The Italian caretaker Prime Minister,
Mario Monti, has promised to cut labour taxes in an interview seen as the launch
of his election campaign. Mr Monti, who leads a centrist coalition while not standing as a candidate
himself, also attacked conservative rival Silvio Berlusconi. In office he vowed to restore market confidence in Italy's finances. Wednesday saw him achieve his aim of halving the difference between Italy's
and Germany's bond yields.
These indicate a country's cost of borrowing and reflect how nervous
investors feel about lending to them. Germany is used as a benchmark as it is
considered the safest bet in the eurozone.
The difference between Italy and Germany's yields dipped below 2.87
percentage points on Wednesday.
When Mr Monti took office as head of a technocratic government in November
2011, the spread had stood at 5.74 percentage points.
Mr Monti's centrist allies are in a three-way race with Mr Berlusconi's
People of Freedom party on the right and the Democratic Party on the
left. Speaking on radio, Mr Monti pledged to take measures to redistribute wealth
in the country. "We need to reduce taxes on the labour force, both on workers and companies,
by cutting spending," he said. He defended his administration's record, saying that the "light at the end of
the tunnel" was "much nearer".
Since withdrawing his party's support for the government in December, Mr
Berlusconi has repeatedly launched attacks against the former European
commissioner. "Berlusconi has made improper attacks against me - on areas like family
values," Mr Monti said on Wednesday.
"I think I need make no further comment," he added, in an apparent reference
to the string of sex scandals involving the veteran billionaire politician. Mr Monti, a former economics professor, was chosen to impose financial rigour
on the economy, after Mr Berlusconi quit the prime minister's job. In power, Mr Monti made some progress early on, including raising the
retirement age and structural reforms. However ordinary Italians have been hard hit by the combination of tax rises
and spending cuts he imposed to repair Italy's public finances. Italians are due to go to the polls over the weekend of 24-25 February....
The Euro will survive even if the ECB has to kill Europeans and recycle them into Euro notes, bit like Soylent Green only bank notes instead of food. Interesting fact on the EU today, they have ordered all the cash machines in the Vatican City to be turned off because the Vatican has failed to comply with anti money laundering regulations. Is this the shape of things to come.
The Euro will survive even if the ECB has to kill Europeans and recycle them into Euro notes, bit like Soylent Green only bank notes instead of food. Interesting fact on the EU today, they have ordered all the cash machines in the Vatican City to be turned off because the Vatican has failed to comply with anti money laundering regulations. Is this the shape of things to come.
17 comments:
The problem with this approach is the most likely outcome is hyper inflation which is caused by flooding an economy directly with new money.
Price led inflation (top down trickle effect) which is what we have now is more manageable and essentially buys time to work out how to implement proper change, helicopter cash would cause a currency collapse.
A weaker euro may be a blessing in disguise for European industries struggling with an overvalued exchange rate. Former French leader Charles de Gaulle once called dollar hegemony America’s “exorbitant privilege”, but the eurozone has learnt that reserve status can also be an exorbitant burden.
Central banks increased their holdings of eurozone bonds by an estimated $1.5 trillion in the early EMU years as China, Russia and the Middle-Eastern petro powers invested fresh reserves in euros to diversify away from the dollar. This pushed the euro to an all-time high of $1.60 by 2008, a level that inflicted serious damage on the manufacturing bases of France, Italy and Spain. It also distorted the EMU credit structure, fuelling debt booms across Club Med.
“There was too much euro buying. It is probably a good thing if the central banks pull back, so long as it does not go too far and lead to a buyers’ strike,” said Mr Nordvig.
International Monetary Fund data show that emerging nations have cut the weighting of EMU bonds in their reserves to 24.7pc from a peak of 30pc at the onset of Europe’s crisis three years ago, with a record drop in the third quarter of 2012.
“They have lost their appetite for peripheral EMU bonds, and some have simply cut Italy and other countries from their benchmarks,” said Jens Nordvik, currency chief at Nomura.
The IMF data also show a record $19bn (£12bn) surge in holdings of sterling by advanced central banks to $98bn, the biggest three-month jump ever recorded. Analysts say this is almost certainly caused by the Swiss National Bank as it takes extreme measures to hold down the franc. The SNB has already bought an estimated $80bn-worth of euro bonds and is increasingly switching to other assets.
“There aren’t many places to go in this 'ugly contest’ if you don’t like the euro, dollar or yen,” said HSBC’s David Bloom.
The effect has been to thwart the Bank of England’s efforts to weaken the pound. The Swiss and UK central banks are effectively in a “low intensity” battle against each other. “This is what happens in currency wars. Desperate times lead to desperate acts,” said Mr Bloom.
What we
have is what Paul Omeroid said in the DEATH OF ECOMICS. A transition period where the economics is
dead and we cerate a new one. Even Joseph Stieglitz talks of the same Bank
loans to companies fell again in Europe, another sign that the economy remains
slack in the 17 European Union countries that use the euro. The European Central Bank said Thursday that loans to
non-financial corporations fell by 1.4 percent in November from the year
before. It's a sign that businesses remain reluctant to take on risk and
borrow, despite the ECB's record low benchmark interest rate of 0.75 percent.
The ECB expects the Eurozone economy to shrink 0.3 percent in 2013 and only
start to recover in the later part of the year. Howard Archer, an analyst at
IHS Global Insight, said the figures indicate, "Households and firms are
reluctant to take on new debt amid weak economic activity levels and still
appreciable uncertainty regarding the economic outlook." I thank you
Firozali A.Mulla DBA
The competitiveness of the Euro zone under German command devaluates all other currencies. With their own productivity, even in Switzerland, in industry and, often forgotten, the worldwide most competitive agribusiness, like in Spain, no other market can stand up with his offers over the whole range of every day products with the present exchange rates, and the Norwegians had to raise the import tariffs for farm products by 300-400% otherwise their farmers would lose their existenciess
The Euro will survive even if the ECB has to kill Europeans and recycle them into Euro notes, bit like Soylent Green only bank notes instead of food. Interesting fact on the EU today, they have ordered all the cash machines in the Vatican City to be turned off because the Vatican has failed to comply with anti money laundering regulations. Is this the shape of things to come.
The Euro will survive even if the ECB has to kill Europeans and recycle them into Euro notes, bit like Soylent Green only bank notes instead of food. Interesting fact on the EU today, they have ordered all the cash machines in the Vatican City to be turned off because the Vatican has failed to comply with anti money laundering regulations. Is this the shape of things to come.
NEW YORK (Reuters) - Wegelin & Co, the oldest Swiss private bank, said Thursday it would shut its doors permanently after more than two and a half centuries following its guilty plea to charges of helping wealthy Americans evade taxes through secret accounts.
The plea, in U.S. District Court in Manhattan, marks the death knell for one of Switzerland's most storied banks. It is also a potentially major turning point in the battle by U.S. authorities against Swiss bank secrecy.
The bank admitted to charges of conspiracy in helping Americans evade taxes on at least $1.2 billion for nearly a decade. Wegelin agreed to pay $57.8 million to the United States, including $20 million in restitution to the Internal Revenue Service.
Otto Bruderer, a managing partner at the bank, said in court that "Wegelin was aware that this conduct was wrong."
Speaking in a thick Swiss-German accent, he said that "from about 2002 through about 2010, Wegelin agreed with certain U.S. taxpayers to evade the U.S. tax obligations of these U.S. taxpayer clients, who filed false tax returns with the IRS."
When indicted last February, the first indictment of a foreign bank by U.S. authorities in recent history, Wegelin vowed to resist the charges. The bank, founded in 1741, was declared a fugitive from justice when its Swiss-based executives failed to appear in U.S. court.
The surprise plea effectively ends the U.S. case against Wegelin, one of the most aggressive bank crackdowns in U.S. history.
"Once the matter is finally concluded, Wegelin will cease to operate as a bank," Wegelin said in a statement Thursday from its headquarters in the remote, small town of St. Gallen next to the Appenzell Alps near the German-Austrian border.
Wegelin, a partnership of Swiss private bankers, was already a shadow of its former self - it effectively broke itself up following the indictment last year by selling the non-U.S. portion of its business.
Dozens of Swiss bankers and their clients have been indicted in recent years, following a 2009 agreement by UBS AG , the largest Swiss bank, to enter into a deferred-prosecution agreement and pay a $780 million fine after admitting to criminal wrongdoing in selling tax-evasion services to wealthy Americans.
William Sharp, a tax lawyer in Tampa, Florida, with many American clients of Swiss banks, said Wegelin's plea "should serve as a wake-up call" to the international banking community servicing U.S. clients to adopt measures to ensure compliance with U.S. law.
Sharp called Wegelin's change of heart "shocking."
Banks under criminal investigation by U.S. authorities in the wider probe include Credit Suisse , which disclosed last July it had received a target letter saying it was under a U.S. grand jury investigation.
Zurich-based Julius Baer and some cantonal, or regional, banks are also under scrutiny, sources familiar with the probes have previously told Reuters. So are UK-based HSBC Holdings and three Israeli banks, Hapoalim, Mizrahi-Tefahot Bank Ltd and Bank Leumi , sources have also said previously. Those banks have not commented on the inquiries.
In a statement after the plea, Assistant U.S. Attorney General Kathryn Keneally said it was a top priority of the Justice Department "to find those who continue to shirk their tax obligations," as well as those who help them and profit from it.
"The best deal now for these folks is to come in and 'get right' with the IRS, before either the IRS or the Justice Department finds them," she said.
As part of the plea, Wegelin agreed to pay the $20 million in restitution to the IRS as well a civil forfeiture of $15.8 million, the U.S. Justice Department said.
Wegelin also agreed to pay an additional $22.05 million fine, the Justice Department said. U.S. District Judge Jed Rakoff, who must approve the monetary penalties, set a hearing in the case for March 4 for sentencing.
Last year, the U.S. government separately seized more than $16 million of Wegelin funds held in a UBS AG account in Stamford, Connecticut, via a separate civil forfeiture complaint.
Because Wegelin has no branches outside Switzerland, it used UBS for correspondent banking services, a standard industry practice, to handle money for U.S.-based clients.
The European union was badly put together. You cannot join states that are dissimilar. Take Russia, some of its states left because of incompatibility, same for China and the list goes on.
You can join countries/states where the people have a mutual respect for each other and one country doesnt want to empty its entire population into anothers.
Britain should not have joined and its associate membership might fix things. But for goodness sakes, remove all the immigrants with work visas, and remove all the illegal immigrants and remove 60% of the immigrants that dont fall into that category.
Get them back on a plane to their own country, get America to supply a weapon each.. should be easy for them and there you go. We can supply some non-GMO seeds and some temporary food for a year and there you go.
"Europe's dream of toppling dollar fades as Asian Tigers dump euro"
Give it three years and toilet paper will be worth more than Euro banknotes. Correction - make that soiled toilet paper. Actually, I'd like to see a monument set up on the side of Trafalgar Square's fourth plinth with the names of all the prominent UK politicians who in the late 20th-early 21st centuries were pushing for the nation to sign-up to the currency. With Nelson looking down, it would be a particularly potent message to future generations.
What are you talking about england13. If Merckel rolls the all Euro-zone countries into one and rule it the German way, it will be the third world war. The Euro-zone is already at breaking point, so forget about more German medicine . Wait for the Spanish reaction in 2013, Angela will soon realise her limits
The weakness of the Euro will only last until Merkel etc manage to financially roll the whole of the Euro-zone countries into one, -IE basically a Greater Germany!
If and when this happens, if ever, it will strengthen the Euro considerably. If not, it will fail.
Asia’s trade tigers dominate global reserves, holding almost two-thirds of the $10.8 trillion total along with commodity exporters. China holds $3.3 trillion.
Advanced central banks have increased their euro holdings over the past year, but that is entirely due to Swiss intervention, a “one-off” anomaly, and may have stopped already.
The broader retreat from EMU bonds has not stopped the euro rising 8pc since July to $1.31 against the dollar. Hans Redeker, from Morgan Stanley, said this is largely due to deleveraging by European banks, which are cutting global exposure to meet tougher capital ratios. “It is a repatriation effect, but it won’t last. We think the euro will fall much closer to parity within two years,” he said.
http://www.chinadaily.com.cn/b...
Include this with the 'bombardier Siemens' situation and the economic argument is blown away.
The longer the eurocrisis persists, the less important economically the EU is to Britain.
All these business leaders that depend on mass immigration from eastern Europe to keep down wages down and profits at a maximum (without paying tax for it) want us to stay in.
Investors that are more interested in high value production and investment couldn't care less either way.
Britain is a big enough entity with enough history and respect to stand up for herself. South Korea doesnt need to be in political union afterall.
The European Union has become a deeply pernicious, corrupt and undemocratic entity, led by arrogant, doctrinaire, third-rate minds .
It is a matter of the greatest urgency that Britain gets out of this dangerous train wreck.
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