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Croatia joinhng the EU is now a worrying prospect

Post  Panda on Mon 24 Jun - 17:19

Carrying on regardless
24 June 2013
Novi List Rijeka

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Zagreb, June 2013. Part of the photo series ‘Membership, the great illusion’ by Eloisa Orsi for Presseurop
Eloisa d'Orsi/Presseurop
Amid the ongoing crisis, Croatia’s long awaited accession to the European Union is now a worrying prospect. Austerity policies advocated by Brussels have dampened popular enthusiasm in the country, however, there is no turning back now.
Denis Romac
Why are Croats not delighted by their entry into the EU? What was the point of dreaming about it for more than 20 years, at a time when the old world was disappearing into the new? And why should we bother with it now when it is clear that this accession will come at a cost to the people?
Only 7 per cent of Croats want to attend a fireworks display on July 1, which is testament to the indifference inspired by the country’s accession to the EU. Obviously, a question as complex as this one merits a complex response, but the fact that Europe is experiencing an unprecedented crisis has a lot to do with it.
For all those countries, which like Croatia, were long governed by irresponsible elites, Europe represented a certain institutional and political framework which offered a prospect of well-being and a guarantee of the rule of law.
However, the crisis has clearly demonstrated that all of this was simply an illusion. The European Union no longer ensures the well-being of countries. Today’s Europe is governed by austerity policies, and it matters little that respected economists have pointed out that the debts these policies are designed to address are not the cause of the crisis but rather one of its consequences.
Policy does not work
But let’s set aside this observation for a moment and take a look at the impact of these policies. We can see that they have pushed several "minor" countries towards economic and social disaster — something that was unthinkable just a few years ago. Not only does Europe’s anti-crisis policy not work — something that has been admitted by the IMF — but to top it all, the people are alone in carrying the weight of recessionary measures that are devised to satisfy the needs of financial oligarchies and banks.
The result of this has been the creation of a “lost generation”. In Spain, almost 55 per cent of young people are unemployed. In Greece the figure is even higher at 58 per cent. And throughout the rest of Europe, which is not faring much better, one young person in four is without a job.
This is not solely a matter of politics but of humanity. The European Commission has been unrelenting in the imposition of measures that punish all levels of the society. How can it be that today Angela Merkel is opposed to any reduction in Greek debt, when in 1953 Europe wrote off 60 per cent of Germany’s debt? How can it be that Germany is refusing to allow Greece a dispensation that it has already been granted itself?
Even in Slovenia, there have been several unprecedented declarations to the effect that an exit from the Eurozone and the EU is only way to avoid a disastrous situation in the country. Who would have thought that we would hear this from such a pro-European country as Slovenia?
Weaknesses laid bare
The crisis has laid bare all the weaknesses of the EU. Ten years ago, we dreamed of a union of peoples and not a union of financial markets. Today the markets are destroying the lives of millions of Europeans, while solidarity has vanished with the crisis.
Today’s Europeans, and in particular those in peripheral countries, are afraid of tomorrow. Those in southern Europe, like the population of Croatia, are also afraid. They feel they have been cheated and betrayed. This is what Croatians, who no longer see the EU as a safe harbour or even lifeline, must be feeling. People here are very much aware of what is going on around them.
Having said that, we do not have a choice. The only alternative to Europe would be to retrace our steps to return to a situation that prompted us to join Europe in the first place. We also very much aware that this is something we do not want.

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Re: New EC Thread

Post  Panda on Mon 24 Jun - 17:57

EU Leaders Try to Stave Off Bond Slump as Bank Talks Fail
By Patrick Donahue - Jun 24, 2013 12:20 PM GMT+01



  • QUEUE

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European Union leaders will this week attempt to stave off a resurgence of market tremors following a breakdown in talks on setting up unified banking rules.
Euro-area bonds fell after negotiations among the 27-member bloc’s finance ministers stalled over the weekend in Luxembourg. They failed to agree on assigning losses at failing banks as part of proposed rules on bank resolution and recovery. They will regroup June 26, before EU leaders gather the next day for a summit in Brussels.

Enlarge image

EU Leaders Set to Stave Off Market Turmoil After Bank Talks Fail

Jock Fistick/Bloomberg
Pedestrians walk past the European Union parliament building and the national flags of the member states, in Brussels.
Pedestrians walk past the European Union parliament building and the national flags of the member states, in Brussels. Photographer: Jock Fistick/Bloomberg



1:03

June 24 (Bloomberg) -- Daragh Maher, foreign exchange strategist at HSBC Plc, talks about the outlook for the euro and dollar. He spoke June 20 in London. (Source: Bloomberg)
“We shouldn’t be lulled by the current calm in the markets,” German Finance Minister Wolfgang Schaeuble said in a statement after the meeting. “Rather, we should quickly ensure that we’re prepared for every eventuality.”
European leaders’ failure to forge ahead with a so-called banking union that was agreed on almost a year ago has underscored the frustrations in overcoming a crisis now in its fourth year. With global markets jolted last week on concern over the possible tapering of U.S. stimulus, euro-area leaders who have relied on market calm over the past year may have less leeway.
A potential snag also emerged in Greece, where one of Antonis Samaras’s coalition partners abandoned the government following a dispute over the closing of state broadcaster ERT, narrowing the premier’s majority in parliament to three seats.
Yields Rise
The single currency was little changed today, slipping 0.1 percent to $1.3112 at 12:45 p.m. in Brussels. It fell 2 percent last week. The yield on Spanish 10-year bonds, another yardstick of euro-crisis market turmoil, briefly jumped above 5 percent from the first time since April 2 before dipping back to 4.97 percent. Ten-year Italian yields rose 7 basis points to 4.69 percent.
The yield on Slovenia’s dollar-denominated securities maturing in 2022 surged 22 basis points, or 0.22 percentage points, to 7.093 percent at 11:31 a.m. in Ljubljana, according to data compiled by Bloomberg, the highest level since debt sold in October.
The banking-union talks collapsed early Saturday after 19 hours of negotiations on the question of which creditors face writedowns when banks fail, compounded by differences between euro-area countries and EU states outside the euro.
“There are still core issues outstanding,” Irish Finance Minister Michael Noonan told reporters as he left the meeting. “We have another meeting next week, and there’s no guarantee it’ll reach a conclusion.”
Recapitalize Banks
The banking union’s primary objective was to allow bailout funds to recapitalize banks directly rather than burdening states with debt, thus ending the cycle of contagion between banks and sovereign debt and offering a way out of the crisis.
French Finance Minister Pierre Moscovici said he had “no doubt” that ministers will reach an agreement this week, while Germany’s Schaeuble said a final deal must be constructed in a way that won’t burden taxpayers.
“The banking-union concept is a credibility test,” Irish Prime Minister Enda Kenny said at a European People’s Party meeting in Vienna June 20. Not going forward “would be a poor signal of both credibility and trust” of the EU, he said.
In Greece, the government was shaken as the Democratic Left, the smaller of Samaras’s two coalition partners, withdrew its ministers. The party had protested the prime minister’s decision to shut the public broadcaster, suspend 2,600 jobs there and create a new, smaller company.
Reduced Majority
The withdrawal leaves Samaras’s New Democracy party and the Socialist Pasok to run the government. Together, they hold 153 seats in the 300-member parliament, compared with the 167 they had when joined with the Democratic Left.
As Greece approaches its next aid disbursement from international lenders in July, the EU has urged the indebted nation to press ahead with its economic overhaul. The upheaval revived concern that Greece will slide back into the political turmoil that halted aid payments and raised the specter of the nation exiting the 17-member euro.
“It would be very important to stabilize the political situation in Greece now, immediately, and really concentrate all energy on implementation of the program,” EU Economic and Monetary Affairs Commissioner Olli Rehn said on June 21 in Luxembourg. “I appeal to the sense of political responsibility of all political leaders and the Greek people to ensure stability and concentrate on policy rather than politics.”
Fed Comments
The European ructions come after markets around the world tumbled last week in response to Fed Chairman Ben S. Bernanke’s announcement that the central bank may start reducing bond purchases that have fueled gains in markets globally.
The possible withdrawal of monetary support places the burden of resolving the euro crisis back onto the shoulders of European governments, according to Nicholas Spiro, managing director of Spiro Sovereign Strategy in London.
“The ‘tapering terror’ that is convulsing financial markets will throw the limited progress achieved in putting the governance of the euro zone on a firmer footing into sharper relief,” Spiro said in an e-mailed statement yesterday. “Euro-zone leaders can no longer count on market complacency to help them muddle their way through the crisis.”

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Re: New EC Thread

Post  Panda on Tue 25 Jun - 11:30

Italy could need EU rescue within six months, warns Mediobanca
Italy is likely to need an EU rescue within six months as the country slides into deeper economic crisis and a credit crunch spreads to large companies, a top Italian bank has warned privately.

The report compared the Italian crisis with when the country was blown out of the Exchange Rate Mechanism in 1992 despite drastic austerity measures Photo: Alamy




By Ambrose Evans-Pritchard
10:12PM BST 24 Jun 2013
383 Comments

Mediobanca, Italy’s second biggest bank, said its “index of solvency risk” for Italy was already flashing warning signs as the worldwide bond rout continued into a second week, pushing up borrowing costs.
“Time is running out fast,” said Mediobanca’s top analyst, Antonio Guglielmi, in a confidential client note. “The Italian macro situation has not improved over the last quarter, rather the contrary. Some 160 large corporates in Italy are now in special crisis administration.”
The report warned that Italy will “inevitably end up in an EU bail-out request” over the next six months, unless it can count on low borrowing costs and a broader recovery.
Emphasising the gravity of the situation, it compared the crisis with when the country was blown out of the Exchange Rate Mechanism in 1992 despite drastic austerity measures.
Italy’s €2.1 trillion (£1.8 trillion) debt is the world’s third largest after the US and Japan. Any serious stress in its debt markets threatens to reignite the eurozone crisis. This may already have begun after the US Federal Reserve signalled last week that it will begin to drain dollar liquidity from the global system.
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Italian 10-year yields spiked to 4.8pc, up 100 basis points since the Fed began to toughen its language in May. But Mediobanca is particularly concerned about the gap that has emerged between yields on short-term bills (BOTs) and longer-term bonds (BTPs) near maturity that expire at the same time. BOTs retiring on July 31 are trading at a yield of 0.48, while the equivalent BTP is trading at 0.74pc. The reason is that BOTs are protected from debt restructuring.
“The bills never get a haircut, so people are fleeing bonds instead as positions gets squeezed,” said one City trader.
Sovereign debt strategist Nicolas Spiro said “taper terror” is jolting eurozone investors out of their complacency, though safe-haven Swiss and German bonds have also sold off sharply in the rout. Yields on 10-year UK Gilts closed at a two-year high of 2.53pc.
Yields punched to 5.1pc in Spain, and 6.7pc in Portugal. This is sending a secondary shock wave through their corporate debt markets, choking recovery.
“The European Central Bank needs to take very aggressive steps to offset this,” said Marchel Alexandrovich from Jefferies Fixed Income. “We have a sell-off across the board. If the ECB doesn’t act, it could see all the gains of the past nine months vanish in two weeks, taking the eurozone back to square one.”
The ECB has already backed away from earlier plans to steer credit to small businesses in the Club Med bloc. The Italian banking association said it was bitterly disappointed by the latest break down in eurozone talks on a banking union, warning that it leaves Italy’s lenders at the mercy of a confidence crisis.
Andrew Roberts from RBS said the world has become “a dangerous place” as Fed tightening marks an inflexion point in global liquidity.
“Central bank stimulus has fed a lovely carry trade and a rising tide has lifted all boats, but unfortunately the opposite is also true,” he said. “We have clear signs in global finance of a generalised meltdown in assets right now.”
Julian Callow from Barclays said the Fed, the Bank of Japan, China’s central bank and others have bought almost the entire $2 trillion issuance of AAA bonds over the past year. The effect of this has been to drive banks, insurers, and pension funds into riskier assets such as the eurozone periphery. This has helped prop up the eurozone, and camouflaged festering problems. “The Fed’s shift towards tightening is highly significant, and it is causing a very dramatic rise in real yields,” he said.
Borrowing costs of 5pc could prove crippling for Spain and Italy, both suffering from contraction of nominal GDP.
Mediobanca said the trigger for a blow-up in Italy could be a bail-out crisis for Slovenia or an ugly turn of events in Argentina, which has close links to Italian business. “Argentina in particular worries us, as a new default seems likely.”
Mr Guglielmi said Italy’s industrial output has slumped 25pc from its peak in the past decade, while disposable income has dropped 9pc and house sales have dropped to 1985 levels.
The 1992 crisis was defused by a large devaluation, allowing Italy to restore trade competitiveness at a stroke. Mediobanca said: “The euro straitjacket is clearly not providing a similar currency flexibility today. With the lira devaluation Italy managed to inflate debt away, which it cannot do today. It could take more than 10 years to revert to pre-crisis output levels.

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Re: New EC Thread

Post  Panda on Wed 26 Jun - 8:46

The caprice of the Brussels gods
25 June 2013
La Repubblica Rome

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Falco
While the living standards of Greeks keeps falling and the troika’s management of the crisis has been called into question, European institutions continue to look elsewhere. It is high time the Commission was held accountable for this appalling tragedy.
Barbara Spinelli
If they only still had their gods of antiquity, perhaps the Greeks could understand better what they are going through. The injustice they are suffering, the apathy and the casualness of a Europe that, for years, has been standing at their bedside, humiliating them, all the while declaring that it has no wish to expel them – while, in its heart, the Greeks are already on the outside.
In antiquity, the gods were known to be capricious. Above them all reigned Ananke, the goddess of necessity or destiny. Ananke shared a temple with Bia, the goddess of violence at Corinth. In the eyes of the Athenians, Europe shares the traits of this goddess of necessity.
Perhaps the Greeks understand why a summit was held in Rome on June 14, attended by the finance and employment ministers from Italy, Spain, France and Germany to discuss joblessness – an issue that has suddenly taken centre stage – and why none of those ministers had the idea of inviting the worst-off of all the member states: Greece, with unemployment at 27 per cent and more than 62 per cent among youth, the highest figures in Europe.
Greece has been a stain on Europe since the austerity cure began. It has paid for all of us, been used as our guinea-pig and scapegoat. At a June 6 press conference, Simon O'Connor, spokesman for the Commissioner for Economic Affairs, Olli Rehn, admitted that [the Greek crisis] has been a “learning process” for Europeans. They are perhaps now taking a different tack with other countries, but this is no reason for complacency: “Keeping Athens in the Eurozone was not an easy task… We strongly reject claims that we have not enough done to spur growth”.
Such was the reaction of Simon O'Connor and Olli Rehn to a report just published by the International Monetary Fund – that same IMF which, alongside the Central Bank and the European Commission, is part of the famous troika that has drafted the austerity programme for the countries in deficit and that keeps watch over them from its commanding heights. That report is a severe indictment of the strategies and conduct of the European Union during the crisis.
‘Could have done better’
Greece “could have done better” if its debt had been restructured and streamlined from the outset. If the plans had not been implemented with the disastrous slowness that stamps decision-making by unanimity. If a common supervision of banks had been agreed upon in time. If growth and social consensus had not been considered as negligible factors. The only thing that mattered was to prevent contagion and to save the money of creditors. For this, Greece was punished. Today it is treated like a pariah in the Union and everyone glories in their success because, technically speaking, Greece is still in the Eurozone, while in all other respects it is ostracised.
Farewell the troika, then? Nothing is less certain, given that citizens have no opportunity to punish it for its misdeeds, and given the condescension with which the IMF report was met. Ideally, it should lose its seat at the European Council meeting of June 27 and 28, devoted to the unemployment that the three “Moirai”, or Fates of the troika have left to inflate with total abandon.
The European Parliament will not dare let out a peep, and over at the ECB, Mario Draghi’s responses have been evasive, even smug: “The positive point that emerges from the IMF report is that no fingers have been pointed at the European Central Bank.” The IMF itself is ambivalent: all its statements are dotted with oxymorons (assertions that are both “subtle” and “stupid”, according to the etymology of the term). There was indeed a failure, but it is deemed to have been “necessary”. The Greek recession “surpasses all expectations”, but it is “unavoidable”. Illogical fate still reigns supreme, but it now falls to humans to manage the consequences.
In reality, the reasons for satisfaction are few and far between. The European Union has not grasped the political nature of the crisis – the lack of unity and European solidarity. There remains only a perverse interlacing of morality lessons and profit-and-loss calculations, and a panicky fear of contagion and moral hazard. To write off the debts without delay, as so many experts demanded, would have rewarded failure. And then, the IMF report points out, Europe preferred to protect creditors rather than fight contagion: putting off making decisions “gave the banks the leisure to withdraw their money from the Eurozone periphery”. The Bank for International Settlements cites Germany, whose banks have repatriated a total of €270bn from five countries (Greece, Ireland, Portugal, Spain and Italy) that found themselves in difficulties between 2010 and 2011.
Greek exit hypothesis
But the true stain is deeper. It's on the concept of the public sector, always under suspicion, that the axe has fallen, and it’s here in particular where wages and employment have plummeted. And democracy has suffered, starting with information services, the climax of which came on the night of June 11, when the Greek government suddenly shut down the nation’s public radio and television broadcaster – the ERT – with the tacit complicity of the troika, which has demanded massive layoffs of public employees.
By continuing to keep alive the hypothesis of a Greek exit, Europe has broken the bond of trust between the members of the Union, giving rise to a form of war. There is no longer any room for some countries that are untrustworthy, that lack power: The Disasters of War, by Goya, in fact. Athens has not been invited to the Rome Summit, and nor has Lisbon, since Portugal’s Constitutional Court ruled that two paragraphs of the troika’s draft were contrary to its constitution.
Portugal has been treated as a pariah too [– despite the government in Lisbon finding a way around the ruling to come up with further cuts]. “We are delighted that Lisbon will pursue the agreed therapy: it is essential that key institutions stand together to support the country”, the Commission declared two days after the verdict, rejecting any idea of a renegotiation. The kind of press release that would never be written on the decisions of the German Court, deemed unalterable.
Such stains cannot be removed, unless the EU is to rediscover what Europe was in its youth. Do not forget: the objective was to end the wars between powers ground down by the two world wars, but also to end the poverty that pushed the people into the arms of dictatorships. It is no coincidence that it was a europhile, William Beveridge, who drafted the plans for the welfare state in the midst of the Second World War.
The European institutions are not up to the task that they are supposed to fulfill today. That makes it all the more necessary that citizens express themselves through parliament, which they will elect in May 2014, and through a constitution worthy of the name. The Commission must take the form of a government elected by the people of Europe and accountable to MEPs. After all the damage it has done, a Commission like the one that is now operating alongside the troika must be sent home.
It has squandered its money, its honour and its time. It has sown hatred among the member states. It has pushed the Greek people into degradation. It has been criticised by an IMF suffering the pangs of a duplicitous conscience. It has reached the stage of what Einstein considered the worst failure of the politician and the scientist: that insanity “that consists of doing the same thing over and over again, yet expecting different results.”

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Re: New EC Thread

Post  Panda on Wed 26 Jun - 10:02



Portugal Throws Open Europe’s Them-And-Us Divide Over Austerity

By Henrique Almeida - Jun 26, 2013 12:01 AM GMT+0100.




..


Francisco Seco/AP Photo

Facing another 2.3 percent contraction in the economy this year, Passos Coelho has pledged no more tax increases and said last month that his government would focus on reducing spending to generate 4.8 billion euros through 2015.

When it comes to sharing the burden of austerity, some Portuguese feel more equal than others.





Enlarge image









A municipal worker pushes a dust cart past a graffiti covered hoarding at Comercio plaza in Lisbon. Photographer: Mario Proenca/Bloomberg
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Half way through his four-year term, Prime Minister Pedro Passos Coelho is trying to curb popular resentment over what opponents say is a widening gulf between private employees and about 600,000 public workers who have mostly stayed immune to mass job cuts. Portugal’s two biggest unions scheduled a general strike for tomorrow, the second since the country asked for international aid in April 2011, to protect benefits, including a 35-hour working week and early retirement.

“It’s unfair for the public sector to have certain benefits that don’t exist in the private sector,” said Francisco Rodrigues, 78, who runs a clothing store opposite the parliament building in Lisbon.

The sentiment is one that echoes across southern Europe from the Algarve in Portugal to Xanthi in eastern Greece as debt crisis-hit countries unpick years of overspending and largesse.

What’s bothering the Portuguese isn’t just that austerity helped prolong a recession and sent unemployment to a record 18 percent, it’s also that the government used taxation more than those in Greece and Ireland to try to narrow the budget deficit. Some workers on the state payrolls are perceived to have escaped the deterioration in living standards being felt by others.

“Today, there isn’t a single member of the government who speaks in public without having to face protests,” said Pedro Magalhaes, a politics researcher at the University of Lisbon.

Old Habits

Labor groups UGT and CGTP will try to grind Portugal to a halt tomorrow. They expect schools to shut, hospitals to work with emergency staffing, and buses, trains and flights will be canceled. It will be the first nationwide walkout since November 2011 and only the fourth of the past 25 years. Non-state workers were invited by both unions to join the strike.

“We expect the country to come to a standstill as people are tired of the government’s attack on their rights,” said Armando Farias, a member of CGTP’s executive committee.

When Passos Coelho, 48, came to power, less than two months after the bailout with the European Union and IMF was agreed, he tried to address them-and-us concerns by banning his ministers from traveling in business class on short-haul flights.

The prime minister sat in economy on a commercial airplane on his first trip as premier to an EU summit to show his government’s commitment to cutting costs laid out in the 78-billion-euro ($104 billion) rescue program. Rodrigues called it “a symbolic move that ended up backfiring.”

Less Popular

If elections were held today, Passos Coelho’s Social Democrats would win 24.8 percent of the vote, compared with 36.9 percent for the main opposition Socialist party, according to a survey by Eurosondagem published on June 7. He won the election two years ago with 39 percent of ballots.

Facing another 2.3 percent contraction in the economy this year, Passos Coelho has pledged no more tax increases and said last month that his government would focus on reducing spending to generate 4.8 billion euros through 2015.

The announcement was made four months after the International Monetary Fund called on Portugal to trim spending on wages and pensions, which together account for more than half of government expenditures that aren’t for interest payments.

“It would seem impossible to generate the government’s spending reduction goals without changes in these two areas,” the IMF said in its January report. “After controlling for purchasing power, the remuneration packages for doctors are above those in Germany, Norway and Italy.”

Equal, Unequal

The government is also considering job cuts, a salary review for public workers, increasing the number of hours they work per week to 40, in line with private companies, and penalties for workers who chose to retire before the age of 66, Passos Coelho said in a May 3 speech in Lisbon.

For a number of politicians and Constitutional Court judges, the benefits that come from working for the state look set to remain intact. Some are eligible to retire after 12 years of contributions, compared with 40 years for the majority of the population, according to two separate laws published on the websites of the country’s Parliament and Constitutional Court.

“There may be some careers in the state that have no parallel in the private sector and thus require specific treatment,” Luis Marques Guedes, the minister for parliamentary affairs, told reporters last month following a cabinet meeting. “The principle of equality means one has to treat as equal what is equal and as unequal what is unequal.”

The same group of judges on April 5 blocked a government plan to suspend the equivalent of a month’s salary to state workers this year as it violated “the principle of equality” between those in the private and public sector, they said.

“What’s really unfair is to have judges and politicians who are immune to the austerity measures imposed upon the majority of the population,” said Antonio Marinho Pinto, chairman of Portugal’s Lawyer’s Association, most of whose members are self-employed. “This is a scandal. Portugal cannot have first class and second-class citizens.”

To contact the reporter on this story: Henrique Almeida in Lisbon at

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Re: New EC Thread

Post  Panda on Wed 26 Jun - 17:44



Euro-Area Bonds Advance on Draghi’s Pledge to Stay Accommodative

By Neal Armstrong - Jun 26, 2013 4:33 PM GMT+010


Q

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Euro-area bonds rose, led by peripheral nations such as Italy and Spain (GSPG10YR), as European Central Bank President Mario Draghi’s pledge that monetary policy will stay accommodative boosted the appeal of fixed-income assets.

Germany’s 10-year bund yield fell the most in three months after Draghi told the French National Assembly that policy makers stood ready to act to support growth in the region. Italy’s 10-year yield dropped from the highest level in four months before the nation sells up to 5 billion euros ($6.51 billion) of five- and 10-year securities tomorrow.






1:39:04

June 26 (Bloomberg) -- European Central Bank President Mario Draghi speaks to lawmakers in the French National Assembly in Paris about monetary policy, the euro area's economy and governments' fiscal policies. (This report contains translation from French. Source: Bloomberg)
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“This is a reflection that the market is expecting more” from the ECB, said Michael Leister, an interest-rate strategist at Commerzbank AG in London. “On the European side, rates have overshot. There is good value in European fixed income.”

Italy’s 10-year yield fell 15 basis points, or 0.15 percentage point, to 4.71 percent at 4:32 p.m. London time after climbing to 4.93 percent, the highest level since Feb. 27. The 4.5 percent bond due in May 2023 rose 1.135, or 11.35 euros per 1,000-euro face amount, to 98.8.

Spain’s 10-year yield dropped 22 basis points to 4.85 percent, the biggest one-day decline on a closing basis since Jan. 10. Portugal’s 10-year yield fell 24 basis points to 6.66 percent and Greece’s slipped 44 basis points to 10.99 percent.

The ECB’s monetary policy “will stay accommodative for the foreseeable future,” Draghi said in Paris. “We have an open mind about all other possible instruments that we may consider proper to adopt.” An exit remains “very distant,” he told reporters at a press conference.

Bunds Gain

Germany (GDBR10)’s 10-year bund yield dropped five basis points to 1.76 percent, the biggest decline since March 27. The rate climbed to 1.85 percent on June 24, the highest level since April 4, 2012.

Euro-area sovereign bonds have slumped since Federal Reserve Chairman Ben S. Bernanke said on June 19 the U.S. may slow asset purchases this year and end them in mid-2014. Government securities around the world are poised for their worst quarter since at least 1997, according to Bank of America Merrill Lynch indexes.

Securities in the Bank of America Merrill Lynch Global Broad Market Sovereign Plus Index fell 2.30 percent this quarter through yesterday, set for the worst performance since the indexes began tracking the data on Dec. 31, 1996. While the average yield on the securities has climbed to 1.79 percent from 1.43 percent on March 31, it is still below the average of 2.06 percent for the past five years.

Most Volatile

Volatility on Belgian bonds was the highest in euro-area markets today followed by those of Finland and Austria, according to measures of 10-year debt, the yield spread between two- and 10-year securities, and credit-default swaps.

Belgium’s 10-year yield dropped 11 basis points to 2.74 percent and Finland’s fell seven basis points to 2.06 percent.

Italy’s Treasury sold 8 billion euros of six-month bills today at an average yield of 1.052 percent, compared with 0.538 percent at a previous sale of the securities on May 29.

Italian securities returned 0.1 percent this year through yesterday, according to Bloomberg World Bond Indexes. Spanish bonds gained 3.6 percent, while German securities handed investors a loss of 2.1 percent.

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Re: New EC Thread

Post  Badboy on Wed 26 Jun - 17:55

I UNDERSTAND THAT MYKONOS IS TO HAVE ABOUT 1MILLION TOURISTS THIS YEAR,IT EVERYONE IN GREECE IS BANKING ON THE TOURISM INDUSTRY TO HELP THEM OUT.

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Re: New EC Thread

Post  Panda on Wed 26 Jun - 18:11

Badboy wrote:I UNDERSTAND THAT MYKONOS IS TO HAVE ABOUT 1MILLION TOURISTS THIS YEAR,IT EVERYONE IN GREECE IS BANKING ON THE TOURISM INDUSTRY TO HELP THEM OUT.

I didn't post it here but did read somewhere that Greece is fed up with the austerity and ready to pull out of the EU if necessary

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Re: New EC Thread

Post  Panda on Thu 27 Jun - 9:07

Business news and markets: live
Large depositors must share the burden of bank rescues with investors and shareholders under new EU rules on bank rescues.

Protesters during the rally against the ratification of a one-off tax on bank deposits in front of the Cyprus parliament in Nicosia in March. Photo: EPA
By Denise Roland, and Ben Martin
8:18AM BST 27 Jun 2013
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2013-06-27 08:30:27.0
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• Britain's shale gas supplies twice as big as expected
• EU to put depositors in firing line for bank failures
• Government fast tracks road and rail projects
• HMV's Oxford Street flagship to become a Sports Direct

Latest


08.18 In the corporate world, courtesy of the City Briefing email, Debenhams has said online sales jumped 40pc in the first half of the year. Overall like-for-like sales rose 2.1pc for the half year although they were flat for the 16 weeks to June 22. The retailer has said it expects to create 430 new jobs through the transformation of its flagship store on Oxford Street.

DS Smith, the recycled packaging company, has declared a "transformational year" after its restructuring with a 51pc rise in annual pre-tax profits on an 86pc jump in revenues to £3.7bn.

The gambling group Betfair has announced a £49.4m pre-tax loss compared to profits of £54.2m last year but still says the results are better than expected at this stage in the company's turnaround programme.

Photo Me has announced a 20.7pc jump in annual pre-tax profits to £24.3m despite a 5.9pc drop in revenues.

Pinewood Shepperton, the iconic film services company which this year shifted its shares from the main market to AIM, has reported £55.6m of revenues, from £63m for the 15-month period to March 2012, and operating profits of £8.4m, from £13.2m


Pinewood Shepperton produced Pirates of the Caribbean. Photo: Buena Vista


08.14 Shale gas is back at the top of agenda with a report by the British Geographical Survey which has suggested that Britain's supplies are twice as big as expected, writes Louise Armitstead in the City Briefing email. The BGS was asked to estimate how much trapped gas there is under the Yorkshire and Lancashire and has come back with the figure of 1,300 trillion cubic feet at one site alone, according to the BBC. It's not clear how much is extractable, especially in the face of fierce opposition to the extraction methods, but even a fraction could meet British energy needs for years. Full details of the report are out this afternoon.


Photo:AP

08.09 Payday lenders are set to come under more scrutiny. The Office of Fair Trading has referred payday lenders to the Competition Commission after finding "deep rooted problems" across the sector. Consumer affairs editor Steve Hawkes has more details:

The OFT said a full investigation are needed given the huge concerns about the way the companies behave and mask the cost of their loans.

The watchdog said there was huge evidence of "financial loss and personal distress" to many people.

It added its own review of the market found there were barriers to switching between providers, and "variable" levels of compliance with the rules. This meant those that were complying were at "a disadvantage".

Critics said the OFT had taken far too long to get a grip with a sector now estimated to be worth £2bn. A Competition Commission could take at least another year to complete.

But Clive Maxwell, OFT chief exec, said:" Tne Competition Commission can now conduct a detailed investigation to get to the root causes and, if necessary, use its far reaching powers to fix the payday lending market."


The OFT said a full investigation of payday lenders are needed given the huge concerns about the way the companies behave and mask the cost of their loans.

08.02 It's another positive start for the FTSE 100 today, with the index of leading shares advancing 23 points, or 0.4pc, to 6,188 at the beginning of trading. The blue-chips have risen for two consecutive days, and investors will be hoping it can manage a third and continue to claw back some of the ground it lost in the recent rout.


07.49 This agreement probably what Dutch finance minister Jeroen Dijsselbloem had in mind when he told the FT and Reuters in March that the heavy losses inflicted on depositors in Cyprus would be the template for future baking crises across Europe.

His comments caused market pandemonium at the time, with investors fearing the consequences for future bail-outs across the troubled eurozone. Back then, Mr Dijsselbloem's spokeman said his comments were taken "out of context"- but apparently he said exactly what he meant, and achieved it in Brussels last night.

If a bank gets in trouble we will now throughout Europe have one set of rules on who pays the bill. The financial sector itself will now to a very, very large extent become responsible for dealing with its own problems.

For the first time, we agreed on a significant bail-in to shield taxpayers.


Dutch finance minister and head of the Eurogroup Jeroen Dijsselbloem. Photo:AFP



07.30 Cyprus-like bank bail-ins are set to be the new blueprint for dealing with failing lenders in the EU after finance ministers struck an agreement late last night.

The plan forms one of the key pillars of banking union and shields EU taxpayers from footing the bill for future rescues. It stipulates that shareholders, bondholders and depositors with more than 100,000 should share the burden of saving a bank.


A Cypriot man protest against the EU bailout deal and German Chancellor Angela Merkel's call for Cyprus to follow economic reforms. Photo: AFP/Getty Images


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Re: New EC Thread

Post  Panda on Thu 27 Jun - 10:01

27 June 2013 Last updated at 09:27 Share this pageEmail Print Share this page

434ShareFacebookTwitter.EU summit in Brussels wrestles with youth unemployment Austria's youth apprenticeships have earned praise in the EU Continue reading the main story
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Jobs crisis: Europe's great migration
Dreams on hold among young Greeks

The record unemployment blighting much of Europe will be the focus of attention at a two-day EU summit set to open in Brussels.

Across the EU, nearly a quarter of people aged 18 to 25 have no job. In Greece and Spain more than half of people in that age group are jobless.

EU leaders will consider mobilising 6bn euros (£5bn; $8bn) earlier than planned to help youth training schemes.

A draft plan has also been agreed on how to rescue troubled banks

Bank creditors and shareholders would take the first hits, followed by savers with deposits of more than 100,000 euros. If that is not enough, government help would be called upon, and taxpayers would be among the last to shoulder losses.

There are still fears that a bank run in one country could spread contagion across a still fragile eurozone.

Weak lending

A source at the European Commission said an extra 10bn euros in funding for the European Investment Bank (EIB) could be used to encourage private banks to lend more to small and medium-sized businesses (SMEs), especially in the struggling southern "periphery" economies hit hard by the euro crisis.

The idea is to turn that 10bn into EIB guarantees worth 100bn - enough to cover loans issued by private banks. The source stressed that "it is not new money" - it would come from the EU structural funds already earmarked for Europe's poorer regions.

Continue reading the main story
Unemployment rates
Greece - 27%
Spain - 26.8%
Portugal - 17.8%
Cyprus - 15.6%
Rep of Ireland - 13.5%
Italy - 12%
France - 11%
EU average - 11%
UK - 7.7%
Germany - 5.4%
Source: Eurostat, April 2013 (Figures for Greece & UK are for February 2013)

The focus is on SMEs because they account for about 99% of businesses in the EU, employing about 70% of the workforce, the Commission said. Despite the SMEs' importance in EU labour markets, bank lending to them fell by 10% in the first quarter of this year.

But the source told journalists at a pre-summit briefing that co-ordinating action on jobs "is not easy at European level - social policy is mainly a national competence".

The Commission's Youth Guarantee plan would offer young people across Europe a quality apprenticeship or job in the first four months after becoming unemployed or leaving formal education.

The EU Commissioner for Employment, Laszlo Andor, says the scheme could help to reduce the growing north-south competitiveness gap in the EU.

But the heavy lifting of job creation still has to be done by national governments, by making labour markets more flexible, stimulating growth and easing the tax and administrative burdens on SMEs, the Commission admits.

Political obstacles

John Springford, an economic analyst at the Centre for European Reform, said the EU was facing "very large political roadblocks" hampering the necessary macro-economic changes.

"They are stumbling towards integration very slowly - when the financial markets relax the pressure, the progress stalls," the think-tank analyst told BBC News.

Germany - one of Europe's few economic bright spots amid the gloom of the euro crisis - is especially loath to pool risk at European level ahead of its general election in September, Mr Springford said.

Germany is making any aid for struggling eurozone economies strictly conditional on them enacting structural reforms, such as making it easier for companies to hire and fire. But such reforms are generally slow to bear fruit.

The draft summit conclusions, seen by the BBC, say the leaders note "the importance of shifting taxation away from labour as a means of increasing employability and boosting job creation and competitiveness".

Leaders are also expected to approve accession talks for Serbia, as well as formalising Croatia's entry into the EU next week.

Serbian Prime Minister Ivica Dacic said on the eve of the summit that he hoped to see his country join within five years at most. Belgrade, he said, had made a "huge step forward" in talks with its breakaway region of Kosovo - an issue which hindered the country's EU bid in the past.

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Re: New EC Thread

Post  Panda on Thu 27 Jun - 20:49


Banking Union: New rules to save failed banks



27 June 2013

Presseurop
Financial Times, El Periódico de Catalunya


Europe took a step toward banking union early on June 27, as EU finance ministers reached an agreement on how to force losses on creditors of failed banks, writes The Financial Times.

Estimating European taxpayers have extended about €1.6trn to banks badly exposed to financial crises since 2008, the daily points out the agreement moves toward “a eurozone banking union that could eventually share the costs of future bank bailouts”.

Although it still needs to be voted by the European Parliament before coming into effect in 2018, the agreement would be able to “force shareholders, bondholders and some depositors to contribute to the costs of bank failure”, while exempting individuals, small business and insured deposits of less than €100,000.

For El Periódico, the decision taken by Ecofin


is crucial for strengthening the soundness of the European banking system and for saving citizens from again having to pay for the mistakes of bankers through injections of public funds into the banks and through cuts in social spending.

The directive, the daily continues, “clearly fixes” the pecking order of contributions if a bank needs to be rescued: “first, the shareholders; second, holders of preferential shares and subordinated debentures [so-called junior creditors, less well insured]; third, bondholders; and fourth, deposits above €100,000.” A certain “flexibility” is granted to the states, which may decide to intervene directly, but in a limited way and only after getting authorisation from the European Commission:


Germany and its allies have insisted that the cost of this flexibility be financed by national funds (public or private), and that European aid backed by a state guarantee can only be requested by a country in difficulty, as in the case of Spain. Direct recapitalisation through the European rescue funds remains the last resort.

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Re: New EC Thread

Post  Panda on Fri 28 Jun - 17:18


EU budget — little money, much waste



25 July 2012
De Groene Amsterdammer Amsterdam

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The EU spends too much money and it does so for pointless projects, goes the usual reproach. But is it really so wasteful? asks Groene Amsterdammer in its third Euromyth investigation.

Reinier Bijman | Yasha Lange

In 2012 the budget of the European Union was 147.2 billion euros, approximately 1% of the combined GDP of all its members. By way of comparison: in an average member state the budget comprises 44 percent of the GDP. A federal government like the United States spends a quarter of the national income. Nevertheless, these comparisons are like comparing apples and oranges. The US budget includes defence, police and all sorts of other matters.

The question is whether that 147 billion of the EU is too much. Brussels itself tends to trivialise it: “A half a cup of coffee a day.” But this doesn't say much either. Is the money used in the right way, for the right things?

The biggest cost headings of the EU are the cohesion policy and the common agricultural policy. Bernard Steunenberg, a lecturer in public administration in Leiden, calls the latter a “blemish” – “Agricultural policy is a costly phenomenon which does little for us. Maintaining specific prices has turned out to be a very poor, wasteful instrument.” The policy is being phased out, but the amount remains 40% of the EU budget.

The money is often not spent

Almost just as much goes to the cohesion policy. Hundreds of thousands of projects which are intended to ensure that the gap between poor and rich regions is closed. An “investment”, according to EU commissioner for Regional Policy, Johannes Hahn. “In your country tax money is also transferred from rich provinces to poorer provinces.”

But there are two big problems. First of all the money is often not spent, or is not spent on useful things. “If there are no projects, or if a country does not have money for co-financing, the reserved money is just held for that region,” says Fabian Zuleeg of the European Policy Centre.

Second problem: the results cannot be assessed. The European Audit Office has been trying to do so since 2001, but still has not been able to issue a positive opinion. National governments cannot properly account for the EU monies they manage. According to recent research of the European Audit Office, many of the 31 agencies of the EU cannot account for a substantial part – in some cases up to half – of their expenditure. 147 billion euros provided by 27 countries may not seem like that much. But if the money is primarily spent on subsidies for farmers and questionable regional projects, the EU loses credibility.

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Re: New EC Thread

Post  Panda on Fri 28 Jun - 22:07

Tempers fray in France as drastic cuts loom
France's budget watchdog has called for another round of drastic cuts and an immediate freeze in public sector pay and benefits, warning that public finances are badly off track as deep recession eats into tax revenues.

Francois Hollande's poll ratings have crashed at the fastest rate ever for a new president, and much of his own party is near revolt Photo: Reuters
By Ambrose Evans-Pritchard, in Paris
8:25PM BST 27 Jun 2013
579 Comments
The country's Cour des Comptes said the budget is likely to breach EU targets by a wide margin yet again this year, perhaps reaching 4.1pc of GDP, risking a fresh showdown with Europe a time when French support for the EU Project is already in freefall.

The watchdog called for €28bn in extra belt-tightening over the next two years to prevent a debacle, demanding a "particularly vigourous effort" to rein in unemployment benefits, housing aide, pensions and help for families.

President Francois Hollande has already angered much of his own Socialist base with plans to cut spending next year in absolute terms for the first time since 1958, but this may be just start of the battle. The Cour des Comptes said France is not even "halfway" through its fiscal squeeze.

The warnings came as a blizzard of grim news dashed hopes for a rapid recovery from two years of slump. The data office INSEE said consumer confidence fell to 82 in June, the lowest since the series began 40 years ago.

A new report on French competitiveness country by Ernst & Young entitled "Last Chance" confirmed the worst fears of business leaders, concluding that the country is being left behind as foreign investment migrates to Germany and Britain.

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The number of new industrial plants created by foreigners fell 25pc last year, and new job creation fell 53pc, with the emerging BRICS powers avoiding the country altogether. Ernst & Young said France's anti-market body language had become almost "repulsive" for outside investors, not helped by a series of bitter labour disputes.

"France is drifting away. Like a receeding wave, it is retreating little by little from the global economy, imperceptibly in the past, but visibly so today," said Jean-Pierre Letartre, Ernst & Young's chief in France.

Mr Letartre said France still has world class companies in technolgy, transport and information services but is succumbing to a "generalised depression" that is feeding itself in a destructive dynamic.

The government has pencilled in economic contraction of 0.3pc this year, with a weak recovery starting in the second half, but a chorus of private economists fear far worse if there is any outside shock.

"It could be as much as minus 1.5pc," said Jean-Michel Six from Standard & Poor's. "The current account deficit is growing month after month, and this means it is depending more and more on the rest of the world to finance its growth. In my view, France has got just one more year to sort itself out."

The Observatoire Economique think-tank said France is tightening fiscal policy by 1.8pc this year to meet EU deficit targets, or 2.5pc including the spillover effect of synchronized cuts in EMU trade partners.

"This is too violent: it is suffocating the economy," said the Observatoire's Marion Cochard. "Tightening of 0.5pc each year would be the right pace, given that the fiscal multiplier is at least 1.0 in France.

"A large part of Europe is already a liquidity trap, and the European Central Bank needs to start buying bonds and capping yields to avoid a brutal downward spiral."

The Observatoire's latest report said Europe risks sliding into full-blown deflation by 2014.

Mr Hollande has so far gone along with EU austerity demands, backing away from his pledge for a New Deal growth strategy in the elections last year. But his poll ratings have crashed at the fastest rate ever for a new president, and much of his own party is near revolt.

Officials in Brussels are watching with alarm as French leaders whip up a concerted campaign against European Commission president Jose Barroso, who in a loose moment described French Socialists as "extreme reactionaries" for clinging to cultural protection for France's film industry and arts.

Parliament president Claude Bartolone, who called for showdown over austerity policies with Germany in April, said Mr Barroso is a relic of the last century. "He is a man past his time. His behaviour is insufferable. He incarnates a Europe of markets, capital and a forced march towards austerity," he said.

Mr Hollande has been more careful, though he too warned recently that France is a self-governing sovereign state and would not tolerate further "diktats" from Brussels.

A recent study by Pew Foundation said French support for the European Project has crashed from 60pc to 40pc over the past year. Just 22pc now think EU economic integration is positive.

Describing a "dyspeptic France" that has become the new "sick man of Europe", it said French attitudes have decoupled from the core EMU states and now resembles views in the crisis-stricken South. Fortunately for the French treasury, global bond investors are still treating its debt as if it were core debt.

Just 9pc think economic conditions are good, though it is worse in Spain (4pc) and Italy (3pc). The dramatic contrast is with Germany, where 75pc are content. France and Germany have never been so far apart in EU history.

Former premier Alain Juppe said the new anti-EU reflex is becoming dangerous. "There is the risk of a breakdown of the European Union that could threaten its existence. We must stop lying about Europe. From morning until night, eveything that now goes wrong is blamed on Brussels," he said.

Yet Mr Juppe said Europe itself had failed to rise to the challenge. "Remember the famous Growth Pact, the €120bn they were talking about two years ago: not a single euro has actually been spent."

Critics would say that, in a nutshell, is the whole story of eurozone crisis strategy.

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Re: New EC Thread

Post  Badboy on Sat 29 Jun - 16:33

DISCUSSION ON ALJEZEERA ABOUT PRESENT CRISIS,SOMEONE SAID BREAK UP EURO,SOMEONE ELSE SAID RATHER THAN MONEY FLOWING FROM NORTH TO SOUTH AS PLANNED,ITS THE OTHER WAY ROUND.

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Re: New EC Thread

Post  Panda on Sat 29 Jun - 17:17

Badboy wrote:DISCUSSION ON ALJEZEERA ABOUT PRESENT CRISIS,SOMEONE SAID BREAK UP EURO,SOMEONE ELSE SAID RATHER THAN MONEY FLOWING FROM NORTH TO SOUTH AS PLANNED,ITS THE OTHER WAY ROUND.
Hi Badboy, the EURO crisis won't go away and Greece will default I'm sure. The EU has just announced Croatia is to be a New Member soon....madness.!!!!

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Croatia joins EU

Post  Panda on Sun 30 Jun - 19:53



Croatian accession (6/6): “We’re back”



30 June 2013
Novi List Rijeka

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Dubrovnik, June 2013. Photo from the series “Accession, the great illusion”, composed by Eloisa d’Orsi for Presseurop.
Eloisa d'Orsi/Presseurop

The European Union is witnessing a decline in confidence as its economic crisis continues. But for a country that has experienced wars and authoritarian regimes, taking on EU membership means above all joining a community of progressive values.

Boris Pavelić

Common human values: that is the meaning of the European Union. Peace, personal freedom, the rejection of violence, the art of compromise, the rule of law -- all of these values are being obscured at the moment by the chaotic situation across Europe. However, even the political chaos has failed to cast a shadow over the freely expressed will of the European people to live by common rules that guarantee peace and human rights.

A troubled past

Sounds like waffling, does it? Well, let us examine life in Croatia up until now. How did we live under the Austro-Hungarian Empire? The Croats had no more power of decision than they did in the Kingdom of Yugoslavia. Ostensibly democratic, the latter was merely a pro-Serbian police state. And what about the independent State of Croatia (NDH), which existed from 1941 to 1945? It was founded on genocide (of Jews, Serbs, Roma and Communists), racism and chauvinism.

And the Socialist Federal Republic of Yugoslavia? Officially a federal state, it was a “light” version of a Communist dictatorship, a country without freedom of expression and the freedom to live by one’s own choices. Finally, Croatia under Tudjman, from 1989 to 1999? Again, officially a democracy, it was in fact a nationalist “democratatorship”, a state that plundered its own citizens, covered up crimes and tolerated hate speech. None of these states enshrined any principle of peace and human rights.

For the EU member states, these are the fundamentals. The European Union is the first political community to open its internal borders and reconcile and unify multiple democratic countries by the common ideal of freedom of individuals and the peace between nations. It’s enough to remember what was happening in the Balkans in the 1990s to see that Croatia has made the right choice.

This is why we must not draw hasty conclusions by peering only into our wallets. Poverty is a threat independent of the EU. If Croatia were to remain outside the EU, it would be even worse. Paradoxically, Croatia will be less dependent on the EU as a member that it has been so far. The lesson from the dispute over Piran Bay is the best proof of that. What matters is not that money be made, but that peace and freedom prevail. Václav Havel, who knew so well how to meet the impossible challenges of politics, once said “Europe does not amount to the price of a sack of potatoes.” His words make perfect sense in the Balkans, where we were never in the habit of insisting on values. One can understand that, as we too often felt deceived. Here, such ideals were often used to trick the people.

A renaissance

Finally, we have opportunity to change all that. In accepting the rules of the EU, we take the decision to reject “the arbitrary”. It is important to have enough self-confidence to be able to enforce, by ourselves, the values that we have chosen. In the future, no one can fight a war against another country by pretending to be doing it for the good of the nation. No one will again be able to conceal crimes on the pretext that it is better that way. No one will be able to base his politics on the fact his “wife is neither Serbian nor Jewish” [so said Tudjman]. And above all, no one can change the rules at his own convenience, as [Prime Minister Zoran] Milanović is beginning to grasp. From now on, we know what is acceptable and what is not. That is why, at this important and solemn moment, we must certainly be enthusiastic while also remaining watchful. Let us remember this toast, full of melancholy, uttered by the great poet Ivan Lovrenović in 2004, during the reopening of the Stari Most [Old Bridge] of Mostar: “While the swallows fly, playing with the wind under the arches of the bridge, I propose a toast: we’re back”.

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Re: New EC Thread

Post  Panda on Mon 1 Jul - 10:34

France's triumphant 'Joan of Arc' vows to bring back franc and destroy euro
Marine Le Pen is spoiling for a fight. The leader of France's Front National vows to smash the existing order of Europe and force the break-up of monetary union, if she wins the next election.

Mrs Le Pen said her first order of business on setting foot in the Elysee Palace will be to announce a referendum on EU membership, "rendez vous" one year later. "I will negotiate over the points on which there can be no compromise. If the result is inadequate, I will call for withdrawal," she said. Photo: EPA
By Ambrose Evans-Pritchard
4:39PM BST 30 Jun 2013
882 Comments
It is no longer an implausible prospect. "We cannot be seduced," she said, brimming with confidence after her party secured 46pc of the vote in a by-election earthquake a week ago. Her candidate trounced the ruling Socialists in their own bastion of Villeneuve-sur-Lot.

"The euro ceases to exist the moment that France leaves, and that is our incredible strength. What are they going to do, send in tanks?" she told the Daily Telegraph at the Front National's headquarters, an unmarked building tucked away in the Paris suburb of Nanterre. Her office is small and workaday, almost austere.

"Europe is just a great bluff. One side there is the immense power of sovereign peoples, and on the other side are a few technocrats," she said.

For the first time, the Front National is running level with the two governing parties of post-War France, Socialists and Gaullistes. All are near 21pc in national polls, though the Front alone has the wind in its sails.

Yet it is the detail in the Villeneuve vote that has shocked the political class. The Front scored highest in the most Socialist cantons, a sign that it may be breaking out of its Right-wing enclaves to become the mass movement of the white working class.

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Commentators have begun to talk of "Left-LePenism" as she outflanks the Socialists with attacks on banks and cross-border capitalism. Anna Rosso-Roig, a candidate for the Communist Party in the 2012 elections, has just defected to the Le Pen camp.

The Socialists had thought the rising star of Marine Le Pen would work to their advantage, splitting the Right. Now they discern a deadly threat. Industry minister Arnaud Montebourg lashed out last week, blaming Brussels for playing into the hands of the Front National by running roughshod over democracies and pushing austerity a l'outrance.

Mrs Le Pen said her first order of business on setting foot in the Elysee Palace will be to announce a referendum on EU membership, "rendez vous" one year later. "I will negotiate over the points on which there can be no compromise. If the result is inadequate, I will call for withdrawal," she said.

The four sticking points are the currency, border control, the primacy of French law, and what she calls "economic patriotism", the power for France to pursue "intelligent protectionism" and safeguard it social model. "I cannot imagine running economic policy without full control over our own money," she said.

Asked if she intends to pull France of the euro immediately, she said: "Yes, because the euro blocks all economic decisions. France is not a country that can accept tutelage from Brussels," she said.

Officials will be told to draw up plans for the restoration of the franc. Eurozone leaders will face a stark choice: either work with France for a "sortie concertee" or coordinated EMU break-up: or await their fate.

Mrs Le Pen fears that other EMU states will resist and let "financial Armaggedon" run its course, but it is a risk that has be taken.

Her plan is based on a study by economists from l'École des Hautes Études in Paris led by Professor Jacques Sapir. It concludes that France, Italy, and Spain would all benefit greatly from EMU-exit, restoring lost labour competitiveness at a stroke without years of depression.

They say the eurozone's North-South imbalances have already gone beyond the point of no return. Attempts to reverse this by deflation and wage cuts must entail mass unemployment and loss of the industrial core. The current strategy of internal devaluation is self-defeating in any case, since recession causes debt ratios to climb faster.

Prof Sapir said the gains are greatest in a coordinated break-up with capital controls where central bank intervention steers the new currencies to target levels. The model assumes that the D-Mark and Guilder is held to a 15pc rise against the old euro, while the Franc falls 20pc.

The gains are less if EMU collapses in acrimony and currencies overshoot. This would inflict a violent deflation shock on Germany, but would still be strongly positive for the Latin bloc.

"A lot of politicians have been coming to see me, both Gaullistes and Socialists. They agree, but don't want to come out publicly. They want somebody else to take the lead. If Marine Le Pen wishes to use my work, I have no problem," he said.

Mrs Le Pen is a single mother of 44, more relaxed about gay rights and abortion than she lets on, closer in some ways to the assassinated Dutch populist Pim Fortuyn than to her cantankerous father Jean Le Pen, who stepped down as party leader two years ago. Mr Le Pen in turn deplores her eclectic modernism as an overlay of "petit bourgeois" views picked up in Paris schools.

She has carried out a quiet purge of the Front, pushing known anti-semites to the sidelines. Vichy nostalgia is out. While her father called the Holocaust an historical "detail", she calls it the "pinnacle of human barbarism". She courts Jewish favour, aiming her fire at Jihadists instead. "Political parties are like people. There is adolescence when you do do crazy things, and then maturity. We are now ready for power," she said.

This campaign of "dédiabolisation" or image detox seems to have worked. Only a minority of voters still thinks the Front is a "threat to democracy". Mrs Le Pen is winning over white working class women in droves. The feminized Front is no longer the party of the angry white male. The softer image is why finance minister Pierre Moscovici describes her as "more dangerous than her father".

It is her defence of the French welfare model and her critique of capitalism that gives her a Leftist hue -- some call it 1930s national socialism -- so far in outlook from Britain's UKIP. She sounds like Occupy activists in her attacks on high finance and the way corporations profit from labour arbitrage, playing off wages in the West against cheap labour in Asia. "It is the law of the jungle," she said.

Nor is she on the UKIP page with her broadsides against Washington and Nato, or her call for France to retake its place as "non-aligned" voice in a multipolar world. It is an anti-Atlanticist patriotism.

She claims to be the true heir of General Charles de Gaulle, accusing the Gaulliste UMP party of selling its soul to Europe and the Anglo-Saxon order. "There was a de Gaulle of the Left, and a de Gaulle of the Right. There were two de Gaulles. We stand for both," she said.

Mrs Le Pen said the Socialists are in melt-down, victim of their own subservience to EU economic doctrines, while their barrage of attacks on Germany's Angela Merkel smacks of a dependency syndrome. "They whine about Chancellor Merkel, the wicked enforcer who metes out punishment, but Merkel is merely defending the interests of Germany, which are not the same as ours."

She said the EMU crisis is structural. North and South need different exchange rates. "The D-Mark would be rising if it were not for the euro, and that means Germany has a chronically undervalued currency. The euro is far too strong for France, and it is eating away our competitiveness," she said.

It is hard know whether the French people would ever vote en masse for an all-out clash with Europe, let alone for her Jeanne d'Arc messianism. Yet the longer the economic slump goes on, the greater the risk for Brussels and Berlin that French patience will snap, setting off one of those eruptions that have punctuated French history through the ages.

A recent Pew Foundation survey said French support for the EU Project has collapsed from 60pc to 40pc over the last year, and 77pc think economic integration has been damaging.

President Francois Hollande says the EMU crisis is "finished" and recovery is at hand, though it is not clear what will break the vicious cycle as France carries out fiscal tightening of 1.8pc of GDP this year and the deepest cuts in half a century. Monetary policy remains contractionary for most of Latin Europe.

"If the government really tries to force the budget deficit down to 3pc of GDP, the economy will contract again next year by 0.5pc to 0.8pc," said Prof Sapir. "Unemployment will continue rising by 30,000 to 40,000 a month. There may be another 600,000 people without jobs by the end of 2014."

France endured the same slow torture in the early 1930s under the Gold Standard, stoically accepting the "500 deflation decrees" of premier Pierre Laval. The dam broke in 1936 with the election of spurned outsiders, then the Leftist Front Populaire, with Communist support. The Gold Standard collapsed.

The emergence of Marine Le Pen as a contender for office in Europe's pivotal power may prove the electric shock needed to force a radical shift in EMU crisis strategy, or at least to force France's Socialist Party to break with Germany and fight for a full reflation agenda, if only to avert its own ruin.

"We have succumbed to a spirit of slavery in France. We have forgotten how to lead, and our voice is not heard any more," she said. It will be heard now.

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Re: New EC Thread

Post  Panda on Tue 2 Jul - 10:13

Europe’s Finance Ministers Start Negotiating Guidelines on Failing Banks


Francois Lenoir/Reuters

Finance Minister Yannis Stournaras of Greece, left, and his Irish counterpart, Michael Noonan.

By JAMES KANT




LUXEMBOURG — European Union finance ministers on Thursday began to negotiate rules for rescuing or closing failing banks, regulations considered crucial to promoting financial stability in the region.





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Tracking the Euro Zone’s Crisis


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But the two-day meeting could be overshadowed by renewed concerns in Greece, where the crisis began. On Thursday, the International Monetary Fund and euro zone officials issued a thinly veiled warning that it could suspend aid to Greece by the end of July if the political turbulence prevented monitors from completing their review of the country’s finances. Olli Rehn, the European commissioner for economic and monetary affairs, expressed frustration that Greece was again undermining efforts in Europe to turn the page on its five-year crisis.

“I love Greece but I’m very much looking forward to a Eurogroup news conference where Greece is not going to be discussed and a summer where we don’t have any Greek crisis,” Mr. Rehn said at a news conference.

The urgency for transformative measures has largely ebbed since the European Central Bank calmed the markets by promising to buy bonds from troubled euro zone countries. But the surge of concerns about Greece underscored the need for the European finance ministers to secure deals — however modest — during the marathon negotiating session in Luxembourg.

A so-called banking union could help prevent a recurrence of the chaos that ensued during a bailout for Cyprus in March, when governments and international lenders argued over how to impose losses on investors in the country’s troubled banks. Such policies could also prove vital if banks reveal new vulnerabilities during the next round of so-called stress tests, which will most likely happen next year.

The goal of the ministers’ talks was to develop policies that “finally close the vicious circle between the banking crises and sovereign crises” and to “definitively put behind us the financial crisis that has weighed on Europe since 2008,” said Pierre Moscovici, the French finance minister.

The meetings could also allow the leaders of the Union’s 27 member states to endorse reform efforts ahead of their meeting next week in Brussels, their last scheduled session before the summer. Still, the meetings are likely to result in incremental steps, rather than transformative ones like creating a lender of last resort to guarantee government or bank debt. The meeting of the 17 ministers from the euro zone, called the Eurogroup, focused on determining the conditions under which countries could draw on a shared bailout fund to inject money directly into troubled banks.

Even though European Union leaders agreed to push forward that initiative a year ago, the ministers confirmed on Thursday night that this tool will not be available until the European Central Bank takes over the supervision of some of the bloc’s largest banks in the second half of 2014. But ministers agreed that up to 60 billion euros, or about $80 billion, could be drawn from the fund to rescue banks whose failure could have broad impact on the financial system.

The ministers also left open the possibility of recapitalizing banks that are already in trouble. “The potential retroactive application of the instrument will be decided on a case-by-case basis,” Jeroen Dijsselbloem, the president of the Eurogroup, said at a news conference.

That option is important for Ireland, which invested more than 30 billion euros, or about $40 billion, to rescue its banks during the crisis. The country is lobbying to use the bailout fund, called the European Stability Mechanism, to recapitalize the banks and relieve its debt.

“We’ve always argued that Ireland was an exceptional case,” Michael Noonan, the Irish finance minister, said at the meeting earlier on Thursday. “We’re not arguing this case for all our colleagues in the euro zone.”

The ministers decided to oblige countries to contribute 20 percent of any capital increase as a way to encourage governments to prevent mismanagement or losses at banks, a demand made by countries like Germany. When the meetings continue Friday, the finance ministers from all countries in the European Union will try to hash out a plan for shutting down troubled banks.

A central issue is the rules for imposing losses on a bank’s creditors, rather than putting the burden on taxpayers. Some countries, including Britain, are pushing to ensure that governments retain some flexibility. The worry is that automatic losses for some creditors could set off fears of losses at other institutions, which could start bank runs.

But for some countries, like Spain, where government finances are under severe strain, having a single rule book has become an important competitive consideration. Spain wants to ensure that bank investors do not flee to more prosperous countries like Germany, where mechanisms for resolving bank problems might be better capitalized and could be used to shield creditors from losses.

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Re: New EC Thread

Post  Badboy on Wed 3 Jul - 17:10

I READ AN ARTICLE IN GUARDIAN ABOUT YOUTH UNEMPLOYMENT IN THE EC.
MANY IN GREECE AND SPAIN ARE THINKING OF EMIGRATING ABROAD.
SOME HAVE SEND OUT DOZENS OF APPLICATIONS FOR JOBS,ONLY TO FIND THEY HAVN'T GOT THE JOB.

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Re: New EC Thread

Post  Panda on Wed 3 Jul - 17:34

Badboy wrote:I READ AN ARTICLE IN GUARDIAN ABOUT YOUTH UNEMPLOYMENT IN THE  EC.
MANY IN GREECE AND SPAIN ARE THINKING OF EMIGRATING ABROAD.
SOME HAVE SEND OUT DOZENS OF APPLICATIONS FOR JOBS,ONLY TO FIND THEY HAVN'T GOT THE JOB.

Problem is Badboy , unless they are University Graduates there is nothing for them.

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Re: New EC Thread

Post  Panda on Wed 3 Jul - 18:33



Portugal’s Coelho Won’t Resign After Foreign Minister Quits

By Joao Lima, Anabela Reis & Henrique Almeida - Jul 3, 2013 6:12 PM GMT+0100.
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Portuguese Prime Minister Pedro Passos Coelho said he won’t quit after a coalition partner resigned, adding to political turmoil as bond yields surged.

Passos Coelho told voters he’ll try to hold his government together in a televised speech from Lisbon last night after Foreign Affairs Minister Paulo Portas, leader of junior coalition party CDS, quit in protest at the government’s budget policy. Portugal’s 10-year (GSPT10YR) bond yield jumped to a 7-month high.





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Portuguese Prime Minister Pedro Passos Coelho stands during a swearing in ceremony for new government ministers in Lisbon. Photographer: Mario Proenca/Bloomberg




3:52

July 3 (Bloomberg) -- Portuguese Prime Minister Pedro Passos Coelho has lost his finance minister and foreign minister as the final 12 months of the nation’s bailout program collide with mounting austerity fatigue. Manus Cranny reports on Bloomberg Television's "Countdown." (Source: Bloomberg)
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“I don’t see an important reason to lose the majority in parliament,” Coelho said today at a press conference in Berlin. “Portugal needs a stable government.”

Portas was the second minister to resign this week after finance chief Vitor Gaspar stepped down, saying his credibility had been compromised by the government’s failure to meet budget targets set by the European Union. Portas disagreed with the prime minister’s decision to name Secretary of State for Treasury Maria Luis Albuquerque as a replacement for Gaspar, saying it would mean a continuation of the policies deepening the country’s recession.

“The combination of higher yields and political uncertainty reduces the prospects of Portugal regaining full market access in the next year, and hence leads to expectations of a new full program being required,” Bank of America Merrill Lynch economists Ruben Segura-Cayuela, Sphia Salim and Laurence Boone said in a note.

Aid Program

Portugal’s aid program is due to end in June 2014. The eighth review of the country’s progress is due to take place from July 15, the Finance Ministry said on June 19. The government has started raising cash to finance its 2014 deficit after covering its needs for this year, Gaspar said on May 7.

The German government is confident that “Portugal will continue to stay the course on the agreed path of reform,” Steffen Seibert, Chancellor Angela Merkel’s chief spokesman, said in Berlin today.

The yield on Portugal’s 10-year debt breached 8 percent today, up from as low as 6.35 percent earlier in the week and reaching the highest level since Nov. 21. That’s more than double the average interest rate of 3.2 percent charged for the country’s bailout loans. The difference in yield that investors demand to hold 10-year Portuguese bonds instead of German bunds widened 79 basis points today to 581 basis points.

Draghi’s Test

The increase of about 250 basis points in 10-year yields over the past six weeks is the biggest reversal for the country’s bonds since European Central Bank President Mario Draghi’s pledge to do “whatever it takes” to hold the euro together last July. The pressure of meeting the terms of its 2011 bailout is buckling Coelho’s coalition with investors’ risk appetite already trimmed by speculation the U.S. Federal Reserve is preparing to reduce bond purchases and slowing growth in China.

“It’s the biggest challenge since Draghi” made his promise, Fredrik Erixon, the director of the European Centre for International Political Economy in Brussels, said in a phone interview today. “We are very soon going to see his words tested.”

Social Security Minister Pedro Mota Soares and Agriculture Minister Assuncao Cristas will hand in their resignations to Coelho today after a meeting of the CDS party’s executive commission, broadcaster TVI reported on its website last night, without saying how it obtained the information. Both ministers are from Portas’s CDS party.

Talks

Coelho said he didn’t accept Portas’s resignation and hasn’t asked President Anibal Cavaco Silva to dismiss his partner, citing the foreign affairs minister’s role as leader of a coalition party.

“In the next few hours I will try to clarify and guarantee with the CDS party all the conditions for the stability of the government and to proceed with the strategy of overcoming the nation’s crisis,” Passos Coelho said last night. “Whatever the differences that are at the base of this crisis, we will know how to overcome them in the name of the national interest.”

President Cavaco Silva will meet with Coelho at 5 p.m. tomorrow and will also meet the country’s political parties following the foreign minister’s resignation request, the presidency said on its website today.

Unfortunate Time

“Any government collapse will come at an unfortunate time in terms of being able to deal with the next budget target miss,” said Harvinder Sian and Michael Michaelides, fixed-income strategists at the Royal Bank of Scotland Group Plc. “A minority government buys time but this is unlikely to solve much in terms of market credibility.”

Coelho is battling rising joblessness and a deepening recession as he cuts spending and raises taxes to meet the terms of a 78 billion-euro ($101 billion) aid plan from the European Union and the International Monetary Fund. He announced measures on May 3 intended to generate savings of about 4.8 billion euros through 2015 that include reducing the number of state workers.

“The situation in Portugal is worrying,” Jeroen Dijsselbloem, head of the group of euro-area finance ministers, said in The Hague today. “From here I would like to appeal to the Portuguese government, the political leaders of Portugal, the coalition, to take their responsibilities. I therefore assume that the problems within the Portuguese coalition can be solved.”

Slippage

On March 15, the government announced less ambitious targets for narrowing its budget deficit as it forecast the economy will shrink twice as much as previously estimated this year. In September, Portugal was given more time to narrow its budget gap after tax revenue missed forecasts.

“The repetition of this slippage undermined my credibility as finance minister,” Gaspar said in his July 1 resignation letter.

The Socialist Party, the biggest opposition group, saw its lead over Coelho’s Social Democrats widen by 2 percentage points in a June 7 survey of voters’ intentions, published by weekly newspaper Expresso. The Socialists’ support increased to 36.9 percent from the previous month compared with 24.8 percent for the Social Democrats. The CDS had 7.7 percent.

Coelho formed the majority coalition with the CDS after June 2011 elections, taking over from a Socialist minority government that had requested the EU-led bailout in April 2011. The Social Democrats have 108 seats in the 230-member parliament, while the CDS party has 24 seats.

New Elections

Coalition governments in Portugal have tended to be unstable and short-lived. Between 1974, when the country returned to democracy after a four-decade dictatorship, and Coelho’s election in 2011, Portugal had six coalition governments, none of which survived a full term.

“The Portuguese do not deserve this situation,” Socialist Party leader Antonio Jose Seguro said in Lisbon after Coelho’s speech. “Our country needs a new government. It’s necessary to have elections.”

Any new government is likely to accept the EU’s aid program for Portugal as the Socialists have voted alongside the governing coalition on certain key policy decisions such as the European Stability Mechanism treaty, even though Seguro is calling for a renegotiation of the terms of the existing rescue package

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Re: New EC Thread

Post  Badboy on Thu 4 Jul - 0:33

Panda wrote:
Badboy wrote:I READ AN ARTICLE IN GUARDIAN ABOUT YOUTH UNEMPLOYMENT IN THE  EC.
MANY IN GREECE AND SPAIN ARE THINKING OF EMIGRATING ABROAD.
SOME HAVE SEND OUT DOZENS OF APPLICATIONS FOR JOBS,ONLY TO FIND THEY HAVN'T GOT THE JOB.

Problem is Badboy , unless they are University Graduates there is nothing for them.
EVEN GRADUATES ARE FINDING THEIR QUALIFICATIONS ARE NOT USEFUL TO ANYONE

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Re: New EC Thread

Post  fuzeta on Thu 4 Jul - 11:15

Badboy wrote:
Panda wrote:
Badboy wrote:I READ AN ARTICLE IN GUARDIAN ABOUT YOUTH UNEMPLOYMENT IN THE  EC.
MANY IN GREECE AND SPAIN ARE THINKING OF EMIGRATING ABROAD.
SOME HAVE SEND OUT DOZENS OF APPLICATIONS FOR JOBS,ONLY TO FIND THEY HAVN'T GOT THE JOB.

Problem is Badboy , unless they are University Graduates there is nothing for them.
EVEN GRADUATES ARE FINDING THEIR QUALIFICATIONS ARE NOT USEFUL TO ANYONE


Nobody trusts the qualifications these days badboy being as everybody gets one, so to speak

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Re: New EC Thread

Post  Panda on Thu 4 Jul - 17:06


Debt crisis: Portugal makes the Eurozone tremble



4 July 2013
Les Echos Paris

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Prime Minister Pedro Passos Coelho
Rodrigo

The political crisis hitting Portugal is opening up a new period of turmoil for the EU. While some voices are rushing in to declare that the crisis is over, the question of growth is coming up. Can austerity without stimulus do it? And, above all, in politically fragile states?

Guillaume Maujean

Ministers resigning, a government teetering, and anxiety gripping the markets all over again: who would have imagined just a few weeks ago that Portugal would cause such a stir? Ever since the EUR €78bn rescue plan was approved, the country has been held up as an example. Lisbon, it must be said, has not held back in its efforts to clean up its finances), trim back its civil service and courageously see through the reforms demanded by its financial backers.

Behind the facade of the Eurozone's good student, though, there remain gaping cracks. The fiscal consolidation plan has been pursued at the cost of a severe recession, and the coalition government has lost the support of the public. “Austerity fatigue" has overtaken the country, and today threatens to trigger early elections and precipitate a renegotiation of the aid programme.

Raising spectres

It has also raised the spectre of a forced restructuring of the debt, or even an abandoning of the euro. Portugal is rousing the ghosts from the autumn of 2011 in the Eurozone, when investors saw Greece head straight for bankruptcy, Spain and Italy sink in their turn and the European banks lose the trust of those who financed them. And it is waking those ghosts at the worst possible time: since investors have grasped that they will not be able to rely forever on central banks and their generous injections of liquidity to cushion the shock of the recession and make up for the shortcomings of the politicians, nervousness has ramped up several notches on the markets. What can the ECB really do today, aside from putting pressure on European leaders to speed up reforms?

In these last 12 months the markets welcomed, and rightly, the vigorous action of Mario Draghi to support banks by handing out billions of euros in loans, and then the states, by buying up their sovereign debt. But they had forgotten the key thing: the "peripheral" countries’ sluggish growth and weak credit, their still unbearable debts, high unemployment and the instability of their governments.

The markets above all hid the disparities between countries in the Eurozone, disparities that remain considerable, if not growing, and that cannot be sustained over the long term. Without conceding new mutualising of resources and the transfer of sovereignty. As it is very unlikely that Germany will make a gesture before its parliamentary elections in September and before the verdict of the Court in Karlsruhe on the legality of the actions of the ECB is announced, the anxiety promises to persist throughout the summer.

On the web
Original article at Les Echos fr
El País editorial es


View from Spain

‘To rectify is wise’

In the pages of El País, columnist Xavier Vidal-Folch still awaits the “grand rectification" of the austerity policy in Europe in the wake of the political crisis in Portugal –


the good student is disturbed [and] is calling for a large-scale correction of an austerity policy that has gone too far.

It is urgent to do it in a big way, rather than through "multiple operations of correction, in instalments" which is what we are seeing in Europe these days, says Vidal-Folch. One example is the second Greek bailout, in July 2011, which involved a writedown of the debt and better loan conditions for Athens. Another was the June 21 decision of the Ecofin Council to stretch out the repayment terms for Portugal and Ireland. Finally, he quotes the most recent decision of the European Council of July 3 on youth unemployment –


To rectify is wise. Bravo. The problem is that these dribbles of rectification are not the great rectification demanded by the double-dip recession today.[...] If these adjustments had been taken into account from the start, would we not have avoided part of the recession, much disaffection for the European Union and far too much social suffering?

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Re: New EC Thread

Post  Panda on Fri 5 Jul - 17:02


Greece: ‘Troika-government headhunting’



5 July 2013

Presseurop
Eleftherotypia
Eleftherotypia, 5 July 2013

With four days left to run before Eurogroup is to decide on the release of a further €8.1bn tranche of aid to Athens, the government and the troika of international creditors are still negotiating on the number of civil servants who will have to be laid off.

On July 4, Poul Thomsen, head of the IMF’s mission in Athens, demanded “more than 15,000” public service job cuts, reports Eleftherotypia.

The Minister for Administrative Reform, Kyriakos Mitsotakis, who previously committed to this figure, has now proposed a plan for 6,256 layoffs, of which 2,656 will be at the public broadcaster ERT, as well as a change to the status of 12,500 civil servants employed by the department of education and local administrations who are currently on leave.

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