology in Mongolia? Talking about GDPs, the per capita GDP of Greece (PPP - what one can buy) in 2011 was lower than that of the Czech republic's and Slovenia's. Now, thanks to all the beneficial effect of austerity it might approaching that of Zimbabwe.

To me, this research and article seem a very convenient way of telling Southern Europeans at the right time: don't complain to the Troika about the destruction of your economies and societies with these anti-economic austerity policies, don't complain about the medieval labor laws imposed on you, the halving of your wages and the asset stripping.

There you go ...no dice ma'man...hihihihi

The Eu Parliament is refusing the budget as is.   Le Point:

"Le Parlement européen ne peut accepter en l'état l'accord trouvé aujourd'hui (vendredi) au Conseil européen. Nous regrettons que M. Van Rompuy n'ait pas parlé, ni négocié avec nous au cours des derniers mois", ont indiqué les parlementaires. Les chefs d'État et de gouvernement européens se sont mis d'accord vendredi, à l'issue d'un sommet marathon, sur un budget d'austérité pour les sept prochaines années, en baisse pour la première fois dans l'histoire de l'Union européenne. "C'est maintenant que les véritables négociations vont commencer, avec le Parlement européen", ont prévenu les parlementaires. True negotiations are starting... 

 

Joint Statement to the Press by Joseph Daul, on behalf of the EPP Group, Hannes Swoboda, on behalf of the S&D Group, and Guy Verhofstadt, on behalf of the ALDE Group and on behalf of the Greens/EFA Group Rebecca Harms and Daniel Cohn-Bendit.

"...This agreement will not strengthen the competitiveness of the European economy. It is not in the prime interest of our European citizens. The European Parliament cannot accept today's deal in the European Council as it is. We regret that Mr Van Rompuy did not talk and negotiate with us in the last months.

.....We see with astonishment that EU leaders agree to a budget that could lead to a structural deficit. Large gaps between payments and commitments will only store up trouble for the future and not solve existing problems. We remain firm on the respect of Article 310 of the Treaty which requires a balanced budget.
In addition to this there are four important points that we will not abandon:

First, we are calling for increased flexibility using Qualified Majority Voting: between years and between categories of spending. It is a sensible approach which will allow us to make the best use of our financial resources.
Second, we are also standing firm on a compulsory revision clause with a Qualified Majority Vote in the Council, which should allow us to revise the financial framework in two or three years. We don't accept an austerity budget for seven years.
Third, with this same sense of responsibility we are calling for new, genuine own resources for the European budget to progressively replace the current system based heavily on national GNI contributions.  Fourth, we cannot accept a budget based solely on priorities of the past. We must maintain support for future-oriented policies, strengthening European competitiveness and research.
The outcome of the final budget will determine whether the second decade of the 21st century will be remembered as the time of further integration for the benefit of all Europeans or the time of a standstill for Europe, or even falling behind in a globalised world.

What an asshole would say ....

Olli Rehn, the European Union's economic and monetary affairs commissioner, today warned that recession-hit Italy must continue to implement economic reforms once the election is decided.

"It's a very fragile situation. Whatever colour the new government in Italy has, it is important that it maintains the course of reform," he told Austria's Profil magazine.

Rehn also cautioned that the growing strength of the euro will hurt countries in southern Europe by causing "problems with their exports to other parts of the world".

Germany and France have clashed over whether EU officials should intervene in currency markets, and Mr Rehn today argued that countries around the world should work more closely together to offset the potential damage caused by currency fluctuations.

"I recognise the risk of competitive devaluation. We have recently warned the government of Japan about corresponding steps towards depreciation of the yen," he said.

"We need reforms in the international monetary system so as to avoid negative influences on international trade. The coordination within the G7, G20 or the IMF should therefore be improved," Mr Rehn added.

Switzerland's oldest bank is to close permanently after pleading guilty in a New York court to helping Americans evade their taxes. Wegelin, which was established in 1741, has also agreed to pay $57.8m (£36m; 44m euros) in fines to US authorities. It said that once this was completed, it "will cease to operate as a bank". The bank had admitted to allowing more than 100 American citizens to hide $1.2bn from the Internal Revenue Service for almost 10 years. Wegelin, based in the small Swiss town of St Gallen, started in business 35 years before the US declaration of independence. It becomes the first foreign bank to plead guilty to tax evasion charges in the US. Other Swiss banks have in recent years moved to prevent US citizens from opening offshore accounts. US Attorney Preet Bharara said: "The bank wilfully and aggressively jumped in to fill a void that was left when other Swiss banks abandoned the practice due to pressure from US law enforcement." The closure of Wegelin is a watershed moment that has huge implications for the Swiss banking industry - and for Switzerland's famed banking secrecy. Wegelin's guilty plea included the admission that it intentionally opened accounts for US citizens to help them avoid tax. In court Wegelin's managers said they knew it was wrong, but thought they would not be prosecuted because it was legal in Switzerland, and common practice in Swiss banking - words which are causing something close to panic among other Swiss banks, including Credit Suisse, who are also being investigated by the US authorities. Until now everyone expected Wegelin to fight the charges - instead Switzerland's oldest bank will cease to exist. The message to the Swiss financial sector is clear - the US will not give up this fight over tax. The Swiss government has been trying for months to negotiate a deal with the US which would protect Switzerland's banking secrecy. The Wegelin case makes that look virtually impossible.

German two-year bond yields turn negative

Another sign of nerves this morning -- investors have been racing to put their money into German two-year government bonds, a classic 'safe-haven'.

That has driven up the value of the bonds, and pushed down the yield (the measure of the interest paid on the bonds) into negative territory. German two-year bonds are now yielding just -0.01%, as this Bloomberg graph shows:

A negative yield means that buyers are effectively paying for the privilege of holding the bonds.

Germany's finance minister Wolfgang Schaeuble has been talking to Reuters ahead of the G20 summit in Mexico this weekend. He said he did not want the two-day meeting in Mexico City to concentrate exclusively on the eurozone crisis to the detriment of other urgent issues such as the "fiscal cliff" facing the United States and Japan's debt problems.

"The United States and Japan bear as great a responsibility for (ensuring stability) as we Europeans," he said.

"The G20 economies must decisively win back confidence with structural reforms and sustainable financial policies. This is the most important precondition for strengthening global economic conditions," Schaeuble said.

"Without consolidation and reforms we risk further loss of confidence and still less growth. No sustainable growth can be built on a mountain of debt," said the minister, known for his advocacy of fiscal rigour even in times of recession.

Schaeuble has taken a tough line on Greece and other weaker members of the eurozone during the region's three-year sovereign debt crisis, insisting they swallow austerity medicine even as their economies sink deeper into recession.

But he had warm words for Spain, saying it was on the "right path" and that there were signs - seen for example in falling wage costs and in the current account - that its economic imbalances were improving.

Schaeuble reiterated that Greece, still locked in difficult talks with its international creditors aimed at averting bankruptcy, must implement the tough measures it has promised.