German Chancellor Angela Merkel recently negotiated a cease-fire in Ukraine with Russian President Vladimir Putin. Within days, Ukrainian troops lost the city of Debaltseve to a new Russian-backed rebel offensive. At the same time, European negotiations on the Greek financial crisis broke down in acrimony. This is the hour of Europe, and it’s a disaster.  And really, it’s the hour of Germany, the West’s crucial player. Led uncertainly by Germany, the European Union’s response to Russia’s aggression was to impose trade sanctions.  By the same token, what’s prolonging the Greek crisis is Germany’s contradictory desire to force Greece to be disciplined so Berlin gets its money back, but also to keep Greece in the euro.  The result of that policy has been to push Greece into a deep depression and put its politics in a headlock. The Greek people broke out by electing Syriza, an idiotic Marxist party which has the sole virtue of believing Greece should be governed from Athens, not Berlin.  German policy in Ukraine has been equally useless. The Germans like to whine—actually a form of bragging—about the sacrifices they have made to impose costs on Russia. This is nonsense.  German exports to Russia in 2013 were under four percent of Berlin’s total, and over the first eight months of 2014, those exports declined by less than 20 percent.  Germany’s sacrifices in cracking down on Russia—which has invaded a sovereign European nation, annexed a chunk of its territory, and shot down a civilian airplane—has cost Berlin about $8 billion, in an economy worth almost $4 trillion.  No wonder Putin thinks the Europeans are pushovers. But it’s worse than that. The point of the cease-fire wasn’t to stop the war in Ukraine. It was to stop the nascent U.S. push to arm Ukraine. As Merkel put it recently, “progress on Ukraine cannot be achieved by more weapons.”  That is more nonsense. Until Ukraine can defend itself, the Russian-backed separatists have no reason to stop fighting. Building up Ukraine’s defensive power will be a long job, but it needs to start now.  The German opposition to arming Ukraine gives Russia a veto on Ukraine’s future: Russia can always threaten to restart the war if Ukraine resists its will.  So Germany, to get its money back, has pushed Greece into an economic collapse so serious that the Greeks believe the answer is Marxism.  At the same time, Germany moans about imposing sanctions on Russia that have cost it one percent of its exports, and it refuses to respond seriously to the fact that Russia is overthrowing a European nation by force of arms.  As the German magazine Der Spiegel put it, Merkel has done “exactly what Germans expect from her: Fight for peace, search for compromise with the Russians, and resist the Americans.”  Every nerve in Germany is straining not to sanction Russia, but to give it a hug and sell it a car. And much of the rest of Europe, frighteningly, has even less backbone than Germany.  Germany is not Europe’s master. But it is Europe’s manager. That management has been disastrous. In Ukraine, people are dying to get into Europe. In Greece, they’re dying to get out of it. In both places, Germany has practiced the worst kind of checkbook diplomacy: draconian and grasping in Greece, narrow-minded and skinflint in Ukraine.  The first “hour of Europe” came during the Balkan Wars of the 1990s, when Bill Clinton’s administration wanted to arm Serbia’s opponents to give them a fighting chance on the ground. The Europeans said no: the result was genocide.  Twenty years later, Europe is fecklessly downplaying catastrophes on its doorstep, narrowly focused on its commercial interests—and concerned above [all] with stopping the Americans.  Originally published in Newsday. 

EU Commission chief Jean-Claude Juncker warned Friday of an alarming lack of progress in talks on Greece's bailout, as Germany raised the spectre of a tumultuous Greek exit from the euro.

Juncker was meeting Alexis Tsipras, the leader of the hard-left Syriza party who came to power in January, just days after Tsipras renewed a demand that powerful Germany repay debts from its Nazi past.  "I am not satisfied by the developments in the recent weeks," Juncker said before talks began with Greece's 40-year-old premier and amid acute concern that Greek coffers could run empty at any moment.  "I don't think we have made sufficient progress, but we will try to push in the direction of a successful conclusion of the issues we have to deal with."  Greece won a four-month extension of its EU-IMF bailout in February -- despite Tsipras initially saying he wanted to abandon austerity and have a completely new arrangement -- but it will not get any of the cash until new reforms are approved by its eurozone partners.  But frustrations with the Greek government are mounting with its 18 fellow eurozone members after Athens this week renewed the claim to Germany for World War II debts seen as outlandish by its partners.  Greece's harshest critic, German Finance Minister Wolfgang Schaeuble, warned that with all the time wasted, a disorderly "Grexident" that could push Athens out of the euro could not be excluded.  "To the extent that Greece is solely responsible and decides what is to happen, and we don't know exactly what Greek leaders are doing, we can't exclude it," Schaeuble told Austrian broadcaster ORF.   A German finance ministry spokeswoman later rowed back on Schaeuble's comments, stressing that "we do not want Greece to leave."

We all live in a fiat money regime. So what is to stop the Greeks adding €377bn to their Bank of Greece accounts and repaying everyone?  Alternatively create the New Drachma. Valued (by sovereign decree) at par with the euro. And repay with that. I know that the secondary market wouldn't accept that it's valued at par but that's not the point. A sovereign state says their drachma is worth a euro. They give their creditors (except the IMF) lots of them. Lots of red faces and indignation but so what?  Alternatively Greece still has the mandate to print small denomination euro notes. So, provided that they have the paper, print loads and repay in cash. Super Mario would huff and puff and say that they were counterfeit but that would have the whole of Europe worried about their cash....The effect of a default would be extremely serious. Nobody lends money to a government that has just defaulted on existing debts. Rich Greeks have removed their Euros from Greek banks and cannot be forced to bring them back. Greeks in general simply do not pay their taxes. Where can they go now? When they have stripped the pension funds, there will be no pensions. When they leave the Euro, they will print Drachmas which will be devalued continuously until they are worthless. Greeks have mortgages denominated in Euros. The Drachma will be worth a few centimes, if that. I think life will get a lot harder for Greeks before it gets better. = This is false - did anybody hear about Brazil and/or Argentina ??? - these countries periodically file for bankruptcy !!!...Of course the great Europeans especially the "unionists" didn't today's Europeans are just as ill informed as the Americans ! - Well ...We are where we are. Hindsight is invariably quoted by opponents of how things have panned out. There is no doubt that matters could have been better planned from the start or the early days. In which case the whole movement might well never have got off the ground.

I see the EU and Euro as, say, 25% positive. It is a job in progress, not made easier by the ongoing crisis which did NOT started in the US, but in the "world". For whatever reason, there are 28 democratically elected (more or less) national governments who want their countries to stay in the EU with another half-dozen applying for membership (stupid). To date no-one has left. Can they all be wrong?

Clearly there are some who have not realized the new economic tectonic shift in power towards the East.  The U.S. has an unpayable debt of nearly 200 TRILLION dollars, when you include unfunded liabilities.  The western shadow banking system is hiding over a 1000 TRILLION in derivatives, that have zero backing.  The plain truth is that Russia is dependent on sales of a product that will NEVER recover to its old price level.   $60 a barrel is the new norm.  This is a disaster for the Russian economy.  The prosperity it enjoyed in the days of $100+ a barrel are gone forever.
And worse times are coming for Russia as the Little Russian Psychopath persists with his grossly transparent plan to get a secure land route from Russia to Crimea through puppet "republics" in Soutern Ukraine... RBS, which maintains an office in Russia, said in its full-year results that it had “reduced limits to customers affected by [sanctions], including tightening transactional controls to mitigate credit risk while ensuring sanctions compliance”, and that it had placed restrictions on new business in the country. Its net exposure fell by £120m last year to £1.8bn, around half of which is fully hedged. While half of RBS’s loans to the country are to corporates, most of Barclays’ exposure is to the financial sector. The retreats represent a major pull-back for Britain’s banks in Russia, after a pre-crisis investment splurge. In 2008, at the height of the banking boom, Barclays paid £373m for Expobank, before selling it for an undisclosed sum in 2011. In the same year, HSBC closed its retail banking operations in the country, having opened them just two years earlier. Other banks cut funding last year, including the French bank Société Générale, which is one of the largest foreign lenders in the country.

Don't forget Target2! Germany is going to take a cold shower of 70-80 billion Euros if there is a Grexit. More worrying Italy and France are up for 10's of billions as well. So it's not exactly a picnic!... Bundesbank's TARGET2 exposure
Amount: EUR 513,365,579,273.88
(As at: 28 February 2015)

I think this whole charade may well simply be about buying time for the "made men" of the Brussels Mafia to settle THEIR creditors and bankers down enough to accept a Greek default and exit and to come up with a creditable excuse that claims the EU is intact and the euro is under no threat ... I've just read Varoufakis's six proposals for negotiation in Brussels next week, and they can be summarised as bla-de-bla-de-bla. In any serious discussion they'd get short shrift. With Juncker there trying to be Greeker than the Greeks, all moral hazard will be blown to bits. So Juncker needs to be told his business is to stay away, shut up, and stop meddling - otherwise his own past 'activities' in Luxemburg will be brought to light...I really don't think the EZ should allow Greek pension funds to be raided, or the ECB or EZ to provide cash for Greece to pay the IMF - the money would never be returned, and it would be an added burden for future taxpayers.  Let us help Greece into an orderly default, grexit from the euro, and the care of the IMF, with vaguely benign promises of rehabilitation 'as and when' ... This could be the final meltdown of the global ponzi scheme that's being going on for over a century. Then all these people who think they are rich will realise that the money they thought they were owed will never be repaid.  The UK and the US didn't avert the collapse of the world's financial systems in 2008, they just postponed it and the imbalances have only got much bigger. If creditors and saver think they're having it tough right now, they ain't seen nothin' yet !

EU - Observer -- Greek prime minister Alexis Tsipras has put the painful question of German war reparations back on the table, saying his country was never paid for the infrastructural damage inflicted in World War II.  In a highly emotive speech before parliament on Tuesday (10 March), peppered with references to Nazism, the Third Reich, and the Holocaust, Tsipras said Berlin had an "unfulfilled moral, as well as material historic debt".  He acknowledged that Germany paid 115 million deutschmarks (€59 million) to Greece in 1960, but said this went only to individual victims of Nazis and did not compensate for the "destruction" of the country.   "This agreement, however, provided compensation only for the victims of the Nazis in Greece and not for the damages inflicted on the country itself," he said.  "And of course it did not relate either to the obligatory occupational loan or the claims for damages due to war crimes as a consequence of the nearly total destruction of the country’s infrastructure and the economy’s disintegration during the war and the occupation".  He accused Berlin, which has long said it has honored its war obligations, of using "legal technicalities" to get around paying.  "They see the mote in their brother's eye but not the beam in their own," he added, quoting a passage from the Bible, and speaking of a "moralistic tone" in Europe in an apparent allusion to Berlin's statements on Greece.  He also said that a parliament committee on "claiming the German debts owed to Greece" is to be reconstituted and upgraded and that his government will offer "political and legal assistance" so that its efforts "bear fruit". The motion to re-establish the committee was then backed unanimously by parliament late on Tuesday.  For his part, Nikos Paraskevopoulos, the Greek justice minister took the rhetoric a stage further on Wednesday by saying that German property in Greece could be seized as compensation.  He said he is "ready to approve" a Greek Supreme Court ruling in 2000, which ordered Germany to pay around €28 million to the relatives of 218 civilians in the village of Distomo, massacred by Nazi forces in 1944. The ruling said that assets such as property could be seized as compensation.  "The law states that the minister must give the order for the Supreme Court ruling to be carried out ... I am ready to give that order," he told Antenna TV, reports AFP.  The Greek statements come after weeks of uneasy relations between Berlin and Athens since the Greek far-left/nationalist coalition government came to power in late January.  Tsipras' first move as PM was to vist a memorial honoring  Greek resistance fighters killed by the Nazis in 1944 - a symbolic gesture that did not go unnoticed in Berlin.  Since then, the Greek government has sought to make good on its election promises to restructure its debt and to end EU-imposed austerity.  But tough negotiations with its creditors have seen it win only small concessions, such as renaming the hated Troika (representing its three international creditors) as "the institutions".   Contrary to what it wanted, the government was forced to extend an existing bailout - by four months - and is currently trying to reach a deal on which reforms it needs to carry out to get the next tranche of cash.  Germany is at the forefront of those saying Athens must stick to its prior commitments on reforms. Rhetoric between the two countries has turned nasty on several occasions since Athens' first bailout in 2010, with Greece - wracked by high unemployment and low growth - viewing Germany as too single-minded on austerity and with Germany seeing Greece as slow to undertake major changes.  The current talk from Athens is much harder than anything before, however.  It comes amid criticism of Tsipras by his own, hardline backbenchers, who expect him to deliver more of his campaign pledges.   Tsipras' defense minister Panos Kammenos, from the nationalist party in the coalition, also recently threatened to "flood" Europe with migrants if Greece does not get a debt deal.  "If they [the Eurogroup, a body which oversees eurozone governance] strike us, we will strike them. We will give to migrants from everywhere the documents they need to travel in the Schengen area [the EU's passport free zone], so that the human wave could go straight to Berlin."

Tipărirea de bani, soluţia găsită de băncile centrale în încercarea de a salva statele blocate în datorii şi economiile afectate de recesiune, va fi accelerată în perioada următoare. BCE a anunţat un plan de „relaxare cantitativă“ fără precedent, urmând să aloce, pentru achiziţii de active, peste un trillion de euro. Măsurile de reducere a dobânzilor, operate de bănci centrale pentru a stimula creditarea şi consumul,  au distrus randamentele plasamentelor monetare, iar cantităţile uriaşe de lichiditate disponibile a trebuit să îşi caute randamene mai bune pe pieţele de capital, alimentând noi bule bursiere. Creşterea cotaţiilor bursiere este responsabilă, astfel, şi de mare parte din avansul fondurilor de investiţii cu plasamente în acţiuni, în timp ce fondurile de piaţă monetară, cu plasamente în depozite bancare, şi-au continuat declinul. Din cele 11,34 trilioane de euro cât totalizează activele fondurilor de investiţii europene, peste 70%, respectiv 8 trilioane de euro, sunt active ale fondurilor mutuale (deschise). Acestea au avut, de altfel, cea mai mare rată de creştere (16,3%), reuşind să înregistreze şi un maxim istoric al vânzărilor, în sumă de 472 miliarde de euro. Fondurile mutuale cu orizont lung de investire (toate în afară de cele de piaţă monetară) au atras partea leului din intrările de bani, cu 476 miliarde de euro, în creştere cu 45% faţă de cele 328 miliarde de euro din 2013.  Pe categorii, fondurile de obligaţiuni au atras cei mai mulţi bani (191 miliarde de euro), la mare concurenţă cu fondurile mixte (multi-asset în noua terminologie folosită începând cu 2015 pe plan global) şi cu un nivel remarcabil de 61 miliarde de euro înregistrat de fondurile de acţiuni. „Din martie 2012, fondurile de piaţă monetară au un regulament foarte draconic, astfel încât majoritatea administratorilor le-au mutat în categoria «alte fonduri»“, spune Neacşu, care administrează în România şi singurul fond de piaţă monetară existent (Erste Money).