The head of a business lobby allied with Chancellor Angela Merkel’s party said the planned merger of Kraus-Maffei Wegman GmbH and Nexter Systems SA shows Germany must do more to retain its defense industry. Kurt Lauk, who heads the Christian Democratic Union’s Economic Council, said a restrictive stand on arms exports by Economy Minister Sigmar Gabriel is threatening Germany’s defense industry. Gabriel heads the Social Democratic Party, Merkel’s junior coalition partner.

“One shouldn’t be surprised that the arms industry is following the implicit call by the government to leave the country,” Lauk told reporters in Berlin today. “If you don’t want arms exports, you don’t need an arms industry” because sales to close military allies alone can’t sustain it.

Lauk’s comments reflect frustration in the CDU about its policy influence in Merkel’s third-term coalition that took office in December. A survey of 2,017 people who are council members showed 79 percent aren’t happy with the coalition’s achievements, according to a June 4-25 poll presented by Lauk today.

While promoting arms exports isn’t an economic-policy goal, Gabriel wants “a competitive German defense industry,” Economy Ministry spokesman Tobias Duenow said in an interview. The German-French merger is an example of European defense cooperation that “would seem to make sense” and Lauk’s portrayal is “not accurate,” Duenow said. Krauss-Maffei Wegmann, the German maker of the Leopard II battle tank, and Nexter said yesterday they plan to combine. Gabriel is trying to block the sale of 800 Leopard tanks to Saudi Arabia, the Bild am Sonntag newspaper said in April, citing government officials it didn’t identify.

Germany was the third-biggest arms exporter behind the U.S. and Russia between 2009 and 2013, according to a report by the Stockholm International Peace Research Institute in March.

Inside the European Union, defense spending by member countries excluding Croatia and Denmark fell 0.6 percent to 189.6 billion euros ($259 billion) in 2012, declining for a fifth year, according to the European Defense Agency.

The German parliament has approved the country's first minimum wage, in a vote in the Bundestag on Thursday.

The wage will be set at 8.50 euros (£6.80) per hour, which is higher than the equivalent in the US and UK.

Angela Merkel's Christian Democrats approved the new policy as part of a power-sharing deal with the Social Democratic Party (SPD).

Germany has previously relied on trade unions and business groups to fix minimum pay instead.

At the moment, the country is one of seven in the 28-nation EU without a minimum wage level.

The minimum wage has been the subject of much controversy in Germany, with business leaders warning that it would result in fewer jobs, or force companies to move production facilities to other countries, where labour is cheaper.

Lobbyists have also claimed that the policy would make Germany less competitive.

However others have been angered by concessionary measures, including a two-year grace period for some employers to phase in the policy. Additionally, the wage does not cover minors, interns, trainees or long-term unemployed people for their first six months at work. For the rest of Germany's employers, the regulations will come into effect on 1 January 2015. The wage will be reviewed annually from 1 January 2018.

Regardless of the outcome of Thursday's vote, the policy will still need to be passed by Germany's upper house, the Bundesrat.

 

 

Recovery ???? lot's of BS, in fact ...

Here's some detail of the drop in German output:

Manufacturing fell 1.6 percent overall, including a 3% drop in intermediate-goods production, and a 3.5% drop in consumer goods output.

• Production of investment goods rose 0.3%
• Energy output was up 1%,
• Construction slumped 4.9%.Recovery in some of the eurozone's worst hit crisis economies is speeding ahead, according to the latest snapshot of the private sector in the single currency bloc.

Ireland, Spain and Italy were the best performing member states in Markit's June purchasing managers index survey combining activity in the manufacturing and services sector.

Italy's services sector benefited from the sharpest rise in new orders since July 2007.

But a poor performance from France, where private sector activity shrank in June, dragged the overall growth reading in the eurozone down to 52.8 from 53.5 in May – where anything above 50 signals expansion.

"Italy is catching up with Spain and Ireland, which have been among the top performers in the eurozone for some time," said Christian Schulz, senior economist at Berenberg. "The performance of the reform countries contrasts favourably with reform laggard France."

Meanwhile the European Central Bank left interest rates on hold at its June policy meeting. President Mario Draghi made the surprise announcement that from January 2015 the central bank will reduce the frequency of meetings from once a month to every six weeks. It will also start to publish the minutes of its meetings...

 

Well a different point of "good reporting" - which is which ???...France is on the cusp of a fresh recession as services contract sharply and the country braces for yet another round of austerity cuts, with record jobless levels likely to bedevil Francois Hollande’s presidency for years to come.

Markit’s PMI services gauge for France fell for the third month to 48.2 in June, pointing to an outright fall in GDP following zero growth in the first quarter.

The International Monetary Fund cut its growth forecast this year from 1pc to 0.7pc, warning that there would be no “appreciable decline” in French unemployment until 2016. “Volatile and uneven leading indicators point to the risk of a stalled recovery,” it said.  The IMF said public debt should peak at 95pc of GDP next year but a “growth shock” would push it to 103pc by 2016. The Fund warned of a “negative spiral of low growth and falling inflation” that is pushing up real borrowing costs and further choking investment, already dismally weak. Core inflation was 0.3pc in May.

The economic relapse is a political disaster for Mr Hollande, already the least popular leader in modern times with a poll rating of 23pc, and reeling from a crushing defeat by the far-Right Front National in European elections.

A world of crisis...

In Iraq, Sunni jihadis fighting under the banner of al-Qaeda splinter group the Islamic State in Iraq and the Levant (ISIL) captured large swathes of territory in the north west. Large numbers of security forces fled their posts, leaving militants in control of several major cities including Mosul, while Kurdish forces seized control of Kirkuk. The mobilisation of thousands of Shiites into militias and their large-scale rallies across Baghdad exacerbate the danger of sectarian conflict escalating. The U.S. and Iran moved quickly=2 0to support the Iraqi government; the former deployed an aircraft carrier and military advisers and the latter reportedly sent ground troops. (See our recent briefing on Iraq’s jihadi surge.)

Israeli-Palestinian tensions increased when 3 Israeli youths were found dead 30 June after being kidnapped in the West Bank weeks before. Israeli Prime Minister Netanyahu held Hamas responsible and vowed retaliation. Before the discovery of the bodies, the Israeli government launched an aggressive arrest campaign in the West Bank, leading to the deaths of 5 Palestinians. Meanwhile, Likud's Reuven Rivlin, who supports annexing the entire West Bank and naturalising its Palestinian inhabitants, was elected president of Israel 10 June. A Fat ah-Hamas agreement in early June led to the formation of a Palestinian government of independents. Hamas’s assumption that the new government would pay salaries to Gaza’s 43,000 government employees did not materialise to date, leaving the Strip with an unprecedented financial crisis.

Yemen’s transition is gradually unravelling due to unprecedented security and economic challenges, partly caused by political infighting and weak consensus on national dialogue results. Several attempts to reach a ceasefire between the army and Huthi rebels failed, while fighting in the north killed hundreds (see our recent report on Yemen). The countr y’s economic crisis meanwhile worsened. Tribal sabotage of the electrical grid left Sanaa without fuel or electricity for several days in early June, prompting mass protests calling for the overthrow of the government.

Al-Shabaab attacks in Somalia throughout June saw the militant group recapture several recently liberated villages in south-central Somalia, displacing thousands. With the onset of Ramadan, Al-Shabaab is expected to intensify its guerilla offensives. Clan conflict in Lower Shabelle intensified as militias clashed over the formation of a federal South West State of Somalia. Divisions between clans are ripe for exploitation by Al-Shabaab, risking the formation of alliances against the Somali National Army and AMISOM. (See our recent briefing on Al-Shabaab.)

Kenya suffered further terrorist attacks. At least 58 were killed mid-month in an attack on Mpeketoni town in Kenya’s east, and scores more in attacks on nearby Witu and Poromoko towns in the following days. Moderate Muslim cleric Sheikh Mohammed Idris was shot dead in Mombasa on 10 June, the fourth prominent cleric to be killed in the city since 2012. Meanwhile, deadly clan clashes continued to escalate in Wajir and Mandera counties in northern Kenya.

An attack on Pakistan’s Karachi international airport in early June, claimed by the Pakistani Taliban as well as the Islamic Movement of Uzbekistan, killed scores and provoked an intensification of the army’s bombing campaign of alleged militant hideouts in the north west. A ground invasion of the North Waziristan region followed in late-June – hundreds were killed and hundreds of thousands fled the region. U.S. drone strikes picked up again after a six-month pause and several strikes hit suspected militant compounds in North Waziristan.

A dispute over the result of Afghanistan’s 14 June presidential run-off vote threatened to ignite a political crisis when first-round winner Abdullah Abdullah alleged large-scale fraud in favour of his opponent Ashraf Ghani. Abdullah has demanded the Independent Election Commission stop counting votes. The political situation remains tense, with Abdullah supporters holding several demonstrations in Kabul in late June. (See our recent report and commentary on Afghanistan.)

Two days of anti-Muslim violence erupted in Sri Lanka when supporters of radical Buddhist group Bodu Bala Sena (BBS) attacked Muslim businesses, homes and mosques in the south-western coastal towns of Aluthgama and Beruwela. The attacks followed a BBS rally where its Buddhist monk leader threatened Muslims with violence and which left at least four dead and 80 injured. The government’s response was feeble: heavily armed police and army failed to stop violence even after curfew was declared and made no arrests of BBS activists. Government sta tements downplayed the attacks and blamed Muslims for initiating violence by attacking BBS marchers. (See a recent interview on Sri Lanka’s religious violence).

Dedicated to all the shysters that rule today's skewed world

Dozens of depositors have withdrawn savings from Bulgaria's third biggest bank despite assurances from the government and the European Union that their money was safe after a similar run shut down another major lender last week.

Bulgarian authorities have arrested four people suspected of trying to destabilise the banking system in a concerted phone and internet campaign. However, the queues forming to withdraw cash have thrown a spotlight on weak economic governance in the EU's poorest state.

A credit line of 3.3bn levs (£1.3bn), requested by Bulgaria, was approved on Monday by the European commission. The EU executive, echoing the International Monetary Fund and economists, said the Bulgarian banking system was "well capitalised and has high levels of liquidity compared to its peers in other member states" of the 28-nation bloc.

President Rosen Plevneliev urged Bulgarians to keep faith with the banks in a national appeal on Sunday after emergency talks with political party leaders and central bank officials. "There is no cause or reason to give way to panic. There is no banking crisis, there is a crisis of trust and there is a criminal attack," he said.

Queues formed nevertheless outside branches of First Investment Bank, although they were smaller than on Friday. The lender says it has sufficient capital to meet clients' demand.

"I am here because I remember what happened nearly 20 years ago," said one woman aged about 60 who gave her name only as Gergana. She was referring to a financial crisis in 1996-7 which sparked hyperinflation and the collapse of 14 banks.

About two-thirds of Bulgaria's banks are now foreign-owned, in sharp contrast to the mid-1990s.

The crisis has rattled Bulgaria's fractious political class, forcing them to bury differences at a time of great political uncertainty and last week they agreed to hold an election on 5 October.

An interim government will be appointed on 6 August to steer Bulgaria until the election.

Touting the deal earlier this year, the United States Chamber of Commerce said a successful TISA agreement would benefit America’s services industry and its 96 million, or 84 percent, of the nation’s private sector workers. “As its chief goals, the TISA should expand access to foreign markets for US service industries and ensure they receive national and most-favored nation treatment,” the chamber said of the deal in February. “It should also lift foreign governments’ sectoral limits on investment in services," “eliminate regulatory inconsistencies that at times loom as trade barriers” and “prohibit restrictions on legitimate cross‐border information flows and bar local infrastructure mandates relating to data storage.”

WikiLeaks warns that this largely important trade deal has been hardly discussed in public, however, notwithstanding evidence showing that the policy makers involved want to establish rules that would pertain to services used by billions worldwide.

“The draft Financial Services Annex sets rules which would assist the expansion of financial multi-nationals – mainly headquartered in New York, London, Paris and Frankfurt – into other nations by preventing regulatory barriers,” WikiLeaks said in a statement. “The leaked draft also shows that the US is particularly keen on boosting cross-border data flow, which would allow uninhibited exchange of personal and financial data.”

Additionally, the current draft also includes language inferring that, upon the finishing of negotiations, the document will be kept classified for five full years.

In Australia, journalists at The Age reported that experts say the proposed changes included within the WikiLeaks document “could undermine Australia's capacity to independently respond to and weather any future global financial crisis.”

Dr. Patricia Ranald, a research associate at the University of Sydney and convener of the Australian Fair Trade and Investment Network, told the paper that the documents suggest the US wants to “tie the hands” of other governments, including allied ones, by way of sheer deregulation.

“Amendments from the US are seeking to end publicly provided services like public pension funds, which are referred to as 'monopolies' and to limit public regulation of all financial services,” she said. ''They want to freeze financial regulation at existing levels, which would mean that governments could not respond to new developments like another global financial crisis.''

Earlier this week, US Trade Representative Michael Froman said the TISA deal was already well on its way to being put together.

"The basic framework of the agreement is in place, initial market access offers have been exchanged, and sector-specific work in areas like telecommunications andfinancialservices is in full swing,” Froman said, according to Reuters.

The document published this week by WikiLeaks is dated April 14 — two months before Froman last weighed in on the progress of the negotiations and six months after his office hailed previous re-write to the proposal. Along with representatives from Canada, Israel, Mexico, New Zealand, Turkey and dozens others, American policy makers will met in Geneva, Switzerland later this month starting June 23 to begin the next round of negotiations.