Despite the evidence that migrants from the Middle East and Africa are continuing to flee war and poverty in their home countries and will strike out to Europe again in huge numbers this year, European leaders have taken no major new steps to curb the flow. Nor have they agreed on a comprehensive border policy or prepared for another influx that could rival last year’s, when more than a million asylum seekers reached the Continent, many of them headed to Germany.  Prime Minister Manuel Valls of France issued a stark warning in an interview broadcast on Friday about the future of a unified Europe, saying the very idea was under threat unless the Continent could protect its borders.  Speaking to the BBC at the World Economic Forum in Davos, Switzerland, Mr. Valls said the Continent could not accommodate the enormous numbers of migrants and warned that they could destabilize European societies. “If Europe is not capable of protecting its own borders, it’s the very idea of Europe that will be questioned,” he said. “Europe has forgotten that borders are required.”  The Schengen zone, which permits largely unchecked movement across most of the Continent and was described by Mr. Valls as “one of the great European projects,” has been under severe strain as countries have introduced border controls aimed at stemming the flow of migrants.

The forced collective suicide of European nations

A friend of mine died of cancer last week. He was in his fifties. Borrow as much as you can and spend it.

This is sound advice, because the worst is yet to come . . . by far.  If cash is to be held, it should be in dollars, because the United States is likely to fare better than other countries.   See https://naegeleblog.wordpress.... ("The World’s Next Credit Crunch Could Make 2008 Look Like A Hiccup")   Almost anything could trigger a crisis in today’s environment globally.   However, one of the greatest risks that has been perceived in Washington for many years is that a run would begin on the funds, which the central banks would be helpless to quell, leading to a liquidity crisis of unfathomable proportions.  The Depression-era tools and “safety nets” would prove useless, and panics would ensue.  Unlike American bank deposits that are insured by the FDIC, the funds are not insured at all.There are new laws in America to prevent us from withdrawing too much money from our own bank accounts. If we go beyond the federal limits, the federal government begins to investigate us.  They've been confiscating cash from depositors for years without court order or reasonable cause, just because businesses like the local diner had lots of cash receipts during the day and wanted to deposit it each day after the lunch crowd left. Too many large cash deposits in one week and the feds swoop in, confiscate it, and you have to sue to get it back. Welcome to the New America ... Of course the things are about to crash hard. Wall Street has been flooded with cash from the Fed and this has over inflated stocks (an that's inflation)  which caused a BOOM on Wall Street while their was a very slow recovery in the economy. NOW THE CHICKENS WILL COME HOME TO ROOST. It will get ugly!!

Finland and Russia. Well Finland is the only EU member nation to border Russia and not be a NATO member. I suspect they are wary of Russia but have a greater understanding of Russia's somewhat justified paranoia and anger with broken ' influence space' NATO invasions since the 1990's. They seek the old USSR relationship probably which worked well for Finland. Your last sentence captures this.  BTW by many polls the most pro-EU Nordic - not members yet (and they were in the list with Denmark, UK and Ireland in the 1960's - is Norway. Following April's elections, Juha Sipila, the prime minister, Timo Soini, the eurosceptic foreign minister and Alexander Stubb, the finance minister, have pledged to create more jobs, to get the economy moving and avoid a "lost decade" from a lack of reforms.  Finland is out on its own compared to the other Nordic countries in joining the Euro. Norway isn't even in the EU, Sweden has done well keeping the Krona and Denmark has kept their Krona but ties it to the Euro, a tie that could easily be broken if the proverbial hits the fan. Finland is looking rather isolated. Of course the Baltic states are in the Euro but they have all paid a heavy price for membership.  Would I be right in thinking that Finland is being hurt by Russian retaliatory sanctions rather more than other countries? Whilst they must have an historical healthy fear of Russia, I would imagine they are far more scared about the West restarting the Cold war in extreme earnest because of western interference in the internal affairs of Ukraine.

A fortnight ago, about 130 business leaders, who between them employ 50,000 people in Scotland, wrote an open letter in the Scotsman newspaper saying No Thanks to separation. The group, led by the chief executive of engineering giant Weir, Keith Cochrane, said the “business case” for Scottish independence had not been made.

Kingfisher boss Cheshire does not believe Scotland will be able to keep the pound, which would mean repricing 35,00 products, with the cost being passed on to customers. He called on other business leaders to come out and make similar points, saying “It’s now or never.”

Jean-Bernard Levy, the head of France’s Thales – Britain’s second-largest defence contractor – said a yes vote would force the company to reconsider its facilities on both sides of the border.

BP boss Bob Dudley, said he does not want to see Scotland “drifting away” from the UK, because independence would almost certainly mean higher costs for his business.

HSBC chairman Douglas Flint has warned that uncertainty over Scotland’s currency could prompt capital flight from the country and leave it in a “parlous” financial state.

Weir, one of Scotland’s biggest companies, said independence will “guarantee” higher costs for business but produce few and uncertain benefits, after commissioning a report on the economics.

Standard Life, one of the main pillars of Scotland’s finance industry, has set up English subsidiaries as a part of “contingency” planning that could see it quit Scotland.

Royal Bank of Scotland, Scotland’s biggest bank, has tried not to raise the temperature despite harbouring concerns over the risks to its credit rating and business.

Lloyds Banking Group has warned of a “material impact” on its costs and borrowing, implying a knock-on impact for businesses and customers for the owner of Lloyds, Halifax and Bank of Scotland.

Alliance Trust, a pensions and savings firm based in Dundee, has been registering companies in England.

Former Sainsbury’s boss Justin King, was accused of scaremongering by the Scottish National party when he warned that independence could mean higher food prices north of the border. Asda and Morrisons have also warned consumers would face higher prices, reflecting the higher transport costs for some remote areas.

 

 

Berlin - A new bargaining chip has emerged in the ongoing German coalition talks: the idea of holding referendums on major EU decisions - be it bailouts, enlargement or more transfers of sovereignty to Brussels.

The idea was formulated in a joint working paper drafted by Hans-Peter Friedrich, a member of Angela Merkel's Bavarian sister party (CSU) and currently the country's interior minister, and Thomas Oppermann, a member of the opposition Social Democrats (SPD).

A grand coalition would be a unique opportunity for "modernizing our democracy," they wrote.

More referendums - which currently can be held only on constitutional matters or if the country's borders are changed - would give voters the chance to "influence political decisions also in-between elections," they added.

In their leaked paper, the two politicians argue for a "careful transition to direct democracy," for instance when 1 million people gather signatures on a matter or if the parliament wants to consult the population on a specific law.

The paper also argues that referendums should be held on EU matters of "great significance" - such as EU enlargement, transfer of powers to Brussels or another eurozone bailout.

Merkel's Christian Democrat party (CDU) was quick to dismiss such wide-ranging plebiscites, saying there was a risk of them being hijacked by populist campaigns.

"There are still serious doubts about the introduction of referendums at national level," said Guenter Krings, the deputy leader of the CDU in the Bundestag.

The chairman of the EU affairs committee in the parliament, Guenther Krichbaum, said such a change would bring about the "advent of populism" in Germany.

The Social Democrats have also distanced themselves from referendums on EU matters.

They say plebiscites should be held on internal matters and formulated in a way that would not give a platform for anti-European campaigns.

"One can leave out certain questions that touch on the core principles of the EU," said SPD secretary general Andrea Nahles.

The issue will form part of coalition talks on Wednesday.

The negotiations are expected to last at least until the end of the month, with a final round expected on 27-28 November. The new government should be in place by mid-December.

FRANKFURT--The European Central Bank will force the euro zone's largest banks to set aside 8% of their risk-adjusted assets as a capital buffer, which will form one plank of the ECB's assessment of bank balance sheets next year, according to a person familiar with the matter. Euro-zone banks, which will be supervised by the ECB starting at the end of next year, will be required to hold a 7% capital buffer. The region's most significant banks will have to hold an additional percentage point, the person said. The buffers protect banks against losses they may take on loans and other assets. An ECB spokesman declined to comment.

The target of 7% is in line with what a bank has to achieve under the new "Basel III" rules on capital in order to pay its dividends and bonuses without restrictions. However, it's lower than the 9% required by the capital exercise that the European Banking Authority carried out over 2011-2012. Theoretically, the new Basel standards don't come into force until 2018, but pressure from both regulators and financial markets has led most banks to report under the new standards already. The one percentage point surcharge for 'significant' banks echoes the Financial Stability Board's intention to impose a capital surcharge of up to 3.5 percentage points for Systemically Important Financial Institutions--also known as banks that are 'too big to fail.' The FSB will phase in these surcharges between 2016-2019. According to its latest assessments, Deutsche Bank AG (DBK.XE) would be liable to a surcharge of 2.5 percentage points, with a dozen other EU banks being subject to surcharges of between one and two percentage points. However, it isn't clear how the ECB will define its list of significant banks.

The ECB will release additional details on how it will handle its asset quality review at a press conference Wednesday. Europe's central bank will conduct the review in the first half of next year, before it takes on the role of bank supervisor. Currently, banks across the 17-member currency bloc are overseen by national regulators. The review is seen by most analysts as a critical part of efforts by European officials to address capital needs of banks, particularly in southern Europe, and to spur new lending to the private sector.

Huge storm do to hit England on monday

Forecasters warned on Thursday that the most powerful storm in several years would batter the south coast on Monday, but have now expanded the alert as far north as the east and West Midlands.

Angela Merkel's domestic policy in her third term will likely be confined to higher spending. But she has grand plans for Europe. SPIEGEL has learned she wants Brussels to have far more power over national budgets. It's a risky move that EU partners and the Social Democrats are likely to oppose.

In the end, the atmosphere became downright festive in the Berlin Hall of the Parliamentary Society, a building next to the Reichstag. Chancellor Angela Merkel's conservatives and the center-left Social Democratic Party (SPD) had met there three times in the last three weeks to sound out whether they could form a coalition government. The decision was still up in the air.

Merkel gave SDP Chairman Sigmar Gabriel a questioning look, and said: "Would you like to say something?" But Gabriel beckoned to her to speak. "I have my delegation's support for what we discussed," she said. "So do I," Gabriel replied.

The grand coalition took shape shortly before 3 p.m. last Thursday. For the third time in postwar German history, Merkel's Christian Democratic Union, together with its Bavarian sister party, the Christian Social Union (CSU), and the SPD are preparing to form a coalition government. The talks are expected to begin this Wednesday. The chancellor is in a hurry because she wants to have a new government by Christmas at the latest. "Christmas will be here sooner than you think," she told fellow members of the CDU executive board on Friday afternoon.  At the beginning of her third term, Merkel has more power in Germany and Europe than any chancellor before her. There hasn't been such a strong majority behind a government in Germany's parliament, the Bundestag, since the first grand coalition half a century ago. In the midst of the European crisis, Germany has become the undisputed dominant power in Europe.

The grand coalition will hand Merkel a majority she could use to shape Germany and Europe and address major issues, including constitutional reforms in Germany and the reform of European Union institutions.

Merkel, unlike SPD Chairman Gabriel, has been unchallenged in her own party since her election victory. Little is left of the accusations that critics had leveled at Merkel, except one: That she is a chancellor without an agenda, plan or vision; that her style of government is reactive rather than proactive; and that she doesn't know where she wants to take her government and Germany.

Big Plans for Europe - In the past, Merkel has treated governing primarily as repair work. The major issues of her first two terms in office, the financial crisis and the fight to save the euro, were suitable for that approach. Will that change, now that she has the necessary power and means? Hardly at all, when it comes to Germany. There are no major reforms in the works at government ministries, and the grand coalition will focus on increasing spending to fulfil some of the parties' campaign promises.

In contrast, officials at the Chancellery are forging plans for Europe that are practically visionary for someone like Merkel. If she prevails, they will fundamentally change the European Union. The goal is to achieve extensive, communal control of national budgets, of public borrowing in the 28 EU capitals and of national plans to boost competitiveness and implement social reforms. The hope is that these measures will ensure the long-term stability of the euro and steer member states onto a common economic and fiscal path. This would be the oft-invoked and ambitious political completion of Europe's monetary union -- a huge achievement.

It isn't a new goal, but what is new is the thumbscrews Brussels will be allowed to apply if Merkel has her way, including sooner and sharper controls and veto rights, as well as contractually binding agreements and requirements. In short, this would amount to a true reconstruction of the euro zone and a major step in the direction of an "economic government" of the sort the SPD too would like to see put in place.

Germany's current economic strength helps to explain these visions for Europe, since stricter budget controls wouldn't pose a threat to Berlin at the moment. Jobless levels are so low that the country has almost reached full employment, and the budget is in good shape, at least at the national government level. In fact, public coffers are so full that the government can afford to boost domestic spending.

More Money to Spend - And that's precisely what the members of that coalition intend to do. The first item on their agenda is to hand out benefits and spend money. Thanks to the strong economy, this won't even require raising taxes. In his financial planning for the medium term, Finance Minister Wolfgang Schäuble anticipates growing national budget surpluses from the year after next: €200 million ($274 million) in 2015, €5.2 billion in 2016 and €9.6 billion in 2017.

In other words, the government will have an additional €15 billion at its disposal in the coming years. This gives Merkel and Schäuble the necessary leeway to fulfill the desires of the CDU/CSU and the SPD for more investment in infrastructure and education without having to raise taxes. There is talk of an €11 billion fund for infrastructure alone.

Prior to the election, Merkel and Schäuble had announced their intention to use the surpluses to pay off old debts. That won't happen now, and yet the conservatives are not plagued by a guilty conscience, noting that despite the additional spending plans, the country will still remain within its debt limit requirements.

The reorganization of the financial relationships between the national and regional state governments, which is on the agenda in this term, will likely be costly for the national government. Many states would have to cut billions from their budgets so that they can make do without new borrowing starting in 2020. Many state governors complain that it's a burden their states can't handle without national government assistance. They are hell-bent on demanding financial support from Berlin in return for agreeing to a reform of the system of transfer payments from richer to poorer German states.

The states' ability to block legislation in the Bundesrat, the legislative body that represents the states, will likely become costly for the new administration long before that. Merkel is worried at the way in which preliminary coaltion talks in recent weeks turned into haggling over money between the national and state governments. "We just had a national parliamentary election, not 16 state parliamentary elections," an irritated Merkel recently told the CDU/CSU parliamentary group.

There may also be a major restructuring in the way transport projects are funded, due to the states' lack of money. The CSU's pet project, the automobile toll, stands a good chance of being approved, since it would generate new revenues.

More Powers For European Commission - During the negotiations, CSU Chairman Horst Seehofer presented a plan for how the toll could become a reality. It calls for drivers to pay an "infrastructure fee" in the future. Germans would be able claim the fee as a credit against the motor vehicle tax, so that the cost could ultimately be imposed on foreign drivers. According to the document, prepared by Transportation Minister Peter Ramsauer, this would be possible under European law. The new coalition won't face serious resistance to its spending policies, not even from the opposition. With the elimination of the pro-business Free Democratic Party (FDP) from the Bundestag, the voice of moderation in budget policy has disappeared. Only the economic wing of the CDU/CSU is likely to put up weak resistance. So Seehofer will get his toll, the states will be kept happy with financial gifts and the social security offices will hand out benefits. This doesn't exactly sound like an ambitious program for Merkel's second coalition government with the Social Democrats. Instead, it feels like more of the same, or a program of minor improvements, at least on the home front. But regarding Europe, Merkel is heading for strategic decisions and is likely to show more courage to take political risks than usual.

Schäuble, the last dyed-in-the-wool European among Germany's top policymakers, can be pleased. Merkel wants tangible amendments to the European Union treaties: more power for Brussels, and even more power for the much-criticized European Commission. "Unfortunately, there is no other option," say government officials.

Carrot-And-Stick Approach - Last Thursday, after the final round of exploratory talks with the SPD, Merkel brought European Council President Herman Van Rompuy into the loop in a private conversation at the Chancellery. It was a back-door initiative of the kind so typical in EU policymaking. Documents are already being put together at the German Finance Ministry over how "Protocol 14" of the EU Treaty could be beefed up. It currently contains a few general statements on cooperation in and control of the euro zone. But now, if Berlin is able to implement its carrot-and-stick approach, tangible powers for the European Commission will be added to the protocol.

For instance, the Commission could be given the right to conclude, with each euro country, an agreement of sorts to improve competitiveness, investments and budgetary discipline. Such "contractual arrangements" would be riddled with figures and deadlines, so that they could be monitored and possibly even contested at any time. In return, a new, long-discussed Brussels budget will become available to individual countries, an additional euro-zone budget with sums in the double-digit billions for obedient member states. Protocol 14 could also be used to install the full-time head of the Euro Group. The influential job is now held by one the member states' finance ministers, currently Dutch Finance Minister Jeroen Dijsselbloem. Devoted Europeans like Schäuble have long dreamed of installing a "euro finance minister."

Resistance Against Merkel's European Plans - If Chancellor Merkel is focusing on an amendment of this central part of the EU treaties, it is a remarkable about-face. Still, the new course is risky, and it has many detractors and an uncertain outcome. None of this is to the chancellor's taste, at least not the chancellor we know. But Merkel has already deployed her key European strategist. The relevant department head in the Chancellery, Nikolaus Meyer-Landrut, outlined the German plan at a Brussels meeting in early October. It didn't go down very well. Opponents of the common currency are rapidly gaining popularity in almost all euro countries. Every change in the balance of power in Europe and every upgrading of the European Commission make governments more vulnerable to domestic political attacks. More power for "Brussels?" No way. There are even growing doubts in the European Parliament, albeit for completely different reasons. Both leftists and conservatives fear that anyone who opens the door to amending the treaties "won't be able to close it again that quickly," says a top Christian Democrat. Especially the British government, driven by the radical, anti-European UK Independence Party (UKIP), could use the opportunity to retrieve powers from Brussels, essentially renationalizing the European Union.

The SPD could raise objections. "The SPD won't support any arrangements if Merkel conducts parallel negotiations with Britain's David Cameron to transfer EU powers back to member states," Axel Schäfer, deputy leader of the SPD's parliamentary group, told SPIEGEL ONLINE. He added that the SPD won't accept any treaty changes that relate to referendums in individual EU states.

The president of the European Parliament, German Social Democrat Martin Schulz, has already warned Merkel privately that he won't back any change in EU treaties. He wants national governments to make the euro zone resilient to future crises by using the instruments created step-by-step over the last three years -- without treaty changes. Schulz fears that a treaty change would take too long and that referendums necessary in some countries couldn't be won given current poor public sentiment regarding the EU. "We will check all the chancellor's proposals to see whether they can be implemented in all EU states," says Schulz, who will be part of the SPD's negotiating team in the coalition talks, responsible for all issues pertaining to Europe.

But Merkel seems undaunted by these obstacles. And she already has a timetable. First she wants to wait and see what happens in the May 2014 European parliamentary election. Then the new president of the European Commission will have to be chosen once the second term of the current incumbent, José Manuel Barroso, ends in 2014. Merkel got him the job and ensured he got a second term. But these days, she doesn't even bother disguising her contempt for Barroso.

Once the new European Commission is in office, the political window for Merkel's European vision is expected to open. It doesn't seem to bother her that she will be in a clear minority when she embarks on her reform plans. She is familiar with this position from the first days of the euro debt crisis, when she wanted to include the International Monetary Fund as a key authority in distributing aid packages, and almost all other euro countries were against the idea. At the time, she said privately: "I'm pretty much alone here. But I don't care. I'm right."

NIKOLAUS BLOME, CHRSTIANE HOFFMANN, PETER MÜLLER, CHRISTIAN REIERMANN, GORDON REPINSKI, CHRISTOPH SCHULT

THE "ISLANDERS" - The Prime Minister was warned by Jose Manuel Barroso that his attempts to negotiate a new relationship with the EU would be vetoed by other member states.

As a war of words raged, Downing Street insisted the Prime Minister will go ahead with his plans to get a better deal.

A Number 10 spokesman said: “As the Prime Minister made clear in January, he will negotiate a new deal in the EU and then put the choice of staying in or leaving the EU to the British people in a referendum by the end of 2017.”

Mr Barroso, an unelected Portuguese politician who comes to the end of his presidency next year, had dismissed claims by Mr Cameron that there is wider European support for his agenda to “repatriate” powers on social, employment and environmental legislation back to Westminster....

He said in an interview “there will be others, many, who oppose” Mr Cameron’s call for treaty changes which must be agreed unanimously by all 28 member states.

He said: “Britain wants to again consider the option of opting out. Fine, let’s discuss it. What is difficult, or even impossible, is if we go for the exercise of repatriation of competences because that means revising the treaties and revision means unanimity. I don’t believe it will work.”

He added: “I am for a stronger EU not a weaker EU.”

The row will add to calls for Britain to quit the EU, as championed by the Daily Express.

Last night Ukip leader Nigel Farage said: “Barroso describes Cameron’s plans as ‘doomed to failure’. So they are. It is about time the pro- European establishment of this country was honest with us. There will be no change in our relationship with the EU before, during or after Cameron’s futile renegotiations.

“The EU knows this, Cameron knows this and the people of this country need to know this, too. This country needs a choice now.”

It changes by the hour ....what a circus !!! lies and deceit and that's all !!

Good news for the European economy: retail sales were much stronger than expected in August.

Eurostat reported that retail sales volumes rose by 0.7% in the euro area, and 0.4% across the wider European Union in August. July's data was also revised higher, showing consumers weren't as cautious about spending as first thought.

Eurozone retail sales to August 2013 Photograph: /Eurostat

Eurostat's data shows that non-food shopping was strong, rising by 0.6% in the eurozone. That covers items such as computers, clothing and medical products.

The data also showed an increase in fuel purchases, suggesting a rise in motor journeys. Spending on "automotive fuel in specialized stores" (that's petrol stations to you and me) was up by 0.9% across euro members.

The eurozone recovery is gathering pace, with its private sector firms reporting the biggest leap in activity since June 2011 last month.

Data firm Markit's monthly surveys of companies across the single currency showed a solid rise in activity.

New business has picked up, and the rate of job cuts may finally be slowing to a halt.

Markit's monthly survey of activity came in at 52.2, up from August's 51.5. Both service sector firms and manufacturers said conditions were better.

Photograph: Markit

Here's some key factoids from the report (online here)

Ireland: 55.7 2-month low
Germany: 53.2 2-month low
Italy: 52.8 29-month high
France: 50.5 20-month high
Spain: 49.6 2-month low

The news comes hours after China's service sector output hit a 6-month high.

Chris Williamson, chief economist at Markit, said the eurozone data showed Europe's recovery on track, despite Spain's private firms faltering after a better August.

Rosia Montana - the criminal government of Romania or an opportunity to make a profit...????

As long as we don't worship the Keynesian Dogma we are going to read things like this one.

Mr Rajoy said the eurozone's fourth largest economy was "out of recession but not out of the crisis", and faced a long period of more austerity before the country could sustain the recovery.

"The task now is to achieve a vigorous recovery that allows us to create jobs," he told the Wall Street Journal.

Spain's unemployment rate, at 25pc, is among the highest in the eurozone. The bloc's official unemployment rate of 12.1pc also masks huge disparities. While Austria boasts an unemployment rate of just 4.8pc, the jobless rate in bailed-out Greece is 27.6pc.

The recovery in Germany, Europe's largest economy, has also been fragile. Data on Tuesday showed business sentiment rose for a fifth consecutive month in September. The Ifo Institute's business climate index, which is based on a survey of 7,000 firms, rose to 107.7 in September, from 107.6 in August. However, the reading fell short of the 108.2 expected by economists.

European Central Bank rate-setter Ewald Nowotny said on Tuesday that the bank had "flexible" tools at its disposal if it needs to take additional measures, including providing banks with additional central bank money. ECB President Mario Draghi said on Monday that the ECB stood ready to deliver a fresh injection of cash into Europe's banks. Asked about the possibility of the central bank giving banks another chance for those loans, known as Long Term Refinancing Operations (LTRO), Mr Nowotny said: "It is certainly important to show all that we have in the way of instruments, which are flexible...Pier Carlo Padoan, the OECD's chief economist, said he expected growth in the 17-nation bloc to be negative this year, despite several countries showing signs of recovery. Mr Padoan said the single currency area, which emerged from its longest recession in more than 40 years in the second quarter, remained "a considerable source of risk" to the global recovery, though he added that the systemic risk from the eurozone's debt crisis had subsided. He added that while countries should continue to implement austerity policies, automatic stabilisers such as unemployment benefits should be allowed to kick-in if economies stalled. Mr Padoan also urged policymakers to tackle high jobless rates. "There is no doubt that policy priority number one in the euro area is fighting unemployment. Let's not fool ourselves and expect unemployment to come down in a stable fashion," he said.

Economists expect growth in the eurozone to pick up in the second half of the year. On Monday, Spanish prime minister Mariano Rajoy said the country would exit recession - defined as two or more consecutive quarters of negative output - in the third quarter, following two years of contraction. 

The number of unemployed people in France rose to a fresh high last month, official data shows. There are now some 3.2 million people seeking work in France, 11.5% more than a year ago and 1.2% more than in February, the labor ministry said.   The number of job seekers is the highest since records began in January 1996.  The ministry does not express the job seeker figure as a percentage of the work force, as done by the International Labor Organization.   Speaking earlier during a state visit to China, French President Francois Hollande said the government's priority was tackling France's rising unemployment.  "Everything the government does, in every ministry, must be to continue to strengthen the battle for jobs," he told a news conference.  "I want all the French people to unite behind this one national priority."  He has promised to reverse the rise in unemployment before the end of the year.  The figures underlie the grave economic problems still haunting eurozone economies, after Spain earlier reported record unemployment amid its continuing recession. Speculation is again rife that Greece may soon leave the eurozone.
Greece's parliament is voting on painful budget cuts and labor market reforms that must be passed in order for Greece to receive its latest round of bailout money. Prime Minister Antonis Samaras has warned that if the vote fails, the government will run out of money by 15 November and be forced out of the single currency. Even if the vote passes, the government still needs to implement the reforms - something the previous Greek government noticeably failed to do. Tax rates were raised, but the taxes were not collected. Promised privatizations were not carried out. Civil servants were suspended but not dismissed.  If Greece once again fails to deliver, and if it were forced out of the euro, what is the worst that could happen? Click on the graphic to find out.

"It defies belief that Poland and others are still keen on joining the economic doomsday machine of the single currency"

No.....What defies belief is not that they may wish to join,but that they may still be allowed to do so. The EU if it contains any semblance of self awareness should by now have come to understand that it has a problem in trying to operate a single currency in the way it does. That problem being manifest by the broadening economic malaise in Europe and the growing political risk arising from it.
One might think therefore that the EU might at this juncture wish to pause and rectify the problem it has before it spreads it net and brings into the fold new 'meat' that will simply feed the problem for the future.

One of the main things that makes the human race superior to other species in it's ability to survive is we learn through iteration. When we do something wrong we figure out what it was and adapt doing something differently next time so that we do not simply perpetuate all of our previous mistakes. The EU in considering expansion without first learning from it's current litany of mistakes and problems promises to continue to do the same thing expecting a different outcome. Begs the question then if it cannot learn from it's mistakes is it even 'human'? !

Certainly when I consider the behaviour of individuals like Wolfgang Schaeuble I find myself thinking of the cult film "Terminator". What did you say Wolfgang? "I'll be back".

Yes,that's what we are all afraid of.

NOW, about Cyprus ...Cyprus has been destroyed by the EURO, the TROIKA and its own Cypriot politicians....Europe is a mess because of the liberal elitist puke scum that want to destroy SOVEREIGNTY / CULTURE / RELIGION...Even the Archbishop see this....Cyprus, like all the European Countries , needs leaders that love their country.

It is a sign of the times when I find myself agreeing with the Archbishop and must acknowledge he is the only Cypriot offering leadership. Today he put the Church's resources at the disposal of the Cypriot people. His exact words were 'no one will starve'. A 'Christian' acting like a christian for once instead of chanting meaningless words and dogma.

Cyprus’s central bank said lenders would remain closed until at least Tuesday amid growing speculation the Meditterranean island could become the eurozone member to exit the currency bloc.

Officials at the ECB were reported on Wednesday to be considering pulling the plug on Cypriot banks unless the country agreed to a new bailout package.

Jörge Asmussen, the ECB’s chief negotiator, warned that Cyprus’s decision to reject the terms of an €10bn (£8.6bn) bailout meant it could not guarantee support to domestic lenders for much longer.

“We can provide emergency liquidity only to solvent banks and... the solvency of Cypriot banks cannot be assumed if an aid programme is not agreed on soon, which would allow for a quick recapitalisation of the banking sector,” said Mr Asmussen in an interview with a German newspaper.

The threat followed the unanimous voting down by the Cypriot parliament of a rescue package that would have seen the authorities levy a “tax” of up to 10pc on deposits of more than €100,000.

Senior European politicians have expressed hope that a new bailout could be organised, however some have begun to openly discuss the possibility of Cyprus exiting the euro. Austrian Chancellor, Werner Faymann, said he could not “rule anything out for Cyprus”.

German Chancellor Angela Merkel said she expected the Cypriot government to come up with a new rescue plan, but continued to insist it was fair for large depositors in Cypriot banks to face a loss on their savings.

Banks in Cyprus have remained closed since last week and on Wednesday the country’s central bank said lenders would not open their doors until next Tuesday, leaving Cypriots dependent on using ATMs for day-to-day cash.  The prolonged closure of banks has led to widespread fears among senior industry executives that it could undermine confidence in the financial system. Christian Clausen, president of the European Banking Federation, said a way had to be found to reopen Cypriot banks before it was “too late”.

“Everything needs to be solved very quickly. This is a matter of a very few days before it gets too late,” Mr Clausen told Reuters... While the eurozone finance ministers are busy having their conference call, Bloomberg reports that the currency bloc's finance chiefs are pressuring Cyprus to shrink its banking system. Here's what the newswire had to say:

Finance ministers for the 17 euro countries are considering a plan to shutter the two biggest banks in Cyprus and freeze the assets of uninsured depositors, said the four officials, who asked not to be named because the talks are ongoing. The ministers are holding a teleconference tonight.

UPDATE : Cyprus Popular Bank and the Bank of Cyprus would be split to create a so-called bad bank, one of the officials said.
Insured deposits -- below the European Union ceiling of 100,000 euros -- would go into a so-called good bank and not sustain any losses, while uninsured deposits would go into the bad bank and be frozen until assets could be sold, said the four officials.

Losses to unsecured creditors, including uninsured depositors, could reach 40 percent under the plan, which has support from the International Monetary Fund and the European Central Bank. hile the eurozone finance ministers are busy having their conference call, Bloomberg reports that the currency bloc's finance chiefs are pressuring Cyprus to shrink its banking system. Here's what the newswire had to say: Finance ministers for the 17 euro countries are considering a plan to shutter the two biggest banks in Cyprus and freeze the assets of uninsured depositors, said the four officials, who asked not to be named because the talks are ongoing.

Russians in Cyprus are getting tired of suggestions from Germany that anyone with a Russian accent here is a Mafioso. They say that claims that the island is simply a money-laundering post for Mob cash are wide of the mark, and that the EU strategy has been purely a political one.
"Since this started happening the German, Dutch, and Scandinavian treasuries have been doing very well while the quotes for southern European ones have gone down," says Andrei Surikov, 30, a financial manager from Moscow who moved to Cyprus three years ago.
"The whole thing is just a dirty political game, and I don't think the EU has estimated the impact of what they have done. The trust has gone now in the whole system."  

 

Stocks are up big to start 2013 but Marc Faber, Editor & Publisher of the Gloom, Boom & Doom Report, says it ends in tears.

"Either the market is going to correct more meaningfully now or we have a shallow correction and a continuously rising market until July or August," Faber told me via phone from Thailand. If stocks don't pullback soon, he says we risk a repeat of 1987 when stocks rallied 40% into summer only to collapse 41% in 2 months.

"In March of 2009 everything looked horrible, now nobody can find a reason why stocks could go down," Faber claims. "We ask that you should buy stocks when everything looks horrible, you shouldn't rush to buy them when everything looks perfect."

The problem is that it's hard to find anyone claiming the environment is perfect. Even the theme running under the reports of "the masses" buying stocks is that it's a cue to sell, not buy.

Analysts are looking for almost no corporate earnings growth in the current quarter and not much better than that for the balance of the year. The idea that Fed money printing is supporting assets may be true, but the FOMC has given clear guidelines on when the printing will stop. When inflation (as measured) rises past 2% or unemployment falls below 6.5% the Fed will raise rates.

Even if you think the Fed is wrong, there's no basis for calling them liars. A surprise end to Quantitative Easing isn't on the table. It's hard to make much of a case for ebullience beyond the fact of stocks much-hyped journey toward all-time highs.

So what's an investor to do? Faber says it's a matter of allocation and perspective. Stocks have gone very far in a relatively short amount of time. If you caught the rally, he says it's time to trim but not bail out entirely. If you're a Johnny-come-lately to stocks, you're too late as he sees it.

"If you have 100% of your money in equities and you just bought them now, maybe you should reassess your position," says Faber.

As for the EU - well I am "out" - the "performance" since 1973 has been pathetic, and we could do a whole lot better economically ourselves as we proved for over two centuries - although I would not wish for one moment to return to the colonial times. As India and China have shown, it is possible to grow GDP in this environment (check out the EU countries' low comparison base in terms of GDP growth - should be easy to improve upon, one might think...). Comparisons with Norway and Switzerland are not fit for purpose - how about the UK "before" and "after" the EU - in the years when the country's economy was actually being run properly - as opposed to the Wilson/Heath panic mode era..?

A lot of people in mainland Europe are extremely unhappy with the way the EU is run - they could not even get a majority on EU Constitution, for goodness sake - which is why the Lisbon Treaty had to be hastily cooked together. Political over-ambition in Brussels got us to this point, and Europe-wide political incompetence is dragging us back. Time for the populus to speak, and for this cretinous, continued practice of hiring people with no economic background, no qualifications or experience of handling multi-billion pound budgets to run the country to stop immediately. It would be regarded as downright negligent in most listed companies to have such people in charge, and it is utterly unjustifiable when the country's economic welfare is at stake.

A rethink on sovereign governance principles is required, and it needs to start now. Without any pointless bickering about socialiam vs capitalism. We exist in a capitalist society, and not to have our best exponents and experts fully engaged in making the best of this type of environment is a complete nonsense. Removing political parties' right to appoint idiotic, incompetent fools to have a direct say and influence in running the country would be a good start. Let the people elect them based on their cvs and background - i.e. competence and experience - just as the rest of us are judged and evaluated. And that does not mean Chancellors with 3rd Class Honours degrees in Economics, or, as we discovered with the allegedly "bright" Gordon Brown, ex-Economics History graduates, with more awareness about Adam Smith and 18th century economics, (valid though many of those theories may be), than the price of gold on the commodities markets at around the turn of the 21st Century, when Brown sold off all our gold for a song. He would have been fired on the spot for such incompetence in any half-decent business for wilful asset destruction. Or am I being too harsh here...??

...the decision to unleash the new action...

The president of the ECB said the decision to unleash the new action, which will be called Outright Monetary Transactions (OMT), had not been unanimous. He refused to confirm that the “one dissenter” on the ECB’s Governing Council was Jens Weidmann, head of the Bundesbank, but repeatedly told reporters that both he and the bank were “independent”. “I am who I am,” he said. As I understand it the ECB will only buy on the secondary market therefore it won't be taking part in national bond auctions. It will also only buy the bonds of countries which have been bailed out. So currently this only applies to Greece, it doesn't solve the problem for Spain or Italy unless they ask for a bailout and get one. It is of course unclear where the money would come from for a Spanish or Italian bail out. So I really can't see how this would help Spain get away its bond auctions, the ECB can't buy at the auction ( someone else would have to buy first) and they can't buy unless a bailout is requested. Also Greece as far as I know doesn't issue new debt, it relies on bailout funding and no newly bailed out country would issue new debt either. So I can't quite see how getting involved in the secondary market will help those countries. Finally of course this doesn't do anything to either write off debts or deficits. Countries are going to have to keep cutting , cutting , cutting, their economies will continue to shrink and their debts ( via bailout funds) will continue to grow...... unless a solution is found to the deficit problem we won't find a solution to the debt problem. I'm afraid I really can't see this helping much at all in a practical sense although obviously the announcement has news value and therefore excites the market. Putting something in place that allows debt ridden nations in deficit to potentially get further into debt and further behind the funding curve is hardly something to get excited about. 'Unleashed' was it? You can't unleash something you leaked the day before. The EU propaganda machinery is in overdrive at the moment - leaking one minute and then unleashing the next. I can't wait to see Draghi doing a 'Putin' beating his beared chest to emphasise the ferocity of the whimpering mouse he has set upon the financial markets. Draghi is Merkel's puppy. He was her nominee and when she barks he whimpers. If they ever have a real conflict he would not last a second. "I am who I am" "I Am that I Am is a common English translation of the response God used in the Hebrew Bible when Moses asked for his name." It's also a gay anthem. he's off his trolley, probably because he must find a new anthem and something else to unleash next week.,,,I wait in bemused anticipation.

Germany's main opposition, the Social Democrats, have upped the ante, saying that Chancellor Angela Merkel must assume greater risks to avert a breakup of the single currency.

Bloomberg has a report on an interview the SPD floor leader, Frank-Walter Steinmeier, gave to the Rheinische Post newspaper.

He raised the pressure on Mrs Merkel to agree to more burden-sharing to stem the euro crisis, claiming that Mrs Merkel, while rejecting euro-region bond sales, fails to say that Germany is already exposed to losses from the debt crisis through the European Central Bank’s bond purchases:

The government should finally be honest about it to the people. If we want to prevent the breakup of the euro zone, it won’t be without risks for Germany.....I have been following the EU. crisis for the last three years and the Muppets in Brussels still have no idea what to do. It gives me no confidence at all in our leaders in Brussels. The numpties in Westminster are not too bright but they beat the nutters in Brussels and Strasbourg hands down.

From debt crisis to food crisis. The UN's food agency has warned today that the world could face a food crisis like that of 2007/08 if countries restruct exports on concerns about a drought-fuelled grain price rally. In its latest update, the Food and Agriculture Organisation said its food price index climbed 6pc last month, after three months of decline, driven by a surge in grain and sugar prices.

Anxieties over extreme hot and dry weather in the US Midwest sent corn and soybean prices to record highs last month, driving overall food prices higher.  Grain markets have also been boosted recently by speculation that Black Sea grain producers, particularly Russia, might impose export restrictions after a drought there hit crops.

The FAO's senior economist and grain analyst Abdolreza Abbassian told Reuters:  There is an expectation that this time around we will not pursue bad policies and intervene in the market by restrictions, and if that doesn't happen we will not see such a serious situation as 2007/08. But if those policies get repeated, anything is possible.