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EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Mon 16 Jan - 20:23

Bojesen

In the wake of the collective downgrading of 9 eurozone countries, including France, it’s become clear that the EU’s policy of rescue funds coupled with fiscal austerity has exhausted itself. It’s time for Angela Merkel and her partners to find a credible outcome, writes Wolfgang Münchau.
Wolfgang Münchau
At the end of a briefly euphoric week, reality caught up.
On one level, Friday’s news was not really surprising. The French rating downgrade was a shock foretold. As was the breakdown in talks between private investors and the Greek government about a voluntary participation in a debt writedown. A proposition that was unrealistic to start with has been rejected. We should not feign surprise.
And yet both events are important because they show us the mechanism behind this year’s likely unfolding of events. The eurozone has fallen into a spiral of downgrades, falling economic output, rising debt and further downgrades. A recession has just started. Greece is now likely to default on most of its debts and may even have to leave the eurozone. When that happens, the spotlight will fall immediately on Portugal, and the next contagious round of downgrades will begin.
Europe’s insufficient rescue fund, the European Financial Stability Facility, now also faces a downgrade because it had borrowed its ratings from its members. The way the EFSF is constructed means that its effective lending capacity will thus be reduced. Even though the French downgrade did not come as a surprise, the eurozone member states have no plan B for this, just a few stopgap emergency scenarios. They may decide to run the EFSF and its permanent successor concurrently. They may also provide the latter with a full immediate allotment of its capital. But this will create gaps in national budgets in a bad year.
By downgrading France and Austria but not Germany and the Netherlands, Standard & Poor’s also managed to shape expectations of the economic geography of an eventual break-up. A downgrading of all triple A rated members would have been much easier to deal with politically. Germany is now the only large country left with a triple A rating. The decision will make it harder for Germany to accept eurozone bonds. The ratings wedge between France and Germany will make the relationship even more unbalanced. Read full article in Financial Times – registered users...
Counterpoint
An anti-democratic intrusion


The far-reaching downgrade of nine Eurozone countries by Standard & Poor's is "as cheeky as it is contradictory," says German daily Süddeutsche Zeitung. "A monopoly is throwing stones at the policies of democratically elected governments," the paper says, calling for greater responsibility from these "self-appointed reviewers". For the paper:
The agency has launched its message, which no one had asked for, at the right time, two weeks before the next EU summit: 'Do as we tell you. You have no choice.' It has not hesitated to put the euro club at the same level as developing countries. Whoever lends money to Italy or Spain runs the same risk as if the money were sent to India, to Columbia or to the Bahamas. That is absurd, it is ridiculous. [...] But there is something more dangerous. Standard & Poor's [...] is trying to intervene directly in European policy. That is not the job of a rating agency. The Americans are pushing continental Europeans more and more to adopt Anglo-American principles in their economic and financial policies. In other words, to print money when needed in order to save banks and to initiate stimulus programmes. Whoever does not do so gets a bad rating.

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Tue 17 Jan - 3:10

Talks To Resume Over Greek Debt Timebomb









  • 0 Comments

















1:55am UK, Tuesday January 17, 2012



Robert Nisbet, Europe correspondent






Talks are to resume in Athens later over a multi-billion euro financial lifeline to keep Greece solvent.


The so-called Troika of lenders - the European Central Bank, the International Monetary Fund and the European Commission - want to ensure the new government has implemented economic reforms before releasing more money.



The second bailout, worth 130bn euros, was only agreed after the
Greek government promised to slash bureaucracy, rake in more money
through taxes and implement tough cutbacks throughout the economy.


Another condition was that Greece entered into talks with holders of
its debt in the private sector to persuade them to take a 50% cut on
their value of their bonds.


But those negotiations faltered on Friday, throwing the whole rescue plan into doubt


The banks and the government can't agree the terms of the so-called
haircut, which involves a complicated swap of lower value bonds and
cash.


It's hoped the two sides will resume talking on Wednesday as debt
inspectors pore over Greece's accounts to ensure they have done enough
to trigger the next bailout payment.


The crunch day is March 20, when Greece has to pay out 14.4bn euros to bondholders.


If no deal is in place and no cash available, the country will
experience what is called a "hard default", the first country in the
developed world to do so for 60 years.


In reality, terms of the bond swap and negotiations between the debt
inspectors and the Greek government will have to be concluded many weeks
before that date to avoid economic chaos.


The fear is that a hard default would trigger a credit event, which
could pull the pin on the markets, similar to that after the fall of
Lehman Brothers in 2008.


On Monday, Greek government spokesman Pantelis Kapsis said he was confident the negotiations would be successful.


But the Troika technical teams believe promises have not been
fulfilled to slim down the public sector workforce and sell off assets.


The finger's been pointed at political infighting between the various
political factions brought into his cabinet of the new technocrat Prime
Minister Lucas Papademos which he has been unable to settle.


It's not the only faultline in the eurozone: the downgrade of nine countries' credit worthiness by the agency Standard and Poor's has also weakened the firewall designed to ensure the contagion doesn't spread.


The agency argued that by concentrating on austerity, European
leaders were strangling what little fragile growth remains in the
eurozone.

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Tue 17 Jan - 10:17

The EFSF is also to be downgraded.

Portugal is paying 18% on Bonds

The German Bond is favoured after the downgrades of Italy, Spain and France and Investors are selling existing Bonds in these Countries.

Spain and France meet and Sarkozy says Spain must have growth

EU President says progress is being made.

Monti, the new Prime Minister of Italy warns on borrowing costs and the fall in the Euro will be in Germany"s self interest. He urges more support from Germany, Spain also says each Country must make it"s own rate.

Meanwhile, confidence in Germany has increased and it is thought the Country will suffer no more than a dent.

The Stock exchanges around Europe have opened higher and borrowing costs are lower on new Bond Issues.

Analysts are still saying Greece will default and leave the EU in March and that Europe is going into recession.

They say, Merkel is driving the situation into a revolt by some Countries with demonstrations envisaged.

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Tue 17 Jan - 11:06

Downgrades



Solvency, not lack of liquidity, is driving Europe down



16 January 2012










The S&P downgrade merely reflects European leaders' failure to regain solvency, says Constantin Gurdgiev.

"In economics, things take longer to happen than you think they will,
and then they happen faster than you thought they could," as Rudiger
Dornbusch remarked some years ago.

Friday the 13th – the day Standard and Poor's (S&P) downgraded
nine euro area sovereign bond ratings, stripping Austria and France off
their AAA status, cutting Italy, Spain, Portugal and Cyprus’ rating by
two notches, Malta, Slovakia and Slovenia by one notch each and placing
14 eurozone countries on negative watch for future downgrades. Finland,
the Netherlands and Luxembourg are now also facing the potential loss of
their AAA ratings. Greece is now in the imminent default territory and
Italy is rated in the same risk group as Kazakhstan – BBB+.

Perhaps more importantly, the announcement came as no surprise.
Ratings agencies like S&P are lagging market indicators, simply
belatedly confirming what we all already know. The immediate
significance of the Friday move, therefore, is its impact on the
mandate-bound investors – pension funds, insurance funds and a small
number of investment funds – which respond directly to changes in risk
ratings and rankings. This will see some substantial dumping of the
bonds by those investors, directly prevented from holding riskier
assets. The medium-term impact will be in reduced liquidity in markets
for the sovereign bonds most impacted by the ratings downgrades and
possible hikes in margins on these bonds. This will further undermine
their liquidity and mount new losses on the balance sheets of those
institutions holding them. In the longer-term, the impact of Friday’s
announcement will be much more dramatic, as the political embarrassment
that follows the downgrades is likely to force political responses –
something that Europe has already shown it is not very good at.

Nevertheless, the announcement still managed to catch European
leaders off-guard. But forget ratings and look at the actual
market-expected probabilities of sovereign default. In Q4 2011, thirteen
out of twenty highest risk countries, as measured by the implied
probability of sovereign default, were members of the EU27, of which
seven were members of the euro area. France’s Credit Default Swaps were
trading at mid-point levels consistent with those of Morocco and
Tunisia. Thirteen EU27 countries had Credit Default Swaps rates
consistent with the implied probability of sovereign default in excess
of 20 percent. A week ago, AAA-rated Austria sported a credit default
swap rate similar to BBB-rated Philippines and Thailand. The only euro
area country that managed to make it into the top 5 performers worldwide
in terms of implied probability of default on its sovereign debt was
Finland, with the closest euro area comparative being Germany in world’s
number 10 position. Finland, (number 5), Germany (number 10) and the
Netherlands (number 15) are the only three euro economies in the top 20
performing states in the CDS league table published by CMA.

All of this amounts to a very public international embarrassment for
the euro area’s leaders, for the ECB and the entire EU. An
embarrassment that is wholly of the EU’s own making. These latest
ratings and the market perceptions of euro area risks that underlie them
are the outcomes of the combination of policy failures that stand at
the heart of the European ‘project’. They are caused by sustained
deterioration of the macroeconomic fundamentals. Anemic growth, stagnant
conservatism, inability to change, incapacity to reward
entrepreneurship and governance structures that are non-transparent and
politicised – all describe Europe of today. All of these are the
underwriters of the European failure to recognise and resolve the
ongoing crisis.

In recent years (not months), Europe collectively has undertaken
policies designed to supply morphine to the dying economies of Greece,
Italy, Portugal, Spain and Belgium, while at the same time collectively
destroying the only viable economy in Europe’s ‘periphery’ – Ireland.
Even today, in the wake of a tsunami of evidence to the contrary,
European leaders continue to insist on pretending the EU’s problem is a
crisis of liquidity. But it’s not. It’s a crisis of solvency.

Perhaps the most telling response to the S&P announcements has
come so far not from the markets – which had already factored in likely
downgrades – but Europe’s leaders. Mr Sarkozy’s emotional outburst in
the wake of the French downgrade and the knee-jerk reaction of Europe’s
most serial crisis denier, commissioner Olli Rehn, were not the signs of
leadership confidence and ability, but the acts akin to a junior school
child smashing his calculator for giving him an answer different to the
one he wanted.

Amidst this, can anyone be really surprised that the more acute
issues of the week – collapse of Greek talks on private sector
involvement in bond restructuring, the abysmal showing of the peripheral
economies – save Ireland – in the latest trade balance figures and the
disastrous news on unemployment from Spain – have been sidelined with a
show of fake indignation at the S&P downgrade? Not really. As Rome
burns, Rome goes on complaining about the lack of wine and circuses.

Image by Ferna

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Tue 17 Jan - 15:42

Merkel's Economic Advisor ..Franz.. says he rejects intervention by the ECB to help Italy, that Countries have gained a lot from the Euro.

Fitch says Greece is insolvent and will not meet it"s $20 Billion liability due in March.

Even if Greece agrees a 50% Haircut , business problems are still to solve and the Country has ended up worse off than if it had defaulted 2 years ago

It is crucial to get yields down , the Country is not insolvent but it cannot sustain current yield. ( the rate dropped slightly this morning for the 10 yr
Bonds issued.)

The EFSF downgrade because France lost its AAA status now has a problem for lending to Italy or Spain .

Portugal is to test the market by issuing Bonds with the longest Maturity date ever.

A strike in the Capital of Greece today included protesters from all kinds of jobs protesting at the cuts and changes went off smoothly.

There is a growing feeling that Germany is enjoying the decreasing value of the Euro because it helps their exports, particularly for Cars so is in no hurry
to resolve the crisis.

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Tue 17 Jan - 16:58

Life at 27

European Union
Myth of equality at an end

17 January 2012
Gazeta Wyborcza
Warsaw

Kazanevsky

Whether it’s the planned European treaty, the S&P downgrade of nine eurozones states or reprimands issued to Hungary, recent events in the EU have highlighted how powerful countries are now imposing their law on their smaller neighbours. Polish columnist Jacek Żkowski aims to set the record straight.
Jacek Żakowski
The events of the last three weeks have definitively put an end to EU hypocrisy that would have us believe that member states are equal albeit different partners.
First and foremost, the members of the eurozone have decided to meet, deliberate and take decisions as an exclusive group, without the others and thus without us [the Poles]. This has limited and undermined the role of the European Commission, which has always operated on the principle of equality between states, and also the role of the European Parliament whose seats are distributed among member states in proportion to their populations. If the European stability pact is adopted in its current form, we will have created a new union within the Union, and on a wide range of issues this new union will dictate its conditions to the others, just as "Merkozy" does today.
Secondly, the decision to cut the credit ratings of nine Eurozone countries will not necessarily affect the cost of their debt (the downgrade of the United States had no impact of this kind, while Italy’s debt is now cheaper than it was when the country had a better rating). However, they will certainly have an influence on the informal hierarchy between member states and their clout within the union.
As a result, Germany’s leadership along with its policy of prudent austerity have clearly been reinforced. All the indications are that Berlin will now be able to stimulate the market and borrow at even lower rates, while increasing its economic advantage over the rest of Europe.
Orbán no more anti-libertarian than Sarkozy

As a consequence, the quantitative criteria of the Lisbon Treaty (the calculation of a qualified majority in the European Council on the basis of the number of states and their demographic weight) will be relativised by increasing importance of qualitative criteria (the quality of states and their economies). We will even see the decline of the Merkozy couple, which has been made unstable by the weight of a Merkel who has become too powerful for Sarkozy. And it will be even more difficult to undertake any initiative in Europe without Germany. As for the other 26 member states, they will not be able to do anything to counter the Germans (apart from blowing up the union).
Procedures for decisions and voting in the European Parliament, Commission and Council, which were laboriously negotiated for the Lisbon treaty have now been shattered. We are entering a period where EU affairs will resemble football in the era when everyone played but the only country that ever won was Germany.
Thirdly, the tough rhetoric and the political decisions that target Hungary have demonstrated that within the union, some countries can allow themselves more leeway than others. That is not to say that Orbán does not indulge in appalling rhetoric or that his economic policy is not stupid, but in terms of state institutions, he has done nothing that would not be tolerated on the part of other countries.
His assault on the media is no more anti-libertarian than Sarkozy’s power plays in French public television, or what Berlusconi previously did to the Italian media. As for the BBC, its directors have always been directly nominated by government. The same applies to the Hungarian National Bank which will be no more dependent on government than the Bank of England or the American Federal Reserve.
Significant international tensions

The international community has calmly tolerated and continues to calmly tolerate such manouevres in France, Italy, the UK, and the United States, not because these go unnoticed, or even as a result of timidity with regard to major powers, but quite simply because it does not see them as reprehensible. Just like German bonds, longstanding large democracies benefit from a capital of trust that is not accorded to their younger smaller peers.
To a certain extent, these differences have always existed and always weighed in the balance. What is new is the fact that they are now openly expressed, and institutionalised without hesitation. We do not know what the long-term consequences of this will be for Poland or for the EU. In general, the adaptation of form (ie. institutional form) to content (for example economic content) has a rationalising impact on institutions. However, today we are dealing with emotions, that is to say with politics.
Differences that are amplified emotionally and politically, and differences that are divulged and institutionalised become uncomfortable for everyone. Many countries will have difficulty accepting Germany’s stronger position within the union, while Germany will have trouble sustaining efforts for solidarity and self-imposed restrictions.
In effect this means that along with economic and internal political tensions, we can look forward to significant international tensions and major issues with regard to decision making. And this will remain the case until a new logic replaces the hypocrisy of the founding myth of the union. This is likely to be a painful change and not one that will happen anytime soon.

On the web


  • Original article in Gazeta Wyborcza pl




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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Tue 17 Jan - 18:03

7 January 2012
Last updated at 15:40











EU opens legal action against Hungary over new laws






Comments (76)






Commission President Barroso says Hungary's new legislation conflicts with EU law



Continue reading the main story Related Stories




  • Q&A: Hungary's controversial reforms
  • Are Hungary's reforms a step too far?
  • Hungary country profile



The
European Commission - the EU's executive arm - has opened legal
proceedings against Hungary over reforms to its central bank, data
protection and judiciary.

PM Viktor Orban was given a month to respond to the Commission's concerns.

Critics say the new central bank law puts the bank's independence at risk. It allows Mr Orban to install a new deputy governor.

His conservative Fidesz party has a two-thirds majority in parliament.

The Hungarian government said it would try to "resolve the
problematic questions as soon as possible", so as to avoid an escalation
of the legal dispute.

The Commission launched an "infringement procedure" against Hungary on Tuesday, the first stage of which is a warning calling for changes to the controversial laws.

"We do not want a shadow of doubt on respect for democratic
principles and values to remain over the country any longer," Commission
President Jose Manuel Barroso said.


Continue reading the main story Analysis




Nick Thorpe
BBC News, Hungary




The Commission move is a slap in the face for Hungary, but a relatively gentle one.

Parliament in Budapest is not due to reconvene until mid-February, but could be summoned early.

Mr Orban has argued that all "convincing arguments" will be listened to, and laws will be changed if necessary.

'This was a political message from the Commission,' said Tamas Boros, of the Policy Solutions thinktank in Budapest.

The three issues highlighted by the Commission were "not
necessarily the most important ones", he said, but show rather "those
fields where the Commission can prove that Hungary is in breach of EU
legislation".

Two formidable critics of the Fidesz government now hold
influential positions in Europe - Commissioner Olli Rehn and Martin
Schulz, newly elected Speaker of the European Parliament.

Mr Orban will speak to the European Parliament on Wednesday
and his Minister for IMF negotiations, Tamas Fellegi, will meet Olli
Rehn in Brussels on Friday.




"We hoped the Hungarian
authorities would make the changes necessary to respect European law.
This has not happened so far, so we have decided to launch the
proceedings."

Mr Barroso was speaking after a meeting of the 27 EU
commissioners in Strasbourg. He said he would discuss the issues of
concern with Mr Orban on 24 January in Brussels.

The Commission can go as far as imposing fines and taking Hungary to the European Court of Justice.

There are fears that Hungary's new data protection authority
will come under Fidesz influence and that a plan to make 274 judges
retire early will undermine the judiciary's independence by enabling new
pro-Fidesz appointees to replace them.

Opposition to Fidesz
Thousands of Hungarians have demonstrated over what they see
as Fidesz authoritarianism. A new media authority set up by Fidesz is
also highly controversial.

The changes are part of a new constitution which took effect on 1 January.

"I expect the Hungarian authorities to address the
Commission's legal concerns swiftly," EU Justice Commissioner Viviane
Reding said.

"Only actual changes to the legislation in question, or their
immediate suspension, will be able to accommodate the Commission's
legal concerns."

Mr Orban says his opponents' criticisms are politically motivated.

He argues that partisan bickering has for too long
handicapped Hungarian politics and that the last vestiges of communist
influence need to be rooted out.

'No dispute with EU'
But the Hungarian government insisted on Tuesday that "we have
no dispute with EU institutions with regard to either the basic
principles, or the importance of common European values and
achievements".

It promised "a basic examination" of the issues raised by the
Commission, saying "our goal is to provide a full and relevant answer".

"Like the European Commission, Hungary regards the
independence of the national bank, the justice system and the data
protection authority as fundamentally important," it said.

Correspondents say a compromise may be found because Hungary
is struggling to service its debts and wants to reach a new deal with
the EU and International Monetary Fund on a standby loan worth up to
20bn euros (£16.5bn; $25bn).

Hungary's total debt has risen to 82% of its output, while its currency, the forint, has fallen to record lows against the euro.

The EU Economic and Monetary Affairs Commissioner, Olli Rehn,
has already warned that Hungary could face a suspension of EU cohesion
funds - support for regional projects.

And on Tuesday he said Hungary must first "review all
relevant legislation" on the central bank before formal negotiations on
the requested EU-IMF assistance could begin.

Nearly a year ago a row between Hungary and the Commission
was defused when Mr Orban's government agreed to amend the wording of
the new media law, in the sections on balanced reporting, country of
origin and media registration.




Your comments (76)





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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Wed 18 Jan - 6:34

“countdown” is also the image used by La Tribune:











Tick-tock,
tick-tock.... The ticking clock that is measuring out the survival of
the euro ticks implacably on. ... Officially, Germany remains opposed to
a more extensive intervention by the ECB. At the rate the crisis is
developing, this stubborn refusal resembles the behaviour of a
firefighter who lets a house burn to teach children the dangers of
playing with matches.









In Madrid, El Economista is wagering
on a collapse of the euro area into two separate zones: one for the
most virtuous countries, and one for the most fragile. It will be,
moreover -












...
Merkel [who] will select the nine countries that will create the
‘super-euro’. The Chancellor wants an agreement to be signed, country by
country, on a new stability pact that will resemble the mechanism of
the Schengen Agreement. The number nine, in fact, under EU rules, is the
minimum number of countries that can reach agreements of enhanced
cooperation amongst themselves. Merkel is satisfied with this formula
for two obvious reasons: time and the simplicity of putting it into
practice (…). The agreement could be in place by January or February
2012, a period that is positively meteoric in its brevity when compared
to that required to change a treaty, which is never less than a year....
Italy and Spain would be included in the club. Having them in is vital
to both countries, as they would then have the ongoing support of the
ECB – not to mention that this would avoid a division between North and
South.










In Berlin, Die Welt foresees “elite sovereign
bonds” backed by Germany: “Six countries in the euro area with the
highest credit rating (Triple A), will create common treasury bills,

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Wed 18 Jan - 7:24

Unending Austerity Wears Down Greeks










Demonstration fatigue appears to have kicked after
Greece's change of government


12:19am UK, Wednesday January 18, 2012

Robert Nisbet, Europe correspondent


In Greek mythology Sisyphus was the king condemned by the gods to roll a
boulder up a hill for all eternity.



It is used now to describe a never-ending task: the kind we witnessed in
Athen's Syntagma Square on Tuesday.

Men in overalls with buckets of soapy water trying to scrub anti-government
graffiti from the marble walls of the buildings which stand near the
Parliament.

But for the Plaza Hotel, Tuesday was one of the better strike days in the
centre of Athens: its marble steps have been destroyed to make improvised
missiles several times over the past two years.

They were left untouched despite a demonstration during the general strike,
which was something of a damp squib.

In some respects there is demonstration fatigue; the protests involving
public and private sctor unions, communists, students and pressure groups have
not stopped the slow free fall of the country's economy.


Last year's protests against austerity measures often
degenerated into violence



Nor have they changed the general policy of the Greek government, despite the
change of administration after the fall of Prime Minister George Papandreou at
the end of last year.

The country is in hock to its international lenders, who are calling the
shots, especially now Greece needs the second bailout of 130 billion euros to
pay its creditors.

The prospect of a 'hard default' does not cheer anyone, in fact 70% favour
Greece remaining in the eurozone, knowing that a return to the drachma would be
traumatic.

But there seems to be less anger than we witnessed last year. It seems to
have been replaced by a feeling of inevitability, mixed with concern about what
a default could mean.

A return to the drachma would make imports cheaper abroad, so spur growth in
certain industries, but would also make imports much more pricey.

Then imagine trying to pay off a loan you took out in euro with drachma,
which may be worth perhaps a tenth as much.

The biggest worry globally is that a default would trigger a so-called credit
event, which would set in train a series of shocks similar to that witnessed
after the fall of Lehman Bros in 2008.

The event is being keenly felt across all ages and social classes.

One woman I spoke to described how her eight-year-old daughter had started to
pick up the lexicon of the crisis: asking what the words "default" and
"unemployment" meant.

She took her away for the Christmas holidays.

The last time I was here I spoke to a man called George whose income has been
so squeezed he now relied on his mother-in-law's smallholding to dig and pick
fruit and vegetables for his family.

He used to be a lawyer, but now drives a taxi for extra income.

George told me his parents used to describe the fear in Greece during the
German-Italian occupation and subsequent civil war.

He says the country rebuilt itself and vowed never to let its people be
hungry or frightened again. But they are, he told me.


















:

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Wed 18 Jan - 8:16

Sarkozy is meeting with Union Leaders in an attempt to negotiate a new austerity measure. Wages in France are higher than in Germany and French
workers only work a 35 hr week He is also going to discuss ways of creating jobs. Exports in France 50%, Germany 120%.

The Hungarian Constitution is in violation of EU Rulesand the National Bank would be in violation of the EU.

While Orban the new Leader was democratically elected, he is considered a relic of the Communist Party, but since Hungary is looking for a Loan from the
ECB it is likely he will change the Rules.

There is a meeting either today or tomorrow between Greek Ministers and Reps. of 32 Hedge Fund Managers to discuss the "haircut ". It is expected that
32 cents cash and Bonds will be accepted , but what happens to the Bonds held by the ECB and the Banks.?

An Analyst says there must be a more comprehensive approach and the Fiscal policy without a plan for growth will not succeed. Germany of course
is quite happy to keep the current situation going, the weak Euro has meant their exports cheaper and they are doing well.

Merrill Lynch says the health of Greek Banks is in the balance and will they get bailed out again?

Several U.S. Investment Companies have lost money over the last few months and are making Staff redundant which will be reflected in European
Stock Exchanges.

Denmark has retained it"s AAA rating and there is a suggestion that the 4 Countries still with AAA status, Germany, Denmark, the Netherlands and
Finland could either break away or the EURO have a two tier system .

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Wed 18 Jan - 10:07

The World Banks says it has cut its' Global Growth Forecast and says the EU will suffer the most by a decrease to 0.3% and there is fear contagion will spread.The is a EU summit at the end of this month may make decisions but EURO Countries will have to finance Greece or an orderly exit by Greece
will not be possible.

Ireland"s increase in empty Office space confirm Boom and Bust.

Fitch says it is monitoring Italian situation and may downgrade again.

Monti is in London meeting Cameron today , he has appealed to Merkel and Sarkozy to ease the austerity plan so that Countries can grow.

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Wed 18 Jan - 16:54

Economist Joseph Stigler says Europe must go for growth.

The offer from Greece to the Hedge Fund Managers is E32 cents plus new 20 yr Bonds with a yield of 5 to 6 %

The IMF seeks to raise $500 billion to bolster Euro crisis but most Countries do not want to Bail out Greece because the Country will default anyway.

Fitch have said it could reduce Italian rating by 2 points by end of January.

It is obvious that if this offer by Greece is accepted , it will mean more borrowing to pay the 32 cents and with Greece paying 33.5 % yield on its' 2o
yr bond the Country will never get out of debt. The ECB won"t help ,the only Countries who still have AAA rating could help but are reluctant to do so.

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Wed 18 Jan - 17:01


Press review











Hungary-EU



Brussels starts power struggle with Orbán


18 January 2012
Presseurop




Viktor Orbán in Brussels, 14 April, 2011


AFP








After quibbling for several weeks, the European
Commission launched three legal actions against the Hungarian
government. But who will back down first - Budapest or Brussels? The
Hungarian press is not expecting any great changes.


On January 17, the Commission sent three letters of formal notice
to the Hungarian government to change or withdraw the contested
legislation which, according to Brussels does not guarantee the
independence of three key areas: the Central Bank, the judiciary and the
data protection agency. If Budapest does not comply within the one
month deadline, the Commission could file a suit before the European
Court of Justice. For its part, the European Parliament is debating the
issue on January 18, in the presence of Hungarian Prime Minister Viktor
Orbán.






Brussels rules "three strikes" against Viktor Orbán, says centre-left Hungarian daily Népszabadság on its front page. Europe, the paper explains-












...
is currently saying but one thing: either the Hungarian people wake up
and change government in the next elections or we will witness the
failure of the State and the government will finally accept the European
'dictates'. For European diplomacy, there is no other scenario.










Nonetheless notes Népszabadság, EU institutions run the risk of not being able to apply sufficient pressure.










The
Commission speaks the language of the law, the European Parliament that
of politics, but Orbán only understands the language of power. Power,
in Europe, rests with the Council, that is the Member States themselves.
If the national politicians (especially the 'major players') were to
decide to send a determined and unambiguous warning, that might work
[...] The pressure of the European Parliament must not be
underestimated, but what are the consequences of these debates? Nothing.










Right-wing daily Magyar Nemzet, for its part,
says that "the European Commission criticises three precise laws and
that is not the end of the world. It's just a question of
technicalities, not political or emotional issues. For now, it's up to
the legal experts to act". But, the paper warns-










Europe
does not have faith in Hungary, neither in its economic policies nor in
its commitment to democracy. But we do not have time to pout.
Discussions must be open because the Union has no interest in seeing
Hungary on its knees. As we saw last weekend [during an anti-European
demonstration organised by the far-right Jobbik party in which, among
other things, European flags were burned] the extreme right can profit
from the Union's excessive criticism.










At stake right now is "Hungary or Orbán," sums up the front page of left-wing daily Népszava. But one must not lose track of the essentials, the paper warns. The three violations singled out by the Commission-












...
are but the tip of the iceberg. The main problem is that Orbán is
building a political and legal system that does not conform to European
values. [...] One can justify, haggle and play with words as the legal
experts do. But in Strasbourg today, the Euro MPs will throw much more
profound criticism at Orbán. And he must toe the line, not in Strasbourg
but at home. And as soon as possible.

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Wed 18 Jan - 17:06

18 January 2012
Last updated at 16:12











IMF seeking $500bn funding boost











IMF head Christine Lagarde welcomed the "commitment of European members"


Continue reading the main story









The
International Monetary Fund (IMF) has said it will seek to increase its
resources by $500bn (£325bn) to help stabilise the global economy.

The extra money could be used to help countries in the eurozone struggling to pay their debts.

But the IMF said it may need up to $1tn "in the coming years".

The $500bn includes the recent European commitment to commit 150bn euros (£125bn; $194bn) to the IMF, the 187-nation body said.

"Based on staff's estimate of global potential financing
needs of about $1tn in the coming years, the Fund would aim to raise up
to $500bn in additional lending resources," the IMF said.

"At this preliminary stage, we are exploring options on
funding and will have no further comment until the necessary
consultations with the Fund's membership have been completed."

The IMF currently has a a total borrowing capacity of about $590bn, and the Fund's lending commitments are at a record $250bn.

With Europe pledging the bulk of the extra funding, the IMF
will have to discuss with its other members how to get the remaining
resources.

European funding

At a summit in December, most of the European Union vowed to
add about 200bn euros to the IMF's resources - which in turn could be
lent to stricken nations such as Greece or to the eurozone bailout fund.

But the UK decided not to take part in the scheme to support the eurozone, so the EU failed to reach their target.


Continue reading the main story WHAT IS THE IMF?







  • An international organisation with 187 member countries
  • Created at 1944 Bretton Woods conference aimed at preventing economic crises
  • Promotes monetary cooperation and stability
  • Provides rescue loans to members in financial trouble and makes demands to get their finances under control




  • Profile: IMF and World Bank


Last year, UK MPs voted to
increase the UK's annual subscription to the IMF from £10.7bn to £20.1bn
as part of an overall increase in the IMF's funding base agreed in
principle in 2009.

UK Prime Minister David Cameron has said it is "in our
interests" to support the IMF but has stressed that additional money
would not support a eurozone bailout.

And the Chancellor of the Exchequer, George Osborne, has
said: "The UK has always been willing to consider further resources for
the IMF, but for its global role and as part of a global agreement,"

On Tuesday, IMF head Christine Lagarde said that she welcomed
the "commitment of European members to contribute to the Fund's
resources".

"To this end, Fund management and staff will explore options
for increasing the Fund's firepower, subject to adequate safeguards,"
she said in a statement.

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  fuzeta on Wed 18 Jan - 22:34

I have just been watching the news and seeing the soup kitchens etc in Greece. I have to say that most of the people in them did not look Greek to me, definitely not. They looked Eastern European, as in Romanian, Albanian etc. IMO. My husband said exactly the same. I do not know what anyone else thought!

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Thu 19 Jan - 7:49

Greece's Rich Pawn Luxuries To Ride Out Crisis









  • 0 Comments

















4:21am UK, Thursday January 19, 2012



Robert Nisbet, Europe correspondent






On the outskirts of Athens there is a company that trades in the unhappiness of others.


A dusty Ferrari sits abandoned in a garage, while the forecourt of
Auto-Credit is packed with other luxury cars incompatible with this age
of austerity.


This is where the wealthy come to pawn their supercars in order to ride out the recession.


Ten owners a day handover over their keys for a three-month contract and a handful of euros.


Increasingly many of those struggling in the crisis can't afford to
get their cars back, so the business has expanded into neighbouring
lots.


There's even a secret location where company founder Christos Ioannou
is now storing luxury yachts, which owners can't afford to run.


"Of course, they are emotional when they come here," he told Sky News.


"It's their car, or their boat and a means of transport and they are only here because of their difficult financial state."


There's an ironic twist to this story too: the number of buyers is
also drying up, so he's planning on reselling the cars in the country
where many of them were assembled.












The Auto-Credit business has expanded into neighbouring lots





"Some owners cannot pay for cars which are left behind and can't retrieve them. These are usually big 4x4s," Mr Ioannou said.


"There is no demand for them in Greece right now so we have set up a company in Germany to export them there for resale."


It's not the only pawn shop doing a brisk trade in Greece. If you
walk down Ermou Street, the equivalent of Oxford Street in London, there
are flashing neon signs everywhere, offering cash for valuables.


Jack Moore from Newcastle was one of the first on the block, after
assessing how much gold was being hoarded by people in other European
countries.


"When I first came here I was one of the first. You would be lucky if
you could see two shops. Now there might be 400 or 500 shops within
such a short space of time," he told me.


"They've come from nowhere."


He said business has been steady throughout the crisis, but more unscrupulous black market traders have been springing up.


It's a sign of the desperation here, where incomes of civil servants
have dropped by 40%, taxes have soared, pensions shrunk and job
prospects all but disappeared.


The
threat of even greater economic deprivation now hangs on talks to try
to keep Greece solvent with another 130 billion euro bailout.



If it defaults, Greece could soon find drachmas back in their pockets.

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Badboy on Thu 19 Jan - 11:39

THINGS MUST BE VERY BAD WHEN EVEN THE RICH ARE DESPERATE FOR CASH.

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Thu 19 Jan - 11:50

Badboy wrote:THINGS MUST BE VERY BAD WHEN EVEN THE RICH ARE DESPERATE FOR CASH.

Yes Badboy, but aren"t they lucky to have something to sell......think of the very poor there is nothing they can do to raise cash.

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Angelina on Thu 19 Jan - 12:03

Badboy wrote:THINGS MUST BE VERY BAD WHEN EVEN THE RICH ARE DESPERATE FOR CASH.

How can they be rich and desperate for cash? Probably a case of the more you've got the more you want.

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Thu 19 Jan - 12:03

Spanish and French Bonds sold well this morning, there is a suggestion that quantitiive easing has been the reason.

European Stock market has increased on the News.

One Analyst is saying Draghi is marking time and that nothing has really changed.

Some Hedge Fund Managers say they will sue Greece if they default on the New Bonds to be issued as part of the Deal. Everyone is mindful of Argentina
doing the same thing at one time.

Monti doesn"t want to sell assets at the moment , he is concentrating on forming a cohesive policy to reduce the Italian Debt.....analysts are in favour
of his approach .

Frederik Semis of Lutecia Capital says we made a mistake saving Greece, it will take several generations before its Debt is cleared

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Thu 19 Jan - 14:13

Hedge Funds May Sue Greece if It Tries to Force Loss

Louisa Gouliamaki/Agence France-Presse — Getty Images
Charles Dallara, left, of the Institute of International Finance and Jean Lemierre of BNP Paribas left the Athens office of Prime Minister Lucas Papademos of Greece on Wednesday after talks.

By LANDON THOMAS Jr.

Published: January 18, 2012






LONDON — Hedge funds have been known to use hardball tactics to make money. Now they have come up with a new one: suing Greece in a human rights court to make good on its bond payments.


Multimedia


Interactive Feature
Tracking Europe's Debt Crisis



Related


  • I.M.F. Seeks $500 Billion More to Lend as It Plans to Cut Growth Forecast(January 19, 2012)
  • Greek Premier Says Creditors May Be Forced to Take Losses(January 18, 2012)


Readers’ Comments

Share your thoughts.


The novel approach would have the funds arguing in the European Court of Human Rights that Greece had violated bondholder rights, though that could be a multiyear project with no guarantee of a payoff. And it would not be likely to produce sympathy for these funds, which many blame for the lack of progress so far in the negotiations over restructuring Greece’s debts.
The tactic has emerged in conversations with lawyers and hedge funds as it became clear that Greece was considering passing legislation to force all private bondholders to take losses, while exempting the European Central Bank, which is the largest institutional holder of Greek bonds with 50 billion euros or so.
Legal experts suggest that the investors may have a case because if Greece changes the terms of its bonds so that investors receive less than they are owed, that could be viewed as a property rights violation — and in Europe, property rights are human rights.
The bond restructuring is a critical element for Greece to receive its latest bailout from the international community. As part of that 130 billion euro ($165.5 billion) rescue, Greece is looking to cut its debt by 100 billion euros through 2014 by forcing its bankers to accept a 50 percent loss on new bonds that they receive in a debt exchange.
According to one senior government official involved in the negotiations, Greece will present an offer to creditors this week that includes an interest rate or coupon on new bonds received in exchange for the old bonds that is less than the 4 percent private creditors have been pushing for — and they will be forced to accept it whether they like it or not.
“This is crunch time for us. The time for niceties has expired,” said the person, who was not authorized to talk publicly. “These guys will have to accept everything.”
The surprise collapse last week of the talks in Athens raised the prospect that Greece might not receive a crucial 30 billion euro payment and might miss a make-or-break 14.5 billion euro bond payment on March 20 — throwing the country into default and jeopardizing its membership in the euro zone.
Talks between the two sides picked back up on Wednesday evening in Athens when Charles Dallara of the Institute of International Finance, who represents private sector bondholders, met with Prime Minister Lucas Papademos of Greece and his deputies.
While both sides have tried to adopt a conciliatory tone, the threat of a disorderly default and the spread of contagion to other vulnerable countries like Portugal remains pronounced.
“In my opinion, it is unlikely that this is the last restructuring we go through in Europe,” said Hans Humes, a veteran of numerous debt restructurings and the president and chief executive of Greylock Capital, the only hedge fund on the private sector steering committee, which is taking the lead in the Greek negotiations.
“The private sector has come a long way. We hope that the other parties agree that it is more constructive to reach a voluntary agreement than the alternative.”
At the root of the dispute is a growing insistence on the part of Germany and the International Monetary Fund that as Greece’s economy continues to collapse, its debt — now about 140 percent of its gross domestic product — needs to be reduced as rapidly as possible.
Those two powerful actors — which control the purse strings for current and future Greek bailouts — have pressured Greece to adopt a more aggressive tone toward its creditors. As a result, Greece has demanded that bondholders accept not only a 50 percent loss on their new bonds but also a lower interest rate on them. That is a tough pill for investors to swallow, given the already steep losses they face, and one that would be likely to increase the cumulative haircut to between 60 and 70 percent.
The lower interest rate would help Greece by reducing the punitive amounts of interest it pays on its debt, making it easier to cut its budget deficit.
To increase Greece’s leverage, the country’s negotiators have said they could attach collective action clauses to the outstanding bonds, a step that would give them the legal right to saddle all bondholders with a loss. This would particularly be aimed at the so-called free riders — speculators who have said they will not agree to a haircut and are betting that when Greece receives its aid bundle in March, their bonds will be repaid in full.



This article has been revised to reflect the following correction:
Correction: January 19, 2012

An earlier version of this article misstated the name of a bank. It is the European Bank for Reconstruction and Development, not the European Bank for Restructuring and Development

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Thu 19 Jan - 17:08

Debate


EU can no longer play the war card



19 January 2012


De MorgenBrussels











François
Mitterrand (left) and Helmut Kohl commemorating the French and German
soldiers who fell during the two world wars, Verdun, France, September
22, 1984.


AFP









European leaders have used the threat of war to
justify policies undertaken to save the euro. But this argument no
longer works, argues Dutch philosopher Paul Scheffer. The hearts and
minds of Europeans must be won with valid arguments. Excerpts.


Paul Scheffer




They make for such enduring images: a repentant Willy Brandt on
his knees in the Warsaw Ghetto; Helmut Kohl and François Mitterrand
side by side on the battlefield of Verdun; and recently Vladimir Putin
and the Polish Prime Minister Donald Tusk at the mass graves of Katyn.

These gestures of reconciliation evoke the guilt and shame
associated with the wars in Europe. And, contrary to what many
imagined, these emotions haven't faded over time.

In the past months we have heard words of warning from Poland,
France and of course Germany, with Angela Merkel stating that: “History
has taught us that countries with a joint currency don't go to war
with one another.” President of the European Council, Herman Van
Rompuy, provided the most concise version of this sentiment: "Together
with the euro the Union will fall, and with the Union our greatest
guarantee of peace.”

It isn't easy to put forward arguments against this “never again”.
For a long time I swore by the notion that the memory of previous wars
should be central to the European idea. But now, “never again” is no
longer effective. Nightmare images of a possible return to previous
violent conflicts serve only as a distraction. In fact: the practice of
instrumentalising the war to construct a European narrative has been
completely exhausted.

"Never again” leads to democratic deficit


In important lesson to learn from the eurozone crisis is that there
has not been enough democratic debate about Europe. This was already
evident during the [Dutch] referendum on European constitution in 2005.
Citizens that intended to vote “no” (in the end, they were 61%) were
continually asked the question: “But have you in fact read the text?”
This question was never put to those in favour, because they were on the
“right side” of history.

In this way, “never again” leads all too easily to a democratic
deficit. Europe stands or falls on the consent of its citizens. During
the referendum on the constitution there was very little objective talk
of costs and benefits, ends and means. Not once was it made explicit
that with the creation of a European Union, Berlusconi would also be
one of our politicians, that Greece's budgetary deficits would be ours
to carry, and that immigrants legalized in Spain are our future
citizens as well.

To put it another way: in Europe we are exporting stability, yet
importing instability at the same time. We can weigh up the benefits
and disadvantages, but it is imperative that give things their proper
name.

Beyond “never again”, there is a need for a renewed justification
for European integration, which should start by taking into account the
global power shift. The huge debts of the West and China’s trade
surplus point to a fundamental global change. More than three quarters
of developing countries have enjoyed a higher growth rate in the past
ten years than the US or Europe.

A form of eurocentrism


In order to recount the history of “Europe” we should thus not start
with Berlin, but with Beijing; not Paris, but Sao Paulo. In other
words: we cannot understand Europe at a national level if do not
conduct a new assessment of the world beyond it. The “never again”
doctrine is in fact a form of euro-centrism. Unintentionally, it
directs its focus inward, while the essential imperative for
integration lies outside the continent.

“Europe” is the only standard by which a societal model within a
global economy can be established. For this to work, European
integration will not be about a loss of sovereignty, but a common
endeavour that will increase influence. In principle, the euro could
contribute to this.

Another motive lies in our joint external borders. The enlargement
of Union has been a great accomplishment, but one that has come at a
cost. Because of it, the Union now borders unstable regions on all
sides. We are surrounded by countries in North Africa, the Balkans, the
Middle East and the former Soviet Union, which are some of the
unsafest in the world.

Sooner or later, the Union will have to become a community in terms
of security and the maintainence of its external borders. In this field
there is also an important deficit. It is not just in offering greater
openness to its members but also security that the Union can renew its
goal of greater integration.

A plea for “more” Europe is far outweighed by a desire for “more”
democracy, particularly now that a new budgetary union is being hastily
cobbled together behind voters’ backs. This is a very risky business
indeed, repeating the same mistakes made when the euro was launched.

The eurozone crisis is not fatal as such, but an invitation to
assume one’s responsbilities. If the euro can be saved by transferring
essential budgetary competences to Brussels, then support for this
proposal should be sought with great conviction. And if a currency
union also implies a transfer union, then we should strive for and
defend a redistribution of wealth from richer regions to poorer ones.

Politicians relying on the past


If the majority of the member states ultimately decide that the
budgetary union is a step too far, then such a decision will be
binding. The most extreme consequences possible would be the exit of
countries from the eurozone or the unviability of the euro. No, it's
not a pretty picture.

Which is why politicians such as Merkel and Van Rompuy drum up fear
and speak of war. But if the collapse of the euro entaims dramatic
economic and political consequences, then why is there so little
confidence in seeking to persuade the majority of this? Why this
dependency on the dissuasive events of the past, rather than the
compelling elements of the near future?

This quest for a new European raison d’être, beyond the mantra of
“never again”, should not consist in kneeling before the realities of
costs and profits or the lowest common denominator. On the contrary:
the ideal is a market economy ruled by justice, sustainability and
openness. A union of social democracies is by far the best example of
what Europe could show the world. If this is the end, the means will be
subordinate. It is for this reason essential that we remember the
previous war, but never again use it as a pretext.

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Thu 19 Jan - 23:30


Economy









Eurozone crisis


European rating agency in the pipeline



19 January 2012


Presseurop

Diário de Notícias











"European rating agency moves forward this year," reports Diário de Notícias.
The Lisbon daily reveals that Roland Berger Strategy Consultants –
the largest European company in strategic consulting – is holding
talks with several EU, as well as Swiss, financial institutions to try
to raise approximately 300 million euros to create a European rating
agency.

The aim is to create "private, non-profit organization", which could
be launched in the first quarter of this year, the Lisbon daily
writes. A European rating agency “promises greater transparency” to be
able to compete with the three major U.S. agencies, Standard &
Poor's, Moody’s and Fitch.

According to Roland Berger, the purpose of creating a European
rating agency – something that several European leaders, like German
chancellor Angela Merkel or EU commission president José Manuel Barroso
have argued for – will -


... overcome the major problems of rating agencies, especially their
monopolistic structure, and conflicts of interest that exist in the
system’s current structure. (...) It will operate with an efficient cost
model developed and approved by the banking sector. The model is based
on Basel II – analysis of infrastructure and credit. At the same
time, the whole rating process will be changed to ensure greater
transparency. An online platform will be created in which all agencies
can publish their evaluations. Investors must commit themselves to
publish their own rankings or ratings or to opt for the rating agency
of their choice.


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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Fri 20 Jan - 8:31

Tax rates 'will not be dictated'

A common consolidated corporate tax base was once dismissed by the Taoiseach as tax harmonisation by the 'back door'

Related


  • Kenny denies treaty referendum claim | 19/01/2012
  • Common EU corporate tax rate back to haunt Kenny | 19/01/2012
  • Noonan hopes for troika's agreement to reduce ?31bn Anglo debt burden | 19/01/2012
  • Government warns EU tax reforms will damage recovery | 12/01/2011
  • Coalition aims to block EU tax reforms | 12/01/2011


IRISH TIMES REPORTERS
Ireland's
position on the corporate tax rate will not be dictated by the
“electoral cycle” in any other member state, Tánaiste Eamon Gilmore has
told the Dáil.
He said: “12.5 per cent is our rate of corporation tax and we are not in the business of changing it."
He was responding to Independent TD Shane Ross who called on the Government to stop “dancing to the Merkel-Sarkozy duet”.
The
Government is facing a new threat to its corporate tax regime as
Germany and France push for the acceleration of moves to create a
pan-European business tax system.
The Dublin South TD questioned plans by Germany and France to create a Europe-wide business tax system.
Mr
Ross said everyone knew the pressure on the corporate tax base and the
financial transaction tax “is an electoral gimmick by two very powerful
nations”.
He asked the Tánaiste “how long are we going to put up
with this extremely unhelpful and hostile attitude from Merkel and
Sarkozy”.
Since the Government came into power, “we have been suffering at the electoral designs of Sarkozy and Merkel," he said.
"Isn’t
it time that we said to them that we’ve had enough of this, that we are
not going to be victims of the Franco-German political domestic agenda
for any longer".
He said Ireland should be saying: “We’re an
independent country and our interests are putting Ireland first and not
dancing to the Merkel-Sarkozy duet”.
However, Mr Gilmore said he
was “not surprised from time to time to see the proposal re-emerging”
about the corporation tax rate, adding people should look at the
Government’s record.
"When the issue of the corporation tax rate
was put very forcibly on the agenda by other member states - we very
vigorously and effectively rebutted and refuted that argument,” he said.
The
Government had made its position clear, “and I believe we won that
argument” on the importance of the rate for invesment, Mr Gilmore said.
The Government had communicated that message at EU level, bilaterally,
globally, the Minister said.
He added: “12.5 per cent is our rate of corporation tax and we are not in the business of changing it”.
Mr
Gilmore said they should not be surprised by the “re-emergence of that
proposal in the case of some countries having regard to the electoral
cycle in those countries”.
French president Nicolas Sarkozy is seeking re-election this year and Germany also faces elections.
Mr Gilmore insisted “our position is not going to be dictated by the electoral cycle in any other member state”.
The
renewed clamour for tax co-ordination is set out in a package of
measures to stimulate the European economy, which Germany and France
want to discuss at two EU summits in the next six weeks.
The two
powers, which dominate Europe’s response to the debt crisis, say in a
private submission to European Council president Herman Van Rompuy that
urgent measures are required to secure economic growth.
In a paper seen by The Irish Times ,
they highlight “tax co-ordination” as being among the policies required
to bring this about. These include a quickening of moves to create a
common consolidated corporate tax base (CCCTB), an initiative once
dismissed by Taoiseach Enda Kenny as tax harmonisation by the “back
door”.
The CCCTB would not harmonise tax rates but it would create
a pan-European tax system for firms operating in more than one country.
The
Government fears this would diminish the attraction of the Irish regime
by making it more difficult for multinationals to take advantage of the
low 12.5 per cent tax rate.
French president Nicolas Sarkozy has
major reservations about the Irish policy. With the support of German
chancellor Angela Merkel, he repeatedly pressed Mr Kenny last year to
dilute the regime in return for an interest rate cut on Ireland’s
bailout.
The Taoiseach refused to yield but pledged to constructively engage in talks on draft EU legislation to establish a CCCTB.

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Post  Panda on Fri 20 Jan - 8:53

EU sets stricter limits on demand of ECB.

La Garde joins warning ahead of meeting in Davos suggesting growth should be priority at the moment, not fiscal cuts.

Greece is starting a third day on negotiations with Bondholders. Report says Greece looks on the meeting as promising.

Italy has issued E50 billion Bonds and Spain E30 billion .

Draghi says 2012 will be a much better Year

Monti wants more fiscal cuts but will Italian workers support him, he will present his growth plan to Parliament today. Italian taxi drivers are protesting
at the opening up of the labour Market.Italy is E 2 trillion in debt.

Merkel is considering a Stamp Duty Tax, more in Line with the U.K.

European stocks open lower

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Re: EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

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