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Re: New EC Thread
Panda Tue 2 Oct - 13:29
Emigration
The Germans are coming back to Poland
1 October 2012Uważam Rze Warsaw
Cost
For years, West Germany was a prime destination for Polish immigrants. But today, it's the Germans who are crossing the River Oder in search of work in Poland.
Piotr Cywiński
“Theo wir fahr'n nach Lodz”, went a popular German song, written in the 19th century, during a period of intense industrialisation of the Calisia-Masovia area. For Germans, the city of Łódź seemed like an eldorado. Here they saw opportunities for a better future, here they amassed their fortunes. The Scheiblers from Rhineland, the Herbsts or Geyers from Saxony. Well, it looks like history likes to repeat itself.
After the cataclysms of two world wars and the communist collapse, are we again seeing a new wave of German immigrants in Poland? While this is hardly an exodus yet, Poland has become one of the favourite places where Germans relocate permanently. In 2006, Poland ranked fifth among such countries, and today more Germans settle in Poland than in Spain or France. According to the Federal Statistical Office (Destatis), 9,434 German passport holders settled in Poland only last year, making Poland the third most popular destination for Germans relocating abroad, now ahead of Austria and behind only Switzerland and the United States.
Germans on the road
Only a couple of years ago the traffic went in the opposite direction. Until the collapse of communism and the democratic changes in Poland, West Germany was a dream land for Polish emigrants, who, having dug out photos of distant relatives who had been drafted into the Wehrmacht, applied for a German passport or at least the residence permit, or Aufenthaltsbewilligung.
Today, despite various official incentives, free language courses, vocational training, and special bonuses offered by some companies, relatively few Poles are interested in working in Germany.
The roles have now reversed and it is Poland that thousands of German citizens today perceive as an attractive place for pursuing a career or taking up residence. Nearly six thousand German businesses operate in Poland today, most of them small or medium-sized, but major corporations too. Overall German investment in Poland has so far reached some 22 billion euros, and last year German companies accounted for 21 percent of all foreign direct investment in the country.
Only a few years ago, when someone in Germany said they were going to work in Poland, the usual reaction was one of astonishment. Today no one in Germany finds this strange. For unemployed Germans, especially from the former DDR, Poland represents an opportunity for getting a permanent job, and for young graduates it offers the prospect of a faster career track and being entrusted with more ambitious and responsible tasks.
Bartłomiej Sochański, former mayor of Szczecin and German honorary consul there since 2001, estimates the number of German gastarbeiters in his region – plumbers, carpenters, bricklayers, roofers – at 2,500, most of them arrived from the high-unemployment states of Brandenburg and Mecklenburg-Vorpommern. Many have settled on the Polish side of the border and have no intention of returning to Germany.
It is not only the prospect of getting a job, advancing professionally or doing good business that attracts Germans to Poland, but also nostalgia for one’s native country or simply the landschaft. Dr Gotthard Sinapius has chosen the village of Lekowo near Świdwin in the Zachodniopomorskie province in north-eastern Poland. A 58-year-old cultural-heritage conservator, he co-owns a manor house there, or rather what remains of the late 17th-century structure. Dr Sinapius refuses to discuss the costs of renovation, saying only they were covered by his relatives from all over the world. He still has a lot of work to do here, but guest rooms, a large dining room with a fireplace and a room where chamber orchestra concerts take place three times a year are ready.
The horses are waiting
Steffen Möller, a stand-up comedian and actor, best known in Poland for his role in the M jak miłość soap opera, Poland’s self-proclaimed “ambassador” in Germany and author of the best-selling book Viva Polonia: als deutscher Gastarbeiter in Polen (2008), humorously instructs his compatriots during his stand-up comedy tours on how to live in Poland. “Some of you will have to throw their favourite stereotypes away tonight”, he begins. “Poland is, after all, the third most popular relocation destination for Germans”. His latest book, Expedition zu den Polen, remained for many weeks on German bestseller charts. In fact, more and more practical how-to guides for prospective emigrants are being published in Germany, instructing them about Polish business, labour or tax regulations.
“Diese verdammte Nest, gibt mir den Rest / Ich fühl mich zu jung für Mist und Dunk – Ich brauch' Musik und Tanz und etwas Eleganz / Gib Dir einen Stoß und dann geht's los / Theo, wir fahr'n nach Lodz” [The damn hole, give me a break / I’m too young for all this crap – I need music and dance and some elegance / Pull yourself together and let’s go / Theo, we’re going to Lodz] – the song, once popular all over Europe and even in the US, became a big hit in Germany in 1974 when recorded by the Greek German singer Vicky Leandros.
Earlier, in the 19th century, the song was sung by many, including soldiers in the Austro-Hungarian army to ironic lyrics written by Fritz Löhner Beda, an Austrian Jew who was murdered in the Auschwitz concentration camp in 1942. Will present-day German emigrants find their “promised land” in Poland? Whatever may be the case, the horses, as the song says, are “already waiting”.
Translated from the Polish by Marcin Wawrzyńczak
The Germans are coming back to Poland
1 October 2012Uważam Rze Warsaw
Cost
For years, West Germany was a prime destination for Polish immigrants. But today, it's the Germans who are crossing the River Oder in search of work in Poland.
Piotr Cywiński
“Theo wir fahr'n nach Lodz”, went a popular German song, written in the 19th century, during a period of intense industrialisation of the Calisia-Masovia area. For Germans, the city of Łódź seemed like an eldorado. Here they saw opportunities for a better future, here they amassed their fortunes. The Scheiblers from Rhineland, the Herbsts or Geyers from Saxony. Well, it looks like history likes to repeat itself.
After the cataclysms of two world wars and the communist collapse, are we again seeing a new wave of German immigrants in Poland? While this is hardly an exodus yet, Poland has become one of the favourite places where Germans relocate permanently. In 2006, Poland ranked fifth among such countries, and today more Germans settle in Poland than in Spain or France. According to the Federal Statistical Office (Destatis), 9,434 German passport holders settled in Poland only last year, making Poland the third most popular destination for Germans relocating abroad, now ahead of Austria and behind only Switzerland and the United States.
Germans on the road
Only a couple of years ago the traffic went in the opposite direction. Until the collapse of communism and the democratic changes in Poland, West Germany was a dream land for Polish emigrants, who, having dug out photos of distant relatives who had been drafted into the Wehrmacht, applied for a German passport or at least the residence permit, or Aufenthaltsbewilligung.
Today, despite various official incentives, free language courses, vocational training, and special bonuses offered by some companies, relatively few Poles are interested in working in Germany.
The roles have now reversed and it is Poland that thousands of German citizens today perceive as an attractive place for pursuing a career or taking up residence. Nearly six thousand German businesses operate in Poland today, most of them small or medium-sized, but major corporations too. Overall German investment in Poland has so far reached some 22 billion euros, and last year German companies accounted for 21 percent of all foreign direct investment in the country.
Only a few years ago, when someone in Germany said they were going to work in Poland, the usual reaction was one of astonishment. Today no one in Germany finds this strange. For unemployed Germans, especially from the former DDR, Poland represents an opportunity for getting a permanent job, and for young graduates it offers the prospect of a faster career track and being entrusted with more ambitious and responsible tasks.
Bartłomiej Sochański, former mayor of Szczecin and German honorary consul there since 2001, estimates the number of German gastarbeiters in his region – plumbers, carpenters, bricklayers, roofers – at 2,500, most of them arrived from the high-unemployment states of Brandenburg and Mecklenburg-Vorpommern. Many have settled on the Polish side of the border and have no intention of returning to Germany.
It is not only the prospect of getting a job, advancing professionally or doing good business that attracts Germans to Poland, but also nostalgia for one’s native country or simply the landschaft. Dr Gotthard Sinapius has chosen the village of Lekowo near Świdwin in the Zachodniopomorskie province in north-eastern Poland. A 58-year-old cultural-heritage conservator, he co-owns a manor house there, or rather what remains of the late 17th-century structure. Dr Sinapius refuses to discuss the costs of renovation, saying only they were covered by his relatives from all over the world. He still has a lot of work to do here, but guest rooms, a large dining room with a fireplace and a room where chamber orchestra concerts take place three times a year are ready.
The horses are waiting
Steffen Möller, a stand-up comedian and actor, best known in Poland for his role in the M jak miłość soap opera, Poland’s self-proclaimed “ambassador” in Germany and author of the best-selling book Viva Polonia: als deutscher Gastarbeiter in Polen (2008), humorously instructs his compatriots during his stand-up comedy tours on how to live in Poland. “Some of you will have to throw their favourite stereotypes away tonight”, he begins. “Poland is, after all, the third most popular relocation destination for Germans”. His latest book, Expedition zu den Polen, remained for many weeks on German bestseller charts. In fact, more and more practical how-to guides for prospective emigrants are being published in Germany, instructing them about Polish business, labour or tax regulations.
“Diese verdammte Nest, gibt mir den Rest / Ich fühl mich zu jung für Mist und Dunk – Ich brauch' Musik und Tanz und etwas Eleganz / Gib Dir einen Stoß und dann geht's los / Theo, wir fahr'n nach Lodz” [The damn hole, give me a break / I’m too young for all this crap – I need music and dance and some elegance / Pull yourself together and let’s go / Theo, we’re going to Lodz] – the song, once popular all over Europe and even in the US, became a big hit in Germany in 1974 when recorded by the Greek German singer Vicky Leandros.
Earlier, in the 19th century, the song was sung by many, including soldiers in the Austro-Hungarian army to ironic lyrics written by Fritz Löhner Beda, an Austrian Jew who was murdered in the Auschwitz concentration camp in 1942. Will present-day German emigrants find their “promised land” in Poland? Whatever may be the case, the horses, as the song says, are “already waiting”.
Translated from the Polish by Marcin Wawrzyńczak
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Re: New EC Thread
Panda Tue 2 Oct - 15:37
Basel Bank in Switzerland has criticised the EU and US for breaking the Capital Rules.
Spain is to study the austerity measures for bailout prior to meeting Rehns in Madrid.Moody's says Spanish lenders require more assets than the stress test found.
15, 000 Spaniards queued to apply for 15 jobs in one factory.
Cypriot ruling party rejects TROIKA plan for bail-out.
Spain is to study the austerity measures for bailout prior to meeting Rehns in Madrid.Moody's says Spanish lenders require more assets than the stress test found.
15, 000 Spaniards queued to apply for 15 jobs in one factory.
Cypriot ruling party rejects TROIKA plan for bail-out.
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Re: New EC Thread
Panda Tue 2 Oct - 16:04
2 October 2012 Last updated at 15:50
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EU says banks should split risky trading from banking
Europe's biggest banks would be affected, should these changes be brought in
Continue reading the main story
Eurozone crisis
A European Union advisory group says that Europe's banks should be split into separate legal entities, in order to protect ordinary retail banking from risky trading.
The review was set up to look at whether banks should be structurally reformed to avoid another crisis.
The group agreed that banks should separate certain high-risk banking activities from everyday banking.
Banks likely to be affected include Deutsche Bank and BNP Paribas.
The report's suggestions echo those put forward in a report into the UK banking sector by Sir John Vickers and the Dodd-Frank act - particularly the Volcker rule - in the US, both designed to avert further financial crises in these countries.
Support
Europe's leaders see banking reform as going hand-in-hand with supporting the economy.
The EU's report also looked at the risks of lending on property, and recommends it should be underpinned with larger capital reserves.
Lending too much to overvalued property was at the core of the banking crisis that led to the credit crunch.
Ireland's over reliance on property, which helped it to thrive in the boom years, prompted it to ask for a rescue. It is also the reason Spain has asked for help for its banking sector.
The report was prepared by a panel of banking specialists, chaired by the Bank of Finland governor Erkki Liikanen.
He said banks had been reckless: "The analysis conducted revealed excessive risk-taking - often in trading highly-complex instruments or real estate-related lending - and excessive reliance on short-term funding in the run-up to the financial crisis."
Bonuses
It also examined ways of spreading the risk burden of a collapsed bank to a wider group, so that bondholders, as well as shareholders and the state, would take some of the losses in future.
It suggested that bankers should accept such a bond as part of their bonus, the value of which would fall if risky trades or lending lost money.
The report also says banks should have higher capital "buffers" to protect against future banking crises.
The report will be passed to EU internal markets commissioner Michel Barnier, who will make the decision on whether to present proposals in line with its recommendations and whose officials write the first draft of new laws.
Mr Barnier said: "The Commission will look at the impact of these recommendations both on growth and on the safety and integrity of financial services."
The report, which the group said should be discussed before the end of the year, is just one of a number of high-level reviews of the banking sector, which is around 8,000-strong across the 27-country European Union.
On Wednesday, the European Banking Authority will release its final report on banks' implementation of plans to establish temporary capital buffers.
The EU is also moving towards banking union within the eurozone and is planning to have a eurozone-wide regulatory system, the Single Supervisory Mechanism (SSM), which it hopes will begin its work by the start of next year.
It would allow the ECB to assume full supervisory responsibility over any credit institution, particularly those which have received or requested public funding, with all banks covered by the SSM by the start of 2014.
The SSM needs to be adopted by member states' government ministers and MEPs.
Share this page
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524
EU says banks should split risky trading from banking
Europe's biggest banks would be affected, should these changes be brought in Continue reading the main story
Eurozone crisis
- Six burning questions for Spain
- Q&A: What went wrong in Spain?
- How eurozone crisis affects you
- Crisis in graphics
A European Union advisory group says that Europe's banks should be split into separate legal entities, in order to protect ordinary retail banking from risky trading.
The review was set up to look at whether banks should be structurally reformed to avoid another crisis.
The group agreed that banks should separate certain high-risk banking activities from everyday banking.
Banks likely to be affected include Deutsche Bank and BNP Paribas.
The report's suggestions echo those put forward in a report into the UK banking sector by Sir John Vickers and the Dodd-Frank act - particularly the Volcker rule - in the US, both designed to avert further financial crises in these countries.
Support
Europe's leaders see banking reform as going hand-in-hand with supporting the economy.
The EU's report also looked at the risks of lending on property, and recommends it should be underpinned with larger capital reserves.
Lending too much to overvalued property was at the core of the banking crisis that led to the credit crunch.
Ireland's over reliance on property, which helped it to thrive in the boom years, prompted it to ask for a rescue. It is also the reason Spain has asked for help for its banking sector.
The report was prepared by a panel of banking specialists, chaired by the Bank of Finland governor Erkki Liikanen.
He said banks had been reckless: "The analysis conducted revealed excessive risk-taking - often in trading highly-complex instruments or real estate-related lending - and excessive reliance on short-term funding in the run-up to the financial crisis."
Bonuses
It also examined ways of spreading the risk burden of a collapsed bank to a wider group, so that bondholders, as well as shareholders and the state, would take some of the losses in future.
It suggested that bankers should accept such a bond as part of their bonus, the value of which would fall if risky trades or lending lost money.
The report also says banks should have higher capital "buffers" to protect against future banking crises.
The report will be passed to EU internal markets commissioner Michel Barnier, who will make the decision on whether to present proposals in line with its recommendations and whose officials write the first draft of new laws.
Mr Barnier said: "The Commission will look at the impact of these recommendations both on growth and on the safety and integrity of financial services."
The report, which the group said should be discussed before the end of the year, is just one of a number of high-level reviews of the banking sector, which is around 8,000-strong across the 27-country European Union.
On Wednesday, the European Banking Authority will release its final report on banks' implementation of plans to establish temporary capital buffers.
The EU is also moving towards banking union within the eurozone and is planning to have a eurozone-wide regulatory system, the Single Supervisory Mechanism (SSM), which it hopes will begin its work by the start of next year.
It would allow the ECB to assume full supervisory responsibility over any credit institution, particularly those which have received or requested public funding, with all banks covered by the SSM by the start of 2014.
The SSM needs to be adopted by member states' government ministers and MEPs.
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Re: New EC Thread
Panda Wed 3 Oct - 8:05
October 2012 Last updated at 18:15
'Hundreds of problems' at EU nuclear plants
The draft report found specific failings in all 58 of France's nuclear reactors
Continue reading the main story
Japan quake
Hundreds of problems have been found at European nuclear plants that would cost 25bn euros (£20bn) to fix, says a leaked draft report.
The report, commissioned after Japan's Fukushima nuclear disaster, aimed to see how Europe's nuclear power stations would cope during extreme emergencies.
The final report is to be published on Thursday. The draft says nearly all the EU's 143 nuclear plants need improving.
Anti-nuclear groups say the report's warnings do not go far enough.
For its part, the regulatory body for European nuclear safety has urged the Commission not to use language that could undermine public confidence, says the BBC's Chris Morris in Brussels.
French failings
The report - the wording of which could change before Thursday's final version is published - points out that in the EU, 47 nuclear power plants with 111 reactors have more than 100,000 inhabitants living within a circle of 30km.
"On the basis of the stress test results practically all [nuclear plants] need to undergo safety improvements," says the leaked draft. "Hundreds of technical upgrade measures have already been identified.
Continue reading the main story
“Start Quote
"Following the accidents at Three Mile Island and Chernobyl, urgent measures to protect nuclear plants were agreed. The stress tests demonstrated that even today, decades later, their implementation is still pending in some member states."
Four reactors in two unnamed countries would have less than an hour to restore safety functions if electrical power was lost, it adds.
In France, Europe's largest nuclear power producer which relies on 58 nuclear reactors for 80% of its electricity, specific failings were found in all 58 nuclear reactors.
Earlier this month, a blast of escaping steam burned two people at the Fessenheim power station in eastern France - one of the country's oldest nuclear reactors which has long been the target of regular anti-nuclear protests.
Fessenheim, close to France's borders with Germany and Switzerland, opened in 1977 and draws water for cooling from the Rhine, but campaigners say its location makes it vulnerable to seismic activity and flooding.
Shortcomings were also reported in the UK. Most of the country's power plants lacked an alternative emergency control room to use if the main one became contaminated by high radiation, says the report.
The UK's Department of Energy said there was no evidence UK nuclear facilities were unsafe.
"However, the Government is committed to the principle of continuous improvement," a spokesman told the BBC.
"We are working closely with the Office for Nuclear Regulation to ensure that operators address any site specific issues using the existing robust UK regulatory regime, which requires operators to take all reasonably practicable steps to reduce risk and seek continuous improvements to safety."
Call for closures
While the stress tests found deficiencies in many of Europe's nuclear reactors, campaigners say they failed to address risks in crucial areas, such as ageing technology, terrorist attacks or human error.
"If this exercise was serious, the Commission should be recommending the closure of unsafe or ageing reactors," said Rebecca Harms, co-president of the Greens/European Free Alliance at the European Parliament.
"At the very least, the Commission should be pressing for the security deficiencies identified in the report to be rectified."
As of June, all 143 nuclear plants in the EU were to be re-assessed using criteria covering both natural and man-made hazards.
Some governments have reappraised their nuclear energy strategy in the aftermath of last year's Fukushima disaster, with Germany deciding to abandon nuclear energy for green technology and cleaner gas- and coal-powered plants by 2022.
Others, like France, have boosted investment in nuclear power since the meltdown.
The Fukushima Daiichi nuclear plant's cooling systems were knocked out by the 11 March 2011 earthquake and tsunami in Japan. The disaster caused a meltdown at three of the reactors.
'Hundreds of problems' at EU nuclear plants
The draft report found specific failings in all 58 of France's nuclear reactors Continue reading the main story
Japan quake
Hundreds of problems have been found at European nuclear plants that would cost 25bn euros (£20bn) to fix, says a leaked draft report.
The report, commissioned after Japan's Fukushima nuclear disaster, aimed to see how Europe's nuclear power stations would cope during extreme emergencies.
The final report is to be published on Thursday. The draft says nearly all the EU's 143 nuclear plants need improving.
Anti-nuclear groups say the report's warnings do not go far enough.
For its part, the regulatory body for European nuclear safety has urged the Commission not to use language that could undermine public confidence, says the BBC's Chris Morris in Brussels.
French failings
The report - the wording of which could change before Thursday's final version is published - points out that in the EU, 47 nuclear power plants with 111 reactors have more than 100,000 inhabitants living within a circle of 30km.
"On the basis of the stress test results practically all [nuclear plants] need to undergo safety improvements," says the leaked draft. "Hundreds of technical upgrade measures have already been identified.
Continue reading the main story
“Start Quote
End Quote Rebecca Harms MEP Greens/European Free Alliance
The Commission should be recommending the closure of unsafe or ageing reactors”
"Following the accidents at Three Mile Island and Chernobyl, urgent measures to protect nuclear plants were agreed. The stress tests demonstrated that even today, decades later, their implementation is still pending in some member states."
Four reactors in two unnamed countries would have less than an hour to restore safety functions if electrical power was lost, it adds.
In France, Europe's largest nuclear power producer which relies on 58 nuclear reactors for 80% of its electricity, specific failings were found in all 58 nuclear reactors.
Earlier this month, a blast of escaping steam burned two people at the Fessenheim power station in eastern France - one of the country's oldest nuclear reactors which has long been the target of regular anti-nuclear protests.
Fessenheim, close to France's borders with Germany and Switzerland, opened in 1977 and draws water for cooling from the Rhine, but campaigners say its location makes it vulnerable to seismic activity and flooding.
Shortcomings were also reported in the UK. Most of the country's power plants lacked an alternative emergency control room to use if the main one became contaminated by high radiation, says the report.
The UK's Department of Energy said there was no evidence UK nuclear facilities were unsafe.
"However, the Government is committed to the principle of continuous improvement," a spokesman told the BBC.
"We are working closely with the Office for Nuclear Regulation to ensure that operators address any site specific issues using the existing robust UK regulatory regime, which requires operators to take all reasonably practicable steps to reduce risk and seek continuous improvements to safety."
Call for closures
While the stress tests found deficiencies in many of Europe's nuclear reactors, campaigners say they failed to address risks in crucial areas, such as ageing technology, terrorist attacks or human error.
"If this exercise was serious, the Commission should be recommending the closure of unsafe or ageing reactors," said Rebecca Harms, co-president of the Greens/European Free Alliance at the European Parliament.
"At the very least, the Commission should be pressing for the security deficiencies identified in the report to be rectified."
As of June, all 143 nuclear plants in the EU were to be re-assessed using criteria covering both natural and man-made hazards.
Some governments have reappraised their nuclear energy strategy in the aftermath of last year's Fukushima disaster, with Germany deciding to abandon nuclear energy for green technology and cleaner gas- and coal-powered plants by 2022.
Others, like France, have boosted investment in nuclear power since the meltdown.
The Fukushima Daiichi nuclear plant's cooling systems were knocked out by the 11 March 2011 earthquake and tsunami in Japan. The disaster caused a meltdown at three of the reactors.
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Re: New EC Thread
Panda Wed 3 Oct - 8:29
Portugal Offers to Exchange Bonds as It Seeks Debt Market Access
By Joao Lima - Oct 3, 2012 12:01 AM GMT+0100
Portuguese debt agency IGCP will offer to exchange bonds due next year for securities maturing in three years as it tries to regain access to long-term debt markets.
The government debt agency will offer to buy bonds maturing in September 2013 and will sell bonds maturing in October 2015, the Lisbon-based IGCP said yesterday. It plans to carry out the offer at 10:30 a.m.
Portugal has to meet the September 2013 bond redemption of about 10 billion euros ($13 billion) without relying on a European Union-led rescue program, which extends until the middle of 2014. While Portugal has continued selling bills, it hasn’t sold bonds since requesting the bailout in April 2011.
“A successful exchange will reduce the amount needed to cover redemptions and will show better sentiment among investors,” said Alessandro Giansanti, a senior strategist at ING Groep NV. “I see the exchange as attractive. If the size of the exchange will be above 30 percent of the outstanding amount, it will be taken as positive by the market and afterwards spreads will move lower.”
Yields have dropped at auctions and in the secondary market as the government cuts spending and raises taxes to comply with the terms of the 78 billion-euro aid plan from the EU and theInternational Monetary Fund. Prime Minister Pedro Passos Coelhohas said that if the country can’t tap bond markets by September 2013 because of “external reasons,” it would be able to count on continued support from the IMF and the EU.
Lower Costs
Borrowing costs dropped to the lowest since 2010 at a Sept. 19 sale of 1.29 billion euros of 18-month bills, while the difference in yield that investors demand to hold Portugal’s 10-year bonds instead of German bunds has narrowed to 7.5 percentage points from 16 percentage points on Jan. 31.
In January, Standard & Poor’s followed Fitch Ratings and Moody’s Investors Service in cutting Portugal’s credit rating to non-investment grade, or junk.
Ireland, which has also received a bailout, in July returned to long-term debt markets for the first time in almost two years by selling 4.19 billion euros of new bonds, while also exchanging some short-maturity notes for longer-term debt.
European Central Bank President Mario Draghi on Sept. 6 said bond purchases may be considered for euro-area countries currently under bailout programs, such as Greece, Portugal and Ireland, when they regain bond-market access.
The Portuguese government plans to carry out debt market operations as it aims to regain access to bond markets by September 2013, Maria Luis Albuquerque, the secretary of state for treasury and finance, said on Sept. 11.
‘Sounding Out’
Portugal is “sounding out” the market as it prepares to resume sales of medium-term notes, Joao Moreira Rato, chairman of the country’s debt agency, said in an interview in July. Portugal plans to issue medium-term notes with maturities of one to five years that are designed for specific creditors, the IMF said on July 17.
Portugal’s debt, which will peak below 124 percent of gross domestic product, “remains sustainable and will be on a firm downward trajectory after 2014,” the IMF, the European Commission and the European Central Bank said in a joint statement on Sept. 11. The IMF in July said Portugal’s debt would peak at about 118.5 percent of GDP in 2013.
The country has been given more time to narrow its budget shortfall after tax revenue missed forecasts an d the economy heads for a third year of contraction in 2013. Portugal aims to reach a deficit of 5 percent in 2012 instead of the previous goal of 4.5 percent, Finance Minister Vitor Gaspar said on Sept. 11 after EU and IMF officials agreed on the new targets.
The government projects GDP will shrink 1 percent in 2013 after a contraction of 3 percent this year. Economic growth has averaged less than 1 percent a year for the past decade, placing Portugal among Europe’s weakest performers
By Joao Lima - Oct 3, 2012 12:01 AM GMT+0100
Portuguese debt agency IGCP will offer to exchange bonds due next year for securities maturing in three years as it tries to regain access to long-term debt markets.
The government debt agency will offer to buy bonds maturing in September 2013 and will sell bonds maturing in October 2015, the Lisbon-based IGCP said yesterday. It plans to carry out the offer at 10:30 a.m.
Portugal has to meet the September 2013 bond redemption of about 10 billion euros ($13 billion) without relying on a European Union-led rescue program, which extends until the middle of 2014. While Portugal has continued selling bills, it hasn’t sold bonds since requesting the bailout in April 2011.
“A successful exchange will reduce the amount needed to cover redemptions and will show better sentiment among investors,” said Alessandro Giansanti, a senior strategist at ING Groep NV. “I see the exchange as attractive. If the size of the exchange will be above 30 percent of the outstanding amount, it will be taken as positive by the market and afterwards spreads will move lower.”
Yields have dropped at auctions and in the secondary market as the government cuts spending and raises taxes to comply with the terms of the 78 billion-euro aid plan from the EU and theInternational Monetary Fund. Prime Minister Pedro Passos Coelhohas said that if the country can’t tap bond markets by September 2013 because of “external reasons,” it would be able to count on continued support from the IMF and the EU.
Lower Costs
Borrowing costs dropped to the lowest since 2010 at a Sept. 19 sale of 1.29 billion euros of 18-month bills, while the difference in yield that investors demand to hold Portugal’s 10-year bonds instead of German bunds has narrowed to 7.5 percentage points from 16 percentage points on Jan. 31.
In January, Standard & Poor’s followed Fitch Ratings and Moody’s Investors Service in cutting Portugal’s credit rating to non-investment grade, or junk.
Ireland, which has also received a bailout, in July returned to long-term debt markets for the first time in almost two years by selling 4.19 billion euros of new bonds, while also exchanging some short-maturity notes for longer-term debt.
European Central Bank President Mario Draghi on Sept. 6 said bond purchases may be considered for euro-area countries currently under bailout programs, such as Greece, Portugal and Ireland, when they regain bond-market access.
The Portuguese government plans to carry out debt market operations as it aims to regain access to bond markets by September 2013, Maria Luis Albuquerque, the secretary of state for treasury and finance, said on Sept. 11.
‘Sounding Out’
Portugal is “sounding out” the market as it prepares to resume sales of medium-term notes, Joao Moreira Rato, chairman of the country’s debt agency, said in an interview in July. Portugal plans to issue medium-term notes with maturities of one to five years that are designed for specific creditors, the IMF said on July 17.
Portugal’s debt, which will peak below 124 percent of gross domestic product, “remains sustainable and will be on a firm downward trajectory after 2014,” the IMF, the European Commission and the European Central Bank said in a joint statement on Sept. 11. The IMF in July said Portugal’s debt would peak at about 118.5 percent of GDP in 2013.
The country has been given more time to narrow its budget shortfall after tax revenue missed forecasts an d the economy heads for a third year of contraction in 2013. Portugal aims to reach a deficit of 5 percent in 2012 instead of the previous goal of 4.5 percent, Finance Minister Vitor Gaspar said on Sept. 11 after EU and IMF officials agreed on the new targets.
The government projects GDP will shrink 1 percent in 2013 after a contraction of 3 percent this year. Economic growth has averaged less than 1 percent a year for the past decade, placing Portugal among Europe’s weakest performers
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Re: New EC Thread
Panda Wed 3 Oct - 10:47
3 October 2012 Last updated at 10:39
Man scales St Peter's Basilica in anti-EU protest
The protester stayed on the dome overnight on Tuesday
Continue reading the main story
Related Stories
A man has scaled the dome of St Peter's Basilica in the Vatican City, in an apparent protest against EU measures he alleges penalise small businesses.
He is standing on one of the many ornate window ledges of the dome.
A large fabric banner hangs beneath him reading, "Help! Enough Monti. Enough Europe. Enough multinationals!"
Marcello Di Finizio, a beach bar owner, staged a similar protest in July against an EU directive that will see parts of the seafront auctioned off.
Firefighters have been pacing a walkway which circles the cupola on the top of the dome.
On the square below, Pope Benedict XVI held a service on Wednesday morning.
Mr Di Finizio started to scale the dome, an iconic feature of one of Catholicism's most revered churches, on Tuesday afternoon.
According to one of his friends, he is angry about an EU directive, backed by the Italian government, which will reform rules for auctioning licenses to operate patches of Italy's seafront. He argues the measure will favour big multinationals.
A telephone call to Italian ministers on Tuesday failed to persuade him to climb down.
Mr Di Finizio rents out parasols and sun loungers to sun bathers.
In August beach operators protested against the measures by keeping parasols closed along large stretches on Italy's coastline.
The operators have said the new rules threaten the jobs of some 600,000 resort workers.
The directive is due to come into effect in Italy from 2016.
Man scales St Peter's Basilica in anti-EU protest
The protester stayed on the dome overnight on Tuesday Continue reading the main story
Related Stories
A man has scaled the dome of St Peter's Basilica in the Vatican City, in an apparent protest against EU measures he alleges penalise small businesses.
He is standing on one of the many ornate window ledges of the dome.
A large fabric banner hangs beneath him reading, "Help! Enough Monti. Enough Europe. Enough multinationals!"
Marcello Di Finizio, a beach bar owner, staged a similar protest in July against an EU directive that will see parts of the seafront auctioned off.
Firefighters have been pacing a walkway which circles the cupola on the top of the dome.
On the square below, Pope Benedict XVI held a service on Wednesday morning.
Mr Di Finizio started to scale the dome, an iconic feature of one of Catholicism's most revered churches, on Tuesday afternoon.
According to one of his friends, he is angry about an EU directive, backed by the Italian government, which will reform rules for auctioning licenses to operate patches of Italy's seafront. He argues the measure will favour big multinationals.
A telephone call to Italian ministers on Tuesday failed to persuade him to climb down.
Mr Di Finizio rents out parasols and sun loungers to sun bathers.
In August beach operators protested against the measures by keeping parasols closed along large stretches on Italy's coastline.
The operators have said the new rules threaten the jobs of some 600,000 resort workers.
The directive is due to come into effect in Italy from 2016.
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Re: New EC Thread
Panda Wed 3 Oct - 17:48
3 October 2012 Last updated at 15:22
EU Single Market Act II aims to boost competition
The European Commission is planning to make it easier to work across the whole single market area
Continue reading the main story
Eurozone in Crisis
The European Commission has put forward new proposals to make it easier for people and businesses to move and do business within the European Union.
The commission's Single Market Act II has four key aims.
They include fostering mobility of citizens and businesses across borders and making it easier to gain access to finance across the 27 nation EU area.
The act also hopes to strengthen social entrepreneurship and boost consumer confidence.
European officials have been pushing forward ideas for growth in a region where many countries are in recession. Some countries - such as Greece and Spain - have austerity programmes in place and no programmes for boosting output.
The commission says the new act should raise employment across the crisis-hit region, particularly for young people.
The new Single Market Act follows close after the first Single Market Act, which was adopted in April last year. However, key actions proposed by the commission under the first act are currently being discussed by parliament and ministers, and not all of these will be in place by the end of this year.
The commission says that the changes that have been introduced have meant a steep fall in the cost of mobile phone calls and air travel.
Saving money
Continue reading the main story
Analysis
Chris Morris BBC News, Brussels
At a time of economic crisis, of recession and high unemployment in many EU countries, the Single Market is seen as part of the solution - boosting competition, making trade easier and giving businesses that operate within it access to nearly 500 million consumers.
It is in many ways one of the EU's unalloyed success stories. But the Single Market is by no means complete, and this is another push to try to make it effective in areas which have proved resistant - the transport and energy sectors, for example.
The trouble is the EU has been talking for years about further measures to improve the way the Single Market works - but action has spoken more softly than words.
The crisis in the eurozone is serving as a trigger to shake off some of the complacency, because the need for measures which boost jobs and promote growth is more urgent than ever.
However, the commission says this second act, with a second set of priorities, is now needed to continue expanding ease of investment and movement within the single marketplace.
It contains 12 key ideas under the four headings.
Among the key aims are:
Philippe de Buck, the director general of the business lobby group, Business Europe, said the new act's aims were welcome, but warned it needed political will to ensure it benefited business.
"For the Single Market Act II to deliver growth, it must be accompanied by a renewed commitment from member states, institutions and stakeholders to ensure that single market rules work better in practice and are correctly applied throughout Europe. The new proposals should be carried out swiftly."
The commission will put forward all key legislative proposals of the new act by spring 2013 and the rest by the end of next year.
It hopes that the act will be in force by the spring of 2014.
The European Commissioner for internal market and services, Michel Barnier, said the act provided a chance to kickstart Europe's economy.
"I am convinced that the 12 key actions that we are presenting today will receive the degree of political ownership that they deserve," he said.
"This is our chance to use our golden asset, the single market, to see our social market economy be competitive and thrive again."
EU Single Market Act II aims to boost competition
The European Commission is planning to make it easier to work across the whole single market area Continue reading the main story
Eurozone in Crisis
- Who's afraid of the euro crisis?
- Is it game over for Greece?
- EU austerity drive by country
- Why Greece's problems matter
The European Commission has put forward new proposals to make it easier for people and businesses to move and do business within the European Union.
The commission's Single Market Act II has four key aims.
They include fostering mobility of citizens and businesses across borders and making it easier to gain access to finance across the 27 nation EU area.
The act also hopes to strengthen social entrepreneurship and boost consumer confidence.
European officials have been pushing forward ideas for growth in a region where many countries are in recession. Some countries - such as Greece and Spain - have austerity programmes in place and no programmes for boosting output.
The commission says the new act should raise employment across the crisis-hit region, particularly for young people.
The new Single Market Act follows close after the first Single Market Act, which was adopted in April last year. However, key actions proposed by the commission under the first act are currently being discussed by parliament and ministers, and not all of these will be in place by the end of this year.
The commission says that the changes that have been introduced have meant a steep fall in the cost of mobile phone calls and air travel.
Saving money
Continue reading the main story
Analysis
Chris Morris BBC News, Brussels At a time of economic crisis, of recession and high unemployment in many EU countries, the Single Market is seen as part of the solution - boosting competition, making trade easier and giving businesses that operate within it access to nearly 500 million consumers.
It is in many ways one of the EU's unalloyed success stories. But the Single Market is by no means complete, and this is another push to try to make it effective in areas which have proved resistant - the transport and energy sectors, for example.
The trouble is the EU has been talking for years about further measures to improve the way the Single Market works - but action has spoken more softly than words.
The crisis in the eurozone is serving as a trigger to shake off some of the complacency, because the need for measures which boost jobs and promote growth is more urgent than ever.
However, the commission says this second act, with a second set of priorities, is now needed to continue expanding ease of investment and movement within the single marketplace.
It contains 12 key ideas under the four headings.
Among the key aims are:
- making online payments more efficient, the commission says that 35% of internet users do not buy online because they have doubts over payment methods
- opening up domestic rail passenger services to operators from other member states
- speeding up the opening up of EU airspace so it operates as a single entity - something the commission says could save air travellers 5bn euros ($6.5bn, £4bn) a year
- opening up energy markets so the 500 million citizens of the EU can chose their power supply from across the whole EU region - something the commission says could collectively save 13bn euros if all citizens switched to the cheapest tariff
Philippe de Buck, the director general of the business lobby group, Business Europe, said the new act's aims were welcome, but warned it needed political will to ensure it benefited business.
"For the Single Market Act II to deliver growth, it must be accompanied by a renewed commitment from member states, institutions and stakeholders to ensure that single market rules work better in practice and are correctly applied throughout Europe. The new proposals should be carried out swiftly."
The commission will put forward all key legislative proposals of the new act by spring 2013 and the rest by the end of next year.
It hopes that the act will be in force by the spring of 2014.
The European Commissioner for internal market and services, Michel Barnier, said the act provided a chance to kickstart Europe's economy.
"I am convinced that the 12 key actions that we are presenting today will receive the degree of political ownership that they deserve," he said.
"This is our chance to use our golden asset, the single market, to see our social market economy be competitive and thrive again."
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Re: New EC Thread
Panda Wed 3 Oct - 20:36
Why the Euro Crisis Is Nowhere Near Being Over
Bailouts and easy money won't be able to resolve the structural problems of the euro zone, and increasing austerity won't fix things either.
By Michael Sivy | @MFSivy | October 1, 2012 | 16
.
DOMINIQUE FAGET / AFP / Getty Images
Spaniards attend a demonstration organized by "indignant" protesters, who rally against a system they say deprives citizens of a voice in the crisis, near the parliament building in Madrid on Sept. 29, 2012
It’s astonishing, but everyone is behaving as though the euro crisis were over. Long-term bond yields are bellwethers of investor confidence. And over the past few months, yields on 10-year Spanish bonds have fallen from 7.5% to 6%, while those on similar Italian issues have dropped to 5%. The U.S. stock market seems equally upbeat. The S&P 500 finished the third quarter last week at its highest level in more than four years. Share prices are shrugging off not only the likelihood of an economic slump in 2013, but also the possibility that a crisis in the euro zone could send shock waves throughout the global banking system.
Something seems very wrong with this picture — at least to me. Focus only on the European elite, and everything may appear under control. The May election of Socialist François Hollande to replace Nicolas Sarkozy as President of France has shifted European finances in the direction of easy money. The ruling three weeks ago by Germany’s Constitutional Court removed the biggest remaining stumbling block for future bailouts in the euro zone. And German Chancellor Angela Merkel has also softened on financial questions, declaring last Thursday, “We will continue to do everything necessary to develop the economic and currency union so that it is stabilized permanently.”
(MORE: LIBOR Lending Rate Gets Overhaul (Sort of))
But as soon as you turn from the elites’ self-congratulation to stories about people in the streets, you get a very different impression. Formerly middle-class Spaniards are scrounging for food in dumpsters. Greeks are rioting when they are not engaged in neofascist marches. Rich French people are thinking about leaving their country because of staggering new income tax rates. And former Italian Prime Minister Silvio Berlusconi — the “bunga bunga” man — is mulling a return to office by running against German oppression.
Everything can be straightened out, according to advocates of easy money, if enough cash is handed around by European financial institutions. “If Germany really wants to save the euro, it should let the European Central Bank do what’s necessary to rescue the debtor nations — and it should do so without demanding more pointless pain,” writes Paul Krugman in the New York Times. “The continued survival of the euro is assured,” writes George Soros in the New York Review of Books, although more ominously he adds: “The line of least resistance leads not to the immediate breakup of the euro but to the indefinite extension of the crisis.”
An indefinite extension of the crisis is precisely what appears to be in store. By lowering the cost of borrowing, expansive monetary policies do indeed reduce the short-term financial pressures on heavily indebted countries. But in my view, three long-term problems remain that have no easy solution.
(MORE: 6 Habits of Extraordinary Bosses)
First, countries can’t easily escape the consequences of past mismanagement. Greece, Italy and Portugal are all projected to run what are called primary budget surpluses next year. That means that their governments will take in more money than they spend, if you don’t count interest payments. In other words, they would now be in great financial shape, thanks to all their belt-tightening, if it weren’t for the burden of the debt they accumulated in the past. By contrast, the U.S. primary deficit is still a whopping 6% of GDP, significantly higher than that of every country in the euro zone. If weak European countries have to pay off all their past debts at the same time that they are running primary budget surpluses, they will face a very long period of austerity indeed.
The second problem is that over the past decade, the euro has created a severe misalignment in labor costs (after adjustment for differences in productivity). Labor costs in weak countries are as much as 20% higher than those in Germany. Part of the reason for the gap is that those countries let wages and benefits rise too fast in past years, and another part is the result of subpar gains in productivity. There are three possible fantasy solutions: everyone could leave the euro and then rejoin it at new exchange rates that equalized costs; everyone in high-cost countries could agree to 20% wage cuts; or a massive wave of new investment could boost productivity. None of those things is particularly likely. More realistically, countries with overpriced labor have a choice between simply leaving the euro zone or preparing for years of austerity that slowly grinds down their labor costs.
The third problem is that perpetual austerity is not only intolerable, it is also ineffective. Occasional protests that result in some broken shop windows are one thing. But current demonstrations in Europe against stringent austerity policies reflect the unraveling of the social fabric itself. What is worse, there is little chance that such policies can solve Europe’s financial problems within a reasonable time frame. There is simply too much debt to pay down and too many accumulated structural problems. Moreover, if austerity pushes countries into recession, their shrinking economies will actually become less capable of hitting financial targets.
(MORE: The Columbus Comeback)
There is, in short, no straightforward solution. At best, a careful balance will have to be maintained between, on one hand, the financial stringency required to chip away at debt while bringing European labor costs into better alignment and, on the other, the basic needs of the people who will suffer in the process. Europe is still immensely wealthy, and there is no reason to believe that today’s problems will necessarily end in catastrophe. However, the current level of complacent optimism seems somewhat naive. There figures to be a lot more mess to wade through before the euro crisis is truly over.
Read other related stories about this:
Read more: http://business.time.com/2012/10/01/why-the-euro-crisis-is-nowhere-near-being-over/#ixzz28GZHN9hV
Bailouts and easy money won't be able to resolve the structural problems of the euro zone, and increasing austerity won't fix things either.
By Michael Sivy | @MFSivy | October 1, 2012 | 16
.
DOMINIQUE FAGET / AFP / Getty Images
Spaniards attend a demonstration organized by "indignant" protesters, who rally against a system they say deprives citizens of a voice in the crisis, near the parliament building in Madrid on Sept. 29, 2012
It’s astonishing, but everyone is behaving as though the euro crisis were over. Long-term bond yields are bellwethers of investor confidence. And over the past few months, yields on 10-year Spanish bonds have fallen from 7.5% to 6%, while those on similar Italian issues have dropped to 5%. The U.S. stock market seems equally upbeat. The S&P 500 finished the third quarter last week at its highest level in more than four years. Share prices are shrugging off not only the likelihood of an economic slump in 2013, but also the possibility that a crisis in the euro zone could send shock waves throughout the global banking system.
Something seems very wrong with this picture — at least to me. Focus only on the European elite, and everything may appear under control. The May election of Socialist François Hollande to replace Nicolas Sarkozy as President of France has shifted European finances in the direction of easy money. The ruling three weeks ago by Germany’s Constitutional Court removed the biggest remaining stumbling block for future bailouts in the euro zone. And German Chancellor Angela Merkel has also softened on financial questions, declaring last Thursday, “We will continue to do everything necessary to develop the economic and currency union so that it is stabilized permanently.”
(MORE: LIBOR Lending Rate Gets Overhaul (Sort of))
But as soon as you turn from the elites’ self-congratulation to stories about people in the streets, you get a very different impression. Formerly middle-class Spaniards are scrounging for food in dumpsters. Greeks are rioting when they are not engaged in neofascist marches. Rich French people are thinking about leaving their country because of staggering new income tax rates. And former Italian Prime Minister Silvio Berlusconi — the “bunga bunga” man — is mulling a return to office by running against German oppression.
Everything can be straightened out, according to advocates of easy money, if enough cash is handed around by European financial institutions. “If Germany really wants to save the euro, it should let the European Central Bank do what’s necessary to rescue the debtor nations — and it should do so without demanding more pointless pain,” writes Paul Krugman in the New York Times. “The continued survival of the euro is assured,” writes George Soros in the New York Review of Books, although more ominously he adds: “The line of least resistance leads not to the immediate breakup of the euro but to the indefinite extension of the crisis.”
An indefinite extension of the crisis is precisely what appears to be in store. By lowering the cost of borrowing, expansive monetary policies do indeed reduce the short-term financial pressures on heavily indebted countries. But in my view, three long-term problems remain that have no easy solution.
(MORE: 6 Habits of Extraordinary Bosses)
First, countries can’t easily escape the consequences of past mismanagement. Greece, Italy and Portugal are all projected to run what are called primary budget surpluses next year. That means that their governments will take in more money than they spend, if you don’t count interest payments. In other words, they would now be in great financial shape, thanks to all their belt-tightening, if it weren’t for the burden of the debt they accumulated in the past. By contrast, the U.S. primary deficit is still a whopping 6% of GDP, significantly higher than that of every country in the euro zone. If weak European countries have to pay off all their past debts at the same time that they are running primary budget surpluses, they will face a very long period of austerity indeed.
The second problem is that over the past decade, the euro has created a severe misalignment in labor costs (after adjustment for differences in productivity). Labor costs in weak countries are as much as 20% higher than those in Germany. Part of the reason for the gap is that those countries let wages and benefits rise too fast in past years, and another part is the result of subpar gains in productivity. There are three possible fantasy solutions: everyone could leave the euro and then rejoin it at new exchange rates that equalized costs; everyone in high-cost countries could agree to 20% wage cuts; or a massive wave of new investment could boost productivity. None of those things is particularly likely. More realistically, countries with overpriced labor have a choice between simply leaving the euro zone or preparing for years of austerity that slowly grinds down their labor costs.
The third problem is that perpetual austerity is not only intolerable, it is also ineffective. Occasional protests that result in some broken shop windows are one thing. But current demonstrations in Europe against stringent austerity policies reflect the unraveling of the social fabric itself. What is worse, there is little chance that such policies can solve Europe’s financial problems within a reasonable time frame. There is simply too much debt to pay down and too many accumulated structural problems. Moreover, if austerity pushes countries into recession, their shrinking economies will actually become less capable of hitting financial targets.
(MORE: The Columbus Comeback)
There is, in short, no straightforward solution. At best, a careful balance will have to be maintained between, on one hand, the financial stringency required to chip away at debt while bringing European labor costs into better alignment and, on the other, the basic needs of the people who will suffer in the process. Europe is still immensely wealthy, and there is no reason to believe that today’s problems will necessarily end in catastrophe. However, the current level of complacent optimism seems somewhat naive. There figures to be a lot more mess to wade through before the euro crisis is truly over.
Read other related stories about this:
- Europe Focused on Union Rather Than Breaking Up Banks Reuters
- Euro Crisis Entering Dangerous Third Phase CNN
Read more: http://business.time.com/2012/10/01/why-the-euro-crisis-is-nowhere-near-being-over/#ixzz28GZHN9hV
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Re: New EC Thread
Badboy Wed 3 Oct - 21:02
THIS PERSON HAS GUTS TO PROTEST LIKE THISPanda wrote:3 October 2012 Last updated at 10:39
Man scales St Peter's Basilica in anti-EU protest
Continue reading the main story
Related Stories
A man has scaled the dome of St Peter's Basilica in the Vatican City, in an apparent protest against EU measures he alleges penalise small businesses.
He is standing on one of the many ornate window ledges of the dome.
A large fabric banner hangs beneath him reading, "Help! Enough Monti. Enough Europe. Enough multinationals!"
Marcello Di Finizio, a beach bar owner, staged a similar protest in July against an EU directive that will see parts of the seafront auctioned off.
Firefighters have been pacing a walkway which circles the cupola on the top of the dome.
On the square below, Pope Benedict XVI held a service on Wednesday morning.
Mr Di Finizio started to scale the dome, an iconic feature of one of Catholicism's most revered churches, on Tuesday afternoon.
According to one of his friends, he is angry about an EU directive, backed by the Italian government, which will reform rules for auctioning licenses to operate patches of Italy's seafront. He argues the measure will favour big multinationals.
A telephone call to Italian ministers on Tuesday failed to persuade him to climb down.
Mr Di Finizio rents out parasols and sun loungers to sun bathers.
In August beach operators protested against the measures by keeping parasols closed along large stretches on Italy's coastline.
The operators have said the new rules threaten the jobs of some 600,000 resort workers.
The directive is due to come into effect in Italy from 2016.
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Re: New EC Thread
Panda Thu 4 Oct - 13:25
Why German unification was a mistake
3 October 2012Der Spiegel Hamburg
At Berlin’s Brandenburg Gate, 3 October 1990.
AFP
Thirty years after the inauguration of Helmut Kohl and 22 years after German reunification, the former chancellor is being celebrated as the father of German unity. But the truth is that, by hastily joining the GDR to the Federal Republic, he planted the seeds of the euro crisis, argues Wolfgang Münchau.
Wolfgang Münchau
Once again he was sitting there in the hall of the CDU / CSU parliamentary group in the Bundestag – one of the last great Europeans among the Christian Democrats, surrounded by an army of euro-sceptics who during his visit to the Reichstag building gave him merely polite applause. Helmut Kohl has reason to fear for his dream of European unification.
Kohl, never at a loss for a metaphor, always used to talk of the two sides of the same coin – German unity, and European unity. That was certainly a handy formula, and he may even have believed in it himself. But time has proved it wrong. German unification is not the flip side of European unity, but its opposite. German reunification is not just one of the root causes of the euro crisis, it is also one of the causes of our inability to master the crisis. Precisely here lies the real tragedy of Helmut Kohl: with his greatest political trick (German reunification), he sowed the seed for the destruction of his greatest political dream (European unity).
The hasty reunification cost almost two trillion euros in transfer payments, and it was the greatest example of economic mismanagement in the history of the world. It was a record, which is only now about to be smashed by the euro-disaster. One can hardly be surprised that the (formerly West) Germans, who had to put up with the transfer payments to East Germany (and must still put up with them) want no further transfer union in Europe.
A leadership role Germany never wanted
I am firmly convinced that the old Federal Republic of West Germany would have handled the euro crisis better. We would now have the fiscal and banking Union, and the Greek debt would be written off. For the old Federal Republic, the European integration was the ultima ratio, the last resort, of all politics. The crisis would have been grasped as a chance to reform the institutions of the EU.
But instead of European unity, national unity came first, and the change of the capital city to Berlin brought the West German politicians into a political culture that is closer to Moscow than to Brussels, Paris and London. I still recall a conversation with a leading CDU member a few years ago, who responded to a question from me on economic policy coordination in the eurozone with the answer: ‘Germany is not coordinating at the euro-level, but only with the G20’ – the group of the top 20 industrialised nations. Germany no longer sees itself as part of the EU, but as an independent mid-ranking power on par with the Americans, Russians and Chinese, without those small European states butting in.
How could it have come to this change in course? With German unification, a key element of the European dynamic, which was based on a balance of the five largest member states – West Germany, France, Britain, Italy and Spain – was broken. It is no coincidence that with German unification Britain’s interest in the EU disappeared. And with the steady withdrawal of the British, the power imbalance grew even greater.
Germany now accounts for more than a quarter of the economy of the entire eurozone, but the country is finding it tough to handle a leadership role in Europe that it never wanted. The old Federal Republic, an equal partner among the five, would be behaving today like the Netherlands. Critical, but constructive.
Germany entered euro at an inflated exchange rate
I myself, I must admit, was among those who believed for a long time in Kohl's two-sides-of-the-same-coin metaphor. At the start of the early nineties it was hard to imagine that Germany would ever diverge from the pro-European consensus. This happened, in part, because of East German politicians like Angela Merkel, who had no personal relationship with the EU and felt strangers to the idea of European integration.
The alienation, though, cannot be explained solely by the ‘Eastern’ effect. Even in the West, priorities were changing. One reason is economic. Due to the costs of reunification, Germany entered the euro at an inflated exchange rate. The result was that for a whole decade German economic policies concentrated on boosting Germany’s own competitiveness against third parties instead of strengthening the economic performance of the eurozone as a whole. And that was one of the major causes of the crisis that would come later.
German and European unification can therefore largely not be reconciled, because they have both turned out badly economically. I believe that future historians will take a critical view of German unification and Kohl's merits, which is the view today.
On the web
3 October 2012Der Spiegel Hamburg
At Berlin’s Brandenburg Gate, 3 October 1990.
AFP
Thirty years after the inauguration of Helmut Kohl and 22 years after German reunification, the former chancellor is being celebrated as the father of German unity. But the truth is that, by hastily joining the GDR to the Federal Republic, he planted the seeds of the euro crisis, argues Wolfgang Münchau.
Wolfgang Münchau
Once again he was sitting there in the hall of the CDU / CSU parliamentary group in the Bundestag – one of the last great Europeans among the Christian Democrats, surrounded by an army of euro-sceptics who during his visit to the Reichstag building gave him merely polite applause. Helmut Kohl has reason to fear for his dream of European unification.
Kohl, never at a loss for a metaphor, always used to talk of the two sides of the same coin – German unity, and European unity. That was certainly a handy formula, and he may even have believed in it himself. But time has proved it wrong. German unification is not the flip side of European unity, but its opposite. German reunification is not just one of the root causes of the euro crisis, it is also one of the causes of our inability to master the crisis. Precisely here lies the real tragedy of Helmut Kohl: with his greatest political trick (German reunification), he sowed the seed for the destruction of his greatest political dream (European unity).
The hasty reunification cost almost two trillion euros in transfer payments, and it was the greatest example of economic mismanagement in the history of the world. It was a record, which is only now about to be smashed by the euro-disaster. One can hardly be surprised that the (formerly West) Germans, who had to put up with the transfer payments to East Germany (and must still put up with them) want no further transfer union in Europe.
A leadership role Germany never wanted
I am firmly convinced that the old Federal Republic of West Germany would have handled the euro crisis better. We would now have the fiscal and banking Union, and the Greek debt would be written off. For the old Federal Republic, the European integration was the ultima ratio, the last resort, of all politics. The crisis would have been grasped as a chance to reform the institutions of the EU.
But instead of European unity, national unity came first, and the change of the capital city to Berlin brought the West German politicians into a political culture that is closer to Moscow than to Brussels, Paris and London. I still recall a conversation with a leading CDU member a few years ago, who responded to a question from me on economic policy coordination in the eurozone with the answer: ‘Germany is not coordinating at the euro-level, but only with the G20’ – the group of the top 20 industrialised nations. Germany no longer sees itself as part of the EU, but as an independent mid-ranking power on par with the Americans, Russians and Chinese, without those small European states butting in.
How could it have come to this change in course? With German unification, a key element of the European dynamic, which was based on a balance of the five largest member states – West Germany, France, Britain, Italy and Spain – was broken. It is no coincidence that with German unification Britain’s interest in the EU disappeared. And with the steady withdrawal of the British, the power imbalance grew even greater.
Germany now accounts for more than a quarter of the economy of the entire eurozone, but the country is finding it tough to handle a leadership role in Europe that it never wanted. The old Federal Republic, an equal partner among the five, would be behaving today like the Netherlands. Critical, but constructive.
Germany entered euro at an inflated exchange rate
I myself, I must admit, was among those who believed for a long time in Kohl's two-sides-of-the-same-coin metaphor. At the start of the early nineties it was hard to imagine that Germany would ever diverge from the pro-European consensus. This happened, in part, because of East German politicians like Angela Merkel, who had no personal relationship with the EU and felt strangers to the idea of European integration.
The alienation, though, cannot be explained solely by the ‘Eastern’ effect. Even in the West, priorities were changing. One reason is economic. Due to the costs of reunification, Germany entered the euro at an inflated exchange rate. The result was that for a whole decade German economic policies concentrated on boosting Germany’s own competitiveness against third parties instead of strengthening the economic performance of the eurozone as a whole. And that was one of the major causes of the crisis that would come later.
German and European unification can therefore largely not be reconciled, because they have both turned out badly economically. I believe that future historians will take a critical view of German unification and Kohl's merits, which is the view today.
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Re: New EC Thread
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Merkel Emulates Kohl German Unity Turning Euro Crisis Into Votes
By Tony Czuczka and Leon Mangasarian - Oct 2, 2012 11:00 PM GMT+0100
Three days before East and West Germany reunited in 1990, Angela Merkel made an acquaintance that was to put her on the path to power.
Enlarge image
Merkel Emulates Kohl German Unity Turning Euro Crisis Into Votes
Sean Gallup/Getty Images
German Chancellor Angela Merkel arrives at the Bundestag commission in Berlin, on Sept. 27, 2012.
German Chancellor Angela Merkel arrives at the Bundestag commission in Berlin, on Sept. 27, 2012. Photographer: Sean Gallup/Getty Images
12:27
Sept. 24 (Bloomberg) -- Michael Meister, the deputy chairman of German Chancellor Angela Merkel's Christian Democrats Party, talks about the prospect of an aid program for Spain, a European banking union and Greece's bailout conditions. He speaks from Berlin with Bloomberg Television's Maryam Nemazee. (Source: Bloomberg)
An East German scientist propelled into politics by the fall of the Berlin Wall and the communist regime’s collapse, Merkel wangled an audience with Helmut Kohl at a party event in Hamburg. Within four months, Kohl had ridden German reunification to a landslide third election victory and Merkel secured a post in his Cabinet.
Just as Kohl knew what Germans on both sides of the border wanted when they united 22 years ago today, Merkel is tuned in to voters who balk at paying the price of the united Europe Kohl brought about. While her peers in France, Italy and Spain have been removed in the three years since the debt crisis emerged in Greece, Merkel’s ability to channel domestic public opinion paired with a still-expanding economy led polling company Forsa to conclude that she looks unbeatable before 2013 elections.
“The crisis makes people rally behind Merkel,” Gerd Languth, a historian and professor of politics at the University of Bonn whose 2005 biography of the chancellor documents her meeting with Kohl, said by phone. “People see her as being on top of the issues and the only one who can solve the problems.”
Sarkozy Unseated
Bucking the crisis that has unseated contemporaries including her ally French President Nicolas Sarkozy is shaping up to be the theme of Merkel’s campaign for the election due next fall. Its resonance with voters will determine whether she emulates Kohl and serves a third term. Outside the 17-nation euro area, U.K. Prime Minister David Cameron’s Conservatives trail the opposition Labour Party by as many as 10 percentage points as he pushes the deepest budget cuts since World War II.
Voters credit Merkel for ensuring Germany is “the only economic safe haven in Europe,” Horst Teltschik, Kohl’s deputy chief of staff and a key adviser on German reunification, said in a telephone interview. “There are no other strong leaders in Europe.” Merkel is “the rock at the center of the euro-crisis storm.”
Merkel’s speeches channel Germans’ historical aversion to debt and profligacy forged in the aftermath of two world wars and marry them to Kohl’s legacy of a more integrated Europe. She’s seen to be “holding the line on debt mutualization” while finding a “middle way” on Europe, said Langguth. Vilification of Merkel with headlines and placards comparing her with Hitler only makes Germans swing behind her, he said.
Robots to China
Merkel, 58, the key political player in nearly three years of crisis-fighting, is aided by an economy that has yet to bear the scars of the turmoil dealt to fellow euro members.
Buoyed by growth in China and the U.S., Volkswagen AG, Daimler AG, and Bayerische Motoren Werke AG (BMW) have so far proved resilient to the plunge in sales that has plagued European rivals such as PSA Peugeot Citroen of France and Italy’s Fiat SpA. Kuka AG of Augsburg, Europe’s biggest maker of assembly- line robots, raised its outlook for 2012 as it expands in China. Germany’s 30-member benchmark DAX index is up almost 25 percent this year compared with a near 11 percent rise in the Dow Jones Industrial Average.
In Spain and Greece, the crisis front line, unemployment is touching 25 percent; even across the Rhine in France joblessness is at a 13-year high. In Germany, Europe’s biggest economy, it is at a two-decade low. While all Europe tightens its belt in fear of the future, Germans’ satisfaction with their economic situation was at an 11-year high in July, FG Wahlen found.
Steinbrueck’s Challenge
Merkel’s edge over three opposition leaders is now so wide in a Forsa poll that she “appears unbeatable” a year from the election, Stern magazine said Sept. 19. Peer Steinbrueck, Merkel’s first-term finance minister who was nominated on Oct. 1 as her main challenger, trails her approval rating by 22 percentage points. She is Germany’s most popular politician and her approval rating is hovering near the highest since November 2009, a separate FG Wahlen poll released Sept. 28 showed.
The chancellor hasn’t offered her political foes much space to land blows as she preaches budget cuts for the euro area, refuses to underwrite the region’s debt with German economic might and barely acknowledges anti-austerity protests from Greece to Spain. Instead she tells weaker euro countries there’s no prosperity without pain.
“We remain true to our philosophy of no help without something in return,” she said in Brussels in June. That followed an all-night European Union summit at which Merkel fended off pressure from Italy and Spain for direct bank bailouts and government-backed buying of sovereign bonds.
More Kohl
Polls indicate that German voters like it when Merkel lays down her doctrine and holds the line against the euro area’s southern tier. Merkel is now getting higher approval ratings than Kohl ever did, said Matthias Jung, Mannheim-based FG Wahlen’s director.
“A growing part of the population realizes that there is no shining solution and that the crisis requires constantly defending German interests,” Jung said in an interview. Merkel is successfully defining herself in voters’ eyes as guardian of “the politics of common sense.”
The crisis has not always worked to her advantage. Re- elected in September 2009, Merkel’s personal and party popularity plunged after the first bailout for Greece in May 2010, leading to a run of state vote defeats. She took months to craft a policy meshing national interest with Germans’ desire after wartime devastation to be good Europeans.
Tipping Point
The turning point came in December 2011 as she persuaded all but two of the EU’s members to sign up to her fiscal pact locking in common budget rules. From a low of 29 percent in a Forsa poll in 2010, her Christian Democratic bloc soared to a four-year high of 39 percent in August. Her bloc won 33.8 percent in the last national election on Sept. 27, 2009.
That trajectory brings Merkel closer to Kohl, who was first elected West German chancellor 30 years ago this week. In 1989, seven years into office, his popularity was languishing when he seized the opportunity provided by the fall of the Berlin Wall to push for a reunited Germany, winning a landslide victory in the first post-unification German elections in December 1990.
Merkel sought out Kohl two months previously at a party convention organized to formally unite Christian Democratic organizations in the two parts of Germany before Unification Day on Oct. 3, Langguth said in his biography, which comprises interviews with Merkel and her contemporaries. Merkel and Kohl met at the press party on the eve of the convention and had “a relatively long talk that evidently impressed Kohl,” he wrote.
Law Breaker
Germans voted Kohl out in 1998 after a record 16 years in office, and Merkel broke with her one-time mentor the next year when he refused to identify secret campaign donors. Writing in the Frankfurter Allgemeine Zeitung newspaper, Merkel said he had broken the law and caused damage to the party he led for a quarter-century.
Now publicly reconciled, Kohl, who agreed in 1992 to give up the deutsche mark for the euro, passed the baton of his legacy on to a new generation at a Sept. 27 gala at Berlin’s German Historical Museum attended by his former protégée.
“Let us make good use of time,” Kohl, now 82 and in a wheelchair, said at the event, where he described Europe as a “grand goal” that others now have to carry forward. “Let us get going.”
A pastor’s daughter, Merkel’s austere Lutheran manner may fit the times even more than Kohl, the wine-loving West German who seized the moment and allayed fears of a bigger Germany with personal diplomacy. Merkel, seeking to extend her chancellorship to 12 years, told Kohl at the Berlin ceremony that he “defined an era.”
Eastern Collapse
Merkel cites East Germany’s economic collapse after decades of rot as a defining moment. Her methodical, home-spun image is part of her appeal as Germans contemplate their position as the chief underwriter of 386 billion euros ($500 billion) in pledges for Greece, Ireland and Portugal plus as much as another 100 billion euros for Spain’s banks -- with a sovereign rescue for Spain possibly ahead. The 700 billion-euro permanent bailout fund, the European Stability Mechanism, comes on top.
“I like to read files,” Merkel said in Berlin on Sept. 26. She relishes cooking with her physicist husband at her rural lakeside retreat north of Berlin, buys her own groceries in the capital and holds up the mythical “Swabian housewife” as symbol of German thriftiness in speeches. She doesn’t host dinner parties and lets off steam with “hiking, cooking, laughing,” the Sueddeutsche Zeitung newspaper quoted her as saying in response to questions from celebrities on Aug. 10.
‘Trust’
“The instrumental word with Merkel is trust,” said Jan Techau, head of the Carnegie Endowment for International Peace office in Brussels. “People don’t understand the European Stability Mechanism or the fiscal pact, but they trust Merkel” and her “plain-spoken confidence in resolving the crisis.”
For all that the economy is slowing, with the Munich-based Ifo institutes’s gauge of business confidence at the lowest in more than two-and-a-half years, record-low German bond yields signal investor confidence in Germany as a safe haven. House prices in cities such as Berlin that were resistant to the boom- that-turned-to-bust in Ireland, Spain and the U.K. are rising so fast that billionaire investor George Soros said Sept. 10 the German capital was in “serious danger” of developing a bubble.
Merkel is disproving “the chorus of people in Europe saying for years ‘the end is near,”’ Techau, a former analyst at the German Council on Foreign Relations, said in a telephone interview. “But the end hasn’t come and the perception is that she’s steered us through it.”
Euro-Bond Gambit
As the crisis heads toward its fourth year, Merkel has signaled that the euro and her plan to shift the energy supply away from nuclear power will be her main campaign themes. Germany’s economic strength is buoying her for now against the Social Democrats, who backed joint euro-area bond issuance as recently as April and now urge pooling the region’s old debt. Polls show voters overwhelmingly back Merkel’s rejection of euro bonds.
To be sure, the latest Forsa poll for Stern published Oct. 2 showed the Social Democrats closing on Merkel’s bloc after announcing nominating Steinbrueck to run against her. The SPD gained three points to 29 percent, while her CDU/CSU fell by the same margin to 35 percent.
What’s more, Merkel’s current coalition with the Free Democratic Party doesn’t have a chance of reelection if current polls are correct. The FDP has been scraping along at between 2 percent and 5 percent support since 2010, far below the 14.6 percent it won in 2009.
Coalition Constellations
Merkel told reporters on Sept. 17 that while she wants a re-run of her current coalition with the FDP, she wouldn’t “rule out” a return of the grand coalition with the SPD that she headed under her first administration from 2005 to 2009.
Even if Steinbrueck can maintain his party’s bounce, the SPD wouldn’t be in a position to choose if elections were held now. A coalition with his preferred partner, the Greens, would fail to win a majority according to all six leading German polling companies.
Gary Smith, executive director of the American Academy in Berlin, says that beyond trust, popular euro crisis policies and the economy, Merkel is also “recapturing the moral high ground” on European unification which, despite the euro crisis, remains important for many Germans.
“Merkel has made the CDU stand for something again,” Smith, whose research group promotes trans-Atlantic ties, said in an interview. “They stand for Europe and voters understand that Germany’s global role is through leading the EU, and it’s Merkel who’s providing that leadership.”
Merkel, pressed on her electoral intentions at a Sept. 22 meeting with French President Francois Hollande marking Franco- German postwar ties, said she’d “happily” serve another term.
“I don’t feel at all like I’m at the end of my mandate,” she said.
By Tony Czuczka and Leon Mangasarian - Oct 2, 2012 11:00 PM GMT+0100
Three days before East and West Germany reunited in 1990, Angela Merkel made an acquaintance that was to put her on the path to power.
Enlarge image
Merkel Emulates Kohl German Unity Turning Euro Crisis Into Votes
Sean Gallup/Getty Images
German Chancellor Angela Merkel arrives at the Bundestag commission in Berlin, on Sept. 27, 2012.
German Chancellor Angela Merkel arrives at the Bundestag commission in Berlin, on Sept. 27, 2012. Photographer: Sean Gallup/Getty Images
12:27
Sept. 24 (Bloomberg) -- Michael Meister, the deputy chairman of German Chancellor Angela Merkel's Christian Democrats Party, talks about the prospect of an aid program for Spain, a European banking union and Greece's bailout conditions. He speaks from Berlin with Bloomberg Television's Maryam Nemazee. (Source: Bloomberg)
An East German scientist propelled into politics by the fall of the Berlin Wall and the communist regime’s collapse, Merkel wangled an audience with Helmut Kohl at a party event in Hamburg. Within four months, Kohl had ridden German reunification to a landslide third election victory and Merkel secured a post in his Cabinet.
Just as Kohl knew what Germans on both sides of the border wanted when they united 22 years ago today, Merkel is tuned in to voters who balk at paying the price of the united Europe Kohl brought about. While her peers in France, Italy and Spain have been removed in the three years since the debt crisis emerged in Greece, Merkel’s ability to channel domestic public opinion paired with a still-expanding economy led polling company Forsa to conclude that she looks unbeatable before 2013 elections.
“The crisis makes people rally behind Merkel,” Gerd Languth, a historian and professor of politics at the University of Bonn whose 2005 biography of the chancellor documents her meeting with Kohl, said by phone. “People see her as being on top of the issues and the only one who can solve the problems.”
Sarkozy Unseated
Bucking the crisis that has unseated contemporaries including her ally French President Nicolas Sarkozy is shaping up to be the theme of Merkel’s campaign for the election due next fall. Its resonance with voters will determine whether she emulates Kohl and serves a third term. Outside the 17-nation euro area, U.K. Prime Minister David Cameron’s Conservatives trail the opposition Labour Party by as many as 10 percentage points as he pushes the deepest budget cuts since World War II.
Voters credit Merkel for ensuring Germany is “the only economic safe haven in Europe,” Horst Teltschik, Kohl’s deputy chief of staff and a key adviser on German reunification, said in a telephone interview. “There are no other strong leaders in Europe.” Merkel is “the rock at the center of the euro-crisis storm.”
Merkel’s speeches channel Germans’ historical aversion to debt and profligacy forged in the aftermath of two world wars and marry them to Kohl’s legacy of a more integrated Europe. She’s seen to be “holding the line on debt mutualization” while finding a “middle way” on Europe, said Langguth. Vilification of Merkel with headlines and placards comparing her with Hitler only makes Germans swing behind her, he said.
Robots to China
Merkel, 58, the key political player in nearly three years of crisis-fighting, is aided by an economy that has yet to bear the scars of the turmoil dealt to fellow euro members.
Buoyed by growth in China and the U.S., Volkswagen AG, Daimler AG, and Bayerische Motoren Werke AG (BMW) have so far proved resilient to the plunge in sales that has plagued European rivals such as PSA Peugeot Citroen of France and Italy’s Fiat SpA. Kuka AG of Augsburg, Europe’s biggest maker of assembly- line robots, raised its outlook for 2012 as it expands in China. Germany’s 30-member benchmark DAX index is up almost 25 percent this year compared with a near 11 percent rise in the Dow Jones Industrial Average.
In Spain and Greece, the crisis front line, unemployment is touching 25 percent; even across the Rhine in France joblessness is at a 13-year high. In Germany, Europe’s biggest economy, it is at a two-decade low. While all Europe tightens its belt in fear of the future, Germans’ satisfaction with their economic situation was at an 11-year high in July, FG Wahlen found.
Steinbrueck’s Challenge
Merkel’s edge over three opposition leaders is now so wide in a Forsa poll that she “appears unbeatable” a year from the election, Stern magazine said Sept. 19. Peer Steinbrueck, Merkel’s first-term finance minister who was nominated on Oct. 1 as her main challenger, trails her approval rating by 22 percentage points. She is Germany’s most popular politician and her approval rating is hovering near the highest since November 2009, a separate FG Wahlen poll released Sept. 28 showed.
The chancellor hasn’t offered her political foes much space to land blows as she preaches budget cuts for the euro area, refuses to underwrite the region’s debt with German economic might and barely acknowledges anti-austerity protests from Greece to Spain. Instead she tells weaker euro countries there’s no prosperity without pain.
“We remain true to our philosophy of no help without something in return,” she said in Brussels in June. That followed an all-night European Union summit at which Merkel fended off pressure from Italy and Spain for direct bank bailouts and government-backed buying of sovereign bonds.
More Kohl
Polls indicate that German voters like it when Merkel lays down her doctrine and holds the line against the euro area’s southern tier. Merkel is now getting higher approval ratings than Kohl ever did, said Matthias Jung, Mannheim-based FG Wahlen’s director.
“A growing part of the population realizes that there is no shining solution and that the crisis requires constantly defending German interests,” Jung said in an interview. Merkel is successfully defining herself in voters’ eyes as guardian of “the politics of common sense.”
The crisis has not always worked to her advantage. Re- elected in September 2009, Merkel’s personal and party popularity plunged after the first bailout for Greece in May 2010, leading to a run of state vote defeats. She took months to craft a policy meshing national interest with Germans’ desire after wartime devastation to be good Europeans.
Tipping Point
The turning point came in December 2011 as she persuaded all but two of the EU’s members to sign up to her fiscal pact locking in common budget rules. From a low of 29 percent in a Forsa poll in 2010, her Christian Democratic bloc soared to a four-year high of 39 percent in August. Her bloc won 33.8 percent in the last national election on Sept. 27, 2009.
That trajectory brings Merkel closer to Kohl, who was first elected West German chancellor 30 years ago this week. In 1989, seven years into office, his popularity was languishing when he seized the opportunity provided by the fall of the Berlin Wall to push for a reunited Germany, winning a landslide victory in the first post-unification German elections in December 1990.
Merkel sought out Kohl two months previously at a party convention organized to formally unite Christian Democratic organizations in the two parts of Germany before Unification Day on Oct. 3, Langguth said in his biography, which comprises interviews with Merkel and her contemporaries. Merkel and Kohl met at the press party on the eve of the convention and had “a relatively long talk that evidently impressed Kohl,” he wrote.
Law Breaker
Germans voted Kohl out in 1998 after a record 16 years in office, and Merkel broke with her one-time mentor the next year when he refused to identify secret campaign donors. Writing in the Frankfurter Allgemeine Zeitung newspaper, Merkel said he had broken the law and caused damage to the party he led for a quarter-century.
Now publicly reconciled, Kohl, who agreed in 1992 to give up the deutsche mark for the euro, passed the baton of his legacy on to a new generation at a Sept. 27 gala at Berlin’s German Historical Museum attended by his former protégée.
“Let us make good use of time,” Kohl, now 82 and in a wheelchair, said at the event, where he described Europe as a “grand goal” that others now have to carry forward. “Let us get going.”
A pastor’s daughter, Merkel’s austere Lutheran manner may fit the times even more than Kohl, the wine-loving West German who seized the moment and allayed fears of a bigger Germany with personal diplomacy. Merkel, seeking to extend her chancellorship to 12 years, told Kohl at the Berlin ceremony that he “defined an era.”
Eastern Collapse
Merkel cites East Germany’s economic collapse after decades of rot as a defining moment. Her methodical, home-spun image is part of her appeal as Germans contemplate their position as the chief underwriter of 386 billion euros ($500 billion) in pledges for Greece, Ireland and Portugal plus as much as another 100 billion euros for Spain’s banks -- with a sovereign rescue for Spain possibly ahead. The 700 billion-euro permanent bailout fund, the European Stability Mechanism, comes on top.
“I like to read files,” Merkel said in Berlin on Sept. 26. She relishes cooking with her physicist husband at her rural lakeside retreat north of Berlin, buys her own groceries in the capital and holds up the mythical “Swabian housewife” as symbol of German thriftiness in speeches. She doesn’t host dinner parties and lets off steam with “hiking, cooking, laughing,” the Sueddeutsche Zeitung newspaper quoted her as saying in response to questions from celebrities on Aug. 10.
‘Trust’
“The instrumental word with Merkel is trust,” said Jan Techau, head of the Carnegie Endowment for International Peace office in Brussels. “People don’t understand the European Stability Mechanism or the fiscal pact, but they trust Merkel” and her “plain-spoken confidence in resolving the crisis.”
For all that the economy is slowing, with the Munich-based Ifo institutes’s gauge of business confidence at the lowest in more than two-and-a-half years, record-low German bond yields signal investor confidence in Germany as a safe haven. House prices in cities such as Berlin that were resistant to the boom- that-turned-to-bust in Ireland, Spain and the U.K. are rising so fast that billionaire investor George Soros said Sept. 10 the German capital was in “serious danger” of developing a bubble.
Merkel is disproving “the chorus of people in Europe saying for years ‘the end is near,”’ Techau, a former analyst at the German Council on Foreign Relations, said in a telephone interview. “But the end hasn’t come and the perception is that she’s steered us through it.”
Euro-Bond Gambit
As the crisis heads toward its fourth year, Merkel has signaled that the euro and her plan to shift the energy supply away from nuclear power will be her main campaign themes. Germany’s economic strength is buoying her for now against the Social Democrats, who backed joint euro-area bond issuance as recently as April and now urge pooling the region’s old debt. Polls show voters overwhelmingly back Merkel’s rejection of euro bonds.
To be sure, the latest Forsa poll for Stern published Oct. 2 showed the Social Democrats closing on Merkel’s bloc after announcing nominating Steinbrueck to run against her. The SPD gained three points to 29 percent, while her CDU/CSU fell by the same margin to 35 percent.
What’s more, Merkel’s current coalition with the Free Democratic Party doesn’t have a chance of reelection if current polls are correct. The FDP has been scraping along at between 2 percent and 5 percent support since 2010, far below the 14.6 percent it won in 2009.
Coalition Constellations
Merkel told reporters on Sept. 17 that while she wants a re-run of her current coalition with the FDP, she wouldn’t “rule out” a return of the grand coalition with the SPD that she headed under her first administration from 2005 to 2009.
Even if Steinbrueck can maintain his party’s bounce, the SPD wouldn’t be in a position to choose if elections were held now. A coalition with his preferred partner, the Greens, would fail to win a majority according to all six leading German polling companies.
Gary Smith, executive director of the American Academy in Berlin, says that beyond trust, popular euro crisis policies and the economy, Merkel is also “recapturing the moral high ground” on European unification which, despite the euro crisis, remains important for many Germans.
“Merkel has made the CDU stand for something again,” Smith, whose research group promotes trans-Atlantic ties, said in an interview. “They stand for Europe and voters understand that Germany’s global role is through leading the EU, and it’s Merkel who’s providing that leadership.”
Merkel, pressed on her electoral intentions at a Sept. 22 meeting with French President Francois Hollande marking Franco- German postwar ties, said she’d “happily” serve another term.
“I don’t feel at all like I’m at the end of my mandate,” she said.
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Re: New EC Thread
Panda Thu 4 Oct - 18:30
Cyprus wants 14 Billion in fifth bailout. Obviously Russia, which has been pouring money into Northern Cyprus, they own all the Casinos. lots of Properties is not willing to lend the money.
Draghi says he is willing to issue Bonds as Governments sign the deal.
Rojay, President of Spain is still holding out on accepting a bail out, with good reason. There is already social unrest about the changes he has implemented, to take money from the ECB will mean Spain has to accept even more austerity.
Spain sold E3.99 million Bonds this morning and although not as successful as the last sale, not bad .
Slovenia may ask for help from the ECB. Banks have spent a lot of money financing Houses not sold, just like Spain. At present Men retire at 60 and Women 58......this is much lower than most Countries. If a bail-out results in one of the austerity measures being to raise the retirement age, watch the protests start.
Interestingly, Poland is experiencing a return of the Poles who settled in Germany before East and West Merged. The
President of Poland is down to earth and not afraid to criticise the EU , many Countries are now asking the question, is Merkel right in her demand on the 3% GDP........most Countries around the World are now in recession.
Draghi says he is willing to issue Bonds as Governments sign the deal.
Rojay, President of Spain is still holding out on accepting a bail out, with good reason. There is already social unrest about the changes he has implemented, to take money from the ECB will mean Spain has to accept even more austerity.
Spain sold E3.99 million Bonds this morning and although not as successful as the last sale, not bad .
Slovenia may ask for help from the ECB. Banks have spent a lot of money financing Houses not sold, just like Spain. At present Men retire at 60 and Women 58......this is much lower than most Countries. If a bail-out results in one of the austerity measures being to raise the retirement age, watch the protests start.
Interestingly, Poland is experiencing a return of the Poles who settled in Germany before East and West Merged. The
President of Poland is down to earth and not afraid to criticise the EU , many Countries are now asking the question, is Merkel right in her demand on the 3% GDP........most Countries around the World are now in recession.
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Re: New EC Thread
Panda Fri 5 Oct - 7:38
Spain fears harsh rescue terms from AAA Nordic parliaments
Senior officials from Germany and other parts of the eurozone's AAA core have warned Spain privately that angry parliaments are likely to impose stringent conditions on any further rescue loans.
Mr Rajoy says Spain will not accept a rescue unless terms are "reasonable" and every eurozone country is on board. It is unclear how he can resist for long unless he is willing to play the "Argentine" card, leave EMU, and default to foreign creditors. Photo: AP
By Ambrose Evans-Pritchard, International business editor
8:06PM BST 03 Oct 2012
266 Comments
Fear of escalating demands by Germany, Finland and Holland is a key reason why Spanish premier Mariano Rajoy continues to drag his feet on a full sovereign bail-out.
Spain's refusal to act has frozen the eurozone rescue machinery and begun to rattle markets. The European Central Bank will not buy Spanish bonds until the country requests aid from the European Stability Mechanism (ESM) and signs a "Memorandum" giving up fiscal sovereignty.
Finance minister Luis de Guindos told Spain's parliament Wednesday that there will be no bail-out until the terms are clear. "The government will take the best decision for Spain and its European allies when it knows all the details," he said.
Finland has become the greatest worry. "Rajoy is terrified that the Finns will say `No' after he has requested a rescue," said a Spanish economist with close ties to the Rajoy team.
Miapetra Kumpula-Natri, head of the Grand Committee on Europe in Finland's parliament, said Finnish lawmakers must vote on any deal and would make their own decision.
Senior officials from Germany and other parts of the eurozone's AAA core have warned Spain privately that angry parliaments are likely to impose stringent conditions on any further rescue loans.
Mr Rajoy says Spain will not accept a rescue unless terms are "reasonable" and every eurozone country is on board. It is unclear how he can resist for long unless he is willing to play the "Argentine" card, leave EMU, and default to foreign creditors. Photo: AP
By Ambrose Evans-Pritchard, International business editor
8:06PM BST 03 Oct 2012
266 Comments Fear of escalating demands by Germany, Finland and Holland is a key reason why Spanish premier Mariano Rajoy continues to drag his feet on a full sovereign bail-out.
Spain's refusal to act has frozen the eurozone rescue machinery and begun to rattle markets. The European Central Bank will not buy Spanish bonds until the country requests aid from the European Stability Mechanism (ESM) and signs a "Memorandum" giving up fiscal sovereignty.
Finance minister Luis de Guindos told Spain's parliament Wednesday that there will be no bail-out until the terms are clear. "The government will take the best decision for Spain and its European allies when it knows all the details," he said.
Finland has become the greatest worry. "Rajoy is terrified that the Finns will say `No' after he has requested a rescue," said a Spanish economist with close ties to the Rajoy team.
Miapetra Kumpula-Natri, head of the Grand Committee on Europe in Finland's parliament, said Finnish lawmakers must vote on any deal and would make their own decision.
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Re: New EC Thread
Panda Fri 5 Oct - 7:43
Germany told to 'come clean’ over Greece
German Chancellor Angela Merkel must “come clean at long last” and admit that Greece will need help for another seven or eight years, the German opposition leader said over the weekend.
There were reports that Berlin is so worried that a Greek crisis would spin out of control that it is ready to back the next €31bn payment to Athens under its EU-IMF Troika rescue. Photo: AFP/GETTY
By Ambrose Evans-Pritchard
7:03PM BST 30 Sep 2012
163 Comments
“The Greeks must stand by their commitment, but we must give them time. We cannot tighten the screws any further,” said Peer Steinbruck, the Social Democrat candidate for chancellor. He said the political and economic fall-out from Greek ejection from the euro would be devastating and must be avoided.
The plea came amid reports that Berlin is so worried that a Greek crisis would spin out of control that it is ready to back the next €31bn payment to Athens under its EU-IMF Troika rescue, despite failure to comply with the terms. Wirtschaftswoche, a German news magazine, said Greece’s parliament merely needs to vote on a list of detailed reforms.
It cited warnings from a top EU official that “domino-effect” dangers are too great to allow the ejection of Greece from EMU. Authorities across the world – including the Bank of England – fear a surge of capital flight from Portugal, Ireland, Spain, and Italy if the sanctity of monetary union is violated.
Diplomats say concerns go beyond financial damage. Both EU and US officials are worried that the fragile security system of the Western Mediterannean could start to unravel if Greece is alienated and withdraws from Nato under populist leaders in the future.
Washington has put intense pressure on Chancellor Merkel to accept a compromise that keeps Greece firmly anchored in the European bloc. Her ministers haves toned down their rhetoric in recent days.
German Chancellor Angela Merkel must “come clean at long last” and admit that Greece will need help for another seven or eight years, the German opposition leader said over the weekend.
There were reports that Berlin is so worried that a Greek crisis would spin out of control that it is ready to back the next €31bn payment to Athens under its EU-IMF Troika rescue. Photo: AFP/GETTY
By Ambrose Evans-Pritchard
7:03PM BST 30 Sep 2012
163 Comments “The Greeks must stand by their commitment, but we must give them time. We cannot tighten the screws any further,” said Peer Steinbruck, the Social Democrat candidate for chancellor. He said the political and economic fall-out from Greek ejection from the euro would be devastating and must be avoided.
The plea came amid reports that Berlin is so worried that a Greek crisis would spin out of control that it is ready to back the next €31bn payment to Athens under its EU-IMF Troika rescue, despite failure to comply with the terms. Wirtschaftswoche, a German news magazine, said Greece’s parliament merely needs to vote on a list of detailed reforms.
It cited warnings from a top EU official that “domino-effect” dangers are too great to allow the ejection of Greece from EMU. Authorities across the world – including the Bank of England – fear a surge of capital flight from Portugal, Ireland, Spain, and Italy if the sanctity of monetary union is violated.
Diplomats say concerns go beyond financial damage. Both EU and US officials are worried that the fragile security system of the Western Mediterannean could start to unravel if Greece is alienated and withdraws from Nato under populist leaders in the future.
Washington has put intense pressure on Chancellor Merkel to accept a compromise that keeps Greece firmly anchored in the European bloc. Her ministers haves toned down their rhetoric in recent days.
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Panda Fri 5 Oct - 7:51
Greece to spend almost €100m on building F1 track
Greece has 'unblocked' €30m so it can build a motor racing circuit capable of hosting a Formula One Grand Prix.
It is hoped the circuit will be able to host a Formula One race in the future Photo: James Moy
By Andrew Trotman
7:00AM BST 02 Oct 2012
189 Comments Despite data showing Greece is heading for its sixth year of recession, the government is pushing ahead with constructing the track in Xalandritsa, near Patras.
The total cost of the project will be €94.6m (£75.6m) and it is hoped the circuit will be able to host a Formula One race in the future.
The news comes as a draft Budget for 2013 shows that the Greek finance ministry expects GDP to contract by 3.8pc next year after shrinking 6.5pc this year.
Meanwhile, Premier Antonis Samaras must prove to the troika he can deliver an austerity package of €13.5bn, amid reports at the weekend that Greece will need financial help from Europe for the next eight years.
Mr Samaras will target pensions, benefits, and top civil service pay in a bid to unlock the next €31bn payment from the EU.
=================================
This is hardly the time for Greece to invest in a Motor racing circuit!!!! I saw the interview with the Finance Minister. He
said Formula 1 was helping with the cost but I think this venture will worry the EU even more about lending Greece any
more money,
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Diplomacy
Syria: Europe’s unsustainable strategic weakness
4 October 2012Le Huffington Post Paris
“In Syria... We’ve had enough.”
Haddad
The impotence of the EU faced with the drama in Syria reflects the lack of a credible European foreign policy. But this can only come about if the European Union gets a real armed force of its own. Excerpts.
Olivier Dupuis
Aleppo, Damascus. Bodies strewn in the streets, gutted neighbourhoods, indiscriminate shelling. Unbearable stories and images that take us straight back to the darkest hours of Sarajevo and Grozny. The killing of whole cities. And no one seems to lift a finger.
The United States is in the midst of an election campaign. As for the Europeans, they couldn’t intervene even if they wanted to.
This European impotence is not only influencing the future outcome of a conflict that has settled down into a long, drawn-out fight; it has contributed to transforming a political conflict into a totally asymmetrical military conflict. The “Potemkin democracy” of Russia has exploited the absence of America and the impotence of Europe.
Europe’s “soft power” is naked. Europe is waiting for November, like it’s waiting for Godot, hoping that the United States will get a move on or that the insurgents will prevail. Little is clear. What is clear is that, looking beyond Syria, Europe must emerge from this unsustainable strategic impossibility.
The question of the strategic weakness of the European countries cannot be viewed solely in the light of the ability (or lack of it) to carry out peacekeeping or peacemaking missions: it goes right to the heart of the tectonic movements that are preoccupying the global strategists. The United States have not only grasped this, but have responded by shifting the centre of gravity of their security policy from the Atlantic to the Pacific and by demanding that the Europeans shoulder greater responsibilities. The latter have responded to that with a new formulation: “spend less and spend better”, or “intelligent defence”.
A common military instrument
If, beyond the matter of money, defence goes to the heart of the sovereign prerogatives of nations, we can leave defence in the strict sense up to the member states and NATO, including the issue of nuclear deterrence, and focus on the consensus that already exists within the Union: “Europe is to uphold the so-called Petersberg Tasks (peacekeeping, peace enforcement and humanitarian missions), while NATO, and therefore the member states, are responsible for keeping the strategic balances,” wrote Jean-Jacques Roche last January.
It is not a matter of merging the armies (or sections of them) of the various member states, but rather of creating alongside them, ex novo, a common European army, with its own staff, its recruitment system, its military schools, its military bases, and its intelligence agencies.
If one assumes an enhanced cooperation that initially ten member countries would join (Belgium, Bulgaria, France, Greece, Italy, Netherlands, Poland, Portugal), each transferring 0.2 percent of their GNP – that is, 8 to 20 percent of their respective defence budgets – to a common European army, the annual budget of the latter would amount to almost 18 billion euros. If we add in the British, that budget would exceed 21 billion euros. This is no little sum, considering that it should for the most part be devoted to the projection of force.
A common military instrument would oblige Member States to discuss and decide conjointly whether or not to participate in peacekeeping or peacemaking missions, and to debate the terms of these missions. The instrument would thus help to define a common foreign policy. It would also let Member States finance programs that they are no longer able to manage by themselves. Finally, the common army would let the national armies of participating states benefit from services they are finding it increasingly difficult to obtain on their own, such as surveillance capacities and satellite communications, protection against bacteriological, chemical and nuclear threats, air and sea battle groups, and intelligence-gathering.
If the approach is a “community” one, the political responsibility for the organisation and functioning of this army should lie entirely with the President of the European Commission and a EU Commissioner for security and defence. It would then be up to them to decide whether or not to engage the common army in peacekeeping or peacemaking operations. This decision would be subject to the double approval of the European Parliament and the Council of States participating in the enhanced cooperation. Through the latter, the member states – in particular, the most populous countries among them – would retain a good control over the numbers and very good political control over the decision to use force.
A rare conjunction
This common army would be integrated into NATO as a strategic reserve under terms to be defined by all the members of the Atlantic organisation. The enhanced cooperation would be open to all the EU countries that accept that this common army is an integral part of NATO.
Some would argue that, in the this time of crisis, the EU has other things to worry about. This attitude, though, dismisses the fact that creating such a common European army could bring political credibility to the European project as a whole, including its economic players.
Moreover, the EU budget would, at one stroke, grow by more than 20 percent. The common army would also bring gains from ripple-out effects, in terms of the economic development resulting from the creation of the single currency, in building the main infrastructure in the countries in the south.
Angela Merkel, the German chancellor, Wolfgang Schäuble, the strong man of her government, French President François Hollande, the President of Italy, Giorgio Napolitano, and Mario Monti, Donald Tusk and Mariano Rajoy, the prime ministers of Italy, Poland and Spain – rarely has Europe seen the conjunction of many leading figures with affirmed European convictions. If one adds a British prime minister known for his pragmatism, there are certain reasons to believe that the time is right. The window of opportunity, though, is narrow. Elections will be held next spring in Italy, and then it will be Germany’s turn.
All this has led us far from the tragedy underway in Syria, no doubt. Because even if Europe decided – at last – to tackle head-on the issue of its security policy, it would need time before it became operational. That’s certain. Nevertheless, we can reasonably assume that this European assumption of responsibility could have immediate effects on these countries that today are blocking all initiatives for action by the international community to stop the deadly politics of the Syrian regime.
Translated from the French by Anton Baer
Syria: Europe’s unsustainable strategic weakness
4 October 2012Le Huffington Post Paris
“In Syria... We’ve had enough.”
Haddad
The impotence of the EU faced with the drama in Syria reflects the lack of a credible European foreign policy. But this can only come about if the European Union gets a real armed force of its own. Excerpts.
Olivier Dupuis
Aleppo, Damascus. Bodies strewn in the streets, gutted neighbourhoods, indiscriminate shelling. Unbearable stories and images that take us straight back to the darkest hours of Sarajevo and Grozny. The killing of whole cities. And no one seems to lift a finger.
The United States is in the midst of an election campaign. As for the Europeans, they couldn’t intervene even if they wanted to.
This European impotence is not only influencing the future outcome of a conflict that has settled down into a long, drawn-out fight; it has contributed to transforming a political conflict into a totally asymmetrical military conflict. The “Potemkin democracy” of Russia has exploited the absence of America and the impotence of Europe.
Europe’s “soft power” is naked. Europe is waiting for November, like it’s waiting for Godot, hoping that the United States will get a move on or that the insurgents will prevail. Little is clear. What is clear is that, looking beyond Syria, Europe must emerge from this unsustainable strategic impossibility.
The question of the strategic weakness of the European countries cannot be viewed solely in the light of the ability (or lack of it) to carry out peacekeeping or peacemaking missions: it goes right to the heart of the tectonic movements that are preoccupying the global strategists. The United States have not only grasped this, but have responded by shifting the centre of gravity of their security policy from the Atlantic to the Pacific and by demanding that the Europeans shoulder greater responsibilities. The latter have responded to that with a new formulation: “spend less and spend better”, or “intelligent defence”.
A common military instrument
If, beyond the matter of money, defence goes to the heart of the sovereign prerogatives of nations, we can leave defence in the strict sense up to the member states and NATO, including the issue of nuclear deterrence, and focus on the consensus that already exists within the Union: “Europe is to uphold the so-called Petersberg Tasks (peacekeeping, peace enforcement and humanitarian missions), while NATO, and therefore the member states, are responsible for keeping the strategic balances,” wrote Jean-Jacques Roche last January.
It is not a matter of merging the armies (or sections of them) of the various member states, but rather of creating alongside them, ex novo, a common European army, with its own staff, its recruitment system, its military schools, its military bases, and its intelligence agencies.
If one assumes an enhanced cooperation that initially ten member countries would join (Belgium, Bulgaria, France, Greece, Italy, Netherlands, Poland, Portugal), each transferring 0.2 percent of their GNP – that is, 8 to 20 percent of their respective defence budgets – to a common European army, the annual budget of the latter would amount to almost 18 billion euros. If we add in the British, that budget would exceed 21 billion euros. This is no little sum, considering that it should for the most part be devoted to the projection of force.
A common military instrument would oblige Member States to discuss and decide conjointly whether or not to participate in peacekeeping or peacemaking missions, and to debate the terms of these missions. The instrument would thus help to define a common foreign policy. It would also let Member States finance programs that they are no longer able to manage by themselves. Finally, the common army would let the national armies of participating states benefit from services they are finding it increasingly difficult to obtain on their own, such as surveillance capacities and satellite communications, protection against bacteriological, chemical and nuclear threats, air and sea battle groups, and intelligence-gathering.
If the approach is a “community” one, the political responsibility for the organisation and functioning of this army should lie entirely with the President of the European Commission and a EU Commissioner for security and defence. It would then be up to them to decide whether or not to engage the common army in peacekeeping or peacemaking operations. This decision would be subject to the double approval of the European Parliament and the Council of States participating in the enhanced cooperation. Through the latter, the member states – in particular, the most populous countries among them – would retain a good control over the numbers and very good political control over the decision to use force.
A rare conjunction
This common army would be integrated into NATO as a strategic reserve under terms to be defined by all the members of the Atlantic organisation. The enhanced cooperation would be open to all the EU countries that accept that this common army is an integral part of NATO.
Some would argue that, in the this time of crisis, the EU has other things to worry about. This attitude, though, dismisses the fact that creating such a common European army could bring political credibility to the European project as a whole, including its economic players.
Moreover, the EU budget would, at one stroke, grow by more than 20 percent. The common army would also bring gains from ripple-out effects, in terms of the economic development resulting from the creation of the single currency, in building the main infrastructure in the countries in the south.
Angela Merkel, the German chancellor, Wolfgang Schäuble, the strong man of her government, French President François Hollande, the President of Italy, Giorgio Napolitano, and Mario Monti, Donald Tusk and Mariano Rajoy, the prime ministers of Italy, Poland and Spain – rarely has Europe seen the conjunction of many leading figures with affirmed European convictions. If one adds a British prime minister known for his pragmatism, there are certain reasons to believe that the time is right. The window of opportunity, though, is narrow. Elections will be held next spring in Italy, and then it will be Germany’s turn.
All this has led us far from the tragedy underway in Syria, no doubt. Because even if Europe decided – at last – to tackle head-on the issue of its security policy, it would need time before it became operational. That’s certain. Nevertheless, we can reasonably assume that this European assumption of responsibility could have immediate effects on these countries that today are blocking all initiatives for action by the international community to stop the deadly politics of the Syrian regime.
Translated from the French by Anton Baer
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Panda Fri 5 Oct - 12:09
De Guidos, the Spanish Finanace Minister speaking at the London School of Economics says Spain does not need a handout, he was heckled.
It is anticipated that Spains debt next year will be E200 billion . If it doesn't accept the bail-out there is a danger it will lose it's Moody rating.
Rajoy knows his people will not tolerate more austerity so why doesn't Merkel et al leave Spain alone???? It is because the more EURO Countries who lose their rating, the more fragile they become.
Merkel has let it be known that she would like non Euro Countries to join the Bank Supervision plan. Presumably these Countries will already be planning their own changes, Sweden has already voiced concern that they should not be governed by the Euro Countries when they are not part of it.
It is anticipated that Spains debt next year will be E200 billion . If it doesn't accept the bail-out there is a danger it will lose it's Moody rating.
Rajoy knows his people will not tolerate more austerity so why doesn't Merkel et al leave Spain alone???? It is because the more EURO Countries who lose their rating, the more fragile they become.
Merkel has let it be known that she would like non Euro Countries to join the Bank Supervision plan. Presumably these Countries will already be planning their own changes, Sweden has already voiced concern that they should not be governed by the Euro Countries when they are not part of it.
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Panda Fri 5 Oct - 16:04
Belgium
Cheap labour feeding a city
4 October 2012De Standaard Brussels
In Anderlecht’s slaughterhouses, October 2012
Leo De Bock
The slaughterhouses of Anderlecht often use an Eastern European workforce – mainly Romanian – that is underpaid and without a contract. A problem that is linked to their vulnerability and economic imbalances between member states, writes De Standaard.
There is a rather unpleasant smell present in the slaughterhouses in Anderlecht, Belgium. Not the odour of offal, but one of exploitation and social dumping. Some of the women working there earn just six euros an hour.
Anyone familiar with the site of Anderlecht’s the slaughterhouses and markets, locally known as “den Abattoir”, is also familiar with the industriousness of the people of all creeds and colours who come here to purchase their meat. They do so because it is relatively cheap and located in the centre of the international district. The site is managed by a firm known as nv Abatan, while the slaughter lines are operated by two companies; bvba Abaco (for cattle) and bvba Seva (for pigs).
In addition, there are some 45 SMEs present which butcher the beef and pork at rented stalls before selling it on to the public. And these small businesses in particular engage the services of workers from Eastern Europe, such as Romanians. However, this is not always organised in accordance with regulations. At least, this is what two women who actually work in ‘den Abattoir' claim. “There are loads of us. And nobody has a contract. We work on the black. And we are being underpaid.”
The one lady is paid eight euros an hour, the other only six, which is far short of the minimum wage. They wish to see neither their names nor ages published in the newspapers, however. “Yes, we are being exploited, but we keep our mouths shut for fear of being shown the door. There are plenty of others just queuing up to take our places. And we simply cannot afford to become unemployed.”
Ten-minute lunch break
According to Codruta-Liliana Filip of the Romanian Social Democratic Party’s women’s organisation, all the Romanian women involved tell pretty much the same story: they usually have no contract, are sometimes also illegal immigrants, are underpaid, work long hours, are allowed one ten-minute lunch break, and often work weekends, too. There is no mention of them receiving holiday pay, never mind an end-of-year bonus. In fact, their bosses generally even forbid them from speaking their own language.
“I once tried to get in touch with the women selling the meat myself”, Ms Filip admits. “I wanted to invite them to a Romanian cultural event. Their employer appeared in a flash, however, and insisted that I translate everything that had been said, ‘to make sure I had no dishonest intentions’, whatever that means.”
“I work ten-hour days”, says the lady who earns eight euros. “I sometimes work eleven hours on the trot, particularly at the weekend”, the other adds. “I have also worked as a salesperson, however, which pays a little better."
One of the workers appreciates her employer’s predicament. “We are in the middle of an economic crisis. Meat companies have substantial expenses, such as the vet’s fees. If they were obliged to pay us thirteen euros an hour, they might not make any profit at all. And it’s still better than what I’d earn in Romania. You’re lucky to make 150 euros a month there, even if you are qualified. It’s little wonder that we have sought to make a future for ourselves elsewhere.”
Germany, the guilty party
Codruta-Liliana Filip: “There are problems everywhere, the meat processing sector certainly appears the worst. The workers have to endure abominable conditions. The women are the most vulnerable. Belgium has a severe lack of butchers, which many Romanians can help address. They are nevertheless treated very badly."
“I understand their fear of speaking out. They can be readily replaced with others who are prepared to accept the terms imposed. At the end of the day, they are just ‘happy’ that they can afford their daily bread, while also putting a little aside. It is nevertheless essential that we address this issue. Companies that do treat their workforce fairly are facing unfair competition. It is in everyone’s best interest that we endeavour to achieve equal working conditions. Otherwise we are simply condoning social dumping and fraud. The end result of such practices is human suffering.”
“I have no wish to blacken the employers’ reputations. I am not out to condemn them. I am familiar with the difficulties being faced in the European labour market. Belgium has to compete with other member states.” The imbalance in the market, however, is primarily due to the meat processing industry in Germany, which has no minimum wage regulation. “This is not a Belgian problem, but a European one.”
Translated from the Dutch by Kelly Boom
Cheap labour feeding a city
4 October 2012De Standaard Brussels
In Anderlecht’s slaughterhouses, October 2012
Leo De Bock
The slaughterhouses of Anderlecht often use an Eastern European workforce – mainly Romanian – that is underpaid and without a contract. A problem that is linked to their vulnerability and economic imbalances between member states, writes De Standaard.
There is a rather unpleasant smell present in the slaughterhouses in Anderlecht, Belgium. Not the odour of offal, but one of exploitation and social dumping. Some of the women working there earn just six euros an hour.
Anyone familiar with the site of Anderlecht’s the slaughterhouses and markets, locally known as “den Abattoir”, is also familiar with the industriousness of the people of all creeds and colours who come here to purchase their meat. They do so because it is relatively cheap and located in the centre of the international district. The site is managed by a firm known as nv Abatan, while the slaughter lines are operated by two companies; bvba Abaco (for cattle) and bvba Seva (for pigs).
In addition, there are some 45 SMEs present which butcher the beef and pork at rented stalls before selling it on to the public. And these small businesses in particular engage the services of workers from Eastern Europe, such as Romanians. However, this is not always organised in accordance with regulations. At least, this is what two women who actually work in ‘den Abattoir' claim. “There are loads of us. And nobody has a contract. We work on the black. And we are being underpaid.”
The one lady is paid eight euros an hour, the other only six, which is far short of the minimum wage. They wish to see neither their names nor ages published in the newspapers, however. “Yes, we are being exploited, but we keep our mouths shut for fear of being shown the door. There are plenty of others just queuing up to take our places. And we simply cannot afford to become unemployed.”
Ten-minute lunch break
According to Codruta-Liliana Filip of the Romanian Social Democratic Party’s women’s organisation, all the Romanian women involved tell pretty much the same story: they usually have no contract, are sometimes also illegal immigrants, are underpaid, work long hours, are allowed one ten-minute lunch break, and often work weekends, too. There is no mention of them receiving holiday pay, never mind an end-of-year bonus. In fact, their bosses generally even forbid them from speaking their own language.
“I once tried to get in touch with the women selling the meat myself”, Ms Filip admits. “I wanted to invite them to a Romanian cultural event. Their employer appeared in a flash, however, and insisted that I translate everything that had been said, ‘to make sure I had no dishonest intentions’, whatever that means.”
“I work ten-hour days”, says the lady who earns eight euros. “I sometimes work eleven hours on the trot, particularly at the weekend”, the other adds. “I have also worked as a salesperson, however, which pays a little better."
One of the workers appreciates her employer’s predicament. “We are in the middle of an economic crisis. Meat companies have substantial expenses, such as the vet’s fees. If they were obliged to pay us thirteen euros an hour, they might not make any profit at all. And it’s still better than what I’d earn in Romania. You’re lucky to make 150 euros a month there, even if you are qualified. It’s little wonder that we have sought to make a future for ourselves elsewhere.”
Germany, the guilty party
Codruta-Liliana Filip: “There are problems everywhere, the meat processing sector certainly appears the worst. The workers have to endure abominable conditions. The women are the most vulnerable. Belgium has a severe lack of butchers, which many Romanians can help address. They are nevertheless treated very badly."
“I understand their fear of speaking out. They can be readily replaced with others who are prepared to accept the terms imposed. At the end of the day, they are just ‘happy’ that they can afford their daily bread, while also putting a little aside. It is nevertheless essential that we address this issue. Companies that do treat their workforce fairly are facing unfair competition. It is in everyone’s best interest that we endeavour to achieve equal working conditions. Otherwise we are simply condoning social dumping and fraud. The end result of such practices is human suffering.”
“I have no wish to blacken the employers’ reputations. I am not out to condemn them. I am familiar with the difficulties being faced in the European labour market. Belgium has to compete with other member states.” The imbalance in the market, however, is primarily due to the meat processing industry in Germany, which has no minimum wage regulation. “This is not a Belgian problem, but a European one.”
Translated from the Dutch by Kelly Boom
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Panda Fri 5 Oct - 17:25
Draghi Defends ECB’s Independence Amid Bond Buying
By Linda Yueh
| Oct. 4, 2012 2:45 PM EDT |
Posted in bonds, European Central Bank
Photograph by EPA
ECB President Mario Draghi on Oct. 4, 2012 in Brdo, Slovenia
ECB President Mario Draghi mounted a robust defense of the independence of the central bank against critics who say that the new Outright Monetary Transactions (OMT) bond buying program compromises it. Vocal critics include former German council members Jürgen Stark and Axel Weber, who have pointed out that the conditionality of the OMT constrains monetary policy when the ECB should be ensuring proper transmission across the euro area regardless of any aid program.
Draghi’s defense seems to stem from his experience at the Bank of Italy and academic studies that point to the problem of ‘fiscal dominance.’ So, Draghi says that OMT enhances ECB independence because it addresses fiscal dominance, reduces moral hazard by governments and acts as a credit enhancement on government bonds.
A way to think about fiscal dominance is to consider how high levels of government debt can influence long-term bond yields. A highly-indebted country may find that its yields or borrowing costs are high as a result. But, as monetary policy aims to change borrowing costs that are determined by long-term rates, fiscal dominance can compromise the operation of interest rates in the real economy. A central bank cutting short-term rates may not do much to lower borrowing costs. Thus, Draghi seemed to say that OMT can help reduce yields and increase the effectiveness of independent monetary policy.
It is also related to the point that Draghi made about moral hazard. OMT conditionality increases fiscal discipline, so it reduces the incentives of governments to act irresponsibly if the central bank buys their bonds and lowers their yields, which could enable them to borrow and spend more. As central banks tend to operate on what’s called a Stackelberg leadership model, monetary policy “reacts” to fiscal policy so governments are the “first movers.” Central banks observe the fiscal picture and then set their policies. Thus, via conditionality, the ECB appears to be more proactive and thus monetary policy operates rather more independently and less entirely reactively.
The jury may be out on whether the ECB can justify introducing conditionality into monetary policy. But, what is clear is that the high levels of government debt will likely dominate the policymaking landscape for some years to come.
Watch Draghi’s news conference and our ECB special show here:
By Linda Yueh
| Oct. 4, 2012 2:45 PM EDT |
Posted in bonds, European Central Bank
Photograph by EPA
ECB President Mario Draghi on Oct. 4, 2012 in Brdo, Slovenia
ECB President Mario Draghi mounted a robust defense of the independence of the central bank against critics who say that the new Outright Monetary Transactions (OMT) bond buying program compromises it. Vocal critics include former German council members Jürgen Stark and Axel Weber, who have pointed out that the conditionality of the OMT constrains monetary policy when the ECB should be ensuring proper transmission across the euro area regardless of any aid program.
Draghi’s defense seems to stem from his experience at the Bank of Italy and academic studies that point to the problem of ‘fiscal dominance.’ So, Draghi says that OMT enhances ECB independence because it addresses fiscal dominance, reduces moral hazard by governments and acts as a credit enhancement on government bonds.
A way to think about fiscal dominance is to consider how high levels of government debt can influence long-term bond yields. A highly-indebted country may find that its yields or borrowing costs are high as a result. But, as monetary policy aims to change borrowing costs that are determined by long-term rates, fiscal dominance can compromise the operation of interest rates in the real economy. A central bank cutting short-term rates may not do much to lower borrowing costs. Thus, Draghi seemed to say that OMT can help reduce yields and increase the effectiveness of independent monetary policy.
It is also related to the point that Draghi made about moral hazard. OMT conditionality increases fiscal discipline, so it reduces the incentives of governments to act irresponsibly if the central bank buys their bonds and lowers their yields, which could enable them to borrow and spend more. As central banks tend to operate on what’s called a Stackelberg leadership model, monetary policy “reacts” to fiscal policy so governments are the “first movers.” Central banks observe the fiscal picture and then set their policies. Thus, via conditionality, the ECB appears to be more proactive and thus monetary policy operates rather more independently and less entirely reactively.
The jury may be out on whether the ECB can justify introducing conditionality into monetary policy. But, what is clear is that the high levels of government debt will likely dominate the policymaking landscape for some years to come.
Watch Draghi’s news conference and our ECB special show here:
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Panda Fri 5 Oct - 17:37
Merkel’s First Greek Crisis Visit May Mark Turning Point
By Rainer Buergin and James Hertling - Oct 5, 2012 2:50 PM GMT+0100
Merkel’s visit to the Greek capital Oct. 9 to meet with Prime Minister Antonis Samaras underscores the shift in her stance since she held out the prospect last year of Greece exiting the 17-nation currency regime.
Enlarge image
Chancellor Angela Merkel and Prime Minister Antonis Samaras
David Gannon/AFP/Getty Images
German Chancellor Angela Merkel will visit Athens on Oct. 9 for talks with Prime Minister Antonis Samaras.
German Chancellor Angela Merkel will visit Athens on Oct. 9 for talks with Prime Minister Antonis Samaras. Photographer: David Gannon/AFP/Getty Images
“The meeting could mark the turning point to the Greek crisis,” said Constantinos Zouzoulas, an analyst at Axia Ventures Group, a brokerage in Athens. “This is a very significant development for Greece ahead of crucial decisions by the euro zone for the country.”
Merkel’s demand for budget cuts in return for bailout packages has stoked public resentment, with the German chancellor depicted in some Greek media and on protestors’placards wearing jackboots and an SS uniform because of her insistence on austerity. While Samaras welcomed Merkel’s visit as a “very positive development,” union walkouts and public protests were immediately called to coincide with the event.
Two bailouts and the biggest debt writeoff in history have so far failed to halt Greece’s slide into a fifth year of recession, prompting Christine Lagarde, the International Monetary Fund’s managing director, to signal last month that another writedown might have to be considered.
Help Greece
“We want to help Greece stabilize within the euro zone,”Steffen Seibert, Merkel’s chief spokesman, told reporters in Berlin today as he announced the trip, saying that is the main message Germany can give to Greece. “We do this by contributing massively to the rescue programs Greece I and Greece II.”
He said Merkel’s trip to Athens, her first since July 2007, reciprocated a visit by Samaras to Berlin in August this year. The full program for the trip has yet to be completed, he said, describing the visit as “normal.”
Greece’s ability to stabilize and stay in the euro “will only be possible if Greece makes great efforts of its own,”Seibert said. “We see that under the Samaras government there’s a strengthened reform effort and we want to support that.”
Merkel has softened her tone on Greece since Samaras’s election earlier this year. He managed to form a coalition after beating off a challenge by parties that advocated tearing up the terms of Greece’s rescues and calling the bluff of the so-called troika of international creditors -- the IMF, the European Central Bank and European Commission -- at the risk of triggering global meltdown in financial markets.
ECB, IMF
ECB Executive Board member Joerg Asmussen said Sept. 29 that Greece may need more outside aid as growth fails to meet projections, joining the IMF in expressing doubt two bailouts will suffice. That followed Lagarde’s comments that the level of Greek debt would have “to be addressed.” Thus two of the three troika members have publicly called for more help for Greece.
Members of Merkel’s coalition have raised options for Greece that include front-loading aid payments to help it over liquidity hurdles and lowering the interest rate or extending maturities on loans.
A third option in the form of a second debt writedown focusing on bonds held by public institutions, notably the ECB, was ruled out by President Mario Draghi yesterday. European policy makers aren’t considering a rescheduling of any Greek debt held by the official sector official, a European official said separately today.
Weighing Words
Merkel has yet to show her hand beyond slapping down lawmakers from her coalition who suggested it was time for Greece to quit the euro, telling them to “weigh their words very carefully.” Germany will stand behind the Greek government as it strives to overhaul the economy, she said during Samaras’s Berlin visit.
“I want Greece to stay in the euro zone and that’s what I’m working for,” Merkel said on Aug. 24, adding that she is“deeply convinced” he will make every effort to solve Greece’s problems. The goal of austerity measures is to help Greece reach“the light at the end of the tunnel.”
That contrasts with a threat she delivered in November 2011, when former Prime Minister George Papandreou proposed a referendum on austerity measures. She said the ballot, subsequently rescinded, “will revolve around nothing less than the question: does Greece want to stay in the euro, yes or no.”
Samaras, who formed a governing coalition with two rival parties after winning the country’s second set of elections this year, is trying to convince Greece’s creditors that his government has done enough to secure its next bailout payment.
A Real Partner
“The question in German leadership circles is do we have a real partner,” said Alexander White, European political analyst at JPMorgan Chase & Co. in London. “If they do, then they are in for the long term.”
Samaras echoed Merkel’s language on the need for a sign of hope for the Greek people, comparing their struggle with economic hardship and political turmoil to the conditions that led to the collapse of the Weimar Republic in post-World War I Germany and ushered in the Nazi era.
His interview, published today in German newspaper Handelsblatt, came hours before Independent Greeks, the fourth-largest Greek parliamentary party, called a protest outside the German Embassy in Athens during Merkel’s visit to reject her“transforming Greece into a German protectorate.” A petition to be handed to the ambassador will also call for World War II reparations, the party said an e-mailed statement.
“Greek democracy stands before what is perhaps its greatest challenge,” Samaras said in the interview. If his government were to fall, “chaos awaits,” he said. “The people know this government is Greece’s last chance.”
By Rainer Buergin and James Hertling - Oct 5, 2012 2:50 PM GMT+0100
- German Chancellor Angela Merkel will travel to Athens for the first time since Europe’s financial crisis broke out there three years ago, a sign she’s seeking to silence the debate on pushing Greece out of the euro.
Merkel’s visit to the Greek capital Oct. 9 to meet with Prime Minister Antonis Samaras underscores the shift in her stance since she held out the prospect last year of Greece exiting the 17-nation currency regime.
Enlarge image
Chancellor Angela Merkel and Prime Minister Antonis Samaras
David Gannon/AFP/Getty Images
German Chancellor Angela Merkel will visit Athens on Oct. 9 for talks with Prime Minister Antonis Samaras.
German Chancellor Angela Merkel will visit Athens on Oct. 9 for talks with Prime Minister Antonis Samaras. Photographer: David Gannon/AFP/Getty Images
“The meeting could mark the turning point to the Greek crisis,” said Constantinos Zouzoulas, an analyst at Axia Ventures Group, a brokerage in Athens. “This is a very significant development for Greece ahead of crucial decisions by the euro zone for the country.”
Merkel’s demand for budget cuts in return for bailout packages has stoked public resentment, with the German chancellor depicted in some Greek media and on protestors’placards wearing jackboots and an SS uniform because of her insistence on austerity. While Samaras welcomed Merkel’s visit as a “very positive development,” union walkouts and public protests were immediately called to coincide with the event.
Two bailouts and the biggest debt writeoff in history have so far failed to halt Greece’s slide into a fifth year of recession, prompting Christine Lagarde, the International Monetary Fund’s managing director, to signal last month that another writedown might have to be considered.
Help Greece
“We want to help Greece stabilize within the euro zone,”Steffen Seibert, Merkel’s chief spokesman, told reporters in Berlin today as he announced the trip, saying that is the main message Germany can give to Greece. “We do this by contributing massively to the rescue programs Greece I and Greece II.”
He said Merkel’s trip to Athens, her first since July 2007, reciprocated a visit by Samaras to Berlin in August this year. The full program for the trip has yet to be completed, he said, describing the visit as “normal.”
Greece’s ability to stabilize and stay in the euro “will only be possible if Greece makes great efforts of its own,”Seibert said. “We see that under the Samaras government there’s a strengthened reform effort and we want to support that.”
Merkel has softened her tone on Greece since Samaras’s election earlier this year. He managed to form a coalition after beating off a challenge by parties that advocated tearing up the terms of Greece’s rescues and calling the bluff of the so-called troika of international creditors -- the IMF, the European Central Bank and European Commission -- at the risk of triggering global meltdown in financial markets.
ECB, IMF
ECB Executive Board member Joerg Asmussen said Sept. 29 that Greece may need more outside aid as growth fails to meet projections, joining the IMF in expressing doubt two bailouts will suffice. That followed Lagarde’s comments that the level of Greek debt would have “to be addressed.” Thus two of the three troika members have publicly called for more help for Greece.
Members of Merkel’s coalition have raised options for Greece that include front-loading aid payments to help it over liquidity hurdles and lowering the interest rate or extending maturities on loans.
A third option in the form of a second debt writedown focusing on bonds held by public institutions, notably the ECB, was ruled out by President Mario Draghi yesterday. European policy makers aren’t considering a rescheduling of any Greek debt held by the official sector official, a European official said separately today.
Weighing Words
Merkel has yet to show her hand beyond slapping down lawmakers from her coalition who suggested it was time for Greece to quit the euro, telling them to “weigh their words very carefully.” Germany will stand behind the Greek government as it strives to overhaul the economy, she said during Samaras’s Berlin visit.
“I want Greece to stay in the euro zone and that’s what I’m working for,” Merkel said on Aug. 24, adding that she is“deeply convinced” he will make every effort to solve Greece’s problems. The goal of austerity measures is to help Greece reach“the light at the end of the tunnel.”
That contrasts with a threat she delivered in November 2011, when former Prime Minister George Papandreou proposed a referendum on austerity measures. She said the ballot, subsequently rescinded, “will revolve around nothing less than the question: does Greece want to stay in the euro, yes or no.”
Samaras, who formed a governing coalition with two rival parties after winning the country’s second set of elections this year, is trying to convince Greece’s creditors that his government has done enough to secure its next bailout payment.
A Real Partner
“The question in German leadership circles is do we have a real partner,” said Alexander White, European political analyst at JPMorgan Chase & Co. in London. “If they do, then they are in for the long term.”
Samaras echoed Merkel’s language on the need for a sign of hope for the Greek people, comparing their struggle with economic hardship and political turmoil to the conditions that led to the collapse of the Weimar Republic in post-World War I Germany and ushered in the Nazi era.
His interview, published today in German newspaper Handelsblatt, came hours before Independent Greeks, the fourth-largest Greek parliamentary party, called a protest outside the German Embassy in Athens during Merkel’s visit to reject her“transforming Greece into a German protectorate.” A petition to be handed to the ambassador will also call for World War II reparations, the party said an e-mailed statement.
“Greek democracy stands before what is perhaps its greatest challenge,” Samaras said in the interview. If his government were to fall, “chaos awaits,” he said. “The people know this government is Greece’s last chance.”
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Re: New EC Thread
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Hollande, Monti Push Leaders for January Bank Union Start
By Helene Fouquet, Karl Stagno Navarra and Andrew Frye - Oct 5, 2012 11:05 PM GMT+0100
French President Francois Hollandeand Italian Prime Minister Mario Monti are pressing countries including Germany and Finland to drop resistance to the European Union’s plan to implement common banking supervision on Jan. 1.
Hollande and Monti were joined by the prime ministers ofSpain, Portugal and Malta yesterday in calling for progress at the region’s summit in Brussels Oct. 18-19.
“The next European Council must pave the way towards the establishment of a single European banking supervision system, to be decided before the end of the year and operational by January 2013,” the five leaders said in a joint statement after meeting in La Valletta, Malta. Jose Barroso, president of the European Commission, also participated in the meeting.
Hollande and Monti are rebuffing calls by some policy makers, including German Finance Minister Wolfgang Schaeuble, to slow down the process of passing bank supervision from national authorities to the European Central Bank. EU leaders called for the single supervisor in June as a condition for allowing banks in the 17-nation euro area direct access to the 500 billion-euro ($651 billion) permanent bailout fund, the European Stability Mechanism.
“We are particularly in agreement,” Monti told reporters, in reference to the banking union timeline, after the meeting.
Deeper Integration
Hollande, Monti and Spanish Prime Minister Mariano Rajoyare pushing for deeper integration among European governments to counter the region’s sovereign debt crisis. Schaeuble and his counterparts from Finland and the Netherlands are seeking to shield the common regulator from being burdened by troubled banks. Schaeuble said Sept. 15 that banks should be subjected to stress tests before passing under ECB supervision.
The leaders also discussed the EU’s bond-buying mechanism as pressure mounts on Rajoy to request the support.
“For the moment, Spain hasn’t taken any decision,” Rajoy told journalists in Malta. “The only thing I will say is that the decision will be taken when the time is right and when we know what the conditions will be.”
ECB President Mario Draghi said Oct. 4 the central bank is preparing a legal opinion on the single-supervisor proposal to spell out accountability channels and ensure a “clear and robust” separation of bank oversight and monetary policy decisions. He said the central bank welcomes the plan, seeing it as “one of the fundamental pillars of a financial union” and an important building block for the euro area.
Pivotal Role
The issue is likely to play a pivotal role on whether the ESM is able to aid banks directly and free countries such as Spain and Ireland from the burden of propping up their financial sectors. When EU leaders announced plans to create the single supervisor in June, they explicitly said the goal was to combat the crisis by breaking the link between banks and sovereigns.
“We need to work to make the banking union ready by the end of the year,” Hollande told reporters.
Luxembourg Finance Minister Luc Frieden said the EU must study the effects a joint supervisor would have across the 27-nation EU, including on countries within the region’s single market that won’t take part in the banking plan. He predicted at least six months of technical work would be required.
Sweden, Poland and Hungary, which don’t use the euro, have voiced objections to the bank-supervision plan, saying its current design would require them to give up power without gaining a clear voice in decision-making. As currently proposed, non-euro nations can volunteer to join the ECB and would agree to follow ECB rules and exchange data without getting a vote on supervisory panels
By Helene Fouquet, Karl Stagno Navarra and Andrew Frye - Oct 5, 2012 11:05 PM GMT+0100
French President Francois Hollandeand Italian Prime Minister Mario Monti are pressing countries including Germany and Finland to drop resistance to the European Union’s plan to implement common banking supervision on Jan. 1.
Hollande and Monti were joined by the prime ministers ofSpain, Portugal and Malta yesterday in calling for progress at the region’s summit in Brussels Oct. 18-19.
“The next European Council must pave the way towards the establishment of a single European banking supervision system, to be decided before the end of the year and operational by January 2013,” the five leaders said in a joint statement after meeting in La Valletta, Malta. Jose Barroso, president of the European Commission, also participated in the meeting.
Hollande and Monti are rebuffing calls by some policy makers, including German Finance Minister Wolfgang Schaeuble, to slow down the process of passing bank supervision from national authorities to the European Central Bank. EU leaders called for the single supervisor in June as a condition for allowing banks in the 17-nation euro area direct access to the 500 billion-euro ($651 billion) permanent bailout fund, the European Stability Mechanism.
“We are particularly in agreement,” Monti told reporters, in reference to the banking union timeline, after the meeting.
Deeper Integration
Hollande, Monti and Spanish Prime Minister Mariano Rajoyare pushing for deeper integration among European governments to counter the region’s sovereign debt crisis. Schaeuble and his counterparts from Finland and the Netherlands are seeking to shield the common regulator from being burdened by troubled banks. Schaeuble said Sept. 15 that banks should be subjected to stress tests before passing under ECB supervision.
The leaders also discussed the EU’s bond-buying mechanism as pressure mounts on Rajoy to request the support.
“For the moment, Spain hasn’t taken any decision,” Rajoy told journalists in Malta. “The only thing I will say is that the decision will be taken when the time is right and when we know what the conditions will be.”
ECB President Mario Draghi said Oct. 4 the central bank is preparing a legal opinion on the single-supervisor proposal to spell out accountability channels and ensure a “clear and robust” separation of bank oversight and monetary policy decisions. He said the central bank welcomes the plan, seeing it as “one of the fundamental pillars of a financial union” and an important building block for the euro area.
Pivotal Role
The issue is likely to play a pivotal role on whether the ESM is able to aid banks directly and free countries such as Spain and Ireland from the burden of propping up their financial sectors. When EU leaders announced plans to create the single supervisor in June, they explicitly said the goal was to combat the crisis by breaking the link between banks and sovereigns.
“We need to work to make the banking union ready by the end of the year,” Hollande told reporters.
Luxembourg Finance Minister Luc Frieden said the EU must study the effects a joint supervisor would have across the 27-nation EU, including on countries within the region’s single market that won’t take part in the banking plan. He predicted at least six months of technical work would be required.
Sweden, Poland and Hungary, which don’t use the euro, have voiced objections to the bank-supervision plan, saying its current design would require them to give up power without gaining a clear voice in decision-making. As currently proposed, non-euro nations can volunteer to join the ECB and would agree to follow ECB rules and exchange data without getting a vote on supervisory panels
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Re: New EC Thread
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A European constitution for the 21st century
5 October 2012The Guardian London
Cost
The EU’s leaders are currently hammering out a new project for the Union, but if they want to avoid a repeat of the rejected constitution of 2005, they might do well to consult the post-apartheid South African model, write two academics, one Portuguese, one American.
Bruce Ackerman | Miguel Maduro
A spectre is haunting Europe. The memory of the 2005 national referendums rejecting the EU constitution has led political leaders to respond to the current crisis with emergency measures that don't require popular approval. But longer-term solutions demand democratic legitimation.
The commission president, José Manuel Barroso, has gone so far as to call for a federation of nation states. Germany's Guido Westerwelle, together with eight other foreign ministers, recently proposed fundamental reforms that might lead to a two-speed Europe – so long as a qualified majority of member states approved, their new treaty would bind them even if the other states do not go along. Such sweeping revisions can't be achieved without popular consent.
Direct democracy is a risky business. Europe should not repeat the organisational mistakes that contributed to the debacle of 2005. The constitutional convention then produced a 350-page text written in legalistic language that mystified ordinary voters. Worse still, nothing special was done to encourage citizens to deliberate seriously on the fateful choice before them. Little wonder that national debates were largely dominated by the petty politics of the moment.
This time around, Europe should follow the example of South Africa's successful three-stage experiment in constitutional creation. During the first stage, participants simply tried to hammer out a statement of basic principles. Only later did they follow through with a long legalistic text elaborating the new social contract. Finally, it was up to South Africa's constitutional court to confirm that the long-form legalisms conformed to the initial principles.
To put this sequence in European terms, the project should follow current treaties by organising a convention representing national and European parliaments, heads of state and governments, and the European commission. This body would focus on formulating readily comprehensible constitutional principles – which could then be revised by an intergovernmental conference.
5 October 2012The Guardian London
Cost
The EU’s leaders are currently hammering out a new project for the Union, but if they want to avoid a repeat of the rejected constitution of 2005, they might do well to consult the post-apartheid South African model, write two academics, one Portuguese, one American.
Bruce Ackerman | Miguel Maduro
A spectre is haunting Europe. The memory of the 2005 national referendums rejecting the EU constitution has led political leaders to respond to the current crisis with emergency measures that don't require popular approval. But longer-term solutions demand democratic legitimation.
The commission president, José Manuel Barroso, has gone so far as to call for a federation of nation states. Germany's Guido Westerwelle, together with eight other foreign ministers, recently proposed fundamental reforms that might lead to a two-speed Europe – so long as a qualified majority of member states approved, their new treaty would bind them even if the other states do not go along. Such sweeping revisions can't be achieved without popular consent.
Direct democracy is a risky business. Europe should not repeat the organisational mistakes that contributed to the debacle of 2005. The constitutional convention then produced a 350-page text written in legalistic language that mystified ordinary voters. Worse still, nothing special was done to encourage citizens to deliberate seriously on the fateful choice before them. Little wonder that national debates were largely dominated by the petty politics of the moment.
This time around, Europe should follow the example of South Africa's successful three-stage experiment in constitutional creation. During the first stage, participants simply tried to hammer out a statement of basic principles. Only later did they follow through with a long legalistic text elaborating the new social contract. Finally, it was up to South Africa's constitutional court to confirm that the long-form legalisms conformed to the initial principles.
To put this sequence in European terms, the project should follow current treaties by organising a convention representing national and European parliaments, heads of state and governments, and the European commission. This body would focus on formulating readily comprehensible constitutional principles – which could then be revised by an intergovernmental conference.
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Re: New EC Thread
Panda Sat 6 Oct - 8:43
crisis
Why German unification was a mistake
3 October 2012Der Spiegel Hamburg
At Berlin’s Brandenburg Gate, 3 October 1990.
AFP
Thirty years after the inauguration of Helmut Kohl and 22 years after German reunification, the former chancellor is being celebrated as the father of German unity. But the truth is that, by hastily joining the GDR to the Federal Republic, he planted the seeds of the euro crisis, argues Wolfgang Münchau.
Wolfgang Münchau
Once again he was sitting there in the hall of the CDU / CSU parliamentary group in the Bundestag – one of the last great Europeans among the Christian Democrats, surrounded by an army of euro-sceptics who during his visit to the Reichstag building gave him merely polite applause. Helmut Kohl has reason to fear for his dream of European unification.
Kohl, never at a loss for a metaphor, always used to talk of the two sides of the same coin – German unity, and European unity. That was certainly a handy formula, and he may even have believed in it himself. But time has proved it wrong. German unification is not the flip side of European unity, but its opposite. German reunification is not just one of the root causes of the euro crisis, it is also one of the causes of our inability to master the crisis. Precisely here lies the real tragedy of Helmut Kohl: with his greatest political trick (German reunification), he sowed the seed for the destruction of his greatest political dream (European unity).
The hasty reunification cost almost two trillion euros in transfer payments, and it was the greatest example of economic mismanagement in the history of the world. It was a record, which is only now about to be smashed by the euro-disaster. One can hardly be surprised that the (formerly West) Germans, who had to put up with the transfer payments to East Germany (and must still put up with them) want no further transfer union in Europe.
A leadership role Germany never wanted
I am firmly convinced that the old Federal Republic of West Germany would have handled the euro crisis better. We would now have the fiscal and banking Union, and the Greek debt would be written off. For the old Federal Republic, the European integration was the ultima ratio, the last resort, of all politics. The crisis would have been grasped as a chance to reform the institutions of the EU.
But instead of European unity, national unity came first, and the change of the capital city to Berlin brought the West German politicians into a political culture that is closer to Moscow than to Brussels, Paris and London. I still recall a conversation with a leading CDU member a few years ago, who responded to a question from me on economic policy coordination in the eurozone with the answer: ‘Germany is not coordinating at the euro-level, but only with the G20’ – the group of the top 20 industrialised nations. Germany no longer sees itself as part of the EU, but as an independent mid-ranking power on par with the Americans, Russians and Chinese, without those small European states butting in.
How could it have come to this change in course? With German unification, a key element of the European dynamic, which was based on a balance of the five largest member states – West Germany, France, Britain, Italy and Spain – was broken. It is no coincidence that with German unification Britain’s interest in the EU disappeared. And with the steady withdrawal of the British, the power imbalance grew even greater.
Germany now accounts for more than a quarter of the economy of the entire eurozone, but the country is finding it tough to handle a leadership role in Europe that it never wanted. The old Federal Republic, an equal partner among the five, would be behaving today like the Netherlands. Critical, but constructive.
Germany entered euro at an inflated exchange rate
I myself, I must admit, was among those who believed for a long time in Kohl's two-sides-of-the-same-coin metaphor. At the start of the early nineties it was hard to imagine that Germany would ever diverge from the pro-European consensus. This happened, in part, because of East German politicians like Angela Merkel, who had no personal relationship with the EU and felt strangers to the idea of European integration.
The alienation, though, cannot be explained solely by the ‘Eastern’ effect. Even in the West, priorities were changing. One reason is economic. Due to the costs of reunification, Germany entered the euro at an inflated exchange rate. The result was that for a whole decade German economic policies concentrated on boosting Germany’s own competitiveness against third parties instead of strengthening the economic performance of the eurozone as a whole. And that was one of the major causes of the crisis that would come later.
German and European unification can therefore largely not be reconciled, because they have both turned out badly economically. I believe that future historians will take a critical view of German unification and Kohl's merits, which is the view today.
Why German unification was a mistake
3 October 2012Der Spiegel Hamburg
At Berlin’s Brandenburg Gate, 3 October 1990.
AFP
Thirty years after the inauguration of Helmut Kohl and 22 years after German reunification, the former chancellor is being celebrated as the father of German unity. But the truth is that, by hastily joining the GDR to the Federal Republic, he planted the seeds of the euro crisis, argues Wolfgang Münchau.
Wolfgang Münchau
Once again he was sitting there in the hall of the CDU / CSU parliamentary group in the Bundestag – one of the last great Europeans among the Christian Democrats, surrounded by an army of euro-sceptics who during his visit to the Reichstag building gave him merely polite applause. Helmut Kohl has reason to fear for his dream of European unification.
Kohl, never at a loss for a metaphor, always used to talk of the two sides of the same coin – German unity, and European unity. That was certainly a handy formula, and he may even have believed in it himself. But time has proved it wrong. German unification is not the flip side of European unity, but its opposite. German reunification is not just one of the root causes of the euro crisis, it is also one of the causes of our inability to master the crisis. Precisely here lies the real tragedy of Helmut Kohl: with his greatest political trick (German reunification), he sowed the seed for the destruction of his greatest political dream (European unity).
The hasty reunification cost almost two trillion euros in transfer payments, and it was the greatest example of economic mismanagement in the history of the world. It was a record, which is only now about to be smashed by the euro-disaster. One can hardly be surprised that the (formerly West) Germans, who had to put up with the transfer payments to East Germany (and must still put up with them) want no further transfer union in Europe.
A leadership role Germany never wanted
I am firmly convinced that the old Federal Republic of West Germany would have handled the euro crisis better. We would now have the fiscal and banking Union, and the Greek debt would be written off. For the old Federal Republic, the European integration was the ultima ratio, the last resort, of all politics. The crisis would have been grasped as a chance to reform the institutions of the EU.
But instead of European unity, national unity came first, and the change of the capital city to Berlin brought the West German politicians into a political culture that is closer to Moscow than to Brussels, Paris and London. I still recall a conversation with a leading CDU member a few years ago, who responded to a question from me on economic policy coordination in the eurozone with the answer: ‘Germany is not coordinating at the euro-level, but only with the G20’ – the group of the top 20 industrialised nations. Germany no longer sees itself as part of the EU, but as an independent mid-ranking power on par with the Americans, Russians and Chinese, without those small European states butting in.
How could it have come to this change in course? With German unification, a key element of the European dynamic, which was based on a balance of the five largest member states – West Germany, France, Britain, Italy and Spain – was broken. It is no coincidence that with German unification Britain’s interest in the EU disappeared. And with the steady withdrawal of the British, the power imbalance grew even greater.
Germany now accounts for more than a quarter of the economy of the entire eurozone, but the country is finding it tough to handle a leadership role in Europe that it never wanted. The old Federal Republic, an equal partner among the five, would be behaving today like the Netherlands. Critical, but constructive.
Germany entered euro at an inflated exchange rate
I myself, I must admit, was among those who believed for a long time in Kohl's two-sides-of-the-same-coin metaphor. At the start of the early nineties it was hard to imagine that Germany would ever diverge from the pro-European consensus. This happened, in part, because of East German politicians like Angela Merkel, who had no personal relationship with the EU and felt strangers to the idea of European integration.
The alienation, though, cannot be explained solely by the ‘Eastern’ effect. Even in the West, priorities were changing. One reason is economic. Due to the costs of reunification, Germany entered the euro at an inflated exchange rate. The result was that for a whole decade German economic policies concentrated on boosting Germany’s own competitiveness against third parties instead of strengthening the economic performance of the eurozone as a whole. And that was one of the major causes of the crisis that would come later.
German and European unification can therefore largely not be reconciled, because they have both turned out badly economically. I believe that future historians will take a critical view of German unification and Kohl's merits, which is the view today.
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Number of posts : 30555
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Re: New EC Thread
Panda Sat 6 Oct - 14:01
Kap
The budgetary austerity zealously applied by Madrid has revitalised demands for independence in Barcelona. Engaged in a fiscal and economic power struggle with the central government, Catalonia is threatening to disrupt the social and regional equilibrium that underlies Spanish democracy.
José Manuel Pureza
For the fifth time in its history, Catalonia is faced with the prospect of independence. The trajectory towards emancipation from Madrid has both a long-term and a conjunctural logic. The Spanish state is a political creation that depends on a web of agreements guaranteeing the permanence of its economic and social dominance, which is superposed on a plurality of nations with their individual identities and long-standing histories. In 1978, this structure showed itself to be a very fragile in the course of a constitutional transition which strained to bridge the gap between nationalisms and centralism: the concession of autonomy to the regions was the institutional and legal consequence of the bargain struck on that occasion.
But that was not the only aspect of the deal: the autonomous communities were also given the opportunity to tap into generous funds, for civil works, modernisation, and future development. While there was money to inject into investments that consolidated the peaceful domination of local elites, the arrangement worked. The exchanges between the national and regional right were typical of the state of mind that prevailed at the time: when José María Aznar [Prime Minister from 1996 to 2004] announced from the Moncloa Palace, “Spain is doing well”, Jordi Pujol [President of the Catalan government from 1980 to 2003] replied from his HQ at the Palau de la Generalitat, “And Catalonia is doing better”.
A monument to the absence of common sense
But then the conjunctural factors came on stage. The right-wing Convergència i Unió government in Catalonia now has to contend with 822,000 unemployed workers in the wake of 22 months of successive cuts in social welfare benefits. This potentially explosive situation has been compounded by the freezing of funds for the autonomous regions, which was pushed through by the central government following a revision of the Spanish constitution implemented at supersonic speed to comply with an order issued by Berlin and Brussels. And what is remarkable is that the zeal with which this order was executed by the local representatives of Brussels and Berlin – the People’s Party (PP) and the Spanish Socialist Workers’ Party (PSOE) – has now been replaced with a vehement insistence on the part of these two same parties to the effect that the constitution cannot be modified to allow the Catalans to hold a referendum on their right to self-determination.
In the context of the demand for constitutional change, the new budgetary pact between Madrid and the autonomous regions appears, by virtue of its obsession with austerity, to be a monument to the absence of political horse sense: specifically with regard to the refusal to envisage the explosive consequences that major cuts in public funding would have on relations between the central government and the regions. Like they have done in Portugal and Greece, the pyromaniacs from Berlin and their local assistants have succeeded in setting a torch to the social equilibrium in Spain, with no thought for the terrible demons that might be awakened by the uninterrupted blaze of the sacrificial fire that must be kept stoked on the altar to the goddess of austerity.
Political conscience forgotten
And the Catalan government has been quick to exploit this lack of political responsibility. In making himself a standard-bearer for the cause of independence, the current President of the Generalitat [Catalan regional government] Artur Mas has much in common with Alberto João Jardim [the President of the government of Madeira]: in response to the catastrophic economic and social results of his mandate, which was marked by a strategy to dismantle public services and social entitlements, the conservative Mas has accused Madrid of being a sinkhole for Catalan funds that is unwilling to invest in public services and projects in the region. Does that not sound familiar? The cause of independence much vaunted by the Generalitat is first and foremost a very convenient means for deflecting attention from the socio-economic decline that has resulted from its own policies.
More than Portugal or Greece, Spain is increasingly a scale model of European implosion, which demonstrates how the remedies prescribed by the troika result in what is now an ongoing process of social, political and territorial fragmentation.You would think that they could have learned from the tragedy of the Balkans. But it is too much to hope that the representatives of the troika and their employers might have a political conscience, which their actions show they are clearly intent on subverting.
On the web
From Catalonia
“Catalan train too fast-moving to stop”
In Catalonia, the possibility that the region might secede from Spain is necessarily viewed as a catastrophic, as columnist Fernando Ónega points out in the Barcelona daily La Vanguardia –
When a parliament rises up to demand consultation on the launch of a process of national transition, and central government announces its intention to block that consultation, the basis for a conflict has been defined. I might add: when the newspapers in Catalonia speak of democratic rights while their furious rivals in Madrid speak of the “lunatic attitude” of Catalonian governor Artur Mas, the conflict has penetrated society and is no longer confined to politics.
The main question therefore concerns the manner in which the transition can be achieved without a full-on collision between two trains. [...] With this horizon in mind, Mr Mas is committed to consultation, even if [Prime Minister Mariano] Rajoy is against it. In the context of power struggle where the exercise of democracy has become a challenge, let there be no illusions in Madrid: it will be impossible, or very difficult to reverse this process. [...] I believe it may well be too late. The Catalan train is too fast-moving to stop.
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