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Re: New EC Thread

Post  Panda on Thu 28 Jun - 9:21

Jun 28, 2:57 AM EDT


Troubled Europe summit: Merkel vs. everyone else

ANGELA CHARLTON
Associated Press




PARIS (AP) -- Germany's Chancellor Angela Merkel is the woman to watch - or fear, or confront - in Europe this week.

The leaders of Italy, France and Spain are pressing their northern neighbor at a European Union summit starting Thursday to agree to share debts before markets push the eurozone any closer to collapse. The EU's top officials and the International Monetary Fund have argued the same.

Markets and investors, who felt burned in the past by promises they saw as too weak to solve Europe's debt crisis, want a breakthrough this week to ensure the region's debt crisis doesn't engulf the world economy, but they aren't expecting one.

Any breakthrough would hinge on Merkel.

Merkel isn't likely to budge. She has argued repeatedly - and again Wednesday - that short-term solutions such as pooled debt or a more active European Central Bank are useless unless governments prove they can manage their budgets. She wants a grand, ambitious political union first.

And she brings the weight of the continent's biggest, strongest economy with her to the meetings in Brussels.

While they may not be able to change Merkel's mind, other leaders who avoided confronting her in the past may not hold back this time.

Italy's Prime Minister Mario Monti, at risk of losing his job because of voter frustration with austerity measures, is increasingly outspoken.

Speaking in Brussels on Wednesday night, he said Italians have made great sacrifices and gotten their country's deficit under control. But yields on Italian debt soared to one-year highs anyway.

If Italians become discouraged that their efforts aren't helping, it could unleash "political forces which say `let European integration, let the euro, let this or that large country go to hell', which would be a disaster for the whole of the European Union," Monti said.

Monti said he's ready to work until Sunday night - instead of the scheduled Friday end of the summit - to ensure that leaders produce a growth package convincing enough to calm financial markets.

Spain's prime minister is sounding especially desperate.

"The most urgent issue is financing," Mariano Rajoy said Wednesday. "We can't continue for a long time to finance ourselves with these prices; there are many institutions and financial entities that don't have access to financial markets."

Simon Tilford of the Center for Economic Reform said, "We're seeing the French, Italians and Spanish showing a greater readiness to act as one."

In the past, they were reluctant to isolate Merkel, he said. "But that flexible approach ... has delivered very little. They have grown alarmed and frustrated," he said. "If anyone is to lead the charge, it may be Monti, he is the one who has the most credibility on the European stage" - and the most to lose if pressure on Merkel fails.

While France has been the traditional partner - and counterweight - to Germany in European dealings in the past, French President Francois Hollande is the least experienced head of state at the summit. He has just seven weeks of governing under his belt, and built his career as a consensus-builder instead of a confrontational rabble-rouser. And his country's economy is weaker, with growth forecast at just 0.4 percent this year.

Hollande was grinning broadly Wednesday night at the one concession he has been able to wring from Merkel so far, an agreement to put growth on the European agenda alongside austerity measures.

Merkel, standing stiffly at Hollande's side ahead of bilateral talks in Paris, agreed to push for a (EURO)130 billion stimulus package that Hollande has vaunted but that is largely just a re-packaging of existing EU funds. Shortly after his meeting with Merkel, Hollande talked to President Barack Obama about their common push for growth.

Even if leaders of all 26 other EU nations line up against Merkel, she cannot bend very far.

She needs Parliament to approve the eurozone's permanent rescue fund, the European Stability Mechanism, and a European budget-discipline pact, both expected to happen Friday. And many measures floated as possible solutions could require changes to Germany's constitution.

Amid calls for Greece or other Mediterranean states - and even Germany - to pull out of the euro, Merkel argued Wednesday for greater unity. "We need more Europe. Markets are waiting for that."

But she also insisted that jointly issued eurobonds - which some experts say would help defuse the prospect of unaffordable bailouts for Spain or Italy by making their debt less expensive to pay off - would be "economically wrong and counterproductive" before governments have shown they can comply with budget rules.

"Supervision and liability must go hand in hand."

---

Geir Moulson in Berlin and Toby Sterling in Brussels contributed to this report


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Re: New EC Thread

Post  Panda on Thu 28 Jun - 21:02


German unemployment rises by 7,000 ......double the estimate.

Rajoy says the yield is too expensive on Bond sales and he will endorse a fiscal and banking Union.

The EU conference has opened and surprisingly a strong line has been taken. it is reported that Government in the Eurozone must give up their control on their Tax and spending if they want bail-outs....this was unexpected and will have some Countries refusing to hand over their Sovereignty.

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Re: New EC Thread

Post  Badboy on Thu 28 Jun - 23:21

SOMEONE AT MY DAY CENTRE SAID HE GIVES EURO UNTIL XMAS THEN ITWILL COLLAPSE

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Re: New EC Thread

Post  AnnaEsse on Thu 28 Jun - 23:22

Badboy wrote:SOMEONE AT MY DAY CENTRE SAID HE GIVES EURO UNTIL XMAS THEN ITWILL COLLAPSE

I'll give it to September/October.

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Re: New EC Thread

Post  Badboy on Thu 28 Jun - 23:25

MIND YOU,THEY WERE SAYING THAT IF IT COLLAPSED,THE COST WOULD BE MORE FOR GERMANY ETC.

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Re: New EC Thread

Post  Panda on Fri 29 Jun - 6:22

Jun 29, 1:03 AM EDT


European leaders agree to closer long-term union

By DON MELVIN and ANGELA CHARLTON
Associated Press




BRUSSELS (AP) -- After tough all-night bargaining, European leaders appeared to salvage what had seemed to be a summit teetering toward failure by agreeing early Friday to funnel money directly to struggling banks, and in the longer term to form a tighter union.

The agreements at a European Union summit in Brussels suggested Germany had yielded a bit on its insistence on forcing tough reforms in exchange for rescue money. That was a victory for Italy and Spain, who have argued they have done a lot to clean up their economies yet are facing rising borrowing costs.

Asian stock markets surged after European leaders agreed to the recapitalization plan and a tighter union. Renewed concerns about Europe's debts have rattled investors worldwide amid fears they could threaten global economic recovery.

The bank decision in Brussels was aimed at helping Spain, which sought a (EURO)100 billion rescue to help its troubled banks.

European Council President Herman Van Rompuy called it a "breakthrough that banks can be recapitalized directly."

In addition, the leaders agreed that EU countries that were following budget rules could apply for bailouts that would not come with the stringent conditions that have accompanied previous EU bailouts - a recognition, said Italian Premier Mario Monti, who pushed for the deal, of the work such countries were already doing in reforming their budgets.

Monti said Italy did not intend to apply for a bailout.

Still, Van Rompuy said the bailout agreement was important.

"We are opening the possibilities for countries that are well-behaving to make use of financial stability instruments, the EFSF and ESM, in order to reassure markets and get again some stability around some of the sovereign bonds of our member states," he said, referring to two bailout funds set up by the EU.

That meant, he said, that there would not be any more countries struggling under the stern conditions that have been imposed on previous EU countries that received bailouts - an apparently sharp change in EU policy.

EU leaders agreed Thursday night to devote (EURO)120 billion in stimulus to encourage growth and create jobs. France had pushed for the growth package, arguing that austerity measures imposed to stem Europe's debt crisis were stifling growth and making it worse.

German Chancellor Angela Merkel said after the meetings broke up soon before dawn that she was "very satisfied that we took good decisions on growth."

Van Rompuy said leaders of the 17-nation eurozone also agreed to a joint banking supervisory body. And he said the leaders of the full 27-member European Union agreed to a general long-term plan for a tighter budgetary and political union.

The importance of recapitalizing banks directly became evident when Spain asked for money for its shaky banks. Under current rules the bailout loan had to be made to the government, which would then lend it on to the banks. But having that debt on the government's books spooked investors, who began demanding higher interest rates for lending money to the government.

The result was rates that would have been unsustainable in the long term. Lending the money directly to the banks would avoid putting that debt on the government's books.

The leaders agreed on "the four building blocks" of a tighter European Union - but said they wouldn't start pinning down details until a report in October. The building blocks were laid out in a sweeping document presented by Van Rompuy and colleagues earlier this week that included sharing debt in the form of jointly issued eurobonds.

Van Rompuy said the report expected in October would be "a specific and time-bound roadmap for the achievement of a genuine economic and monetary union."

"The aim is to make the euro an irreversible project," he said.

He did not say Friday, however, whether the general agreement on the tighter union included a firm commitment on eurobonds from Germany - which has firmly opposed sharing debt with more profligate countries such as Greece.

Analysts said the proposals at the summit in Brussels represented credible steps forward in the region's efforts to contain a debt and financial crisis and to help struggling countries like Greece and Spain, whose economies are hobbled by recession and severe borrowing problems.

"Although the EU summit is still stuck on major issues including joint debt, euro bonds ... the EU has laid out a long term plan in principle that can solve the problem if they can get all the leaders agreed on the details," said Jackson Wong, vice president at Tanrich Securities in Hong Kong.

"We don't expect a magical formula that can solve the problem right out from the EU summit. However, if we can see the stances from all the leaders, especially from Germany - that they are heading to the right direction - I think going forward, it should be OK."

The summit wraps up later Friday.

---

Pamela Sampson in Bangkok contributed to this report.

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Re: New EC Thread

Post  Panda on Fri 29 Jun - 6:38


Santander, one of the Spanish Banks recently downgraded had already arranged for it's U.K. Banks to be seperated but with the scandal with Barclays
and other Banks, customers have started to take their money out of the U.K. Santander Banks even though they have been advised their money is safe.

A protest to stop the eviction of an Ecuadorian family from their Spanish apartment escalated into a mass riot amid clashes with police.

Jorge Cordero, his wife Patricia and five-month-old daughter Amanda were evicted from their home in the Oviedo area of northern Spain because they fell behind with their mortgage payments to Cajastur Bank.


Protesters throw water from a balcony to stop police from entering

A group of 17 people locked themselves into the apartment with Mr Cordero on Wednesday, while hundreds more gathered outside to try and halt the eviction.

Mr Cordero's wife and baby daughter were not in the building at the time.


Riot police try to break down the door of the apartment block

Riot police attended the scene and scuffles broke out between demonstrators and uniformed officers.

Activists threw buckets of water at police to try and stop them from entering the building.


A protester is restrained by police at the scene

Several people were injured during the incident and there were around 20 arrests.

Protesters included members of the "Stop Deshaucios" (Stop Evictions) social movement which has grown in Spain as the country's financial cerisis deepens.


A protester clashes with officers during the incident

More than one million Spaniards face a crippling mortgage debt and almost a quarter of the population is out of work.

Last year there were 58,000 evictions in Spain - a 22% rise.

:: Related Stories

June 13: Spaniards Fight Banks Over Home Evictions


Jorge Cordero is arrested for resisting eviction
Gallery:
Home Eviction Fury In Spain A woman is injured during a mass protest to stop a family eviction in Oviedo in northern Spain

1 of 11
A protester in a scuffle with riot police

2 of 11
Home owner Jorge Cordero, facing eviction, gestures from the balcony of his home surrounded by protesters

3 of 11
Riot police restrain a demonstrator

4 of 11
Police hold up their shields to take cover from the water being thrown at them by protesters

5 of 11
Protesters and riot police clash during the demonstration

6 of 11
Protesters throw buckets of water at police to try and stop them from entering the building

7 of 11
Police try to enter the apartment block

8 of 11
An officer picks up bullets which he accidentally dropped while trying to make an arrest

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Jorge Cordero is arrested for resisting eviction

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Police try to arrest protesters during the demonstration
4:59 PM on 28/6/2012


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Re: New EC Thread

Post  Panda on Fri 29 Jun - 7:01

Luxembourg Prime Minister Jean- Claude Juncker, who heads the group of euro-area finance ministers, said euro leaders agreed on “short-term measures” to aid Spain and Italy.

“We will keep all options open to make the interventions that need to be done to calm the situation,” Juncker told reporters in Brussels today after the first day of a European Union summit. “We will conclude this in definite tomorrow morning. We made significant progress.”










Jean-Claude Juncker, Luxembourg's prime minister. Photographer: Jock Fistick/Bloomberg
.
Euro leaders “didn’t close any doors” on short-term measures to calm markets, he said. “The financial markets are confronted with a situation where everything is possible. I don’t want to prioritize one option, nor do I want to rule out an option. Everything is possible.”

Juncker said the measures will be discussed in the coming weeks and euro-area finance chiefs should reach final agreement on July 9.

To contact the reporter on this story: Josiane Kremer in Brussels at jkremer4@bloomberg.net

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Re: New EC Thread

Post  AnnaEsse on Wed 4 Jul - 15:02


_________________________________________________________________________________________________
"You can run on for a long time, Run on for a long time, Run on for a long time, Sooner or later God'll cut you down." (Johnny Cash)

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Re: New EC Thread

Post  Badboy on Sat 7 Jul - 0:09

AN ECOMONIST HAS PREDICTED GREEK EXIT BY END OF YEAR

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Re: New EC Thread

Post  Panda on Sat 7 Jul - 11:39

Politics


Germany

Economists do battle over Merkel’s policy


6 July 2012

Der Spiegel, Handelsblatt Comment3


German economists are increasingly outspoken on the issue of Chancellor Angela Merkel’s policies. Starting on July 5, they have been launching appeals and counter-appeals to condemn or express support for her handling of the euro crisis.

The first salvo was fired by the highly influential President of the Ifo Institute of Economic Research in Munich, Hans-Werner Sinn. According to Spiegel-Online, Sinn, who is convinced that bailing out European countries in difficulty is against Germany’s interests, has organised a petition signed by 170 economists who urge their “fellow citizens” and the country’s parliament to put a stop to a “dangerous” policy and avoid a banking union.

According to the signatories, the banking union will force “solid countries” like Germany to take on increasing levels of risk to help out their indebted partners.

Economists close to Germany’s employers and unions were quick to respond, arguing that their colleagues petition was both “dangerous” and unfounded. In particular, they insist on one point in their defence of the Chancellor’s policy: the European Stability Mechanism (ESM), which is set to come on-stream this month, will not directly finance crisis-stricken banks until the appropriate European supervisory authorities have been established

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Re: New EC Thread

Post  Panda on Sat 7 Jul - 12:42


68 Comments





The Greek government has been unable to collect €12.6bn (£10bn) in court-ordered tax fines because it has cut too many staff.


The unpaid fines amount to 6.2pc of the debt-stricken country’s gross domestic product, local newspaper Ekathimerini reported, citing data posted on the finance ministry’s website.


News of the shortfall came as the Greek prime minster, Antonis Samaras, said the country would not demand changes to the terms of its bail-out but would ask for more time and renegotiate policies it feels are preventing it from hitting targets. He also announced an acceleration of Greece’s privatisation drive, pledging to go “beyond commitments made”.


Mr Samaras said Greece’s place remained in the eurozone, a position that he said some “were trying to undermine”. But he added: “We have to open our eyes and see the obvious. The fiscal adjustment programme has gone off track.”


He said it was clear fiscal adjustment would take more than two years, as initially agreed with lenders, repeating a pre-election call to lessen the pain of austerity by getting the troika to extend the period to four years.



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"The adjustment must not take place over two years, but longer. And the programme misses its targets because of the recession, this is no reason to take more fiscal measures as we have done so far. Recession must be stopped, not continuously deepen," he said.

As Greece struggles with an unemployment rate of 22.6pc, the country’s tax collection office has managed to take in only €630m due to understaffing and a lack of modern systems. The court orders came about after taxpayers disputed the fines imposed.

There are more than 180,000 outstanding tax cases in the courts. However, while Athens had intended to have 50pc of the pending cases heard by last month and 80pc by the end of December, ministry data indicate that only 2.1pc of the cases made it to court in the first half of the year, Ekathimerini claimed.

Greece is keen to bolster its finances after it was forced to take a €130bn bail-out package from international lenders.




















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Re: New EC Thread

Post  Badboy on Sat 7 Jul - 16:56

good to see you back ,panda,i missed you
slovenia wants a bailout,at this rate all the countries in eu might needd bailouts

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Re: New EC Thread

Post  Panda on Sat 7 Jul - 17:21

Badboy wrote:good to see you back ,panda,i missed you
slovenia wants a bailout,at this rate all the countries in eu might needd bailouts

Aw Gee thanks Badboy. I was hoping someone would have posted the agreements reached at the latest Summit while I was away. Can you imagine Greece ever getting their debt down when they are unable to collect Taxes.????? I am beginning to think Germany will opt out of the Euro and go it
alone, neither the population or Government is will ing to pump more money into the Bailout fund.

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Re: New EC Thread

Post  Badboy on Sat 7 Jul - 17:29

Panda wrote:
Badboy wrote:good to see you back ,panda,i missed you
slovenia wants a bailout,at this rate all the countries in eu might needd bailouts

Aw Gee thanks Badboy. I was hoping someone would have posted the agreements reached at the latest Summit while I was away. Can you imagine Greece ever getting their debt down when they are unable to collect Taxes.????? I am beginning to think Germany will opt out of the Euro and go it
alone, neither the population or Government is will ing to pump more money into the Bailout fund.
IT SEEMS TAX COLLECTION DROPPED DURING THE ELECTION CAMPAIGN,ALSO MIGHT HELP IF THEY HAD COMPUTER SYSTEMS TO CROSS REFERENCE INFORMATION

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Re: New EC Thread

Post  Panda on Sat 7 Jul - 18:19

Badboy wrote:
Panda wrote:
Badboy wrote:good to see you back ,panda,i missed you
slovenia wants a bailout,at this rate all the countries in eu might needd bailouts

Aw Gee thanks Badboy. I was hoping someone would have posted the agreements reached at the latest Summit while I was away. Can you imagine Greece ever getting their debt down when they are unable to collect Taxes.????? I am beginning to think Germany will opt out of the Euro and go it
alone, neither the population or Government is will ing to pump more money into the Bailout fund.
IT SEEMS TAX COLLECTION DROPPED DURING THE ELECTION CAMPAIGN,ALSO MIGHT HELP IF THEY HAD COMPUTER SYSTEMS TO CROSS REFERENCE INFORMATION

Also, the rich Greeks have been taking their money out of Greek Banks and either buying Properties in London or using off-shore accounts. It will be
very difficult to change the way the Greek financial system can be changed in a short time. It would have been far better to let Greece default at the beginning and return to the Drachma instead of lending them Billions which they have no hope of repaying

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Re: New EC Thread

Post  Panda on Sat 7 Jul - 18:30


European Parliament/Pietro Naj-Oleari


Whether it means economic solidarity or political unity, “More Europe” seems to be the way out from the current crisis, writes a Polish columnist. But how can we achieve this without widening the gap between what the EU needs and what European societies are willing to accept?

Piotr Buras


The recent EU summit came out as a heated dispute about who should take responsibility for saving the common currency, and on what terms. This responsibility is measured today in billions of euros, which is why the discussion about a growth package, support for banks and a loosening of austerity measures was in fact a dispute about how deeply the wealthy Germans should reach into their pockets.

But the whole thing is not just about money. The stakes are higher and concern the European DNA: how to save the EU from economic depression and political disintegration without undermining the foundations of democracy? Two years after the crisis began, it has become clear that it is not just the lambasted Greeks or Spaniards who are responsible for the malaise but, above all, the economic and monetary union’s faulty construction.

First of all, the EU has a common currency but no common financial policy. Member states decide themselves about their budgets, taxes and borrowing. Neither the coordination-enhancing reforms (such as the Sixpack or the fiscal compact) nor the decisions made during the Brussels summit solve this problem. Secondly, there is a deficit of European political space. Important decisions are taken on the EU level, but actual policies are hammered out between the political parties, voters and media of the individual member states.

It has dawned gradually on policymakers that the existing integration model has worn out. The policy of small steps, such as the removal of customs barriers, integration of markets, introduction of common regulations, and coordination of policies towards an “ever closer union”, has been unable to plaster over the cracks that have appeared on the foundations of common Europe.

Technocratic federalism

“More Europe”, politicians are saying. But when some mean by this more German money for saving troubled Spanish banks or the shaky public finances of countries like Italy or Greece, others see this as a call for transferring member states’ sovereignty to the EU level. The paradox of today’s situation is that although both demands are generally justified, they can hardly be reconciled with the principles of democracy. During the crisis, the nature of the EU’s political system has changed imperceptibly but fundamentally as besides the traditional sovereign – the individual member states – there has emerged another one, and a very powerful one at that – the so called markets.

Conflicts between the two have usually been settled to the latter’s advantage. In the past, politicians would offer pork barrels. Today, it is the “market expectations” that have become the determinant and weaker countries such as Greece or Italy have had to accept reform packages agreed upon in Brussels as the price for financial support, while the wealthier member states, e.g. Germany, offered that support without paying heed to parliamentary procedures or public opinion. Jürgen Habermas has referred to this surrender of prerogatives by parliaments to intergovernmental arrangements as “technocratic federalism”.

During the recent summit, the EU leaders agreed to make further steps towards a fiscal and political union. Unfortunately, an important speech by the President of the European Parliament, Martin Schulz, who stressed that no goals could be more important than democracy, went largely unnoticed.

This was a mistake: the dilemma of how to save the EU without sacrificing democracy is very real. The propositions of measures towards a “genuine economic and monetary union” contained in the Van Rompuy report entail a significant transfer of nation states’ prerogatives to the EU level. A banking union, which is the talk of the day these days, is only seemingly just a technical solution.

European banking supervision or common deposit guarantees would mean greater EU interference with member states’ budget policies (fiscal union) and common responsibility for member states’ debts („eurobonds”).

Even in Germany, which has firmly opposed the idea of a transfer union (that is, of subsidising the weaker economies), there has been a growing sense that only such radical steps can restore the markets’ confidence that the eurozone will eventually recover.

But the Van Rompuy report says nothing about how to satisfy the original sovereign – the European demos. The question of how to solve the EU’s democratic dilemma in the long term remains as tough as squaring the circle.

Conflict of sovereigns

On the one hand, there is the vision of a political union unfolded by Wolfgang Schäuble. „If important prerogatives reserved until now for sovereign states are to be transferred to Brussels, parliamentary structures on this level should be strengthened too”. Mr Schäuble is in favour of creating a second chamber of the European Parliament that would consist of representatives of national parliaments, and of electing the President of the European Council by direct universal suffrage.

Germany would agree to bear greater financial responsibility (e.g. in the shape of eurobonds) only in such a union that would have the mechanisms of intervening deeply in member states’ policies and of legitimising such interventions. But France and many other countries are not prepared to accept such a far-ranging relinquishment of their national sovereignty. Nor are Europeans themselves ready for it.

The gap between what the EU needs and what European societies are ready to accept has never been greater. The EU’s deficit of democracy is not a new phenomenon. But today it has become a burning issue. There are no recipes today for escaping the trap of technocratism that is pushing forward in the name of higher necessity. But perhaps the greatest mistake would be to deny the fact that a conflict between the two sovereign of European policy – the markets and the people – exists, and to pretend that „more Europe” is a remedy without its side effects. Today, speaking of a European federation without raising the question of the future of democracy is a token not of euro-optimism but of euro-naivety.

There is no doubt that the period of gradual changes in the European construction, silently accepted by the citizens, has ended. The EU needs a large step forward that will have to mean a redefinition of national sovereignty and of the model of democracy as we know it.

Time has come for the European elites to start treating their original sovereign more seriously as otherwise the mounting of resistance against the technocratic dictate will be just a matter of time. In the longer term, the European project will not be able to address this.

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Re: New EC Thread

Post  Panda on Sun 8 Jul - 7:36


AFP


The economic woes endured by Greece, Spain and Italy, as well as the intricacies of Germany’s decision-making process, have long hogged the stage. But one country remains crucial to Europe’s future, where the debate on Europe could be revived: François Hollande’s France.

José Ignacio Torreblanca


The virulence of the debt crisis and instability that has gripped the euro in recent months has now shifted the centre of attention to Spain and Italy. Following the interventions in Greece, Portugal and Ireland, the question on everyone’s lips is how far or for how long the governments of Mariano Rajoy and Mario Monti will withstand the pressure – and what would happen if in the end Spain and/or Italy had to submit to full intervention.

The urgency and the difficulty in saving Spain and Italy have helped to highlight the importance of Germany and have singled out once again Angela Merkel as the person who has the power in her hands to sort out the complex knot of Europe.

Just as the crisis has forced citizens to learn the rudiments of economics needed to grasp and appreciate what is happening and the solutions that are being taken on board, Germany’s dominant position in this crisis has made it imperative to delve into the depths of Germany’s political system, economy and public opinion.

And so in the European crisis we have learned to pay attention to the German regional elections, the verdicts of its Constitutional Court, the process of parliamentary ratification of the European agreements, the weakness or strength of the Liberal or Bavarian partners in the CDU government, the positions of the President of the German Central Bank and the fine-tuning with respect to Eurobonds that the opposition Social Democrats may bring in if they get into government.

Political union now back on table

Germany, we have learned, is a highly complex political system in which power is widely shared among a number of strong and independent institutions that severely restrict Angela Merkel’s ability to act.

Meanwhile, in France, the opposite holds true. The tremendous concentration of power that the Constitution of the Fifth Republic gives the President, combined with the compulsive hyperactivism of Sarkozy, allows all the attention to focus on the role of President and greatly simplifies analyses.

However, as began to be glimpsed during the presidential campaign, behind the cue-taking of Sarkozy – he who always seemed to be following Merkel’s lead – seethed a highly complex France troubled by a series of existential questions: doubts about its national identity, doubts about its economic model, doubts about European integration and doubts about globalisation.

These doubts have severely limited the French centre-right’s room for manoeuvre, forcing it to mimic the tenets of the nationalist and xenophobic right represented by the National Front under Marine Le Pen.

These doubts also hamper – and how! – the centre-left, forced to co-exist with a left that has a phobia about globalisation and that feels increasingly alienated by European integration, which it perceives as globalisation in sheep's clothing out to destroy the interventionist and welfare state that is one of the hallmarks of France.

Unexpectedly, as it was thought that the 2005 constitutional referendum had finally buried it, political union now has thudded back down on the table of the French left. Hollande is facing this challenge from an unenviable position.

Make Europe more efficient

On the one hand, almost two out of three voters who sent him to the Elysee voted against the European Constitution in 2005. Furthermore, the difficult situation of public finances in France, highlighted this week by the Court of Auditors, makes it inevitable that discussions about the next phase of economic and political union will coincide with a battery of significant budget cuts that will run up against a wall of political and social rejection.

To the extent that French public opinion sees steps towards European integration as a new shrinkage in the state's freedom to make leftist policies and interprets the political union as a new turn of the screws on its social model, it will respond strongly to what it sees not as a political union but as a writing of the German economic model and of the austerity policies in Europe into the French constitution.

As happened in the nineties, when preparations were being made for economic and monetary union, and over the past decade, when the European Constitution was being debated, the left will have to decide whether the political and economic union with Germany contributes to preserving and even reinvigorating its economic and social model – or rather consolidates its decline and makes it irreversible.

Hollande's challenge therefore is to make Europe more efficient, which requires greater integration and therefore the transfer of sovereignty – but which in turn will respect and not stifle the diversity of economic and social models. He won’t have it easy, because the France of today is much weaker than Germany.

Translated from the Spanish by Anton Baer

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Re: New EC Thread

Post  Panda on Mon 9 Jul - 15:14

9 July 2012 Last updated at 14:19 Share this pageEmail Print Share this page
Spanish and Italian 10-year bond yields have been rising ahead of a summit of eurozone finance ministers on Monday.

The yield on Spanish 10-year bonds, which are taken as a strong indicator of the interest rate the government would have to pay to borrow money, rose above 7%, while Italian bond yields rose to 6.1%.

Yields above 7% are considered to be unsustainable in the long term.

Details of the bailout of Spain's banks are expected from eurozone ministers.

Eurozone finance ministers are meeting on Monday while those from the 27-nation EU will meet on Tuesday.

The high yields on Spanish and Italian bonds were in contrast to the rates at a short-term German bond auction on Monday.

The yield on six-month German bonds fell to a record low of -0.03%, meaning that investors were paying the German government to lend money to them.

Continue reading the main story
Analysis

Chris Morris

Europe correspondent, BBC News

--------------------------------------------------------------------------------
Splits are emerging between southern and northern members of the eurozone about how to implement decisions taken at a European summit last month.

Tempers within the single currency area appear to be fraying.

Spain and Italy want agreements made at the summit to be put into effect as soon as possible, making it easier to use eurozone bailout funds to help struggling banks or struggling countries.

But other member states, notably Finland and the Netherlands, have said they're not going to be pushed too quickly into any kind of collective responsibility for other countries' debts.

Finance ministers will have to find a way around this impasse.

It is the second time that German bond yields have been negative. The auction was oversubscribed, despite the negative yield.

Investors have been flocking to German debt as a safe haven from the problems elsewhere in the eurozone.

Loan conditions

Eurozone officials have been reported as warning that not too many quick decisions should be expected from the finance ministers' meeting, which is supposed to add detail to the agreements from the eurozone leaders' summit on 29 June.

The communique from that summit said it expected the finance ministers "to implement these decisions by 9 July", although many analysts say that now looks optimistic.

Leaders have already agreed to lend Spain's banks up to 100bn euros ($123bn; £79bn) and independent audits have said that they will need up to 62bn euros.

The finance ministers are likely to confirm the size of the bailout and which conditions will be applied to the loans, both for the banks and the government.

The return to an investor from buying a bond implied by the bond's current market price. It also indicates the current cost of borrowing in the market for the bond issuer. As a bond's market price falls, its yield goes up, and vice versa. Yields can increase for a number of reasons. Yields for all bonds in a particular currency will rise if markets think that the central bank in that currency will raise short-term interest rates due to stronger growth or higher inflation. Yields for a particular borrower's bonds will rise if markets think there is a greater risk that the borrower will default.
Glossary in full It has also been reported that on Tuesday, Spain will be given an extra year to bring its budget deficit down to the permitted level.

Among the key agreements from the 29 June summit were moves towards banking union with the European Central Bank (ECB) acting as a supervisor and allowing European bailout funds to buy bonds to try to reduce countries' borrowing costs.

But since the summit, there have been signs that Finland and the Netherlands would oppose the use of bailout funds in this way.

There is expected to be discussion of the new Greek government's policies. At the end of a three-day debate, the Greek government, as expected, won a vote of confidence on Sunday.

Another area of discussion for the eurozone finance ministers will be choosing a new leader.

Jean-Claude Juncker has been co-ordinating the Eurogroup of finance ministers since 2005. His term of office ends on 17 July, but it may be extended.

Also on Monday, ECB president Mario Draghi appeared before the European Parliament's committee on economic and monetary affairs.

"We need to move towards a further sharing of sovereignty in the fiscal, financial and economic domains," he said.

"The euro is here to stay and the euro area will take the necessary steps to ensure that."

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Re: New EC Thread

Post  Panda on Mon 9 Jul - 15:44

Euro Watch

Rising Borrowing Costs Put Pressure on European Finance Ministers

By PAUL GEITNER and STEPHEN CASTLE

Published: July 9, 2012




BRUSSELS — With borrowing costs for Spain and Italy climbing again to critical levels, European officials sought Monday to dispel some doubts about a deal struck last month to break the “vicious circle” between shaky banks and weak governments.


Reports last week that national governments would still have to assume ultimate liability for banks that are directly rescued with euro zone bailout funds had taken some of the luster off the deal reached by European leaders at a summit meeting in late June.

The possibility of direct investment was a concession most immediately to help Spain, which is under pressure because of concerns that, by borrowing from the bailout funds to recapitalize its struggling banks, it would simply swell its government debt burden.

The interest rate, or yield, on Spanish 10-year sovereign bonds spiked above 7 percent again Monday, after dropping to near 6 percent in the days after the European Union summit meeting on June 29.

The renewed uncertainty prompted the European Commission on Monday to “clarify” that “there will be no need for a sovereign guarantee for banks being directly recapitalized” by the soon-to-be-established permanent bailout fund, the European Stability Mechanism.

Simon O’Connor, a spokesman for the commission, said that the “very clear purpose” of the decision made at the summit meeting “was to break the vicious circle between banks and sovereigns, which is something that has led to a great deal of uncertainty and has been an important factor in undermining confidence.”

He stressed, however, that European leaders also mandated that a new, “single supervisory mechanism” for euro zone banks be put in place before direct recapitalizations will be possible.

Proposals to implement that decision are being drafted “urgently” in Brussels, he said, but the process is expected to take until the end of this year.

Other countries, such as Ireland and Greece, are hoping to benefit eventually. Extending the deal to Greece would knock some 50 billion euros, $62 billion, off the country’s sovereign debt, which currently stands at around 330 billion euros.

In the meantime, finance ministers of the 17 euro zone nations, who were to meet later Monday, were aiming for political agreement on terms and conditions for a loan to Madrid, which could eventually be transferred to the new rules.

The ministers agreed last month to make up to 100 billion euros available to replenish Spanish banks, but the German Finance Ministry last week said it wanted to wait for a report by the commission, the European Central Bank, and the International Monetary Fund later this month before finalizing the loan — a position shared in several other capitals.

Ministers also were still debating a commission proposal to give Madrid another year to bring its budget deficit under control, until 2014, because of the worsening economy in Spain.

E.U. diplomats said some countries did not want to grant a postponement without solid assurances that the new target would be met. Prime Minister Mariano Rajoy is expected to announce a new austerity package later this week.

Ministers also were expected to endorse a commission proposal to give Madrid another year to bring its budget deficit under control, until 2014, because of the worsening economy in Spain. Prime Minister Mariano Rajoy is expected to announce a new austerity package later this week.

Spain is not the only country facing rising borrowing costs. Italian 10-year bonds topped 6 percent Monday, after dropping to around 5.5 percent last week. German 10-year bunds, the European standard for safety, were at 1.3 percent, down from 1.5 percent last week.

At a conference in southern France on Sunday, Prime Minister Mario Monti of Italy — which has one of the highest debt loads in Europe — noted that rising interest rates on the “sovereign debt of several euro zone member states is a concern for the financial stability of the euro zone.” He blamed recent comments from “Nordic” politicians for the renewed rise.



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Re: New EC Thread

Post  Panda on Mon 9 Jul - 16:41

The EU is an empire, and empires mean war


9 July 2012
NRC Handelsblad Rotterdam Comment17


We are often told that the EU has brought peace to Europe. However, this view is not shared by historian Thierry Baudet who provocatively argues that a process in which nation states give up their sovereignty inevitably results in conflict. That is why he recommends dissolving the euro and restoring national borders.

Thierry Baudet


Partisans of the European project invariably argue that nationalism leads to war and while the development of Europe will safeguard peace – a noble objective that is more than sufficient compensation for any loss in democracy, sovereignty and transparency caused by Brussels. However, this theory is fundamentally flawed.

Nationalism does not lead to war. Attempts to build European empires lead to war. The urge to impose a straitjacket on the will of peoples will leads to war. In short, the European project will lead to war.

Fascism and Nazism were both focused on the creation of Europe. As early as 1933, Mussolini declared that Europe could once again exert its power in the world if it succeeded in establishing a certain political unity.

Mussolini’s new Roman Empire

The Norwegian collaborationist Vidkun Quisling argued that we should create a Europe that does not waste its blood in murderous conflict, but one that is solidly united. And on 11 September 1940, Joseph Goebbels affirmed: I am certain that 50 years from now, we will no longer reason in terms of countries.

On 28 November 1941, in the course of a conversation with the Finnish minister of foreign affairs, Adolf Hitler remarked that the countries of Europe should obviously be together, like the members of a big family. In his authoritative study, Nations and States (1977), historian Hugh Seton-Watson, of the University of Oxford, concludes that Hitler’s intentions were not confined to what could be described as German nationalism.

His goal was to conquer all of Europe as well as a vast territory further afield. For his part, Mussolini wanted to found a new Roman Empire centred on the Mediterranean, while the Japanese were intent on building a Greater East Asia Co-prosperity Sphere.

German racism was not an expression of nationalism. On the contrary, race transcends the national borders of the state, and racist theories are thus by definition international – rather than national – doctrines.

EU founding fathers

It is worth noting that until 17 July, 1940, Robert Schuman, one of the founders of the European project, was a Secretary of State for the Vichy regime which collaborated with the Germans.

In 1938, as an MP representing Lorraine in the French parliament, he actively supported the Munich betrayal thus facilitating the annexation of part of Czechoslovakia by Hitler’s Germany. At the time, he also recommended that Mussolini and Hitler develop closer ties. On 10 July, 1940, Robert Schuman was among the MPs who supported Pétain when he took power.

Jean Monnet, another one of Europe’s founders, spent the war years in London where he attempted to prevent the broadcast of De Gaulle’s daily radio news bulletins (something he succeeded in doing on 20 and 21 June, 1940).

Setting aside the Second World War, “nationalism” is also blamed for starting the First World War. However, Germany’s goal in the the First World War was to impose the authority of a German empire over regions that were not German. It is also important to bear in mind that this particular war first broke out in the pan-national powder keg that was Austria-Hungary – a forerunner of the EU which refused to grant independence to Bosnian Serbs, which is why a group of “young Bosnians” plotted to assassinate Archduke Franz Ferdinand in June 1914.

Political unity – a major source of tensions

Oppression exerted by a centralised regime is a source of tension, and one of the major lessons of the First World War was the “principle of self-determination” – most notably promoted by Woodrow Wilson, who advocated respect for different nationalities, arguing that they should not be dissolved and integrated in larger entities.

If we look further back in history, once again we see that it was not “nationalism” but imperialism and the desire to unify Europe that led to wars. Take for example the Napoleonic Wars. For the well-being of Europe, Napoleon wanted the same principles to apply throughout the continent: a European law, a high court of European justice, a common currency, the same units of measurement, the same laws, and so on. Napoleon expected that thereafter Europe would rapidly become a single united nation.

The idea that nationalism leads to war while European unification promotes peace is therefore false. And let’s not forget that Europe has not been at “peace” over the last 50 years. During most of that period, the countries of Europe were engaged in a fight to the death with the Soviet Union, which was once again the expression of yet another anti-national philosophy – in this case communism. As the Communist Manifesto insisted, “Working men have no country.”

As you might expect, today’s attempt to bring about political unity in Europe is a major source of tensions. The political landscape in virtually every country in Europe has now been marked by the emergence of increasingly powerful parties that are opposed to the established order.

Nationalism makes democracy possible

Distrust of the South is increasingly prevalent in Northern Europe, and vice-versa. Here again, it is not nationalism but the European project which is the source of the conflict. It follows that we should seek to create a Europe that is radically different to the current EU.

What we need is a Europe without a central regime: a Europe comprised of nation states, which are not afraid of national differences, and willing to cooperate with each other. The authority of nation states over their own borders should be restored, so that they themselves can decide who they want to allow in their territory.

In the service of their economic interest, they should opt for flexible visa regimes, which will nonetheless allow them to keep control of crime and immigration. We will also have to dissolve the euro to give nation states some monetary breathing space so that they can once again set their own interest rates in response to local conditions. Finally, we will have to get rid of harmonisation which undermines diversity.

Far from being a source of conflict, nationalism is the force that makes democracy possible. Without this unifying force, parliaments would be unable to take legitimate decisions. As the example of Belgium has shown, a lack of national unity can make the administration of a country extremely difficult. The irrational fear of nationalism could ultimately result in the establishment of a restrictive empire in Brussels. The time has come to call a halt and restore the nation state.

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Re: New EC Thread

Post  Panda on Tue 10 Jul - 9:17

10 July 2012 Last updated at 07:14 Share this pageEmail Print Share this page



Eurozone finance ministers have agreed to lend Spain 30bn euros (£24bn; $37bn) this month to help its troubled banks.

It will be the first instalment of a bailout of up to 100bn euros, which was agreed in June.

The ministers will need to get approval from their own parliaments and hope to make the payment by the end of July.

The eurozone finance ministers also agreed to extend the 2013 deadline for Spain to cut its budget deficit to the EU limit of 3% by one year.

The yield on Spanish bonds rose sharply on Monday ahead of the meeting, with many fearing that little concrete action on Spanish banks would be reached.

"We are aiming at reaching a formal agreement in the second half of July, taking into account national parliamentary procedures, allowing for a first disbursement of 30bn euros by the end of the month to be mobilised as a contingency in case of urgent needs in the Spanish banking sector," Eurogroup President Jean-Claude Juncker said.

"There will be specific conditions for specific banks, and the supervision of the financial sector overall will be strengthened," he added.

The exact amount that Spain needs for the bailout of its banks may not be known until September.

.

On Saturday, Spanish Prime Minister Mariano Rajoy announced that he would take further steps soon to cut the country's public deficit.

In a news conference at the end of Monday's marathon meeting, a number of appointments were also announced.

The ministers reappointed Mr Juncker as their chairman and picked German Klaus Regling to head the permanent bailout fund, the European Stability Mechanism, which is due to come into force this month.

The conclusions of the finance ministers from the 17 countries that use the euro will be submitted to a meeting of all 27 EU finance ministers later on Tuesday.

On Monday, the yield on Spanish 10-year bonds, which are taken as a strong indicator of the interest rate the government would have to pay to borrow money, had risen above 7%, while Italian bond yields had reached to 6.1%.

Yields above 7% are considered to be unsustainable in the long term.

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Re: New EC Thread

Post  fuzeta on Tue 10 Jul - 19:02

Panda wrote:The EU is an empire, and empires mean war


9 July 2012
NRC Handelsblad Rotterdam Comment17


We are often told that the EU has brought peace to Europe. However, this view is not shared by historian Thierry Baudet who provocatively argues that a process in which nation states give up their sovereignty inevitably results in conflict. That is why he recommends dissolving the euro and restoring national borders.

Thierry Baudet


Partisans of the European project invariably argue that nationalism leads to war and while the development of Europe will safeguard peace – a noble objective that is more than sufficient compensation for any loss in democracy, sovereignty and transparency caused by Brussels. However, this theory is fundamentally flawed.

Nationalism does not lead to war. Attempts to build European empires lead to war. The urge to impose a straitjacket on the will of peoples will leads to war. In short, the European project will lead to war.

Fascism and Nazism were both focused on the creation of Europe. As early as 1933, Mussolini declared that Europe could once again exert its power in the world if it succeeded in establishing a certain political unity.

Mussolini’s new Roman Empire

The Norwegian collaborationist Vidkun Quisling argued that we should create a Europe that does not waste its blood in murderous conflict, but one that is solidly united. And on 11 September 1940, Joseph Goebbels affirmed: I am certain that 50 years from now, we will no longer reason in terms of countries.

On 28 November 1941, in the course of a conversation with the Finnish minister of foreign affairs, Adolf Hitler remarked that the countries of Europe should obviously be together, like the members of a big family. In his authoritative study, Nations and States (1977), historian Hugh Seton-Watson, of the University of Oxford, concludes that Hitler’s intentions were not confined to what could be described as German nationalism.

His goal was to conquer all of Europe as well as a vast territory further afield. For his part, Mussolini wanted to found a new Roman Empire centred on the Mediterranean, while the Japanese were intent on building a Greater East Asia Co-prosperity Sphere.

German racism was not an expression of nationalism. On the contrary, race transcends the national borders of the state, and racist theories are thus by definition international – rather than national – doctrines.

EU founding fathers

It is worth noting that until 17 July, 1940, Robert Schuman, one of the founders of the European project, was a Secretary of State for the Vichy regime which collaborated with the Germans.

In 1938, as an MP representing Lorraine in the French parliament, he actively supported the Munich betrayal thus facilitating the annexation of part of Czechoslovakia by Hitler’s Germany. At the time, he also recommended that Mussolini and Hitler develop closer ties. On 10 July, 1940, Robert Schuman was among the MPs who supported Pétain when he took power.

Jean Monnet, another one of Europe’s founders, spent the war years in London where he attempted to prevent the broadcast of De Gaulle’s daily radio news bulletins (something he succeeded in doing on 20 and 21 June, 1940).

Setting aside the Second World War, “nationalism” is also blamed for starting the First World War. However, Germany’s goal in the the First World War was to impose the authority of a German empire over regions that were not German. It is also important to bear in mind that this particular war first broke out in the pan-national powder keg that was Austria-Hungary – a forerunner of the EU which refused to grant independence to Bosnian Serbs, which is why a group of “young Bosnians” plotted to assassinate Archduke Franz Ferdinand in June 1914.

Political unity – a major source of tensions

Oppression exerted by a centralised regime is a source of tension, and one of the major lessons of the First World War was the “principle of self-determination” – most notably promoted by Woodrow Wilson, who advocated respect for different nationalities, arguing that they should not be dissolved and integrated in larger entities.

If we look further back in history, once again we see that it was not “nationalism” but imperialism and the desire to unify Europe that led to wars. Take for example the Napoleonic Wars. For the well-being of Europe, Napoleon wanted the same principles to apply throughout the continent: a European law, a high court of European justice, a common currency, the same units of measurement, the same laws, and so on. Napoleon expected that thereafter Europe would rapidly become a single united nation.

The idea that nationalism leads to war while European unification promotes peace is therefore false. And let’s not forget that Europe has not been at “peace” over the last 50 years. During most of that period, the countries of Europe were engaged in a fight to the death with the Soviet Union, which was once again the expression of yet another anti-national philosophy – in this case communism. As the Communist Manifesto insisted, “Working men have no country.”

As you might expect, today’s attempt to bring about political unity in Europe is a major source of tensions. The political landscape in virtually every country in Europe has now been marked by the emergence of increasingly powerful parties that are opposed to the established order.

Nationalism makes democracy possible

Distrust of the South is increasingly prevalent in Northern Europe, and vice-versa. Here again, it is not nationalism but the European project which is the source of the conflict. It follows that we should seek to create a Europe that is radically different to the current EU.

What we need is a Europe without a central regime: a Europe comprised of nation states, which are not afraid of national differences, and willing to cooperate with each other. The authority of nation states over their own borders should be restored, so that they themselves can decide who they want to allow in their territory.

In the service of their economic interest, they should opt for flexible visa regimes, which will nonetheless allow them to keep control of crime and immigration. We will also have to dissolve the euro to give nation states some monetary breathing space so that they can once again set their own interest rates in response to local conditions. Finally, we will have to get rid of harmonisation which undermines diversity.

Far from being a source of conflict, nationalism is the force that makes democracy possible. Without this unifying force, parliaments would be unable to take legitimate decisions. As the example of Belgium has shown, a lack of national unity can make the administration of a country extremely difficult. The irrational fear of nationalism could ultimately result in the establishment of a restrictive empire in Brussels. The time has come to call a halt and restore the nation state.

Thanks for putting this up Panda, what a fantastic piece and oh so true!

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Re: New EC Thread

Post  Panda on Tue 10 Jul - 19:03

Karlsruhe — the court that could bury the euro


10 July 2012
Der Spiegel Hamburg Comment2


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Presseurop


As the German constitutional court in Karlsruhe sits down to examine the controversial fiscal compact, Berlin fears that it could decide to scupper the entire eurozone bailout. But this isn’t only about Europe, writes Der Spiegel, there’s also a power struggle going on between the executive and the judiciary.

Dietmar Hipp | René Pfister


It isn't often that German Chancellor Angela Merkel shows her displeasure at something. One of the chancellor's strengths is that she is able to keep her emotions in check, which explains why her fellow party members were so surprised when the subject of Germany's Federal Constitutional Court was raised in a meeting of the executive committee of her center-right Christian Democratic Union (CDU) two weeks ago.

The judges had just admonished Merkel for disregarding the rights of the parliament during efforts to rescue the euro. It was already the second ruling in this vein this year. Criticism of Germany's highest court is generally viewed as inappropriate in political circles, but this time the chancellor had had enough.

How, she asked, could she pursue reasonable policies if she had to reveal her negotiating tactics before every meeting with a European leader? "This takes me to my limit," Merkel complained, to a murmur of approval from her fellow CDU members. They quickly realized that the chancellor views the judges as unrealistic law professors with no understanding whatsoever of the challenges of everyday politics.

Keeping the government in check

Things have never been easy between Berlin and the Karlsruhe-based court. The Federal Constitutional Court was set up in 1951 to ensure that the state's institutions complied with the constitution of the newly founded Federal Republic of Germany. Since then, government politicians have often viewed the court as a gadfly that can declare laws invalid with the stroke of a pen. A sentence attributed to the late Social Democratic Party politician Herbert Wehner has become legendary: "We won't allow the assholes in Karlsruhe to destroy our policies."

It's in the nature of things that there is occasionally disagreement between the court and the political world. The court's job is to ensure that the government sticks to the guidelines laid down in the German constitution. Politicians, on the other hand, don't appreciate it when the court portrays them as underhanded rogues who bend the constitution to conform to their backroom deals. It also doesn't help matters that the court's judges generally enjoy a level of popularity that many politicians can only dream of.

Since the eruption of the euro crisis, however, there has been more at stake than the usual vanities. If the court's landmark ruling on the European Union's Lisbon Treaty is also taken into account, the judges in their trademark red robes have already crossed Merkel three times in the last few years. The Karlsruhe decisions read like indictments of a chancellor who, in the judges' opinion, is ignoring the basic rules of democracy with her bailout policies.

Citizens applaud them for their decisions, and it is of course the judges' job to keep the executive in check when necessary. There are those in Berlin, however, who increasingly suspect that the court is in league with those populists and euroskeptics who are fundamentally opposed to the project of European integration. Read article in full at Spiegel Online International...

Translated from the German by Christopher Sultan

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Re: New EC Thread

Post  Panda on Wed 11 Jul - 7:06

Austria

Why not let the people decide?


10 July 2012
Die Presse Vienna Comment1




Kazanevski


The ESM is one, and the fiscal pact another: should the major political decisions of a country be put to the people for a vote? In Vienna, which has been debating more transparency and direct democracy for some months, the politicians have been slamming the brakes on with both feet.

Franz Schellhorn


He would not be Heinz Fischer if he didn’t have at least two opinions on the question of "more direct democracy?" In Pressestunde am Sonntag (“News Hour on Sunday)", yes, the President could well imagine the people getting more involved in important decisions in the future.

Just as he could well imagine being against such a thing, too. More emphasis on direct democracy, that is to say, must not lead to the elimination of the National Council. The President is also deeply concerned that in the wake of the increased use of referenda, issues might become sensationalised – “taken to the tabloids”. Complex issues such as the Fiscal Pact and the setting up of the permanent European Security Mechanism bailout fund would therefore also not be suitable matters for referenda. Explaining them to the public, you see, could just get too folksy.

Interesting, that. Almost simultaneously, Fischer’s counterpart in Germany, Joachim Gauck, has been urging Chancellor Angela Merkel to once again describe more precisely to the people the controversial measures to save the euro. It would also help the voters grasp what they’ll have to deal with. Mr. Gauck, of course, is absolutely right in that: a decision of this gravity should not be made behind the voters’ backs – at least not if one wants to keep the people from heading over in droves to the camp of those who bitterly oppose the EU.

Our neighbours in Switzerland

The Austrian people deserve such a declaration. And what exactly should be so hard about telling them in straightforward sentences that bringing in the ESM means that all the states become liable for all the debts of the other states? And what exactly could be “taking it to the tabloids" about explaining to the population that not only the debts of states will be pooled in the Community, but that money for public assistance will be used to bail out private banks – instead of letting the shareholders absorb the losses, which is what should happen.

It is precisely this “tabloidisation” of complex issues so dreaded by Heinz Fischer that might do this country some good – if only because a clear presentation of issues that are very difficult to get to the bottom of need not lead to a crude abbreviation and distortion, as was shown not least by the vote on joining the EU in June 1994.

Our neighbours in Switzerland show how far direct democracy can go and how maturely the people can make decisions. Earlier this year the Swiss voted against extending paid leave from four weeks to six. Not because they have something against more holidays, but because they take the view that the economy, already under great pressure, would be weakened further.

People need not vote on anything and everything

In 2005 an initiative to expand regional hospitals was rejected in St. Gallen by a large majority. The citizens have nothing against a greater density of hospitals, but they were told in simple terms that such a move would naturally lead to higher taxes. In Lower Austria, one doesn’t bother the obviously overburdened people sitting down to their country music and beer; the big questions are decided for them by the political "experts" in the Landtag. The result: two brand-spanking new hospitals in the countryside are to be built within twelve kilometres of each other.

Now, the people need not vote on anything and everything. Much would be achieved if voters were permitted to be there at the major crossroads. For example, regarding the ESM, or the question of whether the state should permanently spend more than it brings in, or whether government spending should be braked by constitutional law. And whether the retirement age should "grow" with increasing life expectancy or stay as it is.

Answers to this kind of question shouldn’t frighten anyone. The supposedly stupid people cannot make decisions any worse than the experts on the benches of the National Council. And that would be a quite passable starting point, would it not?

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