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Re: New EC Thread
Panda Wed 10 Oct - 16:43
Greece-Germany
She comes too late
10 October 2012Frankfurter Allgemeine Zeitung Frankfurt
Corax
A sign of good will, a symbol, a gesture.... The German press has hailed Angela Merkel’s goodwill visit to Greece, but it is too little, and comes too late, complains a FAZ columnist.
Nils Minkmar
Athens, twelve-thirty, and the hairstyle is not sitting flat. As if Aeolus had opened the sack of unpropitious winds, as the Chancellor’s plane touched down in Athens yesterday a wicked crosswind irked the Chancellor and messed up the photos.
It was a dramatic landing, broadcast live on television, and had echoes of Sadat’s landing in Israel and Nixon’s in China. The drama was a surprise and should not have been necessary.
A shame that this trip comes so late. All the same, the Chancellor was delighted to see a familiar face as she began to shake hands on the runway. The whole cabinet, including the prime minister, had formed up right on the tarmac as a guard of honour.
Not so much for reasons of protocol, it appeared, but out of panic. The Greek commentator on Phoenix (the German news channel) said, “The only time it was ever given was for de Gaulle, I believe.” Merkel and the Greeks make for a tangled relationship, and yesterday the whole family got together to try to resolve some profound tensions.
A lesson in practical Protestantism
At the press conference the Chancellor, unfortunately, avoided employing classical Greek communication aids such as the metaphor, symbol, and myth. She spoke as if she had come to inspect water damage to a garage. She looked at her neighbour, Samaras, as if he might explode at any moment with a big bang. And so the double-bind continued.
The German taxpayers do indeed provide huge sums, but some words of explanation are missing. Merkel could have praised the Greeks for wanting to take hold of their destiny once again and put an end to their tolerance of corruption and patronage; instead, her praise went like this: “We have achieved a great deal, which has been very hard for the people of Greece.” She then proudly noted that Germany is “a partner on that hard road.” Emphasising her pride in the road being pretty nasty as well.
It was a lesson in practical Protestantism: before pleasure comes pain. Not: you bought our Leopard tanks and an airport, which you didn’t really need, with money we lent you, even though you were already a case for Peter Zwegat [ TV debt consultant, since 2007 host of the reality show ‘Get out of debt’]. And so, now that the madness is over, we are naturally here to stand by your side.
There could have been ways to combat the Greek crisis without demeaning the Greeks. But no one went looking for them. Such a visit is too little, too late.
Translated from the German by Anton Baer
She comes too late
10 October 2012Frankfurter Allgemeine Zeitung Frankfurt
Corax
A sign of good will, a symbol, a gesture.... The German press has hailed Angela Merkel’s goodwill visit to Greece, but it is too little, and comes too late, complains a FAZ columnist.
Nils Minkmar
Athens, twelve-thirty, and the hairstyle is not sitting flat. As if Aeolus had opened the sack of unpropitious winds, as the Chancellor’s plane touched down in Athens yesterday a wicked crosswind irked the Chancellor and messed up the photos.
It was a dramatic landing, broadcast live on television, and had echoes of Sadat’s landing in Israel and Nixon’s in China. The drama was a surprise and should not have been necessary.
A shame that this trip comes so late. All the same, the Chancellor was delighted to see a familiar face as she began to shake hands on the runway. The whole cabinet, including the prime minister, had formed up right on the tarmac as a guard of honour.
Not so much for reasons of protocol, it appeared, but out of panic. The Greek commentator on Phoenix (the German news channel) said, “The only time it was ever given was for de Gaulle, I believe.” Merkel and the Greeks make for a tangled relationship, and yesterday the whole family got together to try to resolve some profound tensions.
A lesson in practical Protestantism
At the press conference the Chancellor, unfortunately, avoided employing classical Greek communication aids such as the metaphor, symbol, and myth. She spoke as if she had come to inspect water damage to a garage. She looked at her neighbour, Samaras, as if he might explode at any moment with a big bang. And so the double-bind continued.
The German taxpayers do indeed provide huge sums, but some words of explanation are missing. Merkel could have praised the Greeks for wanting to take hold of their destiny once again and put an end to their tolerance of corruption and patronage; instead, her praise went like this: “We have achieved a great deal, which has been very hard for the people of Greece.” She then proudly noted that Germany is “a partner on that hard road.” Emphasising her pride in the road being pretty nasty as well.
It was a lesson in practical Protestantism: before pleasure comes pain. Not: you bought our Leopard tanks and an airport, which you didn’t really need, with money we lent you, even though you were already a case for Peter Zwegat [ TV debt consultant, since 2007 host of the reality show ‘Get out of debt’]. And so, now that the madness is over, we are naturally here to stand by your side.
There could have been ways to combat the Greek crisis without demeaning the Greeks. But no one went looking for them. Such a visit is too little, too late.
Translated from the German by Anton Baer
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Re: New EC Thread
Panda Wed 10 Oct - 16:55
IMF: eurozone capital flight will come back to bite UK
Report warns that Britain's safe haven status for global investors will not last and that non-euro countries are being complacent
Officials at the IMF conference in Tokyo. Photograph: Toru Hanai/Reuters
Britain's status as a safe haven for global investors is temporary and funds will return to their home markets when the eurozone recovers, IMF officials have warned.
Capital flight from Spanish and Italian banks has increased demand for UK government bonds as a safe haven asset but demand is forecast to fall when these countries recover, increasing the Treasury's borrowing costs.
The warning came as the IMF said in its six-monthly report on global financial stability that volatile stock markets and the dramatic flight of capital out of Spain and Italy are signals that the world economy is less stable than six months ago.
The US and Japan could also see government borrowing costs rise should investors switch funds back to the eurozone or panic about their lack of action in bringing down annual government spending deficits.
Officials expressed concern governments that have enjoyed safe haven status have become complacent in recent months, with low borrowing costs taking away the urgency for policymakers to make significant reforms.
The IMF said eurozone policymakers have made strides to give money markets some certainty but it has proved inadequate and encouraged flights of money from the periphery to northern Europe and countries outside the currency union.
Capital flight from Spanish banks totalled €296bn in the year to June 2012, which equalled 27% of the country's 2011 GDP. Italian banks also haemorrhaged funds: more than €235bn left Italy's banks to be deposited in northern European financial institutions and banks outside the eurozone, including UK banks.
A scheme put forward by the European Central Bank (ECB) to buy government bonds known as outright monetary transactions (OMTs) has so far failed to entice eurozone governments, especially Spain, which is fearful of the conditions attached to the lending scheme.
Spain has already rejected a bailout offered under a parallel scheme put together by Brussels, the European Stability Mechanism, saying it was unnecessary.
The authors of the report, Peter Dattels and Mathew Jones, said confidence in politicians had waned as each economic initiative failed to unite policymakers.
The reports authors also pointed out that Europe's banks, unlike their American counterparts, are still struggling to lend.
Dattels said banks remained underfunded and under pressure from a range of concerns, including continued speculation that one or more countries will pull out of the euro.
"Despite significant and continuing efforts of European policymakers, which have been essential in addressing investors' biggest fears, the principal risk remains the euro area crisis," they said.
"Incremental policymaking has been insufficient to fully allay market tensions despite the recent market rally since the end of July."
They said problems in the US and Japan could be tackled over the next few years while it was a priority to agree a way forward for the eurozone in the next months.
A gulf between rich and poorer nations inside the eurozone was making the situation worse. Even with moves to closer co-operation between eurozone countries, banks in the periphery could be forced to reduced their lending by as much as €2.8tn, higher than the previous estimate of €2.6tn in April. A do-nothing policy would lead to a reduction in lending of €4.5tn.
The Washington-based organisation has warned before that the world economy is under threat from an unstable financial system all the time eurozone leaders fail to agree terms for bailouts and monetary easing.
ECB boss Mario Draghi has garnered praise for his efforts to protect weaker eurozone countries in case they come under attack from nervous investors. Spain, Italy and Portugal have enjoyed lower interest rates as a result of the ECB's actions that cut borrowing costs. These moves have helped stave off a run on the currency.
But Draghi has come under constant fire from politicians in Germany, Finland and Holland for creating unlimited rescue funds that could, they believe, rebound on the ECB.
This week the German finance minister, Wolfgang Schaeuble, said he believed Spain would survive with rescue funds from Brussels, contradicting most investor groups and City analysts who believe Spain can only survive if it accepts support from the EU.
The IMF's global stability report argues that badly indebted countries need more support to alleviate the pressure from investors and create an environment that fosters confidence and growth.
It says that while decisions are delayed the assets held by banks come under question and shareholders flee to hold safer assets.
Banks in the eurozone periphery are known to hold billions of euros of bad debts that have yet to be recognised on their balance sheets.
UK, French and German banks are also vulnerable to a downturn in the eurozone through their shareholdings and joint ventures with local banks in the periphery.
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Report warns that Britain's safe haven status for global investors will not last and that non-euro countries are being complacent
Phillip Inman in Tokyo- guardian.co.uk, Wednesday 10 October 2012 05.24 BST
Officials at the IMF conference in Tokyo. Photograph: Toru Hanai/Reuters
Britain's status as a safe haven for global investors is temporary and funds will return to their home markets when the eurozone recovers, IMF officials have warned.
Capital flight from Spanish and Italian banks has increased demand for UK government bonds as a safe haven asset but demand is forecast to fall when these countries recover, increasing the Treasury's borrowing costs.
The warning came as the IMF said in its six-monthly report on global financial stability that volatile stock markets and the dramatic flight of capital out of Spain and Italy are signals that the world economy is less stable than six months ago.
The US and Japan could also see government borrowing costs rise should investors switch funds back to the eurozone or panic about their lack of action in bringing down annual government spending deficits.
Officials expressed concern governments that have enjoyed safe haven status have become complacent in recent months, with low borrowing costs taking away the urgency for policymakers to make significant reforms.
The IMF said eurozone policymakers have made strides to give money markets some certainty but it has proved inadequate and encouraged flights of money from the periphery to northern Europe and countries outside the currency union.
Capital flight from Spanish banks totalled €296bn in the year to June 2012, which equalled 27% of the country's 2011 GDP. Italian banks also haemorrhaged funds: more than €235bn left Italy's banks to be deposited in northern European financial institutions and banks outside the eurozone, including UK banks.
A scheme put forward by the European Central Bank (ECB) to buy government bonds known as outright monetary transactions (OMTs) has so far failed to entice eurozone governments, especially Spain, which is fearful of the conditions attached to the lending scheme.
Spain has already rejected a bailout offered under a parallel scheme put together by Brussels, the European Stability Mechanism, saying it was unnecessary.
The authors of the report, Peter Dattels and Mathew Jones, said confidence in politicians had waned as each economic initiative failed to unite policymakers.
The reports authors also pointed out that Europe's banks, unlike their American counterparts, are still struggling to lend.
Dattels said banks remained underfunded and under pressure from a range of concerns, including continued speculation that one or more countries will pull out of the euro.
"Despite significant and continuing efforts of European policymakers, which have been essential in addressing investors' biggest fears, the principal risk remains the euro area crisis," they said.
"Incremental policymaking has been insufficient to fully allay market tensions despite the recent market rally since the end of July."
They said problems in the US and Japan could be tackled over the next few years while it was a priority to agree a way forward for the eurozone in the next months.
A gulf between rich and poorer nations inside the eurozone was making the situation worse. Even with moves to closer co-operation between eurozone countries, banks in the periphery could be forced to reduced their lending by as much as €2.8tn, higher than the previous estimate of €2.6tn in April. A do-nothing policy would lead to a reduction in lending of €4.5tn.
The Washington-based organisation has warned before that the world economy is under threat from an unstable financial system all the time eurozone leaders fail to agree terms for bailouts and monetary easing.
ECB boss Mario Draghi has garnered praise for his efforts to protect weaker eurozone countries in case they come under attack from nervous investors. Spain, Italy and Portugal have enjoyed lower interest rates as a result of the ECB's actions that cut borrowing costs. These moves have helped stave off a run on the currency.
But Draghi has come under constant fire from politicians in Germany, Finland and Holland for creating unlimited rescue funds that could, they believe, rebound on the ECB.
This week the German finance minister, Wolfgang Schaeuble, said he believed Spain would survive with rescue funds from Brussels, contradicting most investor groups and City analysts who believe Spain can only survive if it accepts support from the EU.
The IMF's global stability report argues that badly indebted countries need more support to alleviate the pressure from investors and create an environment that fosters confidence and growth.
It says that while decisions are delayed the assets held by banks come under question and shareholders flee to hold safer assets.
Banks in the eurozone periphery are known to hold billions of euros of bad debts that have yet to be recognised on their balance sheets.
UK, French and German banks are also vulnerable to a downturn in the eurozone through their shareholdings and joint ventures with local banks in the periphery.
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Zhou Xiaochuan had been due to deliver a keynote closing lecture but will not now attend meeting
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Re: New EC Thread
Panda Thu 11 Oct - 7:44
Democracy
Petitioners of Europe, unite!
10 October 2012Le Monde Paris
Shared 65 times in 10 languages
Krauze
How do you reconcile the democratic expression of Europeans with decision-making in Brussels? While referendums on treaties have become too risky, a functioning tool for this purpose has been around for a few months: bring on the petition.
Arnaud Leparmentier
It’s our new hobby horse. We are now besotted with democratic Europe. Formerly, for those of us who grew up steeped in the spirit of the founders, nothing was better than an enlightened elite to manage European construction. The Prime Minister of Italy, Mario Monti, pointed something out recently. If the people had been consulted on the sharing of coal and steel five years after the war, the founding fathers, Jean Monnet and Konrad Adenauer, would not have got very far. In bringing yesterday’s arms dealers under a single authority, they had to demonstrate a revolutionary daring, as long as they did it discreetly.
The peoples’ “No” in European referendums showed that this old method no longer worked. A new democracy had to be invented. We dug up the tools that the Lisbon Treaty had placed at the disposition of citizens. Since April 1st this year, the petition has been the new weapon of the people. To set the machine in motion, you have to be seven citizens in seven countries.
Thereafter, you have a year to collect a million signatures and exceed the threshold required for each individual member state: 74,250 for Germany, 55,000 for France and 4,500 for Malta etc. At the end of the process, the Commission meets with the petition organisers. At worst, you will get a polite hearing; at best, the Commission will draft a proposal for legislation taking into account your desiderata.
But be careful not to jump the gun. Greenpeace launched a petition to outlaw GMO crops in Europe which gathered 1.2 million signatures. The file, submitted at the end of 2010, was refused, but the affair encouraged the Commission to finally publish application regulations for its system: the starting signal was fixed for April 1st.
This petitionary road looks more promising
In a Europe based on law, freedom is defined by a framework: Brussels only accepts petitions on issues where the European Union has competence to legislate. Plenty of quite nice motions have been refused for this reason. Is it possible to ban bullfighting? The EU is not the competent authority: the safeguards for animal welfare are guaranteed within the framework of the common agricultural policy, but not for the cruel spectacle of bull-baiting. Can we have an unconditional basic income throughout Europe? Impossible: the EU has no mandate to adopt binding social legislation. Can environmentalists demand the closure of nuclear power stations?
Unfortunately, the Commission explains, nuclear energy is governed by a separate treaty, Euratom, which makes no provision for citizens’ initiatives. Undeterred, the promoter of the motion, Austrian Klaus Kastenhofer has submitted a second petition on another legal basis: consumer and environmental protection. He is waiting on Brussels’ response.
The risk is that the system will become a war of the lobbies, fighting it out with petitions. And that it will simply serve the interests of environmentalists wishing to oppose nuclear power, federalists campaigning for a European right to vote, and Catholics who want to outlaw embryo research, to cite just some of the initiatives that are underway. Big deal. Let’s not turn up our noses. Such a procedure could launch trans-European debates, bring up questions that the civil servants in Brussels, worn out by exhausting compromises, have now set aside. Europe works in increments – once a law has been adopted, no-one can undo it. So it went for the Birds Directive, adopted in 1979, that hunters would be glad to shoot down. Amongst such hard-hitting initiatives, one demands the suspension of the 2009 EU Climate and Energy Package which, it is claimed, puts the EU at a disadvantage in the absence of similar commitment from the China, India and the United States. And why not?
This petitionary road looks more promising than consultation with national parliaments, also introduced by the Lisbon Treaty. Europe has just seen a first – the Commission forced to withdraw a proposal on the right to strike of posted workers – Polish plumbers in everyday language. It has been shown the yellow card by parliaments in 12 countries. The bill was in any case stillborn: too social-minded for the liberals and too liberal for the social-minded. The episode above all confirmed that social Europe is blocked.
Petitioners of Europe, unite!
10 October 2012Le Monde Paris
Shared 65 times in 10 languages
Krauze
How do you reconcile the democratic expression of Europeans with decision-making in Brussels? While referendums on treaties have become too risky, a functioning tool for this purpose has been around for a few months: bring on the petition.
Arnaud Leparmentier
It’s our new hobby horse. We are now besotted with democratic Europe. Formerly, for those of us who grew up steeped in the spirit of the founders, nothing was better than an enlightened elite to manage European construction. The Prime Minister of Italy, Mario Monti, pointed something out recently. If the people had been consulted on the sharing of coal and steel five years after the war, the founding fathers, Jean Monnet and Konrad Adenauer, would not have got very far. In bringing yesterday’s arms dealers under a single authority, they had to demonstrate a revolutionary daring, as long as they did it discreetly.
The peoples’ “No” in European referendums showed that this old method no longer worked. A new democracy had to be invented. We dug up the tools that the Lisbon Treaty had placed at the disposition of citizens. Since April 1st this year, the petition has been the new weapon of the people. To set the machine in motion, you have to be seven citizens in seven countries.
Thereafter, you have a year to collect a million signatures and exceed the threshold required for each individual member state: 74,250 for Germany, 55,000 for France and 4,500 for Malta etc. At the end of the process, the Commission meets with the petition organisers. At worst, you will get a polite hearing; at best, the Commission will draft a proposal for legislation taking into account your desiderata.
But be careful not to jump the gun. Greenpeace launched a petition to outlaw GMO crops in Europe which gathered 1.2 million signatures. The file, submitted at the end of 2010, was refused, but the affair encouraged the Commission to finally publish application regulations for its system: the starting signal was fixed for April 1st.
This petitionary road looks more promising
In a Europe based on law, freedom is defined by a framework: Brussels only accepts petitions on issues where the European Union has competence to legislate. Plenty of quite nice motions have been refused for this reason. Is it possible to ban bullfighting? The EU is not the competent authority: the safeguards for animal welfare are guaranteed within the framework of the common agricultural policy, but not for the cruel spectacle of bull-baiting. Can we have an unconditional basic income throughout Europe? Impossible: the EU has no mandate to adopt binding social legislation. Can environmentalists demand the closure of nuclear power stations?
Unfortunately, the Commission explains, nuclear energy is governed by a separate treaty, Euratom, which makes no provision for citizens’ initiatives. Undeterred, the promoter of the motion, Austrian Klaus Kastenhofer has submitted a second petition on another legal basis: consumer and environmental protection. He is waiting on Brussels’ response.
The risk is that the system will become a war of the lobbies, fighting it out with petitions. And that it will simply serve the interests of environmentalists wishing to oppose nuclear power, federalists campaigning for a European right to vote, and Catholics who want to outlaw embryo research, to cite just some of the initiatives that are underway. Big deal. Let’s not turn up our noses. Such a procedure could launch trans-European debates, bring up questions that the civil servants in Brussels, worn out by exhausting compromises, have now set aside. Europe works in increments – once a law has been adopted, no-one can undo it. So it went for the Birds Directive, adopted in 1979, that hunters would be glad to shoot down. Amongst such hard-hitting initiatives, one demands the suspension of the 2009 EU Climate and Energy Package which, it is claimed, puts the EU at a disadvantage in the absence of similar commitment from the China, India and the United States. And why not?
This petitionary road looks more promising than consultation with national parliaments, also introduced by the Lisbon Treaty. Europe has just seen a first – the Commission forced to withdraw a proposal on the right to strike of posted workers – Polish plumbers in everyday language. It has been shown the yellow card by parliaments in 12 countries. The bill was in any case stillborn: too social-minded for the liberals and too liberal for the social-minded. The episode above all confirmed that social Europe is blocked.
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Re: New EC Thread
Panda Thu 11 Oct - 9:52
Standard & Poors has cut Spain's rating to BBB- one step up from Junk.The Agency says the EU Crisis is not going to be easily resolved and will get worse.
Rajoy is still refusing to accept a bail-out but the new rating has meant that Bond Yields are higher, could be because
Catalonia is seeking independence with would mean Spain split into two Countries.
A Greek Minister says if Greece left the Euro, it's situation would be ten times worse but it is difficult to convince Greeks that they need to accept the austerity measures.
The IMF says Greece should have a 2 year stay before adopting the fiscal policy.Merkel seems to be ready to listen.
An American Goldman Sachs analyst says the EU Parliament should stop tinkering , have heads banged together and start doing something constructive and quickly. The need for a Central Bank is never more vital instead of getting together the 27 Countries once a month who really are not involved. It's Draghi and Merkel making the decisions, although the EU Treaty has to be considered by all 27 Nations if alterations have to be made.
Rajoy is still refusing to accept a bail-out but the new rating has meant that Bond Yields are higher, could be because
Catalonia is seeking independence with would mean Spain split into two Countries.
A Greek Minister says if Greece left the Euro, it's situation would be ten times worse but it is difficult to convince Greeks that they need to accept the austerity measures.
The IMF says Greece should have a 2 year stay before adopting the fiscal policy.Merkel seems to be ready to listen.
An American Goldman Sachs analyst says the EU Parliament should stop tinkering , have heads banged together and start doing something constructive and quickly. The need for a Central Bank is never more vital instead of getting together the 27 Countries once a month who really are not involved. It's Draghi and Merkel making the decisions, although the EU Treaty has to be considered by all 27 Nations if alterations have to be made.
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Re: New EC Thread
Panda Thu 11 Oct - 15:07
11 October 2012 Last updated at 14:49
Greece unemployment hits a record 25% in July
Protesters and riot police have clashed again in Athens
Continue reading the main story
Eurozone crisis
Unemployment in Greece hit a record 25.1% in July, with the level among young people reaching 54.2%, according to the latest official figures.
Greece's statistical authority said 1.26 million Greeks were jobless in July, with more than 1,000 jobs lost every day over the past year.
With austerity cuts continuing and Greece likely to enter another year of recession, the level may rise further.
The worst-affected 15-24 age group, however, includes those in education.
According to Greece's statistics agency the total unemployment rate rose from 24.8% in June. In July 2008, a year before Greece's financial crisis broke, there were about 364,000 registered unemployed.
"This is a very dramatic result of the recession," said Angelos Tsakanikas, head of research at Greece's IOBE economic research foundation. He did not expect employment to pick up for at least a year.
The Greek economy is surviving on international bailouts, but Athens has been forced to impose tough austerity measures in return for the money.
Finance Minister Yiannis Stournaras will hold talks on Thursday evening with representatives of the European Union, International Monetary Fund and European Central Bank about signing off the release of more funds.
The BBC's correspondent in Athens, Mark Lowen, said: "The figures have bolstered the anti-austerity argument here, giving fuel to those who believe the entire strategy of Greece's international lenders is wrong, and that pressure for ever more cuts is pushing the country to breaking point and stunting growth.
"They point to the fact that before Greece was bailed out in April 2010, and began its austerity drive when unemployment stood at just 11.8%," he said.
There was some evidence on Thursday that the government's strategy is working on one front, at least. Finance Ministry figures showed that the deficit-cutting effort is on track despite lower-than-anticipated revenues.
The ministry figures showed that the January-September deficit was 12.64bn euros, lower than the 13.5bn-euro target.
Greece unemployment hits a record 25% in July
Protesters and riot police have clashed again in Athens Continue reading the main story
Eurozone crisis
- Six burning questions for Spain
- Q&A: What went wrong in Spain?
- Compare European debt levels
- Who will help Greece now?
Unemployment in Greece hit a record 25.1% in July, with the level among young people reaching 54.2%, according to the latest official figures.
Greece's statistical authority said 1.26 million Greeks were jobless in July, with more than 1,000 jobs lost every day over the past year.
With austerity cuts continuing and Greece likely to enter another year of recession, the level may rise further.
The worst-affected 15-24 age group, however, includes those in education.
According to Greece's statistics agency the total unemployment rate rose from 24.8% in June. In July 2008, a year before Greece's financial crisis broke, there were about 364,000 registered unemployed.
"This is a very dramatic result of the recession," said Angelos Tsakanikas, head of research at Greece's IOBE economic research foundation. He did not expect employment to pick up for at least a year.
The Greek economy is surviving on international bailouts, but Athens has been forced to impose tough austerity measures in return for the money.
Finance Minister Yiannis Stournaras will hold talks on Thursday evening with representatives of the European Union, International Monetary Fund and European Central Bank about signing off the release of more funds.
The BBC's correspondent in Athens, Mark Lowen, said: "The figures have bolstered the anti-austerity argument here, giving fuel to those who believe the entire strategy of Greece's international lenders is wrong, and that pressure for ever more cuts is pushing the country to breaking point and stunting growth.
"They point to the fact that before Greece was bailed out in April 2010, and began its austerity drive when unemployment stood at just 11.8%," he said.
There was some evidence on Thursday that the government's strategy is working on one front, at least. Finance Ministry figures showed that the deficit-cutting effort is on track despite lower-than-anticipated revenues.
The ministry figures showed that the January-September deficit was 12.64bn euros, lower than the 13.5bn-euro target.
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Re: New EC Thread
Badboy Thu 11 Oct - 17:42
THERE A PROGRAMME ON TONIGHT 10.35 ON ITV1 ABOUT CORFU AND THE PROBLEMS THEY HAVE GOT
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Re: New EC Thread
Panda Thu 11 Oct - 19:50
Badboy wrote:THERE A PROGRAMME ON TONIGHT 10.35 ON ITV1 ABOUT CORFU AND THE PROBLEMS THEY HAVE GOT
Hi Badboy , I have ITV Wales, just changed provider so wll ask for a switch to english. Anyway, I looked at the write up for the Corfu programme and it is about British ex Pats and holidaymakers.....no mention of the crisis.
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Re: New EC Thread
Panda Thu 11 Oct - 20:14
Spanish Bonds Risk Forced Selling as Rating Approaches Junk
By Emma Charlton - Oct 11, 2012 3:30 PM GMT+0100
Spanish government bonds are facing a selloff by investors concerned that the nation’s credit rating will be cut to non-investment grade after Standard & Poor’s lowered its ranking for the debt to one level above junk.
Spain’s two-year notes fell for a fourth day, the longest run of declines in six weeks, after New York-based S&P said yesterday it had cut the rating two levels to BBB-. While data compiled by Bloomberg News shows that about half the time government bond yields move in the opposite direction suggested by new ratings, a potential cut to junk may prompt selling by investors who use bond indexes to determine their holdings of fixed-income assets.
Enlarge image
Spanish Bonds Risk Forced Selling as Debt Rating Approaches Junk
Angel Navarrete/Bloomberg
Spain’s two-year notes slid for a fourth day, the longest run of declines in six weeks, after New York-based S&P said yesterday it had cut the rating two levels to BBB- from BBB+.
Spain’s two-year notes slid for a fourth day, the longest run of declines in six weeks, after New York-based S&P said yesterday it had cut the rating two levels to BBB- from BBB+. Photographer: Angel Navarrete/Bloomberg
4:21
Oct. 11 (Bloomberg) -- Steven Major, global head of fixed income research at HSBC Holdings Plc, talks about European bond markets after Standard & Poor's cut Spain's credit rating two levels to BBB- from BBB+. Major speaks with Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg)
Moody’s Investors Service is studying a possible downgrade for Spain from its current Baa3 level, its lowest investment- grade rank, and Fitch Ratings scores the country BBB, two steps above junk.
“Investors now have to reckon with Spain’s average rating going sub-investment grade over the next few months,” Ciaran O’Hagan, head of European rates strategy at Societe Generale SA in Paris, wrote in a research note after the S&P announcement. “Even the prospect of seeing the two major agencies rating Spain below investment grade will lead to widespread selling over the coming month.”
‘Whatever it Takes’
Spain’s two-year note yield climbed one basis point, or 0.01 percentage point, to 3.28 percent at 3:27 p.m. London time. The rate has declined from a euro-era high of 7.15 percent on July 25, the day before European Central Bank President Mario Draghi pledged to do “whatever it takes” to safeguard Europe’s monetary union. It is still above this year’s low of 2.15 percent, reached on March 1.
Ten-year Spanish yields advanced two basis points to 5.83 percent, down from a euro-era record 7.75 percent on July 25.
The nation’s bond market is the seventh-largest among developed nations, at $969 billion, according to data compiled by Bloomberg. Japan’s is the largest at almost $12 trillion, the data shows, while Germany’s is $1.4 trillion.
Spanish companies’ debt slumped, with Banco Santander SA (SAN)’s 4.125 percent bonds due 2017 falling 1.1 percent, the biggest drop in Bank of America Merrill Lynch’s EMU Corporates index and Telefonica SA (TEF) notes maturing in 2019 declining 0.4 percent.
Mounting Risks
S&P cited mounting economic and political risks for the downgrade, as Spain’s government considers resists requesting a sovereign bailout. The company assigned a negative outlook to the nation’s long-term rating and said euro-region peers’ backtracking on a pledge to sever the link between the government and its banks contributed to the decision.
See the latest data: Euro zone economies and the European debt crisis
“The negative outlook on the long-term rating reflects our view of the significant risks to Spain’s economic growth and budgetary performance, and the lack of a clear direction in euro-zone policy,” S&P said. “The deepening economic recession is limiting the Spanish government’s policy options.”
Spanish bonds are so far still eligible for inclusion in the Barclays Euro Treasury Index, Markit iBoxx Euro-Area Benchmark indexes and Citigroup Inc.’s European Government Bond Index and World Government Bond Index because the nation is rated above investment grade at all three ratings companies.
‘Junk Status’
“We need to wait to see what the Moody’s assessment is before we can get particularly concerned about Spain,” Sarah Hewin, London-based head of research in Europe for Standard Chartered Plc, said in an interview on Bloomberg Television’s “The Pulse” with Maryam Nemazee. “If Moody’s downgrades, then that will pull Spain to junk status.”
Fund managers use indexes as a guide to what percentage of their assets should be invested in certain securities and to measure their performance. Some funds’ guidelines require them to sell holdings of a nation, should it drop out of an index or lose its investment-grade ranking.
The downgrade was unexpected and negative for Spain, Ignacio Fernandez-Palomero Morales, deputy head of the nation’s Treasury, said at a conference in Tokyo today.
“Investors are much less reliant today on ratings than they were several years ago,” Fernandez-Palomero said. “My impression, and we saw that after several rating downgrades in the past, is that investors do not rely so much on ratings today.”
Spain’s Deputy Prime Minister Soraya Saenz de Santamaria told reporters in Madrid today that S&P’s report doesn’t match the market’s view of the nation.
“It doesn’t coincide with the treatment markets are giving to Spanish debt, or with our financing costs,” she said.
Coin-Flip
Predicting the consequences of a rating change by S&P or Moody’s may be little different from flipping a coin, with yields moving in the opposite direction than suggested 47 percent of the time since 1974, according to data compiled by Bloomberg. Yields were measured after a month relative to U.S. Treasury debt, the global benchmark.
France’s 1.08 trillion euros ($1.4 trillion) of debt maturing in a year or more has rallied 8.6 percent since it was downgraded to AA+ on Jan. 13, more than double the gains for the rest of the global government bond market, and beating AAA rated Germany, the U.K., and Australia, according to Bank of America Merrill Lynch indexes. U.S. borrowing costs also tumbled after the world’s biggest economy was stripped of its AAA credit grade in August 2011.
Credit Threshold
The Frankfurt-based ECB said on Sept. 6 that it had suspended its minimum credit threshold for government bonds of nations that request aid. That would allow their debt to be used as collateral to obtain funding in the bank’s refinancing operations even if they are sub-investment grade.
Spanish banks’ net borrowings from the ECB fell in September for the first time in a year, Bank of Spain data showed today. Net borrowings fell to 378.2 billion euros from 388.7 billion in August, the data showed.
“When rating agencies decide to downgrade a country, to speculative grade in particular, there is always some forced selling in the market,” Axel Botte, a Paris-based strategist at Natixis Asset Management, which oversees the equivalent of $711 billion, said in an Oct. 5 phone interview. “The ECB took one step to mitigate this effect by offering to suspend rating requirements for collateral issued or guaranteed by a country that would apply for aid.”
Natixis is neutral on Spain, Botte said.
Index Criteria
Spain’s bonds need to retain investment-grade status at two of Fitch, Moody’s and S&P to be included in the Barclays Euro Treasury Index. The nation’s debt makes up around 10 percent of the index, Scott Harman, an analyst at Barclays in London, said on Sept. 26. That’s the fourth-largest share after France, Germany and Italy.
The securities will stay in Citigroup’s European Government Bonds Index and World Government Bonds index while they are ranked above junk at either S&P or Moody’s. Markit uses its own system for its indexes, based on an average score derived from the ranks given by the three ratings companies.
The lower rating “matters for the holdings of bonds, particularly outside of Spain,” Steven Major, global head of fixed income research at HSBC Holdings Plc in London said in an interview with Bloomberg Television’s “Countdown” with Mark Barton. Some foreign investors “may well be forced to sell if we go below investment grade, but for Spanish banks it won’t make any difference.”
Greek 10-year bond yields jumped 272 basis points in June 2010 as the nation’s debt was ousted from indexes run by Citigroup, Barclays and Markit following downgrades
By Emma Charlton - Oct 11, 2012 3:30 PM GMT+0100
Spanish government bonds are facing a selloff by investors concerned that the nation’s credit rating will be cut to non-investment grade after Standard & Poor’s lowered its ranking for the debt to one level above junk.
Spain’s two-year notes fell for a fourth day, the longest run of declines in six weeks, after New York-based S&P said yesterday it had cut the rating two levels to BBB-. While data compiled by Bloomberg News shows that about half the time government bond yields move in the opposite direction suggested by new ratings, a potential cut to junk may prompt selling by investors who use bond indexes to determine their holdings of fixed-income assets.
Enlarge image
Spanish Bonds Risk Forced Selling as Debt Rating Approaches Junk
Angel Navarrete/Bloomberg
Spain’s two-year notes slid for a fourth day, the longest run of declines in six weeks, after New York-based S&P said yesterday it had cut the rating two levels to BBB- from BBB+.
Spain’s two-year notes slid for a fourth day, the longest run of declines in six weeks, after New York-based S&P said yesterday it had cut the rating two levels to BBB- from BBB+. Photographer: Angel Navarrete/Bloomberg
4:21
Oct. 11 (Bloomberg) -- Steven Major, global head of fixed income research at HSBC Holdings Plc, talks about European bond markets after Standard & Poor's cut Spain's credit rating two levels to BBB- from BBB+. Major speaks with Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg)
Moody’s Investors Service is studying a possible downgrade for Spain from its current Baa3 level, its lowest investment- grade rank, and Fitch Ratings scores the country BBB, two steps above junk.
“Investors now have to reckon with Spain’s average rating going sub-investment grade over the next few months,” Ciaran O’Hagan, head of European rates strategy at Societe Generale SA in Paris, wrote in a research note after the S&P announcement. “Even the prospect of seeing the two major agencies rating Spain below investment grade will lead to widespread selling over the coming month.”
‘Whatever it Takes’
Spain’s two-year note yield climbed one basis point, or 0.01 percentage point, to 3.28 percent at 3:27 p.m. London time. The rate has declined from a euro-era high of 7.15 percent on July 25, the day before European Central Bank President Mario Draghi pledged to do “whatever it takes” to safeguard Europe’s monetary union. It is still above this year’s low of 2.15 percent, reached on March 1.
Ten-year Spanish yields advanced two basis points to 5.83 percent, down from a euro-era record 7.75 percent on July 25.
The nation’s bond market is the seventh-largest among developed nations, at $969 billion, according to data compiled by Bloomberg. Japan’s is the largest at almost $12 trillion, the data shows, while Germany’s is $1.4 trillion.
Spanish companies’ debt slumped, with Banco Santander SA (SAN)’s 4.125 percent bonds due 2017 falling 1.1 percent, the biggest drop in Bank of America Merrill Lynch’s EMU Corporates index and Telefonica SA (TEF) notes maturing in 2019 declining 0.4 percent.
Mounting Risks
S&P cited mounting economic and political risks for the downgrade, as Spain’s government considers resists requesting a sovereign bailout. The company assigned a negative outlook to the nation’s long-term rating and said euro-region peers’ backtracking on a pledge to sever the link between the government and its banks contributed to the decision.
See the latest data: Euro zone economies and the European debt crisis
“The negative outlook on the long-term rating reflects our view of the significant risks to Spain’s economic growth and budgetary performance, and the lack of a clear direction in euro-zone policy,” S&P said. “The deepening economic recession is limiting the Spanish government’s policy options.”
Spanish bonds are so far still eligible for inclusion in the Barclays Euro Treasury Index, Markit iBoxx Euro-Area Benchmark indexes and Citigroup Inc.’s European Government Bond Index and World Government Bond Index because the nation is rated above investment grade at all three ratings companies.
‘Junk Status’
“We need to wait to see what the Moody’s assessment is before we can get particularly concerned about Spain,” Sarah Hewin, London-based head of research in Europe for Standard Chartered Plc, said in an interview on Bloomberg Television’s “The Pulse” with Maryam Nemazee. “If Moody’s downgrades, then that will pull Spain to junk status.”
Fund managers use indexes as a guide to what percentage of their assets should be invested in certain securities and to measure their performance. Some funds’ guidelines require them to sell holdings of a nation, should it drop out of an index or lose its investment-grade ranking.
The downgrade was unexpected and negative for Spain, Ignacio Fernandez-Palomero Morales, deputy head of the nation’s Treasury, said at a conference in Tokyo today.
“Investors are much less reliant today on ratings than they were several years ago,” Fernandez-Palomero said. “My impression, and we saw that after several rating downgrades in the past, is that investors do not rely so much on ratings today.”
Spain’s Deputy Prime Minister Soraya Saenz de Santamaria told reporters in Madrid today that S&P’s report doesn’t match the market’s view of the nation.
“It doesn’t coincide with the treatment markets are giving to Spanish debt, or with our financing costs,” she said.
Coin-Flip
Predicting the consequences of a rating change by S&P or Moody’s may be little different from flipping a coin, with yields moving in the opposite direction than suggested 47 percent of the time since 1974, according to data compiled by Bloomberg. Yields were measured after a month relative to U.S. Treasury debt, the global benchmark.
France’s 1.08 trillion euros ($1.4 trillion) of debt maturing in a year or more has rallied 8.6 percent since it was downgraded to AA+ on Jan. 13, more than double the gains for the rest of the global government bond market, and beating AAA rated Germany, the U.K., and Australia, according to Bank of America Merrill Lynch indexes. U.S. borrowing costs also tumbled after the world’s biggest economy was stripped of its AAA credit grade in August 2011.
Credit Threshold
The Frankfurt-based ECB said on Sept. 6 that it had suspended its minimum credit threshold for government bonds of nations that request aid. That would allow their debt to be used as collateral to obtain funding in the bank’s refinancing operations even if they are sub-investment grade.
Spanish banks’ net borrowings from the ECB fell in September for the first time in a year, Bank of Spain data showed today. Net borrowings fell to 378.2 billion euros from 388.7 billion in August, the data showed.
“When rating agencies decide to downgrade a country, to speculative grade in particular, there is always some forced selling in the market,” Axel Botte, a Paris-based strategist at Natixis Asset Management, which oversees the equivalent of $711 billion, said in an Oct. 5 phone interview. “The ECB took one step to mitigate this effect by offering to suspend rating requirements for collateral issued or guaranteed by a country that would apply for aid.”
Natixis is neutral on Spain, Botte said.
Index Criteria
Spain’s bonds need to retain investment-grade status at two of Fitch, Moody’s and S&P to be included in the Barclays Euro Treasury Index. The nation’s debt makes up around 10 percent of the index, Scott Harman, an analyst at Barclays in London, said on Sept. 26. That’s the fourth-largest share after France, Germany and Italy.
The securities will stay in Citigroup’s European Government Bonds Index and World Government Bonds index while they are ranked above junk at either S&P or Moody’s. Markit uses its own system for its indexes, based on an average score derived from the ranks given by the three ratings companies.
The lower rating “matters for the holdings of bonds, particularly outside of Spain,” Steven Major, global head of fixed income research at HSBC Holdings Plc in London said in an interview with Bloomberg Television’s “Countdown” with Mark Barton. Some foreign investors “may well be forced to sell if we go below investment grade, but for Spanish banks it won’t make any difference.”
Greek 10-year bond yields jumped 272 basis points in June 2010 as the nation’s debt was ousted from indexes run by Citigroup, Barclays and Markit following downgrades
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Re: New EC Thread
Badboy Thu 11 Oct - 20:54
THEY IS SOME MENTION OF THE CRISIS,HOW IT AFFECTING EX-PATSPanda wrote:Badboy wrote:THERE A PROGRAMME ON TONIGHT 10.35 ON ITV1 ABOUT CORFU AND THE PROBLEMS THEY HAVE GOT
Hi Badboy , I have ITV Wales, just changed provider so wll ask for a switch to english. Anyway, I looked at the write up for the Corfu programme and it is about British ex Pats and holidaymakers.....no mention of the crisis.
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Re: New EC Thread
fuzeta Thu 11 Oct - 22:20
Panda wrote:Badboy wrote:THERE A PROGRAMME ON TONIGHT 10.35 ON ITV1 ABOUT CORFU AND THE PROBLEMS THEY HAVE GOT
Hi Badboy , I have ITV Wales, just changed provider so wll ask for a switch to english. Anyway, I looked at the write up for the Corfu programme and it is about British ex Pats and holidaymakers.....no mention of the crisis.
Panda I believe that it is about how the present crisis is affecting all in Corfu.
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Re: New EC Thread
Panda Fri 12 Oct - 6:21
fuzeta wrote:Panda wrote:Badboy wrote:THERE A PROGRAMME ON TONIGHT 10.35 ON ITV1 ABOUT CORFU AND THE PROBLEMS THEY HAVE GOT
Hi Badboy , I have ITV Wales, just changed provider so wll ask for a switch to english. Anyway, I looked at the write up for the Corfu programme and it is about British ex Pats and holidaymakers.....no mention of the crisis.
Panda I believe that it is about how the present crisis is affecting all in Corfu.
Right, thanks, I never saw it, fell asleep as usual watching T.V. at night, that's why I wake up eaarly in the morning.
It's quite incredible , this thread had nearly 300 views since midnight , I'm assuming many from Europe, nice to know MM is so popular !!
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Re: New EC Thread
Panda Fri 12 Oct - 10:13
The IMF is meeting and blames Europe and the U.S. for the World Crisis.
The EU has been awarded the Nobel Peace Prize for 2012.........UUm, is that because they keep out of everything??????
The EU has been awarded the Nobel Peace Prize for 2012.........UUm, is that because they keep out of everything??????
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Re: New EC Thread
Panda Fri 12 Oct - 10:14
Schaeuble Says Europe’s Partners See Crisis-Fight Progress
By Rainer Buergin and Jana Randow - Oct 12, 2012 3:47 AM GMT+0100
German Finance Minister Wolfgang Schaeuble said finance chiefs from around the world meeting inTokyo this week have acknowledged that Europe has made“significant progress” in overcoming the crisis of confidence in the euro.
“This time there is a much more positive underlying sentiment” compared with earlier meetings, Schaeuble said today at a briefing with Bundesbank President Jens Weidmann in Tokyo, which is hosting the annual International Monetary Fund and World Bank meetings. European participants at the gathering have agreed that “we explain very precisely and openly what we’re doing, what we’ve achieved and what progress we’ve made.”
Enlarge image
German Finance Minister Wolfgang Schaeuble
Jock Fistick/Bloomberg
Wolfgang Schaeuble, Germany's finance minister.
Wolfgang Schaeuble, Germany's finance minister. Photographer: Jock Fistick/Bloomberg
European countries are standing by their commitments to reduce fiscal deficits, Schaeuble said, citing a 50 percent reduction in the euro region’s fiscal shortfall since 2009, to 3.2 percent of the area’s gross domestic product.
Europe’s strains are again the central challenge facing IMF members as they gather in Japan. The Washington-based lender said this week that failure to remedy them was contributing to an “alarmingly high” risk of a steeper slowdown in the world economy, already on course to expand this year by the least since the 2009 recession.
Europe must avoid raising false expectations and“misunderstandings” that can trigger disappointment, Schaeuble said, pointing to the reduction of Spain’s debt rating to one level above junk by Standard & Poor’s this week as an example. The rating company cited euro-region peers’backtracking on a pledge to severe the link between the sovereign and its banks as Spain considers a second bailout.
Legacy Debts
Spain was lowered two levels to BBB- from BBB+, New York-based S&P said in a statement on Oct. 10. S&P assigned a negative outlook to the nation’s long-term rating and cut the short-term sovereign level to A-3 from A-2.
Germany, Finland and the Netherlands, the euro area countries with the highest credit ratings, on Sept. 25 said they rejected the use of bailout funds to deal with legacy debts such as those of Spanish banks. The joint position doesn’t contradict a pledge made by euro region leaders at a June summit, a Finnish official said the following day, after Spanish bonds dropped.
Schaeuble said today that to overcome government debt problems around the world and return to sustainable economic growth, it’s “decisive” to work on the causes and not take short-term steps that contradict medium-term goals.
Voting Rights
“At yesterday’s talks, at least there’s been a lot of consent to do what’s been decided in principle again and again since 2008, that is that we have to reduce too-high government debt and mustn’t create ever more liquidity globally,”Schaeuble said. “That’s fundamentally understood.”
On a controversy over a redistribution of voting rights at the IMF, Schaeuble insisted that the openness of an economy be considered when deciding on the voting power of countries, a criterion that would work to Europe’s advantage.
While emerging nations such as China and South Korea want the voting formula to better reflect the size of their economies, Schaeuble said while “we’re ready to make our contribution, the component of openness can’t be left out completely.”
By Rainer Buergin and Jana Randow - Oct 12, 2012 3:47 AM GMT+0100
German Finance Minister Wolfgang Schaeuble said finance chiefs from around the world meeting inTokyo this week have acknowledged that Europe has made“significant progress” in overcoming the crisis of confidence in the euro.
“This time there is a much more positive underlying sentiment” compared with earlier meetings, Schaeuble said today at a briefing with Bundesbank President Jens Weidmann in Tokyo, which is hosting the annual International Monetary Fund and World Bank meetings. European participants at the gathering have agreed that “we explain very precisely and openly what we’re doing, what we’ve achieved and what progress we’ve made.”
Enlarge image
German Finance Minister Wolfgang Schaeuble
Jock Fistick/Bloomberg
Wolfgang Schaeuble, Germany's finance minister.
Wolfgang Schaeuble, Germany's finance minister. Photographer: Jock Fistick/Bloomberg
European countries are standing by their commitments to reduce fiscal deficits, Schaeuble said, citing a 50 percent reduction in the euro region’s fiscal shortfall since 2009, to 3.2 percent of the area’s gross domestic product.
Europe’s strains are again the central challenge facing IMF members as they gather in Japan. The Washington-based lender said this week that failure to remedy them was contributing to an “alarmingly high” risk of a steeper slowdown in the world economy, already on course to expand this year by the least since the 2009 recession.
Europe must avoid raising false expectations and“misunderstandings” that can trigger disappointment, Schaeuble said, pointing to the reduction of Spain’s debt rating to one level above junk by Standard & Poor’s this week as an example. The rating company cited euro-region peers’backtracking on a pledge to severe the link between the sovereign and its banks as Spain considers a second bailout.
Legacy Debts
Spain was lowered two levels to BBB- from BBB+, New York-based S&P said in a statement on Oct. 10. S&P assigned a negative outlook to the nation’s long-term rating and cut the short-term sovereign level to A-3 from A-2.
Germany, Finland and the Netherlands, the euro area countries with the highest credit ratings, on Sept. 25 said they rejected the use of bailout funds to deal with legacy debts such as those of Spanish banks. The joint position doesn’t contradict a pledge made by euro region leaders at a June summit, a Finnish official said the following day, after Spanish bonds dropped.
Schaeuble said today that to overcome government debt problems around the world and return to sustainable economic growth, it’s “decisive” to work on the causes and not take short-term steps that contradict medium-term goals.
Voting Rights
“At yesterday’s talks, at least there’s been a lot of consent to do what’s been decided in principle again and again since 2008, that is that we have to reduce too-high government debt and mustn’t create ever more liquidity globally,”Schaeuble said. “That’s fundamentally understood.”
On a controversy over a redistribution of voting rights at the IMF, Schaeuble insisted that the openness of an economy be considered when deciding on the voting power of countries, a criterion that would work to Europe’s advantage.
While emerging nations such as China and South Korea want the voting formula to better reflect the size of their economies, Schaeuble said while “we’re ready to make our contribution, the component of openness can’t be left out completely.”
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Re: New EC Thread
Panda Fri 12 Oct - 11:21
A tale of three Europes
11 October 2012Gazeta Wyborcza Warsaw
Shared 43 times in 10 languages
Bado
Three parallel Europes inhabit the EU, each with its own goals. And the single budget, which used to unite them, is increasingly a source of division and, in the long run, will be unsustainable.
Jacek Pawlicki
The first Europe, hit by the debt crisis, closes ranks to save itself from disaster. This it does with more or less success, but for now at least it has held together.
The second Europe stands on the sidelines, nervously looking at how things are going on in the first one. It does not want to join Europe no. 1 yet, because it does not know whether the latter will survive, and joining would mean costs. But it worries that if the first Europe does survive, the gap between them will widen too much. And that when it eventually joins the first Europe, it will have no say in it. Schizophrenia.
The third Europe is not really Europe anymore. It lives in the shadow of its former glory, covered by the patina of an empire, convinced of its own uniqueness and ability to survive without Europe no. 1 and no. 2. It is dominated by national egoism. That is why the third Europe warns the first and second ones that it will not hesitate to block their progress if it has to defends its own interests. Because interests come before anything else.
The first-Europe countries are trying to push forward the integration and coordination of their economic policies, tightening the control of the stronger countries over the weaker ones in the process. Europe no. 2 is trying to control what is happening in Europe no. 1, because we all ride in the same train. Europe no. 3 is happy that there has been a split, because it has long wanted to go its own way.
Britain increasingly marginalising itself
It is not hard to guess who is who in this story. The first Europe is the eurozone – seventeen countries that have adopted a common currency for better and for worse. The second Europe are the non-eurozone countries: Scandinavia and the new member states, notably Poland. Most of them, with the exception of Denmark, have no choice but to eventually join the euro – but no one knows when this will happen.
The third Europe is Great Britain. Great by name only, hard hit by a crisis, contending with Scottish separatism, increasingly marginalising itself in the EU. David Cameron, the Conservative PM, said during his party’s rally this week that if need be, he would veto the entire 2014-2020 EU budget.
The community budget had so far united the three Europes, but is now beginning to divide them. Berlin is proposing a separate budget for the eurozone, that is, Europe no. 1. Germany pays, so it demands. Leaks to German press suggest that at this point it could amount to 20 billion euros. Even officials responsible for Poland’s EU policy admit that sooner or later such a budget will be created. Poland would rather, of course, that it happens later rather than sooner, and that creating a second budget does not mean shaving the first one. Alas, this is unlikely. The British will help, eagerly blocking the budget to reduce their contribution to the EU’s joint finances.
So a single budget for three Europes is indefensible. What Poland can and should do is try and delay the budgetary bifurcation. And become part of Europe no. 1 as soon as possible. Assuming there is still something to join.
Translated from the Polish by Marcin Wawrzyńczak
Excellent article, Europe will never be in accord until there is Democracy and the EU shows it is putting it's own house in order be reducing expenditure !
11 October 2012Gazeta Wyborcza Warsaw
Shared 43 times in 10 languages
Bado
Three parallel Europes inhabit the EU, each with its own goals. And the single budget, which used to unite them, is increasingly a source of division and, in the long run, will be unsustainable.
Jacek Pawlicki
The first Europe, hit by the debt crisis, closes ranks to save itself from disaster. This it does with more or less success, but for now at least it has held together.
The second Europe stands on the sidelines, nervously looking at how things are going on in the first one. It does not want to join Europe no. 1 yet, because it does not know whether the latter will survive, and joining would mean costs. But it worries that if the first Europe does survive, the gap between them will widen too much. And that when it eventually joins the first Europe, it will have no say in it. Schizophrenia.
The third Europe is not really Europe anymore. It lives in the shadow of its former glory, covered by the patina of an empire, convinced of its own uniqueness and ability to survive without Europe no. 1 and no. 2. It is dominated by national egoism. That is why the third Europe warns the first and second ones that it will not hesitate to block their progress if it has to defends its own interests. Because interests come before anything else.
The first-Europe countries are trying to push forward the integration and coordination of their economic policies, tightening the control of the stronger countries over the weaker ones in the process. Europe no. 2 is trying to control what is happening in Europe no. 1, because we all ride in the same train. Europe no. 3 is happy that there has been a split, because it has long wanted to go its own way.
Britain increasingly marginalising itself
It is not hard to guess who is who in this story. The first Europe is the eurozone – seventeen countries that have adopted a common currency for better and for worse. The second Europe are the non-eurozone countries: Scandinavia and the new member states, notably Poland. Most of them, with the exception of Denmark, have no choice but to eventually join the euro – but no one knows when this will happen.
The third Europe is Great Britain. Great by name only, hard hit by a crisis, contending with Scottish separatism, increasingly marginalising itself in the EU. David Cameron, the Conservative PM, said during his party’s rally this week that if need be, he would veto the entire 2014-2020 EU budget.
The community budget had so far united the three Europes, but is now beginning to divide them. Berlin is proposing a separate budget for the eurozone, that is, Europe no. 1. Germany pays, so it demands. Leaks to German press suggest that at this point it could amount to 20 billion euros. Even officials responsible for Poland’s EU policy admit that sooner or later such a budget will be created. Poland would rather, of course, that it happens later rather than sooner, and that creating a second budget does not mean shaving the first one. Alas, this is unlikely. The British will help, eagerly blocking the budget to reduce their contribution to the EU’s joint finances.
So a single budget for three Europes is indefensible. What Poland can and should do is try and delay the budgetary bifurcation. And become part of Europe no. 1 as soon as possible. Assuming there is still something to join.
Translated from the Polish by Marcin Wawrzyńczak
Excellent article, Europe will never be in accord until there is Democracy and the EU shows it is putting it's own house in order be reducing expenditure !
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Re: New EC Thread
fuzeta Fri 12 Oct - 16:40
Panda wrote:The IMF is meeting and blames Europe and the U.S. for the World Crisis.
The EU has been awarded the Nobel Peace Prize for 2012.........UUm, is that because they keep out of everything??????
I think it is because we all have to do as we are told by Brussels Panda. No choice, we have to keep the peace it is written
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Re: New EC Thread
Panda Fri 12 Oct - 16:52
12 October 2012 Last updated at 12:48
Christine Lagarde says that leaders in the euro area need to indicate "at which pace they are going to move towards banking and fiscal union"
The International Monetary Fund (IMF) head, Christine Lagarde, has backed calls for Greece to have more time to meet the targets of its bailout.
She said in a BBC debate held in Tokyo that this might be better than "frontloading heavily", or making Greece pay the most upfront.
But the biggest contributor to Greece's bailouts, Germany, rebuffed the idea.
"We have to stick to what we announced," Germany's Finance Minister Wolfgang Schaeuble replied.
Continue reading the main story
The BBC World Debate
The BBC World Debate: Rescuing The Global Economy features IMF managing director Christine Lagarde and German Finance Minister Wolfgang Schaueble.
It will be first broadcast on BBC World on Saturday 11 October at 09:10GMT.
Greece has asked for two more years to meet the spending cuts demanded by its lenders, which include the eurozone countries through its bailout funds and also the IMF.
Ms Lagarde backed the calls, but Mr Schaeuble stuck to Germany's previous line that on the terms of the 130bn-euro (£105bn; $168bn) bailout - Greece's second since 2010 - Athens must be held to what it agreed.
'Overcome by next year'
Germany's Finance Minister Wolfgang Schaeuble calls for better financial market regulation
"I think it's even more important for sustainable growth that investors and consumers have some confidence," he said.
"We have to stick to what we announced and we have to implement it step by step. I am optimistic that in one year we will have overcome the most part of the uncertainty related to Europe."
Greece has argued that it has been through five years of recession already and, with shrinking tax revenues, cannot hope to meet its targets through cuts alone.
The IMF boss also took a more nuanced approached to austerity - the spending cuts demanded by lenders that have seen several heads of government in Europe ousted and violent street protests from Athens to Madrid.
Continue reading the main story
“Start Quote
Paul Mason Economics editor, Newsnight
"If people stay away from the job market, they lose hope," Ms Lagarde said, "which is why it's critical that while maintaining those policies of fiscal consolidation where these are needed, there is also concern for growth, so that jobs can be created.
"But it's a factor of pace. You know, at which pace does it happen?"
The debate came after Greece on Thursday announced that unemployment in Greece hit a record 25.1% in July, with the level among young people reaching above 50%.
And the nation predicted its economy will shrink by 6.5% this year, much more than previously estimated this year, worse than a previous estimate of 4.8% in March suggested to its bailout lenders.
Greece also said its economy will shrink for a sixth year in 2013.
The Greek economy is surviving on its international bailouts, but Athens has been forced to impose tough austerity measures in return for the money - which has led to a fraught political situation.
Germany is the biggest contributor to the European Stability Mechanism (ESM), the new bailout fund that will eventually have a full lending capacity of 500bn euros by 2014.
Separately, Ms Lagarde also suggested that the ECB had room to bring interest rates lower to help flagging growth in the single currency area.
The European Central Bank's interest rate is at the record low of 0.75%.
Responding to the IMF's suggestion that the ECB had room to lower rates, ECB board member Benoit Coeure said that the ECB saw no need for rate cuts now.
"It remains an option of course, but the sense has been recently that it was not a priority. Our priority has been to address impaired transmission channels of monetary policy," he said, referring to the ECB's efforts to ease countries' high borrowing costs.
Christine Lagarde says that leaders in the euro area need to indicate "at which pace they are going to move towards banking and fiscal union"
The International Monetary Fund (IMF) head, Christine Lagarde, has backed calls for Greece to have more time to meet the targets of its bailout.
She said in a BBC debate held in Tokyo that this might be better than "frontloading heavily", or making Greece pay the most upfront.
But the biggest contributor to Greece's bailouts, Germany, rebuffed the idea.
"We have to stick to what we announced," Germany's Finance Minister Wolfgang Schaeuble replied.
Continue reading the main story
The BBC World Debate
The BBC World Debate: Rescuing The Global Economy features IMF managing director Christine Lagarde and German Finance Minister Wolfgang Schaueble.
It will be first broadcast on BBC World on Saturday 11 October at 09:10GMT.
Greece has asked for two more years to meet the spending cuts demanded by its lenders, which include the eurozone countries through its bailout funds and also the IMF.
Ms Lagarde backed the calls, but Mr Schaeuble stuck to Germany's previous line that on the terms of the 130bn-euro (£105bn; $168bn) bailout - Greece's second since 2010 - Athens must be held to what it agreed.
'Overcome by next year'
Germany's Finance Minister Wolfgang Schaeuble calls for better financial market regulation
"I think it's even more important for sustainable growth that investors and consumers have some confidence," he said.
"We have to stick to what we announced and we have to implement it step by step. I am optimistic that in one year we will have overcome the most part of the uncertainty related to Europe."
Greece has argued that it has been through five years of recession already and, with shrinking tax revenues, cannot hope to meet its targets through cuts alone.
The IMF boss also took a more nuanced approached to austerity - the spending cuts demanded by lenders that have seen several heads of government in Europe ousted and violent street protests from Athens to Madrid.
Continue reading the main story
“Start Quote
End Quote
Mme Lagarde has called for Greece to be given two extra years to meet its deficit reduction targets. Whether the rule of law and social cohesion can last two years is now a matter of serious concern”
Paul Mason Economics editor, Newsnight "If people stay away from the job market, they lose hope," Ms Lagarde said, "which is why it's critical that while maintaining those policies of fiscal consolidation where these are needed, there is also concern for growth, so that jobs can be created.
"But it's a factor of pace. You know, at which pace does it happen?"
The debate came after Greece on Thursday announced that unemployment in Greece hit a record 25.1% in July, with the level among young people reaching above 50%.
And the nation predicted its economy will shrink by 6.5% this year, much more than previously estimated this year, worse than a previous estimate of 4.8% in March suggested to its bailout lenders.
Greece also said its economy will shrink for a sixth year in 2013.
The Greek economy is surviving on its international bailouts, but Athens has been forced to impose tough austerity measures in return for the money - which has led to a fraught political situation.
Germany is the biggest contributor to the European Stability Mechanism (ESM), the new bailout fund that will eventually have a full lending capacity of 500bn euros by 2014.
Separately, Ms Lagarde also suggested that the ECB had room to bring interest rates lower to help flagging growth in the single currency area.
The European Central Bank's interest rate is at the record low of 0.75%.
Responding to the IMF's suggestion that the ECB had room to lower rates, ECB board member Benoit Coeure said that the ECB saw no need for rate cuts now.
"It remains an option of course, but the sense has been recently that it was not a priority. Our priority has been to address impaired transmission channels of monetary policy," he said, referring to the ECB's efforts to ease countries' high borrowing costs.
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Re: New EC Thread
Panda Fri 12 Oct - 17:29
I think Germany is being too ruthless and I hope Greece leaves the Euro and reneges on its debt, it can't be worse than their situation now. The population of Greece is suffering and angry , only 2 months ago the IMF went to Greece and told the Greek PM it was meeting its target. You can understand why Spain is reluctant to ask for a bail-out , that Country has a very high unemployment rate and an angry population.
The World is facing recession how can anyone increase exports to increase income ?
The World is facing recession how can anyone increase exports to increase income ?
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Re: New EC Thread
Panda Fri 12 Oct - 17:43
fuzeta wrote:Panda wrote:The IMF is meeting and blames Europe and the U.S. for the World Crisis.
The EU has been awarded the Nobel Peace Prize for 2012.........UUm, is that because they keep out of everything??????
I think it is because we all have to do as we are told by Brussels Panda. No choice, we have to keep the peace it is written
Hi fuzeta, I think what this crisis has proved is how undemocratic the EU is, cumbersome , unable to come to quick decisions and Germany , as the main Banker calls the shots. The Euro Countries are bound by the currency and unable to adjust it according to each Countries needs.
Germany is forcing Greece into a corner and it may lead to Greece leaving the EURO which would be chaotic for the rest of the world .
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Re: New EC Thread
Panda Fri 12 Oct - 17:56
From Italy
ESM hostage to Merkel election fortunes
“Will the euro survive until September 2013 [date of German elections] or will it end up falling apart under the impact of tactical electoral and cultural movements of the Germany of Angela Merkel, who is determined not to let go of the chancellery at any price? The question may seem paradoxical, even provocative,” writes Il Sole 24 Ore, “on that ‘historic’ day that marked the birth of the European Stabilisation Mechanism (ESM)” and saw the German Chancellor head to Athens to express her support for the austerity policy of the Antonis Samaras government. “It’s not,” writes the business daily –
ESM hostage to Merkel election fortunes
“Will the euro survive until September 2013 [date of German elections] or will it end up falling apart under the impact of tactical electoral and cultural movements of the Germany of Angela Merkel, who is determined not to let go of the chancellery at any price? The question may seem paradoxical, even provocative,” writes Il Sole 24 Ore, “on that ‘historic’ day that marked the birth of the European Stabilisation Mechanism (ESM)” and saw the German Chancellor head to Athens to express her support for the austerity policy of the Antonis Samaras government. “It’s not,” writes the business daily –
In this context –
The fire continues to smoulder under the ashes of this crisis that refuses to go away, and it could burst out again at any moment in a tense and surreal Europe that, like the web of Penelope, keeps unravelling methodically in an atmosphere of conflict and unnerving calm.
... the rolling out of the ESM seems an ambiguous exercise, considering that it is only half operational and will stay that way until we don’t know when. What needs to be done urgently is to recapitalise Spanish banks with 60 billion euros – but the ESM cannot do that because there is no agreement yet on the supervision of all the banks (in a banking union) by the ECB, due to German resistance. And because Germany, the Netherlands and Finland now believe that the ESM funds can be tapped only for new bank debt [that is, debt incurred since the entry into force of the ESM]. In short, they are trying to change the cards while the rules of the game are being discussed. [...] What is certain is that Merkel and her finance minister are trying to clear the field of all European Union decisions that could disrupt the German public during the election campaign
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Re: New EC Thread
fuzeta Fri 12 Oct - 21:33
Panda wrote:fuzeta wrote:Panda wrote:The IMF is meeting and blames Europe and the U.S. for the World Crisis.
The EU has been awarded the Nobel Peace Prize for 2012.........UUm, is that because they keep out of everything??????
I think it is because we all have to do as we are told by Brussels Panda. No choice, we have to keep the peace it is written
Hi fuzeta, I think what this crisis has proved is how undemocratic the EU is, cumbersome , unable to come to quick decisions and Germany , as the main Banker calls the shots. The Euro Countries are bound by the currency and unable to adjust it according to each Countries needs.
Germany is forcing Greece into a corner and it may lead to Greece leaving the EURO which would be chaotic for the rest of the world .
Yes Panda it would be rather chaotic for the bankers who always pass their losses on to us . I do think though that they are trying to terrify people into thinking it is the worst thing that could possibly happen. Plague and pestulance and all the rest of it.
The real truth is that in the long run it will be the best for everyone except of course all the high finance people who will definately take a pounding. I would have hoped by now that every finance organisation in every country have taken precautions for when it happens !!!! Especially us who should have been prepared long ago. Surely not that hard to do for us as we are not in the confounded Euro.
Whatever excuses they come up with I do not buy it.
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Re: New EC Thread
Panda Fri 12 Oct - 22:04
fuzeta wrote:Panda wrote:fuzeta wrote:Panda wrote:The IMF is meeting and blames Europe and the U.S. for the World Crisis.
The EU has been awarded the Nobel Peace Prize for 2012.........UUm, is that because they keep out of everything??????
I think it is because we all have to do as we are told by Brussels Panda. No choice, we have to keep the peace it is written
Hi fuzeta, I think what this crisis has proved is how undemocratic the EU is, cumbersome , unable to come to quick decisions and Germany , as the main Banker calls the shots. The Euro Countries are bound by the currency and unable to adjust it according to each Countries needs.
Germany is forcing Greece into a corner and it may lead to Greece leaving the EURO which would be chaotic for the rest of the world .
Yes Panda it would be rather chaotic for the bankers who always pass their losses on to us . I do think though that they are trying to terrify people into thinking it is the worst thing that could possibly happen. Plague and pestulance and all the rest of it.
The real truth is that in the long run it will be the best for everyone except of course all the high finance people who will definately take a pounding. I would have hoped by now that every finance organisation in every country have taken precautions for when it happens !!!! Especially us who should have been prepared long ago. Surely not that hard to do for us as we are not in the confounded Euro.
Whatever excuses they come up with I do not buy it.
If Greece defaults and starts off with a clean slate they might do O.K eventually, Argentina survived, but cannot borrow any money any more. The big problem with Greece is the inter-bank lending, apart from what it owes the ECB and EFS, it owes a lot to banks. When Britain joined the Common Market we thought it was a trade arrangement and have never been comfortable in the EU, especially now we have so many directives that we are no longer in control of our Country.
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Re: New EC Thread
fuzeta Fri 12 Oct - 22:17
Panda wrote:fuzeta wrote:Panda wrote:fuzeta wrote:Panda wrote:The IMF is meeting and blames Europe and the U.S. for the World Crisis.
The EU has been awarded the Nobel Peace Prize for 2012.........UUm, is that because they keep out of everything??????
I think it is because we all have to do as we are told by Brussels Panda. No choice, we have to keep the peace it is written
Hi fuzeta, I think what this crisis has proved is how undemocratic the EU is, cumbersome , unable to come to quick decisions and Germany , as the main Banker calls the shots. The Euro Countries are bound by the currency and unable to adjust it according to each Countries needs.
Germany is forcing Greece into a corner and it may lead to Greece leaving the EURO which would be chaotic for the rest of the world .
Yes Panda it would be rather chaotic for the bankers who always pass their losses on to us . I do think though that they are trying to terrify people into thinking it is the worst thing that could possibly happen. Plague and pestulance and all the rest of it.
The real truth is that in the long run it will be the best for everyone except of course all the high finance people who will definately take a pounding. I would have hoped by now that every finance organisation in every country have taken precautions for when it happens !!!! Especially us who should have been prepared long ago. Surely not that hard to do for us as we are not in the confounded Euro.
Whatever excuses they come up with I do not buy it.
If Greece defaults and starts off with a clean slate they might do O.K eventually, Argentina survived, but cannot borrow any money any more. The big problem with Greece is the inter-bank lending, apart from what it owes the ECB and EFS, it owes a lot to banks. When Britain joined the Common Market we thought it was a trade arrangement and have never been comfortable in the EU, especially now we have so many directives that we are no longer in control of our Country.
It will be very tough for Greece but then it is now. Eventually it will go back to it's own 'alternative economy' which it managed very well with for donkey's years. Good luck to them I hope they do it. I expect other countries are waiting in the sidelines, waiting to see what happens with Greece.
I think all countries have sold their souls to the banks so I feel that they are no different than anyone else in that respect
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Re: New EC Thread
Panda Fri 12 Oct - 22:39
Banks rule the World now, not Governments. I watched "War Horse " last night , don't know if you have seen it , it's a film about the first World War, quite harrowing at times , but uplifting as well. It shows you the courage and bravery of those young men and I thought of today's young men and honestly don't think they could cope'Britain has gone soft.
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Re: New EC Thread
Panda Sat 13 Oct - 9:00
http://www.bbc.co.uk/news/uk-politics-19926638
This is a discussion about the EU being awarded the Peace Prize.....Nigel Farrage telling it like it is.
This is a discussion about the EU being awarded the Peace Prize.....Nigel Farrage telling it like it is.
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Re: New EC Thread
Panda Sat 13 Oct - 14:49
EconomyEuro
Spain
IMF calls for end to all-out austerity
12 October 2012
PresseuropEl País
El País, 12 October 2012
“The IMF is demanding an end to the excessive austerity in countries like Spain,” headlines El País following the annual meeting of the International Monetary Fund held October 11 in Tokyo.
The Director of the Fund, Christine Lagarde, has indeed called for “more time” to be given to countries to implement austerity measures.
According to El País, the statement marks –
Spain
IMF calls for end to all-out austerity
12 October 2012
PresseuropEl País
El País, 12 October 2012
“The IMF is demanding an end to the excessive austerity in countries like Spain,” headlines El País following the annual meeting of the International Monetary Fund held October 11 in Tokyo.
The Director of the Fund, Christine Lagarde, has indeed called for “more time” to be given to countries to implement austerity measures.
According to El País, the statement marks –
The Madrid daily sums up the “four elements” that make the Spanish economy the global “centre of attention” in the conclusions of the IMF –
... the high point of a Copernican turn in the IMF's view of the crisis, a vision that has evolved from a radical orthodoxy to [...] a fresh and promising realism. Many, especially among the group of leaders of the European Union, with Germany in the lead, should try to understand and take onboard these decisions.
Lagarde's statements coincided with a new downgrade of Spain by Standard & Poor's, from BBB + to BBB-, or just one notch above the ‘speculative’ rating (junk bond). El País qualifies the decision as a –
Spain is second-last place in the global growth forecast for 2013; its total bail-out by the EU is urgently needed to prevent new episodes of turbulence; if the Spanish government demands it, the more prosperous countries, like Germany, should make it easier; peripheral countries should be given longer periods to meet their commitments to lower the public deficit.
... miserable disqualification, because it combines a critical analysis similar to that of the IMF with an alarmist and hyper-politicised rhetoric, to show itself [the ratings agency] as being a self-styled arbiter above all suspicion. This agency – and the others as well – should reflect on the effectiveness of their analyses.
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