The forced collective suicide of European nations

Europe braced for a revolutionary Leftist backlash after Greece  .. He has vowed to block anti-austerity measures such as reverses to wage cuts, rehiring of public sector workers, and halting privatisations. A constitutional amendment would require a two-thirds majority vote in the country's 230-seat parliament. It cannot pass with the support of the Socialists who are the second largest party in parliament.  If the motion fails, Anibal Cavaco Silva, the president, faces the choice of appointing a caretaker regime for six months, or relenting and allowing the Leftists to enter power.

He is due to make a decision in the coming days. Indebted Portugal is still the problem child of the Eurozone . The political stalemate comes as Portugal's economy has stalled. GDP growth ground to a halt at just 0pc in the third quarter for the former bail-out country. Portugal's former international creditors in the IMF and Brussels have urged any new regime to continue cutting government spending, reduce debt levels and make crucial economic reforms. "Since the onset of the eurozone crisis, Portuguese voters have shown remarkable loyalty to their traditional political parties," said Ben May at Oxford Economics. "The pace of structural reforms has dwindled and could even go into reverse under a Left-wing alliance", he said

Hungary pays off IMF debt, may eye EU exit

Portuguese bonds and stocks were hit as a coalition of left-of-centre anti-austerity parties looked set to form the country's next government.  The opposition Socialists struck a deal with two smaller far-left parties over the weekend, all but guaranteeing Prime Minister Pedro Passos Coelho will fall.  Mr Passos Coelho's party emerged as the largest in October's election, but has no absolute majority.  Government bond yields hit a five-month high, while shares fell 1.9%.   "The scenario of a left-wing government and the ousting of the centre-right is about to become reality, which the markets obviously don't like," said Joao Lampreia, an analyst at Banco BiG.  Portugal's benchmark 10-year bond yields jumped over 20 basis points to 2.87%, the highest since July, as investors anticipated higher borrowing costs.  Socialist Party leader Antonio Costa sealed the so-called "Triple Left" pact with the Communist Party and Left Bloc over the weekend.  Together they will have 122 seats, enough to out-vote the centre-right coalition government, which was left with only 107 after October's inconclusive elections.  A vote on the government's programme is likely to take place on Tuesday, when the leftist parties are set to use their parliamentary advantage to topple the minority administration. Matt Cairns, a strategist at Rabobank, said there were fears a change in government "could end up in some wind-back of austerity measures".   Another analyst, Rainer Guntermann at Commerzbank, warned "rating jitters are also on the rise for Portugal".  Amid the political uncertainty, Portugal's only investment grade credit rating will be assessed on Friday by credit agency DBRS.  The loss of that rating would bar Portugal from the European Central Bank's quantitative easing (QE) programme, Commerzbank warns.

Finland's parliament will debate next year whether to quit the euro, a senior parliamentary official said on Monday, in a move unlikely to end membership of the single currency but which highlights Finns' dissatisfaction with their country's economic performance. The decision follows a citizens' petition which has raised the necessary 50,000 signatures under Finnish rules to force such a debate, probably the first such initiative in any country of the 19-member euro zoneThe petition - which will continue to gather signatures until mid-January - demands a referendum on euro membership, but this would only go ahead if parliament backed the idea.  Despite the initiative, a Eurobarometer poll this month showed 64pc of Finns backed the common currency, though that is down from 69pc a year ago. But the Nordic country has suffered three years of economic contraction and is currently performing worse than any other country in the eurozone. Some Finns say the country's prospects would improve if it returned to the markka currency and regained the ability to set its own interest rates, pointing to the example of neighboring Sweden, which is outside the euro. The markka could then devalue against the euro, making Finnish exports less expensive. Since 2008 the Swedish economy has grown by 8pc, while ours has shrunk by 6 percent," said Paavo Vayrynen, a Finnish member of the European Parliament who launched the initiative. Now is a good time to have a wider debate whether we should continue in the eurozone or not," said Vayrynen, a veteran lawmaker from the co-ruling Centre Party who is known for his opposition to greater European integration. The center-right government is struggling to balance public finances and improve export competitiveness through "internal devaluation", including cuts to workers' holidays and other benefits, amid opposition from unions. Before 1992, Finland devaluated its markka currency time and again to improve export competitiveness.

So, it seems that despite all of the ZIRP and all of the QE debasement around the world (which was supposedly to "stimulate" economies), none of it has worked. What a surprise! The proof of the pudding is always in the eating. That is the ultimate of pragmatics. Any fool can see from economic history that permanent debasement by whatever tricks are used never works to "stimulate" any economy but just makes things all much worse. However, the fools in control at present cannot even see that, and many of them are supposed to have degrees in History from good universities...Oh those polices stimulated the economy, there is absolutely no doubt about that. But its just been a temporary boost, requiring another "hit" as soon as the last one wears off. The underlying problem is the macro-economic imbalances between young and old, poor and rich, trade surplus nations vs trade deficit nations. These have led to a surplus of global savings on one side, and a deficit of global consumption on the other. The stimulus polices (such as our housing bubble) have simply papered over these imbalances temporarily, but the global plutocratic elite don't want to take the necessary rebalancing steps since they will be big losers from this, and the older wealthier voters/supporters who form their power bases will be losers too... GDP is simply a measure of spending (or in some cases such as imputed rent - imaginary spending). If a government borrows or prints lots of money and makes it cheaper (by lowering interest rates) for others to also borrow and spend, then inevitably spending goes up.   GDP does not differentiate between the spending of earned, and borrowed money.  If I lost 50% of my income but borrowed the missing amount and some more to 'Stimulate my economic activity' naturally my spending would go up. Is that sustainable though? No. I still only have half the underlying income I used to have, but now I have a pile of new debt too.  So the short answer to your question is that borrowing and spending (temporarily) raised GDP because GDP measures borrowing and spending among other things.

To be sure, there is no proof thus far that Juncker himself promised tax relief to individual companies. He told the European Parliament committee that he had never personally met with consulting firms.  That may be true. But the former head of tax issues for Amazon testified last December that Juncker, in personal meetings between the two, had offered to assist the online retailer in setting up a tax home in Luxembourg. He said that the Luxembourg government had behaved as a "business partner."...Juncker's credibility has been shaken, partly because the accusations aren't just about tax law. They also call into question the image that Juncker has for years been portraying of himself, that of the model European. Now, he stands accused of being the architect of a business model that is based on the extremely un-European principle of steering tax flows away from neighboring countries into Luxembourg's coffers. As Commission president, he demands EU solidarity almost daily when it comes to the refugee crisis. But how credible can he be after years of promoting policies that can accurately be described by the term "tax dumping?"  The question regarding responsibility must be reexamined," says Green Party politician Giegold. "The European Parliament special committee must continue its investigations." The committee is currently scheduled to wrap up its work at the end of November, in accordance with the wishes of powerful Juncker allies, such as Manfred Weber, head of the conservative European People's Party group in European Parliament, and Parliament President Martin Schulz, a Social Democrat. Now, though, pressure to continue the investigation is growing.  In Luxembourg, meanwhile, Juncker's successors are doing what they can to absolve the country of its image as a tax paradise. Recently, Luxembourg's government opened a large university campus in the capital to finally enable companies to do that which they have long claimed to be doing: perform research.