France -- tax rises for the wealthy ???!!!

"In France, prime minister Hollande is presenting the details of the 2013 budget to his cabinet this morning. The budget is expected to include tough spending freezes and tax rises for the wealthy as Paris struggles to rein in its deficit."

Just a second: tax rises for the wealthy is not typically classed as "austerity".

There are two sides to fixing the finances of the state:

a) cutting expenditure, i.e. welfare, public sector jobs, wages and pensions, all of which certainly hit the unemployed and low paid. One can also cut procurement of things like weapons but often the interests of the "defence" industry are well protected.

b) increasing income via taxation. Here, there are options. One can increase indirect taxation and hit the poor or introduce higher marginal taxes for the wealthy, capital gain tax, corporation taxes etc. Some of the latter of course have become risqué economic policies because highly mobile globalised capital can blackmail governments with disinvestment.
However, I would certainly not classify tax rises for the wealthy as "tough austerity" in the classic definition of austerity.   Some "austerity for the rich" is long overdue. Inequality has kept increasing in the context of the worst crisis and impoverishment of the populations of Europe.

Waiting to see what Hollande is proposing anyway ... I doubt that it will be a vicious attack on the rich.

Libor rate-setting is “no longer viable”.

Martin Wheatley, the incoming head of Britain's new market regulator, is expected to recommend this week that the lobby body lose its supervisory role in the setting of the rate. "If Mr Wheatley's recommendations include a change of responsibility for Libor, the BBA will support that," the BBA said on Tuesday: The review was announced following revelations three months ago that big banks were had been attempting to rig Libor for years. The scandal led to a £290m fine for Barclays, ongoing investigations into manipulation at other banks, criticism of the rate and calls for a new benchmark that is more transparent and relevant to the credit worthiness of banks. Sir Mervyn King, Governor of the Bank of England, believes Libor has stopped working and should be replaced, while Mr Wheatley, who is the chief executive-designate of the Financial Conduct Authority, has said Libor rate-setting is “no longer viable”.

The BBA, a lobby group for banks, has been heavily criticised for its oversight of Libor, which is used to price loans and transaction for businesses and individuals worth more than $350 trillion globally. Libor is based on what a panel of banks expect to be charged rather than measuring actual lending rates. It is not directly supervised by regulators in Britain but has been overseen by the BBA since 1986. The Wheatley's review, due out on Friday, is expected to propose anchoring Libor interest rates to real transactions, rather than rates which panel banks believe they could borrow from their peers. (source telegraph.uk)

Up to 60bn euros (£48bn; $78bn) will be needed to bail out Spain's banks, according to the country's second biggest lender, BBVA. The results of independent stress tests of the Spanish banking sector will be published on 28 September. But previews are already being sent to the country's financial institutions. The BBC has been told that the Spanish government has already put in place economic reform plans that would allow it to apply for a bailout immediately. Spain's conservative Prime Minister Mariano Rajoy has in the past insisted Madrid would not become the fourth European capital in recent years to apply for such a bailout, but sources indicate such a programme is now likely. Spain's banking sector needs recapitalizing, and much of the money would come from 100bn euros in European Union funds already pledged by eurozone finance ministers in June. "We'll get a figure of around 70, 75 or 80 billion euros," BBVA's Chairman Francisco Gonzalez said. That figure includes around 20bn euros already allocated to troubled banks, which means 50-60bn euros is still required. The bigger question however for investors is how the Spanish government begins to balance its books. Many in Brussels and beyond now assume it is only a matter of time before Spain becomes the fourth eurozone country to take a bailout. A source in Brussels said the preference is that Madrid applies for the money sooner rather than later, before market conditions change. That is important because of the different manner in which this bailout is being put together. A European Commission spokesman said it would be wrong to see this as a "kind of proto-bailout" - but to many it does look like a bailout-by-stealth. Over the last few months Spanish officials have held numerous meetings with their European counterparts, working out what Madrid would have to do to fulfil the criteria of any bailout deal. Officials say Spain is already living up to any future bailout terms. Next Thursday Mr Rajoy will unveil the next Spanish budget. Rather than more cuts, more austerity, he is pushing for structural reforms to help him make savings. Such reforms will form the basis of a bailout agreement with the so-called troika - the European Commission, European Central Bank and International Monetary Fund. For a program to work, all that would need to be added would be firm dates for implementing such reforms and a team to monitor progress. Asked to comment, the Spanish finance ministry did not deny that negotiations to this effect had taken place. It could give Spain's prime minister enough wiggle room to present this to his country as a Spanish-led process. Many will not believe him, but it helps a leader who said he would never apply for a bailout to save some face. (source BBC)

Mr Ayrault made clear the frustrations in the new socialist government over the handling of Greece by eurozone leaders, including the German chancellor, criticizing them for a “political weakness” and “a lack of vision”. I think Merkel is guilty of both of these things. She makes big, definitive statements, then undermines them a few days later. The people of Greece (and of Spain, Ireland and Portugal) deserve to know where they stand. The last Greek election was a farce because it was fought between a party that said it would simply cancel the debt with no consequences and a party that said it would renegotiate the bailout. Surely, if Merkel's "heart bleeds" for the Greeks, she's morally obliged to be straight with the Greek people. These are real people who can't make big life decisions - like whether to stay in Greece, whether to start a business, whether to start a family - because their country is in limbo. And it's in limbo because they don't know how much support they have from Germany. They don't have a clear way to stay in the EZ... they're just being strung along. Maybe it's good for her re-election chances - or her opinion poll numbers - but it's a lousy way to treat people.As things stand, we're still waiting for the Troika's official report into Greece's progress. Ayrault's comments add weight to the theory that Athens will be granted more support in the event that it has missed a significant chunk of its targets. We'll bring you reaction to Ayrault's comments as soon as possible.

Portugal is on the brink of abandoning its controversial plans to hike taxes on workers, in a victory for the huge numbers of people who protested a week ago. Pedro Passos Coelho, the Portuguese prime minister, is due to hold talks with employers and trade unions today to discuss alternative proposals. The public opposition to his plan to effectively slash workers' pay to fund lower taxes for companies appears to have forced Lisbon to change course.

The European Central Bank is in "panic" over the eurozone crisis and acting outside its mandate with its new bond-buying plans, the bank's former chief economist said in comments published Saturday. "The break came in 2010. Until then everything went well," Juergen Stark, the German who resigned from the ECB in late 2011 after criticising its earlier round of buying up of sovereign debt, told Austrian daily Die Presse in an interview. "Then the ECB began to take on a new role, to fall into panic. It gave in to outside pressure ... pressure from outside Europe." Mr Stark said the ECB's new plan to buy up unlimited amounts of eurozone states' bonds, announced on September 6, on the secondary market to bring down their borrowing rates was misguided. "Together with other central banks, the ECB is flooding the market, posing the question not only about how the ECB will get its money back, but also how the excess liquidity created can be absorbed globally," Mr Stark said. "It can't be solved by pressing a button. If the global economy stabilises, the potential for inflation has grown enormously." He added that "panic" about the eurozone breaking up was "nonsense" but that the only way to end the crisis was for member states to bring down their debts and implement structural reforms to boost economic growth. "Governments have recognised that returning to budgetary discipline is indispensable. Markets focus much more on whether states will be able to service their debts in five years' time," he said. Mr Stark quit in late 2011, following in the footsteps of former Bundesbank head Axel Weber, who stepped down earlier in the year from Germany's central bank because of unease about the ECB's policies. Mr Weber's successor Jens Weidmann was the only member of the ECB's policy-setting governing council to vote against the bank's new programme earlier this month. "Weidmann's arguments ... should not be made light of," Mr Stark told Die Presse. "The way in which his position has been publicly commented upon by the ECB leadership has crossed the line of fairness." Source: AFP

Difficulties in the markets for Spain, a slippery slope towards a bailout, austerity, protests and social unrest, we have seen this movie before. Here is my a guide for how to deal with the situation.

An ancient Greek guide for Spanish and other PIIGS who wish to deal effectively with the crisis

1. Dealing in private with the pain and anxiety caused by the market turmoil and/or frequent visits of the Troika and their impossible demands (for how to deal in public see other points below): Draw from Stoicism. Stoics strived to be free of suffering and through exercise of reason achieve peace of mind - meant in the ancient sense of having "clear judgment" – as well as maintain equanimity in the face of life's highs and lows.

2. Dealing with “nice” comments about your morality: Use Aristotelian or Chryssipian logic. Convince yourself with sound deductive syllogisms that the rubbish posted around the world about your country & culture is the result of incorrect induction and reckless stereotyping (one pig does this, two pigs do this, therefore all pigs do this).

3. Dealing with the unethical behaviour of political and economic elites in your country and the abroad: Adopt Socratic dialectic and ethics in public life. Socrates was renowned for his relentless questioning of authorities and public figures, which was aimed not to humiliate individuals (yeah sure – never swallowed this at school) but to discover truth with a view to achieving the “good life” for everyone.

4. Dealing with seemingly endless half-baked attempts to re-establish financial stability: Recall Zenon’s paradoxes especially the one of Achilles and the Tortoise. If the Tortoise is given advantage in the race, Achilles will never reach her because by the time he has reached the last position, the Tortoise will always have moved a bit further.

5. Dealing with debt slavery: Recall σεισάχθεια (seisachtheia), Prior to Solon (5th cent BC) Athenians practiced debt enslavement: a citizen incapable of paying his debts became "enslaved" to the creditor. This issue primarily concerned peasants working leased land belonging to rich landowners and unable to pay their rents. In theory, those enslaved would be liberated when their original debts were repaid. Solon put an end to it with the σεισάχθεια / seisachtheia, liberation of debts, which prevented all claim to the person by the debtor.

6. Finally, if you fail to bring about the much desired relief or political change with the above measures why not go for a Roman style “Spartacus slave revolt” and then establish “Epicurean philosophical communes” all over the Med. They survived for hundreds of years in antiquity and provided peace and happiness to millions.

Even the ECB's support is not obvious. Monetary hawks – the Bundesbank and several other core central banks – who were worried about a new open-ended ECB mandate pushed successfully for strict and effective conditionality for countries benefiting from the bond purchases. As a result, they can pull the plug on the programme if its stringent criteria are not met.  Moreover, Greece could exit the eurozone in 2013, before Spain and Italy are successfully ringfenced; Spain – like Greece – is spiralling into depression, and may need a full-scale bailout by the "troika" (the ECB, the European commission, and the International Monetary Fund). Meanwhile, austerity fatigue in the eurozone periphery is increasingly clashing with bailout fatigue in the core.  Small wonder, then, that Germany, politically unable to vote on more bailout resources, has outsourced that job to the ECB, the only institution that can bypass democratically elected parliaments. But, again, liquidity provision alone – without policies to restore growth soon – would merely delay, not prevent, the breakup of the monetary union, ultimately taking down the economic/trade union and leading to the destruction of the single market.  In the United States, the latest economic data – including a weak labour market – confirm that growth is anaemic, with output in the second half of 2012 unlikely to be significantly stronger than the 1.6% annual gain recorded in January-June. And, given America's political polarisation and policy gridlock, we can expect more fights on the budget and the debt ceiling, another rating downgrade, and no agreement on a path toward medium-term fiscal consolidation and sustainability – regardless of whether Barack Obama is re-elected as president in November. On the contrary, we should expect agreement only on the path of least political resistance: avoidance of tough fiscal choices until the bond vigilantes eventually wake up, spike long rates, and force fiscal adjustment on the political system.....

"Ineffective governments with weak leadership are at the root of the problem. In democracies, repeated elections lead to short-term policy choices. In autocracies like China and Russia, leaders resist the radical reforms that would reduce the power of entrenched lobbies and interests, thereby fuelling social unrest as resentment against corruption and rent-seeking boils over into protest."

There are indeed two problems which could be called "ineffective governments" and "power of entrenched lobbies and interests" but I disagree with the implication that the former belongs only to "democracies" and the latter only to "autocracies".
Britain's "democratic" government is ineffective, but it's ineffective because its leaders resist radical reforms that would reduce the power of entrenched interests -- there is zero attempt to seriously address the overweening power of corporate wealth and its corruption of the political balance, and far from attempting to rectify Britain's diseased inequalty, the government seeks to demonise the most vulnerable people.
Judging by actions and policies, Britain's government is every bit as craven before wealth, and subjugated to corporate corruption, as China's. The millionaires around the Cabinet table regard the poorest and weakest in their society with just as much contempt as those in the Politburo.

The EU is the nightmare that just keeps growing

I don't know what's more puke-inducing: (1) hearing Barroso stating that the EU must be turned into a "federation of nation states" in which member countries will surrender more sovereignty to Brussels whilst moving towards full integration; or (2) seeing Barroso's fat, ugly face plastered in numerous DT threads. OMG what a horrible day for the EU!!!.....So how much more crap can the EU citizenry take? ... How many more rights and privileges will be transferred over to Barroso and the other Brussels Eurocrats before the citizens finally revolt? ... How many more hundreds of billions of tax dollars will the Eurocrats waste in their delusional, warped quest towards an ideal Euro-federation? ... How many new bailout funds will be developed? ... How many more ESMs will emerge? ... How many more Draghi speeches promising UNLIMITED FUNDING for the PIIGS will transpire? ... How many more summits between Merkel and the Latin Desperadoes will be required to keep this disaster afloat? ..... The EU is the nightmare that just keeps growing.

 Mircea Halaciuga, Esq.
004.0724.58.1078
PROXEMIS - Managementul Riscurilor

The "details" of a soap bubble ...

European Central Bank president Mario Draghi is expected to announce the details of a bond-buying programme to help keep down borrowing costs of crisis-hit countries later on Thursday. Leaks suggest it will involve unlimited purchases of government debt that will be "sterilised" to assuage concerns about printing money. The bond-buying scheme is rumoured to be called the "outright monetary transactions", with a shorthand title of OMT.

 

Maturity

The life of a bond, at the end of which it will be repaid in full. A bond's maturity can be as short as a year to as long as 100 years.

Seniority

This refers to how likely you are to be repaid if a bond issuer goes bankrupt. Bondholders with seniority over others will be paid back before other bondholders. There was some concern that the ECB would demand seniority over other bondholders when it undertook the bond-buying scheme, but leaks now suggest otherwise.

Unanimity

Was the ECB governing council united in backing Thursday's decision, or was there opposition? Bundesbank head Jens Weidmann has spoken out against a bond-buying programme before – is he now onside? Was the ECB split over interest rate levels, or were the decisions unanimous? Draghi's answer to these questions (which will surely come up) could be crucial.

Pari passu

A Latin phrase meaning "equal footing". In the bond markets, this means bondholders will be treated the same if a bond issuer goes bankrupt. Any purchases the ECB makes as part of its bond-buying programme are expected to be pari passu with other bondholders.

Collateral requirements

The ECB asks banks for collateral in return for taking out cheap loans. If they relax collateral requirements, they can accept a wider range of assets as collateral from banks. They have already relaxed these requirements, and can now accept everything from bundles of car loans to mortgage-backed securities.

Conditionality

This is the way the ECB would keep the Germans happy, by imposing conditions on receiving assistance from the ECB; so, if the ECB helps keep a country's borrowing costs low by buying up its bonds, that country may have to agree to some strict austerity. Without conditionality it would be easier for the ECB to unilaterally intervene.

Convertibility risk

This refers to the risk that you will buy bonds denominated in euros but could ultimately be paid back in lire or drachma (or deutschmarks) if the country taking out the debt leaves the eurozone before the end of the bond's life.

Unlimited intervention

Exactly what it says on the tin. Expectations are that the ECB will not put a limit on its bond buying. This is seen to be an improvement on the previous bond-buying programme, which was limited in size and therefore lacked credibility in the markets. If other traders do not believe the ECB has the firepower (or inclination) to buy enough bonds to bring down yields, they may continue to bet on them rising.

Sterilisation

This makes sure the money supply does not increase as a result of the bond-buying programme. When the ECB buys bonds, it is injecting liquidity into the financial system, effectively creating new money. To counteract that, the ECB has in the past followed bond purchases by subsequently draining an equal amount of liquidity from the system. It does this at the weekly deposit tender by increasing the rates it will pay commercial banks to deposit money with the ECB. The idea is that this will encourage banks to deposit more money with the ECB, thereby taking it out of the system.

Yield cap

Rumour had it that the ECB would set a yield cap on certain countries' government bonds. This would mean if the yield looked like it would break through that level, the ECB would start buying bonds to push prices higher and bring yields back down.

...54% of Germans are in favour of the court blocking the legislation,

Fate of eurozone rests in the hands of German judges. The decision is likely to give financial rescue fund the go-ahead against a background of German disillusion with single currency. They have the potential to throw the stock exchange into turmoil, trigger frenzy on bond markets and bring down the German government. So the eyes and ears of the eurozone will be on the eight red-robed judges of Germany's highest court this week when they deliver a long-awaited verdict over whether a financial rescue fund considered crucial to the future of the euro gets the green light.

The constitutional court is under international pressure to rule in favour of the European stability mechanism and fiscal pact. A dissenting ruling from the court, based in Karlsruhe, southwestern Germany, would probably cause havoc on money markets and cast doubt on the future of Europe's single currency.  "The German constitutional court cannot afford to be seen as not being independent, but it also cannot afford to be seen as the court that brought down the government," said Constanze Stelzenmüller, a senior transatlantic fellow at the German Marshall Fund in Berlin. "They're going to have to try to square the circle; in other words, not bring down the government at the same time as asserting their independence."

The ruling, due on Wednesday, is expected to give the go-ahead to the ESM, a permanent bailout mechanism, and the fiscal pact, but with caveats such as constraints on future decision-making or a ruling that Germany's basic law has to be rewritten if there is to be further EU integration.

A government insider told the Observer, on condition of anonymity, that the court "is very independent and always good for a surprise. Nobody knows what will happen on 12 September." A poll published on Friday on Spiegel Online showed that 54% of Germans were in favour of the court blocking the legislation, reflecting the degree to which public opposition to bailouts is increasing.

Greece has a German Governor - Horst Reichenbach - there is no "troika"

The Greek people can hardly complain when this greek government (right-wing) tries to accept the capitlistic approach of the IMF/EU. They had the chance only a few months ago to elect a party (Syriza) into Government that wanted to put Greek people first and they decided against it. They will now have to pay the price. Just as the Greeks led the way with Democracy over 2500 years ago, they should now be taking the first steps of overhauling systems put in place to ensure the continuation of Capitalism, by letting the "rule of the people" rather than the "rule of the creditors" such as Germany and other countries of the European Union decide. Although the measures, such as extending the working week, supposedly only apply to Greeks in a dysfunctional economy - the aim is clearly also to remind those at home, e.g. fellow Germans back home or in the UK for that matter, that work is the only way to save yourself. Instead, Greece should take advantage of this symptom of global financial mismanagement by those in 'power', and set it's own agenda for the "good of the people". Well, half of so called Europeans (the term is BS) (by "you" I mean non-Greeks) wanted for people to vote Syriza and the rest, especially the creditor countries, were "pushing" for the same old governments, by literally starting a campaign (or propaganda) of fear. So, damned if we did and damn if we didn't. You don't care now, others would not care if it was the other way around. Big whoop....I say : Greece will have to exit the Euro and return to the Drachma - with all the extreme pain this will lead to (making the current situation look like a picnic), but long-term, it will have to reform its labour laws and skills base, in order to compete with the likes of China, Germany and Eastern Europe (regardless of its currency). Borrowing to maintain a good standard of living is no longer an option.

QUATRO REICH = THE EUROPEAN UNION

EUROPEAN UNION —The European Central Bank should police the more than 6,000 banks in the euro zone, the European Union's executive said Friday, setting itself up for a clash with Germany, which wants to retain oversight over smaller lenders.  A proposal from the European Commission, to be finalized in coming days, will call for the central bank to set up an agency to take responsibility for supervision of all banks in the 17-nation currency area. The proposal follows a June decision from euro-zone leaders who wanted the supervisor created as a step to break the "vicious circle" between weak banks and governments with strained finances that have eroded confidence in the euro zone. The proposal, however, falls far short of creating the true "banking union" that the ECB and the commission have called for. It doesn't set up a regional fund for guaranteeing bank deposits or give powers to euro-zone agencies to wind down or restructure shaky banks and distribute losses among investors. The ECB would, however, be able to take operating licenses away from unstable lenders. The supervisory agency would be run by a separate decision-making panel at arm's length from the ECB, in an effort to prevent conflicts of interests with the central bank's main role of fighting inflation and to allow EU states that don't use the euro to join.   As the supervisor, the ECB would have to make sure banks build up sufficient capital levels to absorb economic and financial shocks—such as the real-estate crashes that triggered the Irish and Spanish problems or over-investments in shoddy products like the U.S. subprime mortgages that sank banks across Europe in 2008.The threat to withdraw a license would be the ECB's most potent enforcement tool. "That's the first crucial element: to empower the European supervisor with the right to withdraw the license," said Guntram Wolff, deputy director of Brussels-based think tank Bruegel. But other powers and responsibilities that are central to creating a unified banking framework for the euro zone would remain in national hands. Proposals that would force private investors to share the burden—for instance by converting debt into equity once a bank's capital falls below are certain level—aren't set to come into force until 2018. In a sign of possible movement, German Finance Minister Wolfgang Schäuble, in an opinion piece in the Financial Times Friday, said the so-called bail-in mechanism should already come into force in 2015. (WSJ)

Potential foreign buyers of Spain's sovereign debt are likely to wait on the sidelines, however, until the efforts to clean up the financial sector start to show that banks are beginning to lend again to the euro zone's fourth-largest economy, said Jordi Fabregat, a finance professor at Esade Business School in Barcelona.  Additional clarity about European Union countries' willingness to help weaker brethren could also draw investors. Those outcomes could take months or years.

The latest measures show "Spain's determination to comply fully with the requirements" to get financial support from the EU, said European Monetary Affairs Commissioner Olli Rehn.

The government hopes to limit its ownership in the bad bank to 50%, with private investors taking the rest. Finance Ministry officials indicated on Friday that they hoped to take a page from the Irish model for cleaning up the banking sector while avoiding its pitfalls. Many analysts say the Irish government paid too much for the banks' bad assets.

Spain wants to focus on the transfer of land and unfinished buildings that account for half of the €180 billion in problematic property assets held by banks. The government still has to specify potential purchase prices.  Bankia, the ailing lender that is a focal point of Spain's banking crisis, stands to shed a significant amount of toxic property. Spain's fourth-largest bank by assets, Bankia on Friday posted one of the largest losses on record for Spain's financial sector. It posted a loss of €4.45 billion after booking loan losses of about €6.57 billion. The bank said an extensive cleanup of its balance sheet conducted since the government took it over in May spawned total charges of about €7.5 billion. The losses were in line with projections disclosed by the company's management after the government's takeover, Bankia Chairman José Ignacio Goirigolzarri said.  Spain's bank bailout fund plans to inject capital immediately into Bankia before the first tranche of EU aid to the Spanish financial sector is made available, which likely will arrive by November. The bridge funding could be between €4 billion and €5 billion.

Austerity was always a dumb idea...

We are not in a recession because industry is incapable of producing enough goods, or because there are productivity problems, or cost or quality problems.

One of the most notable phenomena of the past three years has been a 25% increase in exports. You simply can't get that kind of increase if you are producing goods that are inferior in quality or price.  Foreign buyers obviously don't have to buy your goods, so if they increase their purchases by 25% in such a short period of time, quality and price aren't the issue, and if you can ramp up export production by 25% in a couple of years, then obviously capacity and productivity aren't the problem either.....So what is the problem? It is that consumers got over-leveraged and took on too much debt while house prices were rising and unemployment was low, pre-2007. Then, when the house bubble burst, and unemployment started to climb, consumers got nervous about debt levels and future employment prospects and started to pay down debt, which means cutting back on consumption.We are not short of productive capacity - we are running well below long-term trend - and we are not production constrained. We are in a recession because of shortage of domestic demand.  Incidentally, if you think about it, if we really were production, capacity or productivity constrained, but had eight percent unemployment, that would be very weird indeed.  Instead of increasing it's level of debt the Private sector is reducing it (Deleveraging) - This is the result of the bursting of the credit bubble resulting in Falling demand -
If Government attempt to reduce it's own debt at the same time as the private sector it will cause the shrinking economy to contract faster - Deflation will only make the private sector more cautious making it contract further - Austerity was always a dumb idea that is never going to work as long as the private sector debt is contracting.

 

Can anyone enlighten me?????

Can anyone enlighten me as to WHY Greece thinks that by getting more time they'll sort out their mess when in the short/miedium term we have the following:
- US Debt @ 16TN and rising rapidly
- US Debt fiscal cliff in Jan 2013
- US Election
- Japan debt @>200% GDP, rising rapidly and economy plummeting
- EU zone economies falling
- Spain/Italian bonds at 'danger levels' and no sigh of relief
- China economy cooling (rapidly?) according to over 16 indicators (as you cannot trust the official figures)

So where is the economic miracle that will help Greece recover???
Anyone??..... The meeting between Hollande and Merkel appears to be mainly about greece, according to an SZ article not (yet) online. They had agreed the "let's wait for the Troika report, before deciding" line some time back. Hollande is noticeably more open towards renegotiation or extension towards Greece than Merkel is, but recognises her extremely limited room for manoevre. The FDP are pretty solidly against an extension (exceptions: Lindner in NRW and Westerwelle at the Foreign Ministry). The CSU appear to be solid against it, as much for local reasons (a burgeoning eurosceptic local rival) as for economic ones. There have been a few cautious voices in the CDU who are prepared to say that minor changes in the timescale are possible, but for the moment, the more noisy euro-sceptics get to take the stage in the party. The SPD "co-leader" Steinmeier said recently that he thinks Merkel will eventually agree to some extension for Greece, assuming the plan looks solid, but mostly the opposition are quietly letting the coalition display its disunity. If the Bundestag were asked to ratify? At the moment, I don't think they can take it to the Bundestag, without breaking their coalition. So if they were to do it, it would have to be by shuffling money around, rejigging targets and so on.

Smoke and mirrors...

Lord Rothschild has taken a near-£130m bet against the euro as fears continue to grow that the single currency will break up. --- If Lord Rothschild doesn't know what is going on, well, then nobody does..... As a wise man once said "watch where the wise money goes".The member of the banking dynasty has taken the position through RIT Capital Partners, the £1.9bn investment trust of which he is executive chairman. The fact that the former investment banker, a senior member of the Rothschild family, has taken such a view will be seen as a further negative for the currency. The latest omen follows news in The Daily Telegraph late last week that the government of Finland is already preparing for the euro’s break-up. RIT, which Lord Rothschild has led since 1988, had a -7pc net short position in terms of principal currency exposures on the euro at the end of July, up from -3pc at the end of January. Given a net asset value of £1.836bn at the end of July, the position is worth £128m. Sources close to RIT suggested that the position was not a dogmatic negative view on the euro as a currency, but rather a realistic approach on a currency that remains relatively weak....Meanwhile, Germany and France, the eurozone’s two biggest economies, did better than expected, even if their second quarter performances were far from being success stories. Germany’s GDP grew by 0.3%, beating its own forecasts, and France flat-lined at 0% growth, but avoided slipping into a much feared recession…..On news of Germany and France’s numbers, stock markets bounced up and share prices rose across the continent. Britain’s FTSE 100, Germany’s DAX and France’s CAC-40 all finished with slight gains on Tuesday.  According to Jeremy Batstone-Carr, director of client research for Charles Stanley, a financial advising firm, the figures as a whole should be a cause for worry. “According to further looking projections, data for Germany suggests the next six months will be just as bad if not worse,” he said.  The data also showed a clear divergence between the region’s northern core countries and weakness in the southern periphery countries, which threatens to exacerbate existing problems. Hard-hit over the past three months were Italy (-0.7%), Finland (-1.0%) and Portugal (-1.2%).  On another gloomy note, Britain’s economy shrank by 0.7 percent, according to Eurostat. That compared to .03% negative growth for the first quarter of the year, which meant that Britain has been in recession for the last nine months. Recession is defined by economists as two consecutive quarters of contraction.  During the same three-month period, GDP increased by 0.4% in the United States and 0.3% in Japan - Europe’s main economic partners.

STEP BY STEP ..." goose" step that is ...!!!

The German military will in future be able to use its weapons on German streets in an extreme situation, the Federal Constitutional Court says. The ruling says the armed forces can be deployed only if Germany faces an assault of "catastrophic proportions", but not to control demonstrations. The decision to deploy forces must be approved by the federal government. Severe restrictions on military deployments were set down in the German constitution after Nazi-era abuses. The court says the military still cannot shoot down a hijacked passenger plane - fighter jets would have to intercept the plane and fire warning shots to force it to land. After World War II the new constitution ruled that soldiers could not be deployed with guns at the ready on German soil, the BBC's Stephen Evans reports from Berlin. The court has now changed that, saying troops could be used to tackle an assault that threatens scores of casualties. The judges had in mind a terrorist incident involving armed attackers in public places. German troops have been deployed abroad since the war, but it has been a gradual process. German warplanes have been used in the Balkans and troops are on the ground in Afghanistan, protecting construction workers, but able to return fire if attacked.

In theory, Europe's leaders created...bla,bla, bla - in fact the concoring of Europe !

In theory, Europe's leaders created the temporary euro rescue fund, the European Financial Stability Facility (EFSF) and its successor, the European Stability Mechanism (ESM), both headed by Germans (though some have different citizenships but the same origin) precisely to support countries facing financial bottlenecks. But providing more help for Greece would be a very tough sell for Europe's politicians. Chancellor Angela Merkel would have to get the consent of the German parliament, the Bundestag, which could prove tricky. And Merkel's junior coalition partner, the conservative Bavarian Christian Social Union (CSU), has been adopting an increasing shrill tone against Greece lately -- meaning that the government could plunge into crisis if the chancellor supports more aid for Athens. For some weeks now, it has been clear that the Greeks would run out of money this summer. And there is no emergency backup plan in place. Everyone has instead counted on the ECB. For his part, ECB chief Mario Draghi seems to have accepted this and allowed the leaders of the euro-zone countries to force him into the role of the pragmatic emergency helper. ... For now, the priority for Greece is to keep its head above water until it receives its next planned bailout payment. The troika overseeing Greece's aid package, comprised of the European Commission, the ECB and the International Monetary Fund (IMF) and headed by Horst Reichenbach, The German Governor of Greece is expected to decide on the payment of the next tranche of €31 billion in September. In terms of communication, it appears that the troika is already trying to pave the path for a "yes" on the tranche payout. Recently, it gave unexpected praise for an agreement that would see Greece introduce additional austerity measures worth €11.5 billion in 2013 and 2014. "Talks went well, we made good progress," the IMF's mission chief for Greece, Poul Thomsen, told reporters. And the troika has stated that progress has been made with Greece's plans to privatize state-owned assets. The Greek government is claiming it will have binding offers for the sale of state gas company Depa and the gas grid operator DESPA by the end of September. The message is meant to be that things are moving forward. Meanwhile, Greek Prime Minister Antonis Samaras wants to do a bit of hustling before the governor of Greece Mr Horst Reichenbach issues his decision. He is planning visits to Germany and France at the end of August. The Greek media have already reported on his plans for the trip: Samaras wants to ward off Greece's "quick euro death."....well there is no "troika" - there is a 4th Reich however and Greece is a test site for what it is to follow for Europe.

EUROPE - SOME "UNION" THERE IS ....only smoke and mirrors

EURO/EUROPE/ THE SO CALLED  "UNION" - The elephant in the room is losing it's grip on the ceiling light flex? Stand by for the mass stampede through doors and windows and walls. The IMF is as informed as manuel as to the whole picture, the truth is nobody can know the extent of the desolation bankers and financial whizzkids have visited upon us and anyone who can be convinced otherwise has little appreciation of the shortcomings of human nature. It's likely that from top to bottom they were all behaving with the mindset of the shoplifters during the riots, driven mad in their bonus rush, many also under the influence of cocaine? ... Over four years some of the known truth has been drip fed out, it's rumsfeldt's unknown unknowns (as it were) that will lock in the longest depression yet, as we especially seem stuck with the present establishment using the austerity argument totally dishonestly for dogmatic gains and repression....ECB President Mario Draghi has staged a dramatic power-play, in what could be a game-changer for Europe, argues Simone Foxman in Business Insider.  Foxman explains that Draghi set forth criteria that EU political leaders must abide by in order to receive aid, while at the same time promising that EU countries like Spain and Italy won't fail in the short term.In other words, he sent the following message: "If you do that, then I will do this."This is a a divergence from earlier policy, which was unpredictable and reactive. For the first time, the ECB really is saying that it will make reducing sovereign borrowing costs (at leat at the short end) a matter of clear policy.  She says this won't necessarily be good for markets, as Draghi has essentially said he will push EU leaders to the brink before he does anything. But, she argues, that the announcements should help restore confidence in the eurozone. However, in the real economy, Draghi's promises to act are invaluable. It could give investors faith enough to invest in the real economy because the ECB's long-term promises are clear, despite continued volatility in the markets.

TRUTH IS : Private sector activity shrank for the tenth time in 11 months

Who on earth is investing to raise these stock markets so high? If I were Warren Buffet I would say this is a typical bubble Companies are not making real profits Banks aren't either so who is doing the investing????...Bond yields are down, oil prices high, USA crops are devastated by drought, housing in USA is still very much wasted. So are "the powers that be" simply doing what analysts do talking up the benefits of share ownership until even "my mate Joe Blw" decides that investing in stocks beats keeping his money under the mattresse ? I have had it with markets banks and politicians lies and deceits. I am closing all my banking accounts and simply paying in earwigs from now on.We are living in the Alice of Wonderland World. The more bad economic data we gets, the more the worlds stock markets rise..... Hopes that Europe’s leaders will act decisively drowned out weak data showing the eurozone endured another torrid month in July. Private sector activity shrank for the tenth time in 11 months and pointed to a 0.6pc rate of quarterly contraction, according to the purchasing managers index. Offsetting that was the strong US jobs data. July saw 163,000 people find work in the world’s largest economy, beating forecasts of 100,000. The sense of relief was sharpened because almost all the recent US data have pointed to a deterioration since the first quarter of the year. “It will alleviate fears that the US might be tipping back into recession,” said Nigel Gault, an economist at IHS Global Insight. The utterly repellent EU freak show stumbles from crisis to crisis, a crisis which conveniently gives the bureaucrats an excuse to force member countries into a fiscal union with budget control being handed over to Brussels, effectively crushing the last breath of democracy of the nation state in favor of an EU super state, but the light of freedom, sovereignty, cultural identity and the ability to decide one owns destiny will not be extinguished whilst the euro sceptics still have a voice. The common market worked well, that is where Europe should be heading not more Europe.....However : While U.S. employers hired an additional 163,000 "human resources" they also sacked an additional 195,000 "human resources" last month, including a decrease of 228k full-time jobs which was only partially offset by a 31k rise in part-time jobs (defined as 1 to 34 hrs/wk). Furthermore, a new group of 199,000 Americans joined the "Working-Age" pool last month and will need jobs as well. Not only is the U.S. economy in such a severe situation as reported, it is, in fact, in a worse one. Currently some 87 million Americans, or about 36% of the working-age population of the U.S., are no longer even looking for work and are considered "out of the labor force." If it were not for workers who dropped out of the labor force, the real UE rate would be far north of 11%. All of this MSM "rah-rah" reporting and "growth and recovery" hopium smoking needs a reality check.