Senator Rand Paul on Tuesday officially sued the Obama administration, seeking to stop it from enforcing a federal banking law that has led large numbers of Americans overseas to renounce their citizenship.  In a move with implications for his 2016 presidential bid, Mr. Paul joined six other plaintiffs in a suit filed by Republicans Overseas Action (ROA), arguing that the Foreign Account Tax Compliance Act (FATCA) is unconstitutional. The 2010 law, passed by a Democratic Congress, has been a centerpiece of President Obama’s campaign to crack down on wealthy Americans he says have been dodging taxes by hiding their money overseas.  But it has become enormously controversial, empowering foreign banks to turn over overseas  Americans’ private information to foreign governments, who then must turn it over to the Treasury Department.

The lawsuit argues the agreements the Treasury Department reached with foreign countries to gain access to Americans’ banking information violates the Constitution’s Article II, Section 2 that requires two-thirds of U.S. senators present and voting to approve a foreign treaty.
 “This lawsuit speaks volumes about the Obama administration’s lawlessness and disregard for the Constitution,” said Jim Bopp Jr., lead attorney for the plaintiffs who, collectively, have eight separate constitutional claims against the law and its enforcement mechanisms.

Mr.. Bopp noted he had only one Constitutional claim in the landmark Citizens United vs. FEC case, for which he was the original architect.  A total of 1,335 Americans renounced their U.S. citizenship during the first three months of 2015, according to figures released by the IRS.

That suggests U.S. renunciations will hit another new high this year. Last year, 3,415 Americans gave up their citizenship — 15 times more than in 2008.  “Americans overseas are suffering egregious unconstitutional violations of their privacy and are facing draconian fines by the vigorous enforcement of the law by the Obama administration,” said Mr. Bopp. “The vast majority of overseas Americans are law-abiding middle class Americans, but the Obama administration treats them all as tax cheats.”   “We want the federal court to stop Obama’s Internal Revenue Service by immediately issuing a preliminary injunction that will protect Americans overseas until a trial can be held by the court.,” Mr. Bopp said.  Critics emphasize the government overreach that they say the law’s efforts to nail tax cheaters represents.

Following weeks of stock market turmoil, China has confounded expectations that its economic growth would slow further in the second quarter, with gross domestic product rising by 7%.
Analysts had widely predicted that economic growth would dip from 7% in the first quarter to around 6.8% in the second.  However, GDP held steady, officials from China’s National Bureau of Statistics claimed on Wednesday morning. The figure still represents the lowest level of growth since the 2009 global financial crisis but is in line with Beijing’s official target for 2015 of “around 7%”... 

However, there were immediate doubts over the growth figure’s reliability with the announcement sparking renewed debate over the trustworthiness of Beijing’s statistics.

The fact that the figure was exactly in line with the Communist party’s 2015 full-year growth target “raises suspicions,” said Yang. “There is the issue of credibility, certainly.”   China’s premier, Li Keqiang, tried to put a brave face on the recent stock market collapse during a meeting on Friday with economists and business leaders in Beijing.

“China’s economy still boasts remarkable tenacity, potential and flexibility,” Li said, according to state media. “There is little doubt that China’s potential for medium-high growth remains underpinned by strong, long-term fundamentals. The global economic recovery is full of twists and turns. China should push forward its own development with stronger confidence and greater efforts.”
However, Beijing has faced criticism for its handling of the crash. Chinese president Xi Jinping has vowed to reduce Beijing’s role in the economy but as stocks plunged earlier this month the Communist party took drastic measures, including temporarily halting initial public offerings.  ....No-one, even in China, believes this number. Party apparatchiks deliver a number to suit the forecast, to do otherwise would cause Xi to lose face and further erode trust in the crashing stock market. The real number is probably around 5%.

The severe damage caused to the Greek economy by more than two weeks of bank closures and capital controls means the stricken eurozone country will require far more generous debt relief than is currently on offer from its single-currency partners, according to the International Monetary Fund.

A report by the Washington-based Fund leaked to the news agency Reuters shows that Greece’s public debt is likely to peak at 200% of its national income within the next two years, with the risk that the actual outcome could be even worse.The debt sustainability analysis comes on the eve of a crucial vote in Athens when the prime minister, Alexis Tsipras, will be seeking parliamentary approval for the fresh austerity measures demanded by the eurozone in return for a three-year rescue package worth up to €86bn (£61bn).  Putting into question its involvement in the bailout, the IMF report paints a far darker picture of Greece’s public finances than contained in the blueprint released at the end of the marathon eurozone leaders’ summit on Monday.  “The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date – and what has been proposed by the ESM,” the IMF said, referring to the European Stability Mechanism bailout fund which will be used to bankroll the Greek bailout plan.  Throughout the Greek crisis, the IMF has consistently urged deeper debt relief but has met resistance from European finance ministers, who have been unwilling to make their taxpayers pay the cost of a write-down.  Tsipras has also insisted that debt relief must form an important part of the package, but the Eurogroup statement on Monday said only that further measures might be taken provided Greece adhered in full to the reforms demanded by its creditors.In the leaked report, the IMF says that Greece’s debts threaten to be unsustainable for decades, and that its financing needs will rise so that they are above the 15% of national income level deemed safe.  The IMF added that European creditors now face the choice of either annual transfers to the Greek budget or “deep upfront haircuts” (cancellation of part of the debt).  IMF sources confirmed that an updated debt sustainability analysis had been prepared by staff and would be discussed by the organisation’s executive board.  Unless the IMF can convince itself that Greece’s debts are sustainable, it would be forbidden by its own rules to put money into a new bailout. The assumption has been that the Fund would provide €16.4bn – around 25% of the total – with the rest coming from the ESM.

The Bundestag has voted in favor of starting negotiations with Greece over a third bailout.

439 lawmakers voted in favor, and 119 opposed the move, with 40 abstentions.  The Board of Governors of the European Stability Mechanism (ESM) approved today a decision to grant, in principle, stability support to Greece in the form of a loan programme. This decision follows the completion of national procedures that involved parliamentary approval in some of the ESM Member States. The basis for the Board of Governors’ approval was the assessment by the institutions and the proposal by ESM Managing Director Klaus Regling.  This in-principle decision paves the way for the institutions to negotiate a Memorandum of Understanding (MoU) detailing the agreed macroeconomic reforms, or policy conditionality, linked to the ESM financial assistance facility. Simultaneously, the ESM Managing Director will prepare a proposal for the loan contract with Greece, the Financial Assistance Facility Agreement (FFA).  Once the MoU is finalised, the Board of Governors must take a further decision, involving national parliaments in some Member States, to approve the MoU as well as the FFA proposal. The European Commission must sign the MoU. Finally, the ESM Board of Directors must adopt the FFA and agree to disburse the first tranche of the loan.  Klaus Regling, ESM Managing Director, said: “We welcome that the Greek government and parliament voted in favour of the reforms with a very broad majority. This has paved the way for today’s decision in principle to start negotiations on a new programme for the benefit of Greece. Let me stress that thanks to reform implementation, Greece had started to grow again in 2014, unemployment had begun to decline, and the country had regained some market access. The ESM has a remaining lending capacity of €455 billion but only a small part of this sum will be needed. The ESM stands ready to provide financial assistance when our Members fully adopt an ESM program.”

One of the European officials said that the four major Greek banks - National Bank of Greece, Eurobank, Piraeus and Alpha Bank (all of which have subsidiaries in Romania) - could become two. "The Greek economy is in ruin. That means that banks need a reboot", according to the quoted source, which stressed that prompt action will be necessary in the event of any bail-out between Athens and the Eurozone, adding that Cyprus could be a model in that regard.  Another official said that even though the mergers of banks are necessary, that measure would be a process that could take a long time.  Ever since autumn last year, there have been rumors circulating in the Romanian market that talks concerning the merger between Bancpost and Piraeus Bank or Banca Românească had taken place.  Banking market sources told us, at the time, that the financial institution that would acquire Bancpost would be designated following the decisions made at the level of the parent banks, headquartered in Athens.  In the beginning of October 2014, the press wrote that Piraeus Bank was considering acquiring Bancpost from Eurobank, in exchange for selling its Bulgarian subsidiary or those in Bulgaria and Serbia together.  According to a scenario presented in a reorganization plan drafted upon the request of the General Competition Department of the European Commission, the Piraeus plan proposes for the Greek banks to consolidate their Balkan operations through exchanging branches, in order to reach critical masses on those respective markets, as written on October 8th by Greek portal Sofokleous10. At the time, Piraeus representatives were saying that the operations in Romania, Bulgaria, Albania and Cyprus were viable and of strategic importance for the group. The Greek press had written, a few days earlier, that Banca Românească, the subsidiary of National Bank of Greece (NBG), the biggest bank in Greece, was for sale. The four major Greek banks - Eurobank, Piraeus, Alpha and NBG - have not yet succeeded in merging, even though in the past, a merger agreement was signed between Eurobank and NBG, which was later cancelled, in the beginning of last year.

 ATHENS, Greece (AP) -- Greek lawmakers voted overwhelmingly early Thursday to approve a harsh austerity bill demanded by bailout creditors, despite significant dissent from members of Prime Minister Alexis Tsipras' left-wing party.  The bill, which imposes sweeping tax hikes and spending cuts, fueled anger in the governing Syriza party and led to a revolt against Tsipras, who has insisted the deal forged after a marathon weekend eurozone summit was the best he could do to prevent Greece from catastrophically crashing out of Europe's joint currency.  The bill was approved with 229 votes in favor, 64 against and six abstentions - and won the support of three pro-European opposition parties.    The vote came after an anti-austerity demonstration by about 12,000 protesters outside parliament degenerated into violence as the debate was getting underway Wednesday night. Riot police battled youths who hurled petrol bombs for about an hour before the clashes died down.

The bill was the first step Greece must take in order to begin negotiations with creditors on a new bailout - its third in five years - of about 85 billion euros ($93 billion) in loans over three years.

Dissenters argued that Greeks could not face any further cuts after six years of recession that saw poverty and unemployment skyrocket and wiped out a quarter of the country's economy.

Tsipras has been battling all week to persuade party hard-liners to back the deal. He has acknowledged the agreement reached with creditors was far from what he wanted and trampled on his pre-election promises of repealing austerity, but insisted the alternative would have been far worse for the country.

THE GREEK PROPOSAL - Crucially, in this document at least, there is no mention of the debt sustainability issue.

• Primary budget surplus targets: government has agreed to hit targets of 1pc, 2pc, 3pc, and 3.5pc from 2015-2018. This is in line with what has already been proposed, but they are still very ambitious, particularly as economic activity is set to have deteriorated even further while the country is under capital controls and the banking system is temporarily shut down.

• VAT exemptions for Greek islands will be abolished: the 30pc discounted rate will go, as demanded by creditors but previously fiercely resisted by the government. The proposals say they will start with "islands with the highest incomes and which are the most popular tourist destinations" first.

• Hotels will remain in lower 13pc bracket, but restaurants will be hit by the highest 23pc bracket. Books, medicines and the theater (don't ask me why) will remain at a super reduced 6pc rate.

• Greek farmers will also have all fuel subsidies abolished, another concession demanded by creditors in previous plans

• Importantly, the proposals note that these VAT measures will be reviewed before the end of 2016, if "additional revenues are collected through tax evasion" and other improved collection measures result in higher tax income

• Higher income tax: should any of the proposals result in "fiscal shortfalls" the government is controversially proposing hikes on income tax for the poorest earners. This would see

- incomes below €12,000 taxed at 15pc (from 11pc)

- incomes above €12,000 taxed at 35pc (from 33pc)

• Corporation tax: will be raised to 28pc, rather than 29pc first set out by Athens

• Pensions: Greeks have agreed to phase out their supplementary pensions for the poorest by Dec 2019, rather than 2020. There is no mention of replacing them, and importantly, the top 20pc beneficiaries will also not be protected from the cuts. The government has also agreed to hike the basic pensions retirement age to 67

• Interestingly, the government also seems to have agreed to nullify previous court rulings which have deemed the 40pc cut in pensions as unconstitutional and need of reverse: The authorities will adopt legislation to fully offset the fiscal effects of the implementation of court rulings on the 2012 pension reform.

• Defence spending: to be cut by €100m this year and €200m in 2016. Creditors previously demanded €400m budget cut next year.