The Economist 2015 cover - At first glance, we see political figures like Obama and Putin, references to the Rugby cup and the new Spider-Man movie. But a closer look reveals a plethora of disturbing elements. - The Economist is not a random newspaper that publishes quirky 2015 predictions to sell a few additional copies. It is directly connected to those who shape global policies and who make sure that they are applied. The publication is partly owned by the Rothschild banking family of England and its editor regularly attends Bilderberg meetings. In other words, The Economist is connected to those who have the means and the power to make “predictions” a reality.  The 2015-themed cover basically reflects the overall Agenda of the elite and is peppered with cryptic symbols that appear to be included for “those in the know”. And the masses, like Alice watching the Cheshire Cat disappear, will focus on illusions while the wolf in sheep’s clothing will strike … and strike hard....The presence of the Pied Piper on this 2015-themed cover is downright unsettling. The Pied Piper of Hamelin is a German legend about a man who used his magical flute to lure away the children of the city of Hamelin, never to be seen again....This folkloric figure dating from the Middle-Ages is said to represent either massive death by plague or catastrophe, or a movement of massive immigration. It also perfectly represents today’s youth being “lured” and mystified by the “music” of mass media. Conveniently enough, there’s a small boy right under the Piper’s flute.

Each nation's economy is individually analyzed, then, says Stiglitz, The World Bank (WB) hands every minister the same exact four-step program. Step One is Privatization - which Stiglitz said could more accurately be called, 'Briberization.' Rather than object to the sell-offs of state industries, he said national leaders - using the WB's demands to silence local critics - happily flogged their electricity and water companies. "You could see their eyes widen" at the prospect of 10% commissions paid to Swiss bank accounts for simply shaving a few billion off the sale price of national assets.

And the US government knew it, charges Stiglitz, at least in the case of the biggest 'briberization' of all, the 1995 Russian sell-off. "The US Treasury view was this was great as we wanted Yeltsin re-elected. We don't care if it's a corrupt election. We want the money to go to Yeltzin" via kick-backs for his campaign.
Stiglitz is no conspiracy nutter ranting about Black Helicopters. The man was inside the game, a member of Bill Clinton's cabinet as Chairman of the President's council of economic advisors.
After briberization, Step Two of the IMF/World Bank one-size-fits-all rescue-your-economy plan is 'Capital Market Liberalization.' In theory, capital market deregulation allows investment capital to flow in and out. Unfortunately, as in Indonesia and Brazil, the money simply flowed out and out. Stiglitz calls this the "Hot Money" cycle. Cash comes in for speculation in real estate and currency, then flees at the first whiff of trouble. A nation's reserves can drain in days, hours. And when that happens, to seduce speculators into returning a nation's own capital funds, the IMF demands these nations raise interest rates to 30%, 50% and 80%.
"The result was predictable," said Stiglitz of the Hot Money tidal waves in Asia and Latin America. Higher interest rates demolished property values, savaged industrial production and drained national treasuries.
At this point, the IMF drags the gasping nation to Step Three: Market-Based Pricing, a fancy term for raising prices on food, water & cooking gas. This leads, predictably, to Step-Three-and-a-Half: what Stiglitz calls, "The IMF riot."
The IMF riot is painfully predictable. When a nation is, "down and out, [the IMF] takes advantage & squeezes the last pound of blood out of them. They turn up the heat until, finally, the whole cauldron blows up," as when the IMF eliminated food & fuel subsidies for the poor in Indonesia in 1998. Indonesia exploded into riots, but there are other examples - the Bolivian riots over water prices last year & this February, the riots in Ecuador over the rise in cooking gas prices imposed by the WB. You'd almost get the impression that the riot is written into the plan.
And it is. What Stiglitz did not know is that, while in the States, BBC and The Observer obtained several documents from inside the WB, stamped over with those pesky warnings, "confidential," "restricted," "not to be disclosed." Let's get back to one: the "Interim Country Assistance Strategy" for Ecuador, in it the Bank several times states - with cold accuracy - that they expected their plans to spark, "social unrest," to use their bureaucratic term for a nation in flames.
That's not surprising. The secret report notes that the plan to make the US dollar Ecuador's currency has pushed 51% of the population below the poverty line. The WB "Assistance" plan simply calls for facing down civil strife & suffering with, "political resolve" - & still higher prices. The IMF riots (& by riots I mean peaceful demonstrations dispersed by bullets, tanks & teargas) cause new panicked flights of capital and government bankruptcies. This economic arson has it's bright side - for foreign corporations, who can then pick off remaining assets, such as the odd mining concession or port, at fire sale prices. Stiglitz notes that the IMF and WB are not heartless adherents to market economics. At the same time the IMF stopped Indonesia 'subsidizing' food purchases, "when the banks need a bail-out, intervention (in the market) is welcome." The IMF scrounged up tens of billions of dollars to save Indonesia's financiers and, by extension, the US & European banks from which they had borrowed.
Now we arrive at Step Four of what the IMF and WB call their "poverty reduction strategy": Free Trade. This is free trade by the rules of the WTO and WB, Stiglitz the insider likens free trade WTO-style to the Opium Wars. "That too was about opening markets," he said. As in the 19th century, Europeans & Americans today are kicking down the barriers to sales in Asia, Latin American & Africa, while barricading our own markets against 3rd World agriculture.

Yes, let's be honest, the de facto leadership of all things in Europe is exercised by Germany. The problem is that unless or until we all accept and formalize that a German politician (former STASI officer - merkel) captains the European Union and that Germany calls all of the shots, then it's the same as if there was nobody in charge.
Everybody was sure that somebody would do it. Anybody could have done it, but nobody did it. Somebody got angry about that because it was everybody’s job. Everybody thought that anybody could do it, but nobody realized that everybody wouldn’t do it. It ended up that everybody blamed somebody when nobody did what anybody could have done.My dual military related and commercial career to date has led me to hold a few golden rules dear to my heart.One of my golden rules is this. When one enters a situation where there is clearly a crisis playing out, the first question to be asked is, "Who is in charge here?" The answer can tell you a lot about why the crisis might have arisen in the first place, and can give some indication of the chances of the crisis being controlled and resolved.  If the person questioned can't answer straight away, confidently that "So-and-so is in charge", then you already have some understanding of why the organization is in a crisis. If the person questioned answers along the lines of "I think Blogs is in charge but, err, then again it could be Smith in charge. Err, or is it Jones in charge? Not sure really. One of them, is in charge anyway ... I think."...And there you have it. Nobody's quite sure who's really in charge at the ECB. Indeed, nobody's really sure who's in charge at the ECB; or in charge of the Euro Monetary Union; or in charge of the European Union. These are all just monstrous, dysfunctional European institutions which can neither jointly nor severally take 400 million European citizens to the economic and social paradise of a super state (which is what the European Union is supposed to be about). This is as much because the structures for governance of these organizations are a shambles, as it is because the underlying concept itself - of slamming sovereign nations together into a super state without democratic consent and without a single, clearly identified leader at the helm - is a monstrous deceit.  And now we have the particular situation explained by AEP above where the best the nascent European superstore's bank can do is to slam the continent into deflation. That's terrific, just terrific. A dysfunctional monetary union, tucked inside a dysfunctional economic and political union with, sitting behind it all, a dysfunctional central bank. An organization in crisis if ever there was one.

Investing in Federal Bonds a Losing Proposition - Some €900 billion of monetary assets consist of deposits, which can be withdrawn immediately and earn an average of about 0.42 percent in annual interest. At an estimated inflation rate of 1.6 percent this year, these assets will see a 1.18-percent decline in value, or about €11 billion. The situation is slightly more favorable for savings deposits or fixed deposits with terms of up to two years, but even here the real rate of interest is often negative. Investing in federal bonds is also a losing proposition for Germans. In the case of five-year bonds, for example, interest rates have also fallen below inflation. This also affects many insurance companies and pension plans, which together account for more than €1.8 trillion of German monetary assets. They, too, invest most of their money in government bonds, which means that the returns on life insurance policies are declining from one year to the next. Guaranteed interest rates, which were at 4 percent in 2000, had dropped to 1.75 percent by 2012. "Savers still benefit from the fact that their policies are backed by previously acquired bonds with higher fixed-interest coupons," Kater explains. "But the longer the low-interest-rate phase lasts, the more fixed interest rates will expire, and the bigger the losses will become from year to year." If the structure of monetary assets doesn't change and the low interest-rate policy continues for another 10 years, the total loss to savers could grow to €60 billion. "In Germany today, people can no longer provide for their retirement by saving," says Walter Krämer. A statistics professor in the western city of Dortmund, Krämer initiated a call for protest by 282 German economists against the euro bailout policy last year, and this summer he followed up with a letter of complaint titled "Cold Expropriation." Krämer assigns the blame to the ECB. "Savers pay the price for the fact that the ECB is determined to rescue comatose banks," he says. According to Krämer, banks are being charged too little to gain access to ECB funds, so that they have no incentive to offer more to savers.

BRUSSELS - An idea to create special arrangements within the European Parliament for deputies from eurozone countries is gaining traction but there is confusion over whether it can work in practice. The aim is for eurozone MEPs alone to be able to discuss issues affecting the single currency area - reflecting wider moves to strengthen the economic and political integration of the soon-to-be-18 member region. A Franco-German paper published last week was the latest to mention the concept. It spoke of "dedicated structures specific to the euro area to be set up within the European Parliament" after the 2014 elections. But the idea is highly complex both legally and politically. It is similar to the UK's so-called 'West Lothian' question - first raised 25 years ago and an increasingly hot topic today. That concerns the extent to which Scottish, Welsh and Northern Irish deputies should be able to vote on issues only affecting England.

The European Parliament's own West Lothian question was raised about two years ago about the time when EU leaders started to earnestly think about the institutional future of the single currency, including eurozone bailout funds and eventually a eurozone budget.

Political leaders in the parliament suggested setting up sub-committees to deal with eurozone issues. But since then discussions have stalled. "The problem is that when you look at the rules of the treaty, it is immensely difficult to put such a concept in place," said centre-right Polish MEP Rafal Trzaskowski.

"Because we have all equal rights. We represent citizens not member states. It would be quite difficult to organize it in a way that would not breach the treaty." According to Trzaskowski, who has been involved in discussions on the issue, one idea would be to have some sort of gentleman’s agreement under which the political parties concerned would agree amongst themselves to send only euro and would-be euro member deputies to a sub committee.   Another option, said Trzaskowski, could be to have the three biggest parties give key posts and reports only to euro member states.  There is also the broader question of what is purely a eurozone issue. "It's one union and one financial market. The problems of the banks are not just issues of the eurozone," said Jacek Saryusz-Wolski, also a Polish MEP. UK liberal MEP Andrew Duff points to the financial transaction tax (FTT), supported by 11 eurozone states but potentially affecting all 27 member states. "The discussion over the FTT is a very good example of this. All member states are seriously involved in that concept. They all have a stake." He also raises a purely organisational objection. "If you decide to divide the present responsibilities of the economic and monetary committee then you’re risking incoherence and inconsistency. And we’ve got quite enough of that already." In addition to blurred boundaries between euro and non-euro issues, Polish and other MEPs reject the idea on principle. Of the all the eurozone outs, only the UK and Denmark have an opt-out from joining the single currency. It was part of EU membership negotiations for the rest. So why, goes the argument, should they be excluded from discussions on issues that will eventually affect them. Saryusz-Wolski said he and other eventual eurozone member MEPs will oppose creating "two tiers of MEPs" within the parliament and, if necessary, before the European court of justice.

We're not living in a world where the one billion people inhabiting the 'developed world' control 80% of the world's wealth. We're living in a world in which 65% of the world's wealth is held by the 'developing world' (mostly in the BRIC countries).

This the underpinning global economic reality of where we are. The never-ending 'Euro crisis' blog and 'Japan crisis' articles that appears on this website on a daily basis is a consequence of this profound global shift in wealth and power... More info here...

http://www.youtube.com/watch?v=mOwZwkhFemQ

http://www.youtube.com/watch?v=6a0zhc1y_Ns

What has helped mask these extraordinary transformations are cheap energy, cheap debt, and cheap imported goods. However, right now, all the chickens are coming home to roost - the west (and particularly Japan) does not have sustainable access to cheap debt and cheap energy to fuel consumption and our mobile lifestyles.

We're still in the mindset that 'we' control 80% of the world's wealth. The reality is much of our supposed wealth is entirely abstract - living in the imagination of bankers and the financial industry. Whilst much of the real economy (primary resources; secondary manufactured goods, and; increasingly the service industry) is to be found more so in the BRIC countries.

We seem unable to face up to the reality - socially, economically, or politically - and educationally, we do not want to learn from the BRIC countries. In sum total: The world has got a lot more diffuse, and multi-facetated, with its power, wealth and social relations increasingly spread. But most people would prefer to accept the social and political attitude and agenda of a dinosaur imperialist like Farage, rather than a modern internationalist voice from the BRIC countries.

In essence, every city is becoming more like Janeiro or Johannesburg and every country more like Brazil or South Africa. This is the effect of globalisation - it's unsteadying the safe and cosy world of white Europeans and Americans - who can no longer rely on cheap energy, cheap oil, cheap debt, and cheap imports.

BAD NEWS FOR THE EUROPEANS ...

New Spanish tax laws affecting an estimated 200,000 British expats, have sparked panic, prompting some to leave the country or hand in their residence cards at town halls before today's deadline (30 April), fearing a Cyprus-style money grab.

Opponents, including Spanish politicians, have branded the new asset declaration law discriminatory, and fear an exodus of EU residents from the fragile economies of the coastal towns.  Russell Thomson, the former British Consul for Alicante, Spain, has led a petition to the EU, branding the law unlawful and discriminatory against non-Spanish residents.
The Spanish government requires that any resident with an overseas asset worth more than €50,000 and who lives in Spain at least six months (183 days) of the year is affected – and must declare what they own abroad.

Failure to declare or any errors in any of the 720 online forms will result in a penalty of €10,000 or more. As relatively few Spaniards have assets outside of Spain, those most affected are EU residents, the vast majority of which are British pensioners and retirees who have homes in the EU and, or, rely on EU pension funds and trusts for their income. They are required to declare EU bank account numbers, mortgages and other details, via professional intermediaries, in an online format, considered risky by many.

Any delays or errors will attract hefty penalties. No information has been given as to what will be done with the data. The new law was passed in November 2012, but the majority did not find out until several months ago via the local English-language newspapers.

It was always going to be an unusual but memorable moment as Italy's parliament reconvened after the recent inconclusive elections, with members of the maverick party founded by comedian Beppo Grillo taking their places for the first time.

And so it is proving. Southern Europe editor John Hooper writes:Not since the dawn of the Italian Republic after the Second World War, when ex-Communist partisans arrived in force, has there been an opening of parliament anything like today’s.The representatives of the Five Star Movement (M5S) unexpectedly respected the rule that male Italian lawmakers must wear ties (though, in line with the M5S’s enivronmentalist principles, many chose a black one bearing the words “No Coal”). But from the moment that the movement’s deputies entered the Chamber, it was clear they were going to be awkward to deal with.Instead of taking up a position on the left or right of the semi-circle in which the members of the lower house sit, the M5S’s deputies (who prefer to be called “citizens”) ranged themselves around the back.“Neither right nor left, but above (and beyond),” chirped one of their number, Tiziana Ciprini, on her Facebook page.The whole episode reflected the view that the movement’s co-founder, the comedian, Beppe Grillo, put to me in an interview last month: that the M5S cannot be fitted into conventional political categories.It is one of things that worries many Italians about the M5S. Most of the so-called grillini are passionately committed to progressive causes (they eschew the mineral water that is everywhere available in parliament in favour of tap water, for example).  But denying the existence of left and right is a classic sign of populism. And Mussolini did it all the time.

Greek finance minister: Bankruptcy is still a risk - Greece's finance minister has slightly deflated the sense of optimism as we ease into the Christmas break, by warning that the country faces another very difficult year.

Yannis Stournaras has cautioned against getting carried away by recent progress, pointing that things could unravel next year "if the political system finds the situation too difficult to handle".

He made the comments in an interview with the Financial Times, published just a day after Greece's credit rating was upgraded.

Stournaras is not all doom and despair, arguing that 2013 will be crucial:

We can make it next year if we can stick to the programme agreed with the EU and IMF.

But only if the Greek people accept the job cuts and austerity measures that were contained in the 2013 budget. Stournaras warns that this is far from guaranteed:

What we have done so far is necessary but not sufficient to achieve a permanent solution for Greece...The issue now is implementation.

As such, there's a 'possible risk' of Greece leaving the euro, he added, despite Athens having now received its latest aid tranche.

With bond yields falling sharply, and yesterday's general strike passing off peacefully, Greece has reached a calmer state. But it's going to be a grim winter for many Greeks - and Stournaras is clearly concerned that he may struggle to hit his deficit targets and improve the competitiveness of the battered Greek economy.

As he put it:

We still face the possible risk of bankruptcy.

But get through 2013, and the future will be brighter, he added.

ECB policymakers continue to reject international calls to intervene decisively as Europe's lender of last resort, stressing it is up to governments to resolve the debt crisis through austerity measures and reforms. The bond market contagion continues to spread across Europe. Italian 10-year bond yields have risen above 7pc, unaffordable in the long term, while yields on bonds issued by France, the Netherlands and Austria - which along with Germany form the core of the euro zone - have also climbed. With its prized 'AAA' credit rating under threat from soaring borrowing costs, France appeared to plead for stronger ECB action. German Chancellor Angela Merkel made clear Berlin would resist pressure for the central bank to take a bigger role in resolving the debt crisis, saying European Union rules prohibited such action. I believe that the euro zone having so many diverse economies and no fiscal transfers that the ECB needs to act as a lender of last resort and start printing money like any other normal central bank would do - if it does not, then the euro zone could well collapse... and it will ! On the reverse : France is truly pathetic. No balanced budget for decades; Chirac did nothing to restructure France, which has the highest costs for govt. employees in the EU. They surely need a reality check; this pathetic begging for the ECB to print money is ridiculous. They have only now, started a programe of "austerity", but we're not allowed to call it that. I fear far worse is to come when the socialists win the Presidency; than, we may well see a real collapse.

The European parliament has voted to ban "naked" credit default swaps, a controversial financial instrument used by traders to bet on the risk of a country defaulting on debt. With no solution to Italy’s problems in sight, the country can continue to raise money from the markets at high interest rates whilst the ECB can continue to buy Italian debt and try to cap yields. However, neither is sustainable. This would mean we are headed for an almighty crunch. Either we continue along the current path [where Italy is likely to run out of funding options], or Germany has to give way on QE. Thinking through these scenarios should make euro policymakers redouble their efforts to find a solution: make the EFSF fly or get external help. QE is probably the lesser of two evils when compared to euro break up, but recognizing that the ship is currently headed for the rocks should spur a change of course. Italian bonds now up to 7.039 pc.

Two of the leading Petrom top managers, who were in the company's management team ever since the privatisation of the oil and gas producer in 2004, have this year left to carry out the reorganisation of OMV's latest acquisition: Petrol Ofisi."I won't be talking about Petrom today because it is already going in the right direction, of integration. Let's talk about Turkey." This was one of the opening messages conveyed by Wolfgang Ruttenstorfer, CEO of OMV in London, at the latest media summit organised by the Austrian oil group, Petrom's majority shareholder.
In mid-October, OMV finalised the acquisition of Turkey's biggest petrol station chain, Petrol Ofisi, for which it paid one billion euros, securing a significant share of a market credited with the biggest chances of growth in the next period.Reinhard Pichler, 49, former CFO of Petrom, left his position last week, being replaced by Daniel Turnheim, a member of the OMV group since back in 2002. Pichler is not leaving the group, however, but will go to Turkey, where he will fill the same position he has occupied in Petrom since 2004.At the beginning of this year Tamas Mayer, who used to be in charge of Petrom's marketing operations, i.e. of the nearly 550 distribution stations, left the position to become Vice Chairman of the Board of Directors of Petrol Ofisi. According to some sources, Mayer will be running marketing operations within Petrol Ofisi, as well.Agerpres, Mediafax, Romanian Vancouver Sun,Global News, Financial Times,Tribune, ,Wall Street Journal,The Washington Times,Athens News,The New York Times,USA Today,Le Monde

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UniCredit Ţiriac Bank ended the third quarter with 67 million RON (almost 16 million euro) net profit, down 6% compared with the same time last year. Nine months into the year, net profit amounted to 215 million RON (52 million euros), a 15% decline compared with 18% in the first half.Operating revenues exceeded one billion RON (245 million euros) nine months into the year, up 15%, while the credit portfolio rose by 13%, to 13.3 billion RON (3.1 billion euros). Midyear, the lending increase stood at 11%, with the Italian group continuing to apply the strategy designed to boost the loan market share.

China - the new frontier for EU Investors

China's rapid growth is easing to a manageable pace and Beijing can do more to reconfigure its economy to promote domestic consumption and reduce reliance on trade, the World Bank said Wednesday. Inflation that has risen steadily this year should level off and is unlikely to be a serious problem, the bank said in a quarterly China outlook. The Washington-based bank raised its 2010 growth forecast from 9.5 percent to 10 percent and said the expansion should slow to 8.7 percent next year. Growth eased to 9.6 percent in the three months ending in September, down from 10.3 percent the previous quarter, as the government imposed lending and investment curbs.
"We think that coming from this very strong growth, China should be able to ease into a more sustainable growth rate in the long term," said the report's main author, Louis Kuijs, at a news conference.
The outlook reflects China's status as the first major economy to rebound from the global crisis on the strength of a flood of stimulus spending and bank lending. While Washington and others are trying to shore up growth, Beijing faces the challenge of cooling inflation and restoring normal conditions.
Beijing needs to boost wages and consumer spending and promote growth of private and service businesses to reduce reliance on exports and energy-intensive heavy industry, the World Bank said.
"The need to rebalance to more domestic demand-led, service sector-oriented growth seems stronger now than five years ago," said Kuijs. "Internationally the environment is less favorable than it was."
Communist leaders made raising domestic consumption a priority in their latest five-year economic plan crafted at a meeting last month. But it also was a goal in their previous plan and private sector analysts say Beijing has yet to take major steps to shift emphasis away from manufacturing and construction. The World Bank recommended opening up more industries to private business, changing the way energy prices are set to encourage efficiency and nurturing private-sector research and development. The bank cautioned against abrupt steps such as mandating sharp wage hikes, saying Beijing instead should look at gradual changes such as allowing more rural workers to move to cities and changing energy prices that favor heavy industry."We are looking for a market-oriented, market-friendly way of getting this consumption growth, consistent with continued strong growth," Kuijs said. Inflation that hit 3.6 percent in September, well above the 3 percent government target, should level off but might stay as high as 3.3 percent next year, the bank said. Kuijs said that in developing economies such as China, inflation of 3 to 5 percent might be acceptable as industries grow rapidly and demand for resources shifts."We still do not think China's inflation is at a very serious risk of escalating but we also do not think China will go back to the very low rate of inflation it saw in 2005," he said.
The bank also cautioned that China's politically contentious trade surplus is likely to rebound in 2011 after narrowing temporarily this year.
The multibillion-dollar trade gap has strained relations with Washington and other trading partners and prompted some U.S. lawmakers to demand sanctions over Chinese currency controls blamed for widening the surplus.

IMF to relax deficit targets for the co-funding of more EU projects

The IMF should relax budgetary gap targets for Romania so that more EU projects could be co-funded, states Andreas Treichl, a CEO with Erste Group, which controls BCR. "Romania is in a situation of conflicting objectives: its strong advantage are the funds available from the EU, but governmental funding is also necessary for these funds to be used. If money from the budget is allotted, deficit targets agreed on with the IMF are overshot and a conflict of 'interests' emerges. The IMF could relax the targets for the European funds to be used. This will be a very interesting exercise in the following months," Treichl stated.Banks have a direct interest in the success of such a move, considering many entrepreneurs and public authorities need loans to be able to co-fund the European funds they try to get. It remains to be seen whether the banking lobby in this respect will be as strong as in the case of modifications requested for Ordinance 50 regarding retail loan contracts.

Fate of the Romanian Economy in 2011 depends on talks with IMF

Yesterday saw the start of two weeks of negotiations with the Fund, which are set to provide some answers to essential questions as far as next year is concerned.
Romania could find out in about two weeks' time if and how much economic growth it will see next year, what the main taxes will look like - flat rate, social contributions, VAT, what the new arrangement to be signed with the IMF in spring will look like and implicitly how big the RON/euro exchange rate volatility will be.
The first official talks between the IMF's review mission and the authorities began yesterday.Jeffrey Franks, the mission chief, says the Fund's forecasts regarding the Romanian economy could be adjusted, but not significantly.Forecast modifications have become a current practice over the course of the arrangement sealed in the spring of 2009, with the IMF so far only revising its calculations for the worse, after failing to anticipate the economic trends. Now the Fund expects a 1.5% GDP growth for 2011.The final forecasts will be an essential tool towards building next year's budget. The draft that recently featured in the press but has yet to be officially assumed is already suspected of overestimating the revenue potential. Things are made even more complicated by the chaos on the political scene, which was reflected yesterday in the Parliament in the decisions on introducing a 5% VAT rate on basic food items and on exempting from taxation pensions of less than 2,000 RON, after there had been talk of taxing all incomes of this type.If these decisions are politically assumed, by the head of state inclusively, attempts by the main ruling party PD-L to talk to the IMF about cutting the flat rate to 12%, cutting overall social contributions to 41% and increasing the minimum wage to 700 RON will fail.