Showing posts with label international press. Show all posts
Showing posts with label international press. Show all posts

Monday, June 3, 2013

The number of jobless people in France rose by nearly 40,000 (1.2%) in April, to hit an all-time high. The increase took the number of registered jobseekers in mainland France to 3,264,400, the worst since records began in 1996, marking two uninterrupted years of monthly rises, official figures revealed.
Looking at the last five years, it was the 53rd month out of 61 showing a rise, highlighting France's chronic job crisis as the economy fell back into recession in the first quarter and jobless figures were driven up by industrial layoffs.
The new record is a blow to President François Hollande, who is sticking to a pledge to reverse the unemployment trend by the end of the year, despite multiple forecasts to the contrary.
The UK labor market has done much better than expected since the start of the recession. Although we are suffering the worst recovery for over a century – national income has shrunk by almost 3% since 2008 – jobs have held up. Professor John Van Reenen explains that the main reason for this paradox is that real wages have collapsed, allowing firms to enjoy cheaper labor despite low demand for their goods and services. More jobs than ever before?  The headline claim that ‘there are more people in work today than before the economic crisis started’ is true but it is also profoundly misleading. Employment has risen a little – from 29.5 million in 2007 to 29.7 million up to the release of the jobs figures – but the adult population has also risen. This means that the proportion of people over 16 who are in work, the employment rate, has actually fallen from 73.1% at the end of 2007 to 71.4% in 2013. What’s more, there is evidence of underemployment as there has been a big rise in the proportion of part-timers, temporary workers and ‘zero-hours’ contracts. Even more striking is the boom in the number of people who would like to work more hours at their current wage rates, but cannot get the extra work. Although the unemployment rate rose from 5.2% at the end of 2007 to 7.8%, estimates of the underemployment rate rose from 6.8% to 10.5%.


Wednesday, May 29, 2013

Christian Noyer, governor of the Bank of France, said the FTT posed a very real “risk” to the economy if not implemented correctly. France was one of a splinter group of 11 European Union countries to decide to press forward independently with a so-called Tobin tax earlier this year. The UK has opposed the move, which Sir Mervyn King, Bank of England Governor, said earlier this month does not even have the unqualified backing of the 11 members adopting the levy. He claimed there was “enormous scepticism” even among politicians in countries signed up to it, adding that he could “not find anyone within the central banking community who thinks it is a good idea”. Mr Noyer’s comments appeared to confirm Sir Mervyn’s analysis. Mr Noyer, who is also on the European Central Bank board, said: “It will be essential to define the base, interest rates and scope of a possible financial transaction tax in order to prevent the risk of destroying entire segments of our financial industry or the offshoring of jobs, as well as the highly counterproductive effects on government borrowing and the financing of the economy.”
Under the current plan, a 0.1pc levy would be charged on equity and debt transactions and a 0.01pc tax on derivatives. Germany, France, Italy and Spain are among those that have agreed to the plan, which the European Commission expects will raise €35bn (£30bn) a year and hopes will be in force by 2014.
To prevent business moving abroad, the FTT carries an “extra-territoriality” clause that would see the levy imposed on any euro-denominated transaction, even in countries that are not signed up to the FTT. The UK is challenging the decision in the European courts, and the US and other countries have vowed to block it – which would almost certainly make the FTT unworkable.... Well...
Monsieur Noyer .... most of us (being of sound mind if not body) have been saying this since the idea was first mooted. The concept of a financial tax applying only to Europe is hilarious. The progenitors must have shares in Singapore, NY and Shanghai.
It is of course barmy. All the French political elite knows how to do is impose more taxes. I am astonished theyhaven't yet got their grubby hands on e-mails! Imagine that - a 1p tax on all e-mails .... that would allow them for a while to continue with their insane spending before running out of money agfain and looking for another Milch Kuh..... Even the French socialists couldn't tax sex, could they?But better late than never, Mr Noyer, and GOOD LUCK with passing on your message to your President .... however, given A) his reception to new ideas and B) his general understanding of what is going on, I am not that optimistic.  No, I'll rephrase that; you are belching into the face of a hurricane ....

Friday, May 24, 2013

Italian industrial data - New industrial orders data from Italy shows the deep damage caused to its manufacturing base in the last year. Italian industrial orders slumped 10% year-on-year in March, after 12 months of recession, austerity measures, and political uncertainty. But orders were actually 1.6% higher than in February, a somewhat encouraging sign for the future . Industrial sales (as opposed to future orders) tumbled 7.6% year-on-year, and were down 0.9% on a monthly basis. Steve Collins, global head of dealing at London & Capital Asset Management, dubbed the figures 'dire'....My take on what has been going on is that the "corporates" that have all the unelected people at the EU,ECB,IMF,WTO etc. on speed dial have decided that the social systems of the "West" are too expensive and bad for business. The unelected do not care - the revolving door means that after they have done their master's bidding they can look forwards to nice directorships to supplement their pensions. Big business spends billions on lobbyists and political donations - they do not do this other than to influence events. Rebalancing, restructuring, global race - words used by the elite as they re-order things in this "post democratic age"....How many democracies have been overthrown recently?
National budgets are now subject to the Troika for several countries....This Troika is telling countries how many people to sack, and what state assets to sell off. "Post democratic age" has been mentioned by Barroso a few times, now Lagarde is saying the same (not sure about HVP).  Draghi said he would do "anything it takes" to save the Euro (note - save a currency, nothing about saving the life chances of tens of millions of people).
Also - if you get bored you may want to look up what protections from prosecution the likes of Draghi enjoy, and who has the authority to stop him from doing whatever he wants to.
Anyway, I must go...I'm taking my close friends out to lunch before the zombie apocalypse starts.

Wednesday, May 1, 2013

Speaking ahead of a confidence vote in the lower house, Mr Letta said Italy could not afford to focus simply on trying to cut its huge public debt and needed a new emphasis on lifting the economy out of recession. He will be backed by his own center-left Democratic Party, Silvio Berlusconi's center-right People of Freedom (PDL) party as well as centrists led by former prime minister Mario Monti, with a second vote in the Senate on Tuesday.
"We will die of fiscal consolidation alone, growth policies cannot wait any longer," Mr Letta said, noting that the country's economic situation remains "serious" after more than a decade of stagnation.
However he pledged to stick to Italy's budget commitments to its European Union partners, announcing he would visit Brussels, Paris and Berlin this week. Financial market reaction to Letta's appointment and the end of months of political stalemate after last February's inconclusive election was positive, with bond yields falling and shares rising....So Letta thinks he can revive the economy! How pray? Any fool can see that Italy can't even find breathing space while it remains strapped into the "Gold-Standard" like EMU straight jacket and shackled to the brick wall of Germanic inspired demands to collapse public spending, aka austerity. 
Until this otherwise clever nation comes to its senses and exits EU/EMU, Italy seem destined to continue its underworld sojourn in the dank dungeons of economic bondage and fiscal discipline. 
Responding to Berlusconi's demands for an unpopular housing tax to be scrapped, Mr Letta said payments due in June would be halted prior to a wider overhaul of property taxes but he did not promise to abolish the tax altogether. He also said he hoped an increase in sales tax, which would see the main rate rise from 21pc to 22pc planned for July, could be delayed. In a speech laying out an ambitious programme of reforms, Mr Letta said the welfare system would have to be strengthened, taxes weighing on employment and young people would be cut and measures to get more women into the workforce would be passed. He promised to change the current electoral law, which contributed heavily to the inconclusive election result in February and left Italy in political limbo for two months as the parties wrangled over forming a government. He also said he would review the progress of reforms in 18 months' time and if he felt that he had been blocked by other parties he would not hesitate to assume the consequences, an apparent suggestion that he would resign.

Friday, April 19, 2013

EU Parliament adopts "most comprehensive and most far-reaching banking regulation in European history" with overwhelming majority
"Today's decision makes European banks more resilient, so that no more taxpayers' money has to be used to prop them up", explained Othmar Karas MEP, Vice-President of the European Parliament. The new set of rules for banks, which was adopted with an overwhelming majority, comprises more than a thousand pages and is the basis for the planned banking union. "The new single rule book for all 8200 banks in the EU is the foundation on which the house of the Banking Union is to be built. The single supervisory mechanism will be the roof. As walls to the house, we must now feed in the Resolution framework for banks and the deposit guarantee schemes. The new set of rules is the most comprehensive and most far-reaching banking regulation in the history of the EU", he said. Karas was Parliament's negotiator for the law known as the CRD (Capital Requirements Directive) or Basel III....Part of the new rules is that for the first time, there will be a cap on bankers' bonuses. Bonuses may not be higher than the salary. Only in exceptional cases, the shareholders of a bank may decide that bonuses may amount to a maximum of twice as much as the fixed salary. "The rules concerning bankers' bonuses do not regulate the amounts of the salaries. As legislators, we do not regulate salary levels. But we install fairness and transparency and we contribute to a change in culture", said Karas. The most important part of the new rules is tightened capital requirements for banks. From 1 January 2014 onwards, European banks have to put aside more and better capital to be prepared for possible crises. Unprecedented is the new rule that banks have to publish, country by country, what their profit is, how much tax they pay and how much they receive in subsidies. This increases transparency.
"The new capital requirements are key to an efficient banking supervision and therefore a crucial condition for the banking union", said Marianne Thyssen, EPP Group MEP responsible for the negotiations on the new single European banking supervision. "Today's large majority for the new banking regulation is a major success for Othmar Karas and an important step on the road to a safer banking sector. Both the new capital requirements and the reinforced European banking supervision will help to avoid crises. Prevention is better than cure", said Thyssen.  For the first time, criteria for the liquidity of bank capital are being introduced. Banks have to be able to fulfill their liabilities in stress situations for a period of at least 30 days. Particularly important to Othmar Karas has been making loans to Small and Medium-Sized Enterprises (SMEs) easier: "Banks must focus on their core business, which is financing the real economy." The new law reduces the capital requirements for loans to SMEs and business start-ups. Granting loans become easier this way. In addition, continental European banks are being strengthened in their competition with Anglo-American competitors by recognizing the characteristics of European banks as decentralized structures and loss-sharing agreements. "Our aim is to make European banks as firm as a rock on the global financial markets", concluded Karas.

Wednesday, April 10, 2013

As the Süddeutsche itself reports, news that Deutsche Bank conducts offshore operations isn't new. As the paper notes, such activities aren't as prolific at Deutsche as at Switzerland's UBS, where the records traced at least 2,900 offshore entities. Back in 2009, it was already public knowledge that Deutsche Bank had some 500 subsidiaries in places known to be tax havens.
Still, the paper claims, the government has done little to stop a German firm from engaging in the kind of financial behavior Berlin has been aggressively combatting in countries like Luxembourg, Switzerland and Cyprus. The paper quotes the financial policy point man in parliament for the Green Party, Gerhard Schick, criticizing both the government and the business model of firms like Deutsche Bank. He alleges the banks may be contributing to the shielding of money laundering activities, tax evasion and money linked to corruption. He also alleges that Chancellor Angela Merkel's conservative government "at the very least tolerates these illegal structures and is possibly protecting them." In an interview with SPIEGEL ONLINE published on Friday, the head of Germany's Federal Financial Supervisory Authority (BaFin), Elke König, said her authority, although not responsible for taxes, would investigate if banks appeared to be systematically violating or helping people to violate tax law. "Banks have a special responsibility," she said.
For Deutsche Bank, Germany's largest bank, the revelations are creating a second wave of unwelcome scrutiny this week. On Wednesday, the Financial Times reported that Germany's central bank, the Bundesbank, has launched an investigation into claims the bank hid billions of dollars of losses on credit derivatives during the financial crisis. Bundesbank investigators plan to fly to New York next week as part of the inquiry into claims that the bank miss valued credit derivatives in order to hide losses as high as $12 billion and avoid a government bailout.

Sunday, April 7, 2013

Portugal's opposition party has called for a renegotiation of the country's EU/IMF bailout package and labeled the government an "incompetent" one which must be replaced. Socialist leader Antonio Jose Seguro, presenting a largely symbolic no confidence motion, said his party was against the spending cuts the government agreed to. He said (as reported by Reuters): Your government is destroying Portugal and there is only one solution - to replace the incompetent government. But the prime minister Pedro Passos Coelho, whose centre-right coalition has a comfortable majority, said the country had to comply with the programme to guarantee funding, and the no-confidence vote created a climate of political instability. He said a bailout renegotiation would lead to a second bailout.... The weaker than expected jobs data out from the US today could mean analysts are being too optimistic about Friday's non-farm payroll numbers, suggested James Knightley at ING. He said: The employment component [of the ISM non-manufacturing survey] dropped to 53.3 from 57.2. Given today’s ADP payrolls survey also showed a slowdown in private sector hiring to 158,000 from 237,000 in February this perhaps indicates some downside risk to the consensus forecast of non-farm payrolls rising 198,000 on Friday. With ongoing concerns about the potential economic impact from sequestration we suspect that we are going to see a softer period of activity data. As such we doubt that the Federal Reserve’s quantitative easing plans will be scaled back before the third quarter of 2013.

Greek business head calls for rethink on bailout terms - It may count as stating the obvious but the head of Greece's biggest business group reckons the Cypriot crisis could tip his country into an even deeper recession this year. He also called for the troika of international lenders, due in Greece this week, to rethink the bailout programme by promoting growth measures as well as austerity. From Reuters: "Greece is directly affected by the Cyprus crisis and based on some estimates this may chop up to one percentage point off GDP (gross domestic product)," Dimitris Daskalopoulos, head of the Hellenic Federation of Enterprises (SEB), told reporters. "With the success of the Greek bailout programme already hanging by a thread, many signs show the recession is deepening with the prospect of recovery in 2014 fading," Daskalopoulos said. He said the insistence on austerity by the eurozone's core to cure the ills of the debt crisis risked breeding euro scepticism and anti-German sentiment among the suffering countries of the single currency bloc. "The North must give and the South must change, otherwise the historic demons of Europe will find again room to act." He said the protracted economic downturn and fiscal austerity were testing society's tolerance limits and called on the government and its international lenders to retool the applied programme with growth measures. "The bell of reforms must finally ring loudly in Greece," Daskalopoulos said. "We cannot be fighting tooth and nail against firing a few thousand public sector workers when almost one million people have lost their jobs in the private sector."

Saturday, February 16, 2013

Billionaire investor George Soros and French President François Hollande, a Socialist, are in agreement: The world is on the verge of a currency war, and it threatens to destroy Europe. The Europeans should finally enter the fray and do battle with all their might, says Soros, who made some of his fortune by betting against the British pound. "Europe is an outsider," the 82-year-old recently said at the Davos World Economic Forum. He blamed the European Central Bank (ECB), which he called the last representative of an outdated central bank policy. Hollande doesn't put it as clearly, but he means the same thing. "A currency zone must have an exchange rate policy, or it will end up with an exchange rate that doesn't correspond to the actual state of its economy," the Socialist told the European Parliament in Strasbourg last week. These remarks were intended for Mario Draghi, the president of the Frankfurt-based ECB. Hollande's message is that he should protect the euro's exchange rate. The central bank chief is coming under increasing pressure because he can't quite bring himself to embrace the concept of quantitative easing, the latest fashion in the world of finance. It involves central bankers engaging in the large-scale purchase of bonds issued by their governments and other securities, thereby injecting huge sums of money into the financial system. In this way, they hope to stimulate the domestic economy and keep their own currencies cheap, thereby strengthening exports. Soros believes that this is the only way countries can grow out of their large debts. But a country that artificially pushes down its exchange rate is obtaining competitive advantages at the expense of others. And if they manipulate their own currencies, all sides will end up losing out.

Sunday, January 20, 2013

Gross domestic product (GDP) in the world's second-largest economy expanded 7.8pc last year in the face of weakness at home and in key overseas markets, the National Bureau of Statistics (NBS) announced on Friday.  But it grew 7.9pc in the final three months of 2012 as industrial production and retail sales growth strengthened at the end of the year, snapping seven straight quarters of slowing growth in a positive sign for the spluttering world economy.
The official statistics come as optimism grows among analysts that China will pick up steam in 2013 after two years of relative weakness, although they - and the government - caution that the improvement will not be dramatic. "The international economic environment remains complicated this year and... there are still unbalanced conflicts in the Chinese economy," NBS spokesman Ma Jiantang told reporters.  Still, Ma added: "We expect China's economy to continue to grow in a stable manner in 2013."  The problem is that the economic and social arrangements that have emerged in China on the back of a decade or so of double-digit growth don't work, ie are unsustainable when the growth rate subsides. This is what worries the hell out of the Chinese leadership. The risk is that Chinese society becomes unstable. It's really no different to us over here having got used to trend economic growth of, say, 2.0% - 3.0% pa trying to sustain our own massively indebted complex societies on annual growth rates of 1.0% - 1.5%. In essence, we're going bust....The fundamental issue in all of this is that politicians won't tell their societies that they/we are indeed going bust. By the same token, many/most folk don't fully appreciate that a society that has emerged on the back of 60 years of a trend of, say, 2.5% pa growth (as is the case in the UK) cannot survive in recognisable form for more than about 5 years, 10 years at the very most, without that society fracturing. China certainly has its problems; we certainly have ours. Our mutual predicament is that "infinite" economic growth predicated on "infinite" supplies of cheap energy, primarily cheap oil, is by definition unsustainable. .....We have entered interesting times.

Thursday, January 17, 2013

And the dollar falllsss, and the markets rrrriseee...?? abslute madness...?

LONDON—Euro-zone industrial output declined the most in three years in November, pulled lower by countries in the region's south facing recession as they attempt to cut debt and deficits through austerity policies. The decline is a further indication that the wider economy could contract for a third consecutive quarter in the final three months of 2012 as fiscally frail countries struggle with still-high borrowing costs and demand for goods suffers amid continuing job cuts. Output dropped 3.7% from a year earlier, the biggest decrease since November 2009, when output slumped 7%, Eurostat, the official European statistical office said Monday. Industrial output fell 0.3% in November compared with October, the third consecutive slide on a month-to-month basis. The yearly decline was due to weakness across the board with production of intermediate and capital goods falling at the steepest pace since 2009. In October, industrial output retreated 3.3% on the year and 1.0% on the month, Eurostat said. The October data were revised after previously being reported as falling 1.4% on the month and 3.6% on the year. The November figures were weaker than expected. Economists surveyed by Dow Jones Newswires last week projected the data to show industrial output rose 0.2% on the month and fell 3.2% on the year. The data provide further evidence that the economy of the 17-nation currency bloc contracted for a third straight quarter in the final three months of 2012. "November's euro-zone industrial production data provided further strong signs that the recession in the region as a whole intensified in the final quarter of last year," said Ben May, European economist for Capital Economics. Ireland, Greece, Spain, Italy and Portugal all saw production decline in November compared with October. Italy also published its full industrial production release Monday. Output fell 1.0% on the month and by 7.6% on the year in November last year, a bigger fall than expected. Output has declined for six straight months in monthly terms, and 15 consecutive months on an annual basis. Italy's national statistics agency Istat said the decline was mainly due to a fall in investment and energy output. Eurostat also reported that Germany saw a meager 0.1% monthly increase in November, while in France, output grew 0.5% over the same period.

Wednesday, January 9, 2013

Protests on the streets of Madrid on Monday highlighted the tensions inside the euro area after banner-waving protesters blamed Brussels, Berlin and the right of centre PP government of Mariano Rajoy for privatisations and cuts in healthcare spending.
Elga Bartsch, an analyst at Morgan Stanley, said she was anxious that Barroso and his colleagues in Brussels would fail to resolve long-running disputes over the EU's new institutions.
"The euro crisis seems contained for now. But we think it is not resolved for good. In addressing the fundamental flaws in the euro's institutional set-up, progress on banking union will be key. Assuming no crisis escalation, the euro area should re-emerge from recession and return to sub-par growth. Politics is the main risk," she said. Political deadlock, which has also characterised the reform agenda in Washington and Tokyo, could allow social unrest to grow and wreck any coherent reform plans, she said.
"An extended recession, diverging political positions and several elections create a difficult backdrop for in-depth reforms. We therefore expect only limited progress on an effective resolution of the crisis this year. We believe that progress on banking union, where preparations are under way for a Single Supervisory Mechanism (SSM) and where discussions continue on harmonising, and possibly pooling, bank resolution and deposit guarantee schemes, will be key."  Merkel faces a general election in the autumn against a resurgent Social Democratic party (SPD) while the Italians are expected to go to the polls next month in an election that could see a revived Silvio Berlusconi with enough votes to block reform measures.  Global stock markets, which have warmed to the message that the euro crisis is abating, drifted lower as some investors sought to cash in on last week's strong gains and worries grew of more political brinkmanship in Washington. Major indices surged last week after the US Congress passed a bill to avoid a "fiscal cliff" combination of government spending cuts and tax increases.
The deal, however, remains incomplete. Politicians will face another deadline in two months to agree on more spending cuts while a debate over the country's $16 trillion (£9.9tn) debt ceiling is also looming.  Concerns that the eurozone will suffer another year of economic downturn after entering recession last year were heightened by comments from OECD boss Angel Gurría who said the 17 member zone could continue contracting into 2014.
Britain's FTSE 100 fell 0.4% to 6064 while Germany's Dax was down over 0.7% to 7719.78. France's Cac-40 lost 0.8% to 3701.06.
Wall Street opened lower as well, with the Dow shedding 0.4% to 13,377.13 and the broader S&P 500 falling 0.4% to 1460.14.
The one bright spot for the markets was the banking sector, where stocks were up after global regulators eased new rules obliging lenders to set capital aside. The so-called Basel III rules are a set of new international standards to make sure banks protect themselves from the same trouble that caused the 2008 financial crash. On Sunday, the officials setting those rules delayed the date by which banks needed to have certain amounts of cash readily available.

Wednesday, December 26, 2012

Norway's foreign minister has urged the UK to assess the advantages of staying in the European Union, rather than consider leaving.
Norway is not in the EU but has access to the single market. UK Eurosceptics use it as a model for how the UK could relate to the EU from outside. But Foreign Minister Espen Eide said Oslo had "limited scope for influence".
"We are not at the table when decisions are made," he told Radio 4's The World This Weekend.  Mr Eide is pro-EU, though Norwegian voters have twice rejected the chance to join the EU in referendums in 1972 and 1994. Sir Nigel Sheinwald, a former UK ambassador to the US and to the European Union, said: "The issue is - do you want to be part of the single market? All the economic indicators are that the UK needs to be.
"But [the Norwegians] have no role in negotiations... they have no impact, no influence and there's no accountability. So this is regulation without representation. "It's the first thing the UK needs to decide, whether it wants to be associated with the single market, from the inside or the outside.
"If on the outside, both the Swiss and the Norwegian models give you no actual impact on the substance of what's agreed."
Conservative MEP Daniel Hannan said he was "not aware of any British Eurosceptics who are arguing that we should precisely replicate the Norwegian model".  He added: "What we're after is something a bit more like what the Swiss have, but actually I think we could get better terms than either Norway or Switzerland."
Prime Minister David Cameron has consistently said he supports Britain's continued membership.
 
In other news: Germany's DIHK say's German exports could grow by 4% in 2013. If you are educated and looking for a decent paid job, good healthcare, 25 day's vacation, maternity leave, a decently maintained road network, public transport that runs on time, airports that don't close when there is 1/10 inch of snow go, speak English then look for a job in the fatherland. They are still making things that people want.

Saturday, December 22, 2012

Greek finance minister: Bankruptcy is still a risk - Greece's finance minister has slightly deflated the sense of optimism as we ease into the Christmas break, by warning that the country faces another very difficult year.
Yannis Stournaras has cautioned against getting carried away by recent progress, pointing that things could unravel next year "if the political system finds the situation too difficult to handle".
He made the comments in an interview with the Financial Times, published just a day after Greece's credit rating was upgraded.
Stournaras is not all doom and despair, arguing that 2013 will be crucial:
We can make it next year if we can stick to the programme agreed with the EU and IMF.
But only if the Greek people accept the job cuts and austerity measures that were contained in the 2013 budget. Stournaras warns that this is far from guaranteed:
What we have done so far is necessary but not sufficient to achieve a permanent solution for Greece...The issue now is implementation.
As such, there's a 'possible risk' of Greece leaving the euro, he added, despite Athens having now received its latest aid tranche.
With bond yields falling sharply, and yesterday's general strike passing off peacefully, Greece has reached a calmer state. But it's going to be a grim winter for many Greeks - and Stournaras is clearly concerned that he may struggle to hit his deficit targets and improve the competitiveness of the battered Greek economy.
As he put it:
We still face the possible risk of bankruptcy.
But get through 2013, and the future will be brighter, he added.

Saturday, December 1, 2012

The International Monetary Fund said on Thursday that it would not disburse funds under its part of the EU-IMF package unless the eurozone delivers on a bond "buy-back" scheme, which is supposed to cut Greece’s burden by 10pc of GDP and is deemed crucial for restoring long-term viability. If the IMF withdraws, Finland and Holland will also pull out of the programme. "This has become a really big problem," said Raoul Ruparel from Open Europe. The dispute comes as Moody’s said the EU-IMF deal to unlock €44bn in bail-out payments to Athens merely papers over cracks and does little to alleviate Greece’s "extreme economic and social fragility".  "We believe that the country’s debt burden remains unsustainable," it said. Moody’s warned that there can be so lasting solution until EU states and official creditors agree to write down their holdings, now the lion’s share. Private investors are furious at demands that they take a second "haircut" of 70pc on residual holdings, after already taking a 53.5pc loss earlier this year, while official creditors still refuse all loses.   Having given guarded and subsequently misleading support for the latest Greek bail out plan, Ms Lagards has now done her job, which is to carry out IMF policy, not French, Euro or personal
inclinations. This whole Greek farce is a tragedy for the Greeks and everyone connected with them and their failed economy.
She should have made the IMF position clear at the meeting rather than offer false hope to so many, and she should be condemned for that.   The Greeks, meanwhile seem to have two options.
Leave the Euro, or alternatively, leave the Euro.
The only moral approach to this nightmare is for the EU to allow/encourage/force Greece to return to its own currency and instead of pouring endless zillions into the bottomless pit of keeping Athens in this latest piece of European utopian insanity, the EU/IMF etc should use what funds it can donate to help the Greek economy benefit from its newly minted but devalued Drachma to rise again from the dangerous and irrational EMU.

Thursday, November 29, 2012

Italian centre-left Democratic Party chief Pier Luigi Bersani is set for a run-off vote next week against young pretender Matteo Renzi, after millions of supporters chose their nominee for next year's general election.With 40 percent of the votes counted from Sunday's balloting,  Bersani was in front with 44.3 percent support, followed by Florence mayor Renzi with 36.3 percent, the organising committee said. More than four million supporters took part in the vote which will now head for a second round run-off on Sunday. A general election is expected in April 2013 with the winner of the centre-left nomination one of the favourites to replace Mario Monti as Italy's next prime minister. All the most recent polls show the Democratic Party coming first in the general election. Observers were surprised by the large turnout for the primaries and many polling stations were overwhelmed, with large queues forming outside. More and more Italians are feeling the pain of a recession that began in the second half of last year and is forecast to continue into next year. The main drama is between 61-year-old Bersani, a cigar-chomping former communist with a liberal economic orientation, and rising star Renzi, who at just 37 is a new face in politics, inspired by US President Barack Obama. The primary is being held at a time of deep economic crisis and political uncertainty in Italy, with a series of corruption scandals within the main parties sparking voter apathy and disgust with traditional leaders. Both men have said they will follow the broad course of reforms set by unelected technocrat prime minister Monti, but will seek to curb some of the more unpopular austerity measures he has advocated and do more to boost growth. "We have to show the rest of the world that we don't just have Monti," Bersani, a former economic development minister, said last week. "People want to take part, they want to have a politics that is in touch with the streets, with the squares, that returns hope to the country," he said.   Monti, a former European commissioner, took over from Silvio Berlusconi a year ago as Italy struggled with the eurozone crisis. While his cuts have angered many, he is seen as having saved Italy from a Greek-style collapse.

Wednesday, November 21, 2012

A country isn't a business...

A country isn't a business, even though there are politicians who like to treat their voters as if they were employees. Politics is the art of mediating between the political and economic markets, convincing parliaments and citizens that economic policy promotes their prosperity and the common good, and convincing markets and investors that nations cannot be managed in as profit-oriented a way as companies.
After four years of financial crisis, this balance between democracy and the market has been destroyed. On the one hand, governments' massive intervention to rescue the banks and markets has only exacerbated the fundamental problem of legitimization that haunts governments in a democracy. The usual accusation is that the rich are protected while the poor are bled dry. Rarely has it been as roundly confirmed as during the first phase of the financial crisis, when homeowners deeply in debt lost the roof over their heads, while banks, which had gambled with their mortgages, remained in business thanks to taxpayer money.
In the second phase of the crisis, after countries were forced to borrow additional trillions to stabilize the financial markets, the governments' dependency on the financial markets grew to such an extent that the conflict between the market and democracy is now being fought in the open: on the streets of Athens and Madrid, on German TV talk shows, at summit meetings and in election campaigns. The floodlights of democracy are now directed at the financial markets, which are really nothing but a silent web of billions of transactions a day. Every twitch is analyzed, feared, cheered or condemned, and the actions of politicians are judged by whether they benefit or harm the markets.

Thursday, November 1, 2012

Francois Hollande will travel to Berlin with leaders for crisis talks on Tuesday after Germany said a Greek sovereign debt restructuring was “out of the question”.  On Monday, the French president met with Jim Yong Kim, head of the World Bank, and IMF chief Christine Lagarde, as well as leaders of the World Trade Organisation and the OECD, to discuss solutions for Greece, including a debt buy-back. The group will talk about the ideas with Ms Merkel on Tuesday.
European markets dropped ahead of the pivotal talks amid worsening bank problems gripped both Greece and Spain. Greek banks plunged almost 16pc after the finance ministry in Athens said that Brussels’ bail-out fund would not recapitalise the banks. The collapsed dragged the Athens exchange down 6.3pc.-- Are the German public finally being told the truth ?"For German finance expert Max Otte, such a debt haircut is nothing but an orderly insolvency and an acknowledgement of bankruptcy. "It's two words meaning the same thing," Otte said, "but there's no denying that Greece is bankrupt." So far, Germany has lent Greece some 80 billion euros by granting emergency credit lines or buying up sovereign debt through the ECB. A 50 percent debt cancellation, then, would leave Germany with a loss of 40 billion euros. It would be the first time that German taxpayers would actually lose money in an attempt to rescue Greece from bankruptcy. "Up until now, Germans have been told that their country was only assuming liability for a certain sum without taxpayers actually facing any costs," said Johann Eekhoff, the director of the Cologne-based Institute for Economic Policy".... 

Saturday, October 27, 2012

Quarto RECH - well I wish you stupid Europeans good health and enjoy the german boot on your neck ...

On the "escrow" account:  The European citizens should know, however, that loans to Greece are paid into an "escrow" account and are used exclusively to repay past loans and to recapitalise near-bankrupt private banks. The money cannot be used to par salaries and pensions, or to buy basic medicines for hospitals and milk for schools. The precondition for these loans is more austerity, paralysing the Greek economy and increasing the possibility of default. If there is a risk to the European taxpayer losing their money, it is created by austerity.`The Greek message to Angela Merkel, Alexis Tsipras, The Guardian 8/10/12....What is needed is a full implementation of the promise to remove government liability for private financial sector banking debts, not only in Greece but in every EU nation state. This was mooted some time ago only to be followed by political elite class vacillation over whether or not pre-2012 debts could be included. The only way forward for the countries shouldering the burden of insolvent banks is to place responsibility for those debts back onto the banks and make the policy retrospective....Well,....Draghi enters lion's den to sell bond-buying plan (reuters)
Well actually it's just the Bundestag Budget and European Committees, but they're probably happy to be described as "lions". Given the amount of extra paperwork dumped on them by the Constitutional Court regarding EZ crisis-handling, they could do with being pepped up I expect.
It's a good report by Reuters, in any case.
I expect the big questions to be about Spain," said Guntram Wolff, deputy director of the Brussels-based Bruegel think-tank and a former Bundesbank economist.
"There is a lot of opposition to a programme for Spain. They are against it because they fear it would open the floodgates at the ECB. The concerns run very deep, also in the SPD."
Yes, the SPD are fiscal conservatives too.
But amid the concerns, there was general agreement that Draghi had done the right thing in offering to explain his policies at a time when many citizens in Europe feel momentous decisions are being taken without their input.
"One of the big problems of Europe is that European institutions only talk to voters through national governments," said Wolff. "So it's important to have a direct link to the people, and this is a step in that direction."
Yes. Draghi was really quite wise to make the offer to appear before the Bundestag committees.