I think the results of the EU elections have not gone unnoticed by the upper echelons of the ECB. They can see that there is deep, and deepening, resentment against the EU machine. The EZ is interwoven with that machine, and I would imagine what they fear is this resentment spreading and continuing to fester over the coming years.
Hence, there may be a serious political justification for a step-change in policy towards easier policy. Objections on the basis of economic principle are probably being overridden on the basic of political exigency.The ECB can knock itself out trying to sell monetary policy as a panacea all it wants. The reality is that monetary policy is and has been almost totally ineffective across the globe in stimulating growth in aggregate demand.  Only the mindless monetarists such as the ECB and the German elites are still worshipping false gods.  The EMU member states are woefully below economic capacity as all have suffered a dramatic decline in aggregate demand. Still, now going on 7 years of demonstrably failed economic policies, such as austerity, which directly caused massive unemployment, attacks on the welfare state, massive increases in poverty and social unrest, the elite still think the ECB has a cure?  The press should at the very least recognize what a large swath of European voters have, and that is that the Troika and other elites have been peddling baseless dogma.   The baseless dogma of austerity and eschewing of fiscal policy choices continues to destroy democracy and Europe.  The ECB has nothing to offer other than more ineffective monetary policy when what is desperately needed is expansionary fiscal policy.  The whole shebang was started as the EEC and now the bank owner's puppets (ex-Goldman Sachs employees) like Draghi have turned it into the EU through strong-arm tactics and "debt-rape"! They are heading us to a new order controlled by a world bank and "1984" style security forces in all Western Countries using terrorism as an excuse!  And it's very funny how, when any party in any country goes against EU and EZ policies, they are labeled "extremist" or "Nazis" - but when the buggers at the central banks or puppets in Brussels run over people's rights and freedoms everything is just "wonderful" !  By the way, Club Med's economy is in "the toilet" thanks to the central bank owners - and now the vulture bastards are making money off of the "bones" of dying countries like Greece! Presumably the BoE, the FED and the ECB - disguised as governmental agencies - are there to regulate the banking industry? That's like asking a coke addict to regulate the amount of cocaine coming out of Columbia! Austerity in the form of reparations payments - which are very similar to un-payable bailout loan payments - was a wonderful solution imposed on the Germans after WWI - they had Hitler to show for it! Austerity has also been very beneficial to Mexico since the 80's and 90's - they have 50% of the population working for the drug cartels supplying heroin and cocaine to the North Americans!

THE largest country in the European Union did not make the largest news this time. No Eurosceptic "shock" or "earthquake" rippled through German politics as it shook France, Britain and other member states. It was more like a deep-mantle rumbling, one that may shift German politics more slowly.

First, the losers. Most obviously, these include Germany's once-grand liberal party, the Free Democrats (FDP). They continued their slide into irrelevance, getting a mere 3.4% of the vote, compared with 11% in 2009. They are no longer a factor in German politics for the time being.

Less obviously, the losers also include the nominal victors: the centre-right camp of Angela Merkel, the chancellor. It is composed of Mrs Merkel's party, the Christian Democrats (CDU), and its Bavarian sister party, the CSU. With 35.3% of votes, this "union" of the two remains Germany's largest delegation to Strasbourg. But it did worse than in 2009, when it got 37.9%. In domestic politics, this counts as a setback. Almost all of the loss, moreover, occurred in Bavaria, where the the CSU had dabbled in soft-Eurosceptic innuendo during the campaign.

The main winner is the closest thing Germany has to a Eurosceptic party, the one-year old Alternative for Germany, led by Bernd Lucke, an economics professor (pictured above). The Alternative claims to be only anti-euro, not anti-EU. Mr Lucke says he wants no part in a coalition with actual Eurosceptics in Strasbourg and will instead start talks with Britains Tories and other conservative parties. But even this milder form of anti-Brussels rhetoric marks a permanent change in Germany, where such talk has been taboo until now. The Alternative got 7%. It now has a good chance of entering state parliaments in Saxony, Brandenburg or Thuringia in their regional elections this summer. It could even enter the federal Bundestag in 2017. The mainstream parties can no longer simply ignore it.

The other winners were the Social Democrats (SPD), currently Mrs Merkel's coalition partners in Berlin but usually archrivals to the CDU and CSU. They reached 27.3%, a good gain from their 20.8% in 2009. Martin Schulz, a German Social Democrat who campaigned as the party's top candidate, still has not given up hope of becoming the next president of the European Commission. At the very least, he'll have to be bought off with some other big job.

In domestic politics, the SPD may now become a more cantankerous coalition partner within Mrs Merkel's government in Berlin, just as the CSU will become a less boisterous coalition partner for a while. All of them, meanwhile, will soon have to figure out how to respond to the increasingly eloquent, skillful and confident needling of the Alternative for Germany.

It is a surprise only to the ECB in Europe that inflation is falling. I doubt countries where youth unemployment is 40/50% and higher are surprised prices are falling. Certainly no economist should be surprised given the withdrawal of LTRO financing and the rising capital needs of banks to comply with regulatory demands they strengthen their balance sheets and raise core tier 1 ratios and reduce leverage. Indeed anyone who has glimpsed at a bluff your way in Economics book at the book store could have provably explained to the ECB that as fiscal conditions are tightened in Europe you are going to get deflation unless it is accompanied by monetary easing in the form of QE but the trouble is under Teutonic pressure the ECB remains completely dysfunctional.  My prediction for what it is worth is that negative interest rates will be a damp squib and no use what ever. The US and UK realized years ago that you can't push on a string. While I am not opposed to the EU in principle, I think many of the people who are in charge are far too ideological in increasing the federal control and power of Europe, which fundamentally means that the system will have to kowtow to Germany. It's like the election of the EU president, Merkel is the kingmaker. When it comes to how to rescue the damaged economies, Merkel called the shots. She is fundamentally driven by domestic politics, which is extremely dangerous, since what is good for Germany is not necessarily good for anyone else, and people outside Germany end up having their national politics dictated by someone in a different country. This is a terrible way to run things and fundamentally undemocratic. Unlike the US, where the federal and state governments have specific sets of powers that were thought out before the official formation of the country, the EU is a messy hodgepodge of systems.

Referendum now. It is time to leave this authoritarian empire. It is now more apparent than ever that the EU seeks to dilute and eventually eradicate our ability to determine our own laws and our own leaders and to steam roll the wishes of the British people.

This has gone to far for economic arguments, it is now a matter of liberty, if we are committed to it we must withdraw from the EU.The UK Treasury has said the European Commission should not be asking for "yet more money" from EU member states.

The commission has published proposals to increase the 2014 contributions from members by 2.16 billion euros (£1.76bn) to cover increased costs for growth and jobs schemes, and help for Ukraine.

It wants 4.73 billion euros (£3.85bn) in total but some will come from other sources including competition fines.

The commission said the money was for schemes agreed by member states. "The UK was among the member states who agreed that extra support be given to the Ukraine and youth employment initiatives, so it should come as no surprise when the commission calls on member states to follow through on this support," a spokesman said.

But the Treasury said "existing funds" should be used to cover costs. It said the real cost to member states would be the higher figure of 4.73 billion euros - of which the UK share would be about £500m. The extra money being raised from sources such as competition fines should be used to fund rebates to member states or cut future payments, it added. 

Under a mechanism called the "contingency margin", the European Commission can call for extra funding for unforeseen circumstances.

This must be approved by the European Council - made up of a senior minister from each member state - after which states cannot refuse to pay.

However, future budgets must decrease by the same amount to ensure overall spending between 2014 and 2020 stays within agreed limits.

Last year the EU agreed a seven-year budget which included a real-terms spending cut, with maximum spending of 908 billion euros (£738bn at current values) from 2014-20.

The Treasury said: "At a time when countries across Europe continue to take difficult decisions to deal with deficits, the European Commission should not be asking Europe's taxpayers for yet more money. "The UK firmly believes the EU should manage any additional spending pressures through the reallocation of existing funds within the agreed budget.

"We will work with other governments to achieve a budget for this year which ensures budget discipline and reflects the economic reality in Europe, as well as the tough but fair deal done by the prime minister last year."

The European Commission, the only part of the EU that can propose laws, is made up of one commissioner chosen by the government of each member state. Its responsibilities include ensuring EU legislation is "correctly applied" in member countries.

Unemployment is rising in Europe's two largest economies, with a shock jump in Germany and a new record high in France, according to the latest figures.

The number of unemployed people in Germany rose unexpectedly by 24,000 to 2.905 million in May. It was the biggest monthly increase since April 2009, and a long way off economist's expectations of a 15,000 decrease. Economists said the drop could partly be explained by the weather, with a loss of fewer seasonal jobs during a milder than usual winter.Despite the rise in unemployment numbers, the jobless rate was unchanged in May at 6.7%, and Schulz said Germany's labour market "remains on a strong positive trend despite the slight May setback".

Nevertheless i know a whole bunch of academics out of work after graduating. Some for years. And from all fields...economics, law, natural sciences, social sciences. Most of those people graduated with above average marks....

Others i know, even with phDs, are working on short term contracts, low paid and always in fear of not getting the follow-up contract. Meanwhile couples with children, even with both working (academics) cannot afford to build a house for their families, even if their parents did that with only one working and the other stay-at-home. German Jobwunder? Rather for the capital-side...If Juncker gets appointed that number will sky rocket, his plan for the United States of Europe, starve them into submission. The EU learnt nothing form the recent vote they are already holding out the begging bowl for another 3.5 billion to plug a hole in their finances.

Mr. Schäuble, we thank you for this interview.

SPIEGEL: Mr. Schäuble, are you familiar with the name Conchita Wurst?
Schäuble: That was the winner of the Eurovision Song Contest. But I haven't heard her song.
SPIEGEL: What does it say about Europe that a bearded drag queen won the contest?
Schäuble: It says something about cultural diversity in Europe. But you also shouldn't attach too much importance to it.
SPIEGEL: You aren't a fan of the song contest?
Schäuble: It is probably a generational thing. Seriously, though: I think her victory isn't a bad thing. It showed many people for the first time that the current dispute with Russia has a political dimension that goes beyond what is happening in Ukraine.
SPIEGEL: You mean the conflict between Western values and those held dear by Russian President Vladimir Putin?
Schäuble: The Ukraine conflict unfortunately shows that the exploitation of nationalist emotions and resentments does not belong to the past. Putin appears intent on belittling the liberal democratic order. It is a good thing when the West counters that effort with its societal model and its values of openness and tolerance. That also increases our appeal.
SPIEGEL: You are speaking of what is often referred to as "soft power."
Schäuble: In a globalized world, soft power is enormously important. We Europeans have to realize that we are much more attractive and powerful than many think we are. We need more self-confidence. Europe has a global mission. And according to international surveys, Europe has by far the greatest degree of soft power.
SPIEGEL: Conchita has been interpreted more as a sign of European decadence in Russia and other authoritarian countries.
Schäuble: There's no accounting for taste. I try not to make my own tastes into generalized norms for others, but that's not the point. Rather, the point is that our understanding of freedom and human dignity demands tolerance and openness from everybody.
SPIEGEL: On one issue, though, Putin has an advantage over the West. European soft power was unable to prevent Russia's annexation of the Crimean Peninsula.
Schäuble: Should we have marched in militarily? Nobody wants that. Eventually it will become clear that Russia made the wrong move in Crimea.
SPIEGEL: Was the period of Russian modernization and the partnership with Moscow just an interim phase? Are we now headed back toward the kind of East-West confrontation we know so well?
Schäuble: I hope not. Putin was just in China and signed a sizable natural gas deal -- but at prices that are below what Russia gets in Europe. That demonstrates that it is not in Russia's interest to become too reliant on China. Russia is dependent on the partnership with Europe at least as much as Europe is. That is actually a solid foundation for a partnership.
SPIEGEL: What is the reason for the crisis in Russia's relations with the West? Was Moscow uninterested in cooperation or was the Western offer of partnership with Russia not credible?
Schäuble: I believe that the Western offer was honest. But perhaps more should have been done to ensure that Russia saw it that way as well. Even the ancient Romans understood that one has to be particularly generous with partners when they are facing difficulties.
SPIEGEL: In an essay for the German daily Frankfurter Allgemeine Zeitung last week, you wrote that the West has to be strong. Were you referring to military strength?
Schäuble: Our soft power is persuasive, but we have to be strong enough militarily that we cannot be attacked.
SPIEGEL: In truth, though, the West couldn't stop Russia militarily in the Baltics, for example, even if it wanted to. In the last 20 years, Western armies have been reduced in size and reconfigured for crisis intervention. They are no longer prepared for the defense of national or alliance borders.
Schäuble: In the NATO treaty, Article 5 states that an attack on one alliance member would be seen as an attack on all others.
SPIEGEL: NATO General Secretary Anders Fogh Rasmussen says that NATO has to prepare for a completely new situation. He has demanded that alliance members spend more money on defense. In addition, he said that NATO might permanently station troops in Eastern Europe.
Schäuble: I don't consider such a debate to be constructive. Ninety percent of people -- not just in Germany or the European Union, but far beyond -- would see such steps as an intensification of the situation.
SPIEGEL: If you want peace, then prepare for war: NATO appears to be applying this principle.
Schäuble: In the current situation, I think the focus should be on avoiding misunderstandings. When you look at the situation in eastern Ukraine, I can understand those who see Vladimir Putin as a sorcerer's apprentice: He can no longer control the powers that he has unleashed.
SPIEGEL: You believe that the lesson NATO should draw from the Ukraine crisis is to merely continue with business as usual?
Schäuble: I would advise those in positions of responsibility in NATO to consider the old saying: Talk is silver, but in such questions silence is likely of a greater value.
SPIEGEL: Do you understand the anxiety in Baltic countries and Poland?
Schäuble: I speak frequently with my colleagues from these countries and I don't have the feeling at all that they are anxious. They know that they are protected by their membership in NATO. The US also belongs to the alliance. Trans-Atlantic relations are more important than some of us might have believed.
SPIEGEL: Germany devotes a much smaller percentage of its budget to defense than other large NATO member states such as Turkey, Great Britain, France and the United States. Have we been too parsimonious?
Schäuble: Everyone has to understand that, due to its history, Germany is more reserved when it comes to the military. Do you read the surveys showing how Germans think?
SPIEGEL: We have never thought of you as a politician who is guided by public opinion surveys.
Schäuble: That isn't the point. But we have to approach our responsibility with sensitivity and intelligence.
SPIEGEL: In other words: Because of Adolf Hitler, we can't increase our defense budget.
Schäuble: Such statements have little to do with serious analysis. Everyone should accept that our military alternatives are a bit more limited.
SPIEGEL: To many partners, that sounds like an excuse.
Schäuble: Increasing the defense budget in the present situation would really not be intelligent politics. That is the opposite of what we need.
SPIEGEL: As Russian or Chinese politicians looking at the West, we would be forced to draw the conclusion that we could push pretty far before provoking a serious response from the West. It doesn't seem particularly capable of action.
Schäuble: You would never make it into the Central Committee of the Chinese Communist Party because your view of the world is far too limited. Moscow and Beijing know that we don't want a military confrontation. Moscow and Beijing are dependent on a functioning global economy. They also know that we are representing our interests.
SPIEGEL: With soft power?
Schäuble: And with our economic strength. Europe's strong position in the world is dependent on its ability to solve its economic and financial problems.
SPIEGEL: Are you not overvaluing Europe's appeal? The fact that populist, EU-skeptical parties are on the rise shows that the EU has lost its power of persuasion internally as well.
Schäuble: Usually, it is as Hölderlin once said: "Where danger threatens, salvation also grows." Perhaps the development will increase the decisiveness among the large majority of democratic powers to push Europe forward.
SPIEGEL: That sounds very abstract. What do you mean specifically?
Schäuble: We have to make Europe more efficient. I know that changing the EU treaties looks difficult from today's perspective. But most experts also didn't believe that we would come to agreement on the establishment of a banking union. And then, in the end, we found a solution that was acceptable to all.
SPIEGEL: You have proposed the introduction of a budget commissioner with the power to reject national budgets. Does that not foster exactly the kind of EU-skepticism that you are interested in combating?
Schäuble: We have European rules, but we don't have effective instruments for enforcing them. We realized that when then-German Chancellor Gerhard Schröder and his French counterpart President Jacques Chirac agreed to turn a blind eye to the deficit criteria. That is how you destroy trust -- also among the electorate.
SPIEGEL: You really believe that voters would find it acceptable if Brussels were to tell their national governments that their budgets were inadmissible?
Schäuble: That is already the case when it comes to competition rules! We have agreed on norms because we have a common market. Everybody ratified them together and we are now adhering to them. What good are rules if we don't have to adhere to them?
SPIEGEL: You want to combat EU-skepticism by giving Europe more power. That sounds like a paradox.Schäuble: The people aren't against Europe. They simply don't understand sufficiently what Europe actually does. It has to be explained. Perhaps foreign crises will help boost enthusiasm for Europe once again. The acceptance of the euro in Germany continually climbed during the euro crisis.
SPIEGEL: Mr. Schäuble, we thank you for this interview.

The head of the International Monetary Fund has warned that a persistent violation of ethics among bankers and rising inequality pose a major threat to growth and financial stability.

Christine Lagarde told an audience in London that six years on from the deep financial crisis that engulfed the global economy, banks were resisting reform and still too focused on excessive risk taking to secure their bonuses at the expense of public trust.

She said: "The behaviour of the financial sector has not changed fundamentally in a number of dimensions since the crisis. While some changes in behaviour are taking place, these are not deep or broad enough. The industry still prizes short-term profit over long-term prudence, today's bonus over tomorrow's relationship.

"Some prominent firms have even been mired in scandals that violate the most basic ethical norms - Libor and foreign exchange rigging, money laundering, illegal foreclosure."

Lagarde warned the too-big-to-fail problem among some of the world's largest financial institutions was still unresolved and remained a major source of systematic risk, with implicit subsidies of $70bn (£42bn) in the US, and up to $300bn in the eurozone.

In a speech littered with quotations from Winston Churchill to Pope Francis and Oscar Wilde, Lagarde said international progress to reform the financial system was too slow. "The bad news is that progress is too slow, and the finish line is still too far off. Some of this arises form the sheer complexity of the task at hand. Yet, we must acknowledge that it also stems from fierce industry pushback, and from the fatigue that is bound to set in at this point in a long race." Lagarde told the inclusive capitalism conference that rising inequality was also a barrier to growth, and could undermine democracy and human rights. The issue has risen up the agenda in recent months with the publication of the French economist Thomas Piketty's book, Capital in the Twenty-First Century.

"One of the leading economic stories of our time is rising income inequality, and the dark shadow it casts across the global economy," Lagarde said.  Borrowing from Oxfam research, she noted that the world's richest 85 people, who could fit into a single London double-decker bus, control the same wealth as the poorest half of the global population of 3.5 billion people.

Options to address inequality include more progressive tax systems and greater use of property taxes, she said.

"We must recognise that reducing inequality is not easy. Redistributive policies always produce winners and losers. Yet if we want capitalism to do its job – enabling as many people as possible to participate and benefit from the economy – then it needs to be more inclusive. That means addressing extreme income disparity."

Lagarde compared the rising awareness of social responsibility tied into the financial system with the world's expanding environmental consciousness. "Just as we have a long way to go to reduce our carbon footprint, we have an even longer way to go to reduce our 'financial footprint'. Yet we must take those steps."