New EC Thread

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Life at 27










Eurozone crisis


Save the euro – get rid of Germany



27 January 2012


n







Brookes







By foisting fiscal austerity on its Eurozone partners
while stubbornly refusing an enhanced role for the ECB, and greater
mutual support on national debt, Germany is a greater hindrance than a
help to the single currency, argues Anatole Kaletsky.


Anatole Kaletsky




The world has been watching with horror and fascination as
investigators seek the cause of an eminently avoidable shipwreck in
Italy. Meanwhile, the cause of a much greater shipwreck is coming into
view.

As Greece moves towards default, as France, Italy and Spain suffer
credit downgrades, and as negotiations over last month’s fiscal treaty
reach deadlock, the euro is heading for the rocks and the driving force
is becoming clear. The real cause of the euro disaster is not France,
Italy or Greece. It is Germany.

The fundamental problem lies not in the efficiency of the German
economy, although that has contributed to the divergence in economic
fortunes, but in the behaviour of German politicians and central
bankers.

Not only has the German Government consistently vetoed the only
policies that could have brought the euro crisis under control –
collective European guarantees for national debts and large-scale
intervention by the European Central Bank. To make matters worse,
Germany has been responsible for almost all the misguided policies
implemented by the eurozone, ranging from last year’s crazy interest
rate rises by the ECB to the excessive demands for austerity and bank
losses that now threaten Greece with a chaotic default.

Mario Monti, the German-appointed Prime Minister of Italy, was
explicit, warning that Germany would suffer a “powerful backlash” if it
persisted in opposing measures that could relieve financial pressures
on other euro members, such as the issue of jointly guaranteed bonds.
Meanwhile, many of the country’s leading economists, former central
bankers and business leaders have started writing articles advocating
withdrawal from the euro on the ground that Germany’s policies are
incompatible with other members’. Read full article behind The Times paywall or in Presseurop's nine other languages...

[Panda]

The EU summit today was meant to discuss other matters has been dominated by the Greece crisis.already the tranche of E130 Billion tranche has been raised to E145 Billion ......who is going to fund the difference.?

The Greek Government is outraged that Merkel has considered a EU Commissioner be appointed to manage its debt.

Portugal will get scant relief from it"s problems because of Greece.

Spain is heading for a double dip recession and will contract 1.7% in 2012

One investment Manager says the legacy of this crisis will be felt for years to come . The Rules have changed for good and and weaker economies will be made to leave the Euro.

France has taken the lead and introduced a 1% Financial Tax, much to the dismay of the Banks, Sarkozy hopes other Countries will follow suit.

Stocks are down all across Europe.

[Panda]

• 
  

Taxing times for Sarkozy



30 January 2012

• 
  Comment
  
• 
  
• 
  
  

France's planned introduction of a "Tobin tax"
has broken a practical taboo, but will it help or hamper economic
growth, asks Jason Walsh.

Speaking on television on Sunday night, French president Nicolas Sarkozy announced plans to introduce a tax on financial transactions.

The 0.1 per cent levy, often referred to as a Robin Hood tax or Tobin
tax after economist James Tobin, will be introduced in August as part
of a package of measures, including hikes in VAT, the president says
will promote economic growth and job creation.

It would be easy to dismiss Mr Sarkozy's move as nothing more than
naked electioneering. Indeed there is much to commend such a view, but
the move is more than just smoke and mirrors, even if it is gesture
politics.

The idea of a tax on financial transactions is simple: supposedly it
will take from the rich to give to the poor, hence the cute Robin Hood
monicker.

Mr Sarkozy says the implementation of the tax, first proposed by Mr
Tobin in 1972, will "create a shockwave and set an example" to other EU
nations. It may well do.

Nevertheless, the French president is not quite the maverick
trailblazer he claims to be. German chancellor Angela Merkel has
previously expressed support for the idea, as have Joseph Stiglitz,
noted economist and adviser to former US president Bill Clinton, former
British prime minister Gordon Brown and EU commissioner Michel Barnier,
to name but four. In fact, it is hard to find any senior political
figure who is actually against a tax on financial transactions. True,
Britain's prime minister David Cameron is strongly against imposing one,
but the main complaint political leaders make about Tobin taxes are
that they are fine in principle but cannot be imposed unilaterally
without driving the financial services industry to leave the country en masse.

Clearly this is bunk and any blood and thunder proclamations of
impending doom from bankers should be treated with some scepticism. That
doesn't mean a Tobin tax is necessarily a good idea, though.

The idea isn't really to generate revenue from the tax, so much as to
curb financial transactions by dissuading speculators from making short
term investments (in the original conception Tobin taxes were aimed
particularly in the foreign exchange market, a fact which goes some way
toward explaining British reluctance: much of the City of London's
business is actually transacted in euros). This is all predicated on a
view of the world economy as a giant casino in which fortunes, often
borrowed, are won and lost in a zero sum game. This may be a popular
view today, but it obscures as much as it illuminates.

We are all now familiar with the concept of the real economy
and how it has become disconnected from the high-flying world of
finance, but we are still paying little more than lip service to the
idea that investment exists to provide funding to the real economy.

Real growth requires not a curbing of financial services, but a
recouping of investment to industry, something the tax is neither
capable of doing, nor was it designed to do.

For those who say the tax is only fair given the various bailouts and
nationalisations of banks – effectively the socialisation of private
debt – the fact remains that bailing out bankrupt banks was a
political choice and a Tobin tax will do nothing to address this or the
consequent, also political, austerity programme being pushed across
Europe. Mr Sarkozy claims the money will be used for social protection,
but quite why anyone in Europe, where raised taxes are being used to pay
down debt, believes the revenue from this tax will actually be used to
help the poor has not been sufficiently explained. Far from being a move
toward economic fairness, Mr Sarkozy's move is very much in line with
the austerity agenda.

Image

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• 
  
  
  Greece
  Poverty in a time of economic diktat
  
  
  
  
  
  
  
  
  While negotiations on the write-down of
  Greek debt remain ongoing, Athens city hall is supplying two meals a day
  to jobless workers who are now threatened with famine in the wake of
  austerity measures: a situation that some Greeks readily compare with
  the occupation of the country during World War 2.
  
  
  
  30 January 2012
  
  2
  
  Libération
  Paris
  
  
• 
  
  
  Italy
  Relax, Germans!
  
  
  
  
  
  
  
  
  Italy has long cursed Germany as a
  know-it-all, and yet respects as the head of the class. With the arrival
  of the very proper Mr Monti this is changing, and Berlin will have to
  get used to some lessons from Rome.
  
  
  
  30 January 2012
  
  
  Die Zeit
  Hambu
  

[Panda]

Ingo Schulze – 10 theses about the crisis



27 January 2012


Süddeutsche Zeitung
Munich







Beppe Giacobbe







It is the madness that has become self-evident: for
years, the public sphere has been plundered and democracy ruined. The
German writer Ingo Schulze has had enough. Here he sets out ten reasons
to take himself seriously again. Excerpts.


Ingo Schulze




For about three years I haven’t written any articles, because I
no longer know what I should be writing about. It's all so obvious: the
elimination of democracy, the increasing social and economic
polarisation between rich and poor, the ruin of the welfare state,
privatisation and commercialisation of all spheres of life and so on,
and so on, and so on...

If the madness is served up to one every day as a matter of routine,
it's just a matter of time until one considers oneself to be sick,
abnormal. In the following I will try to summarise some thoughts that
seem important to me:

1. To speak of an ‘attack’ on democracy is to speak euphemistically.
A situation in which a minority of a minority is allowed – i.e., it is
legal – to seriously harm the public good for their own enrichment is
post-democratic. The public sphere itself is guilty, because it is
unable to elect representatives that perceive its interests.

2. Every day one hears that governments must “win back the
confidence of the markets." By ‘markets’ it is primarily the stock
exchanges and financial markets that are meant: that is, those
speculators who, in pursuit of their own interests or the interests of
others, are raking in as much profit as they can. Are they not those
who have relieved the public sphere of unimaginable billions? They are
the ones whose “confidence” our top elected officials should be
struggling to win back?

3. We are right to be outraged by Vladimir Putin's concept of
"guided democracy". But when Angela Merkel spoke of "market-based
democracy”, why did she not have to beat a retreat?

4. The collapse of the Soviet bloc helped some ideologies turn into a
hegemony so unchallenged that it has come to be accepted as a natural
state. One example of that would be privatisation, which was seen as
something boundlessly positive. All that remained in the possession of
the public sphere was deemed ineffective and consumer-unfriendly. Thus
there spread throughout society an atmosphere that, sooner or later, had
to force that public sphere to relinquish its own power.

5. Another ideology that enjoyed a great blossoming is the ideology
of growth: “Growth isn’t everything – but without growth, nothing
amounts to anything," as the Chancellor decreed some years ago (2004).
The euro crisis cannot be discussed without reference to these two
ideologies.

6. The language of the politicians who should be representing us can
no longer grasp the reality (something I already lived through in the
GDR). Their language is one of self-assurance that no longer receives
any checks and balances from across the negotiating table. Politics has
degenerated into a mere vehicle, a bellows for rekindling the fires of
growth. The Citizen has been cut down to the status of Consumer.
Growth in itself means nothing. Society’s ideal would be the playboy
who consumes as much as possible as fast as possible. And what would
cause a tremendous spurt in growth? A war.

7. The simple questions: "Who benefits from it?” and "Who makes
money off it?" have become crude, gross, unrefined. “Are we not all in
the same boat?” Anyone who doubts this must be “stuck in class
struggle”. The social and economic polarisation of society has taken
place accompanied by loud incantations to the effect that we all share
the same interests. A walk through Berlin is enough to illustrate the
error of that contention. In the better neighbourhoods the few
unrenovated houses are by and large schools, kindergartens, retirement
homes, swimming pools and hospitals. In the so-called problem areas the
unrenovated public buildings are less conspicuous, and poverty can be
glimpsed in the gaps between the teeth of passers-by. Today, as the
demagoguery would have it: “Sure, we have all lived beyond our means,
but everyone has been greedy.”

8. In being deprived of its income, our public sphere has been and
is being systematically driven up against the wall by our
democratically elected representatives. Under the Schroeder government
the top tax rate in Germany dropped from 53 to 42 percent, while
corporate tax rates between 1997 and 2009 almost halved, namely to 29.4
percent. Nobody should be surprised that the coffers are empty, even
though our gross domestic product has grown year after year.

9. A tale: what was once peddled to us as an antagonism between East
and West Germany is now being peddled as an antagonism between
countries. In March I held a reading in Portugal, in the city of Porto,
from one of my books in translation. The atmosphere of friendly
interest was from one moment to the next chilled by a single question
from the audience. All of a sudden, we were merely Germans and
Portuguese, who sat facing each other as enemies. The question was
unpleasant. Were we – meaning myself, a German – now taking over with
the euro what we had failed to take over with our tanks? Nobody in the
audience disagreed with the sentiment. And suddenly I responded as
desired – namely, as a German: “No one is forced to buy a Mercedes,” I
said, offended, “and they should be happy to be getting credit that
would be cheaper than credit on the financial markets.” I thought back
to all the German newspaper stories heaping abuse on the PIGS
countries, and it made my molars grind.

In the uproar that followed, my head cleared. And since I had the
microphone in hand, I stammered in my imperfect English that I would
have responded just as stupidly as they had, that we would all be
falling into the same trap, if we, as Portuguese and Germans, sided
reflexively with our own national colours as we would at a football
game. As if it were now about Germans versus Portuguese, and not the
upper versus the lower classes – that is, those who in Portugal as in
Germany brought this situation about, and who profited and continue to
profit from it more than they deserve to.

10. It would be democracy if the politicians intervened in the
existing economic structure through taxes, laws and controls, and
forced the players in the markets to play by rules that were compatible
with the interests of the public sphere. It's about the simple
questions: Who benefits from it? Who profits from it? Is this good for
our public sphere? Ultimately, it would be the question: what kind of
society do we want? That would be democracy for me.

At this point I must break off. I would still like to talk about a
professor who said that he had reverted to seeing the world the way he
had as a fifteen-year-old, about a study from ETH Zurich that looked
into the interdependence of corporations and came up with a tally of 147
of them that have divided up the world among them, the fifty most
powerful being banks and insurance companies. I would like to talk about
what an important thing it is to take oneself seriously again and to
find other like-minded people, because one cannot speak a different
language on one’s own. And about getting back into the mood to open my
mouth again.



Translated from the German by Anton Baer

[Badboy]

IT WAS SAYING IN THE GUARDIAN TODAY THAT THE AUSTERITY MEASURES ARE MAking things worse and that nobody has any ideas how to get the economies going.

[Badboy]

I READ IN GOOGLE NEWS THAT IN ATHENS A PERSON WAS SAYING THAT THERE WAS HARDLY ANY SHOPPERS IN ONE SHOPPING AREA.
HALF OF ALL SMES IN GREECE ARE EXPECTED TO FAIL IN GREECE THIS YEAR.

[Panda]

Badboy, Germany has insisted on these austerity measures and everyone knows Greece will default, had it been allowed to when this crisis first started
the contagion might not have been so bad. Now Greece has a debt which will take many generations to wipe out.

[Panda]

10:57pm UK, Monday January 30, 2012





David Cameron is no longer isolated in Europe after the
Czech Republic joined Britain in refusing to sign a controversial EU
treaty handing more powers to Brussels.


Some 25 out of the 27 member countries have signed the new fiscal
pact which is aimed at stopping overspending by eurozone countries.


Leaders hope the agreement will reassure investors they will never repeat the mistakes that led to the current debt crisis.


At the last EU summit in December, Mr Cameron caused fury by vetoing a treaty designed to shore up the eurozone.


The UK was the only country to walk away from the so-called fiscal compact, after the Prime Minister was rebuffed when he sought protection for Britain's financial services industry.


It was a decision which tested the strength of the coalition and
brought accusations the UK had pushed itself to the periphery of the EU,
its largest trading partner, amid the eurozone crisis.


Mr Cameron warned any changes the other members made under their
alternative fiscal pact - excluding Britain - could not use EU
institutions such as the Commission and EU court because they could only
carry out policies applying to all 27.


At the latest EU talks, he did not try to push his case against using institutions.


But he warned he would take action to defend British national
interests in Europe if the new fiscal deal between other member states
threatens UK powers.


He said: "We will only take action if our national interests are
threatened - and I made clear today that we will be watching this
closely."










EU leaders met in December but have struggled to implement fiscal harmony





The PM added: "They (the other member states) have today agreed on a
new treaty focused on tighter fiscal discipline which we agree is
essential. Now this is a totally separate treaty - because we vetoed an
EU treaty in December.


"We're not signing this treaty. We're not ratifying it. And it places
no obligations on the UK. But, as I said in December, this is new
territory: it has only been agreed today. It has yet to be ratified or
implemented."


Sky's political editor Adam Boulton said: "David Cameron is saying
Britain is not involved, therefore constitutionally there is no question
for Britain, no referendum and no opportunity to take back powers.


"But he insists Britain has reserved its position to take action,
obstructing progress if it believes the British national interest is
going to be threatened.


"The ground he has given is he is saying European institutions can be used to police this new agreement for the eurozone."


France's president Nicolas Sarkozy said the Czech Republic did not join for constitutional reasons.


Mr Sarkozy also announced there were high hopes of a deal over debt-laden Greece in the "coming days".


At the talks in Brussels, EU leaders promised to stimulate growth and
create jobs but admitted there were no "quick fixes" to the continent's
sovereign debt woes.


The heads of government vowed they must "do more to get Europe out of
this crisis" as they pledged to offer more training to young people in
their search for work.


Amid 23 million unemployed people in Europe, the leaders also said
they would channel unused development funds into creating jobs.


They also pledged to reduce barriers to doing business across the
EU's 27 countries, and ensure small firms have access to credit. But
they did not offer any new financial stimulus.


Over the course of Europe's two-year debt crisis, leaders have
repeatedly tried to reassure investors by pledging to cut spending and
reduce their deficits.


But those austerity measures have hurt growth, and Europe is now facing a new recession.

[AnnaEsse]

I read somewhere today that the unemployment rate in Spain is now 24%.

[Badboy]

I THINK IHAVE READ SOMETHING SIMILIAR.
THE YOUTH UNEMPLLOYEMENT RAT IS I BELIEVE HIGHER.
HOW IS THE TOURISM INDUSTRY DOING?

[Panda]

Yes, unemployment in Spain is 23.7% and it is officially in a doubledip recession

[Panda]

Go for it, Angela




27 January 2012










“My vision is one of political union”: the remark made by Angela Merkel in an interview granted to the Europa
supplement produced by six European dailies is worth noting for
several reasons. The German Chancellor had already spoken of this
objective on the occasion of the CDU party conference but not with such clarity. This time she offered details of the future union’s institutional architecture.

First and foremost, it is noteworthy because it effectively answers a
question that we have been asking for some time. Do European leaders,
and in particular Europe’s most influential leader, have a vision for
the future of the EU? The procrastination and improvised initiatives
that have become a feature of the debt crisis appear to indicate the
opposite.

Secondly, it is noteworthy because it featured in an unprecedented
joint publication which presented the Chancellor’s “vision” to ten
million European readers, and in particular to her European partners,
and it is also addressed to them, which brings us to a third point. Now
that she has finally explained where she wants to steer the EU, it is
time for Mrs Merkel to embark on the “long process” she has described.

However, this will imply a change in attitude, because Berlin’s
reluctance to support some of the key measures to overcome the crisis
cited by its partners – Eurobonds, the reinforcement of the European
Central Bank and the European Financial Stability Facility – and its
stubborn demand for diziplin and budgetary austerity at a time when
the weaker members of the EU are stranded in the doldrums do not
demonstrate a desire for greater unity.

However, if Mrs Merkel proves to be as effective at convincing
European leaders to accept her “vision” as she has been at imposing her
line on the crisis, this political union is likely to see the light of
of day. Which is why we almost feel like saying: go for it, Angela.







Author





Gian Paolo Accardo (b. 1969) is an Italo-Dutch journalist. He
worked as an editor at Internazionale, Courrier international and as a
correspondent for Italy's ApCom press agency before becoming assistant
editor in chief of presseurop.eu.

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EU summit: UK and Czechs refuse to join fiscal compact






Comments (354)















Germany's Chancellor Angela Merkel says EU leaders have taken an "important step forward"






Continue reading the main story













Global Economy

• 
  What caused the eurozone crisis?
  
• 
  How will the euro crisis end?
  
• 
  Crisis jargon buster
  
• 
  Europe's four big dilemmas
  

Twenty-five of the EU's 27 member states have agreed to join a fiscal treaty to enforce budget discipline.

The Czech Republic and the UK refused to sign up. UK Prime
Minister David Cameron said his government would act if the treaty
threatened UK interests.

He still has "legal concerns" about the use of EU institutions in enforcing the fiscal treaty, he said.

The Czechs cited "constitutional reasons" for their refusal, France's President Nicolas Sarkozy said.

Czech President Vaclav Klaus, a Eurosceptic, may be reluctant to sign the treaty, analysts say.

The goal is much closer co-ordination of budget policy across the EU to prevent excessive debts accumulating.

Germany - the eurozone's biggest lender and most powerful
economy - was particularly keen to get a binding treaty adopted to
enforce budget rules.

The treaty will empower the European Court of Justice to monitor compliance and impose fines on rule-breakers.

The treaty also spells out the enhanced role of the European Commission in scrutinising national budgets.













British PM David Cameron: "We will not be ratifying this treaty and it places no obligation on the UK"






The Czech Republic is not yet in the euro, but like the other new EU member states it is committed to joining.

European Union leaders also discussed ways to stimulate
economic growth despite the stringent austerity budgets in many
countries - and focused on how to reduce unemployment across the
eurozone.

UK concerns
The UK and Denmark are the only states with explicit opt-outs from the euro.

Mr Cameron said "it's good that the new treaty is absolutely
explicit and clear that it cannot encroach on the competences of the
EU".Q&A: EU summit deal on debt crisisQ&A: EU summit deal on debt crisisQ&A: EU summit deal on debt crisis


Continue reading the main story Analysis





Chris Morris
BBC News, Brussels




No-one believes that this treaty on its own will solve
anything, and it could face an uncertain future. The Socialist candidate
in the French presidential election Francois Hollande has promised to
renegotiate it if he wins, and President Nicolas Sarkozy has now
confirmed that the treaty will not be ratified in France before the
election takes place.

In fact given general agreement on the need for measures to
promote growth, some critics have described the fiscal treaty as little
more than a distraction. But Germany has pushed hard for its
implementation - partly to persuade political opinion in Berlin that
there really will be strict rules in place to ensure that another debt
crisis can't happen in the future. Only then will Germany consider
spending more money to help other countries which are struggling with
their debts now. The fear is that if Germany doesn't act, the current
crisis will only get worse.

• Q&A: EU debt crisis deal
  
• What caused the crisis?
  

"They must not take measures that in any way undermine the EU single market," he said, adding: "we'll be watching like a hawk".

He insisted that the treaty would impose "no obligations on the UK".

Mr Cameron used his veto last month to opt out of the treaty,
arguing that the UK needed to keep its authority over financial
services in the City of London.

The eurozone crisis dominated Monday's summit, with debt-laden Greece still at risk of defaulting.

A general strike in Belgium, paralysing transport, reminded
EU leaders of public discontent with austerity as they arrived for the
summit.

The talks also concentrated on reducing unemployment, which
is averaging 10% across the eurozone, though youth unemployment is often
much higher.

There are fears that wide-ranging budget cuts will harm enterprise and training.

The leaders discussed measures to support small and
medium-sized enterprises (SMEs), many of which complain of excessive
administrative costs imposed by Brussels.

In a joint statement on economic growth they noted that cutting budget deficits was "not in itself sufficient".

"We have to modernise our economies and strengthen our competitiveness to secure sustainable growth," the statement said.

The EU will help to fund schemes to get young people into
work or training in member states with the highest youth unemployment
levels.

They pledged to speed up measures to develop the EU single market, including:

• agreement on a common EU patent system by July;
  
• better targeting of EU funds towards SMEs;
  
• national legislation to create a functioning single market in services and energy.
  

The European Commission says 82bn euros (£69bn; $107bn)
of EU money is available for countries to spend on projects to boost
jobs and growth.




Your comments (354)

[Panda]

Everyone forgets that when the euro was adopted no Country could exceed 3% of its GDP and it was Germany and think Italy who were the first to
breach this. Now, after 2 years the new fiscal Pact is no different to the old.!!!!!!! these are some of the comments.
-----------------------------------------

• 315.
  
  Its later than you think
  3 Hours ago I
  love how even though the UK has no part in the Euro, has no intention
  of joining the Euro,and if it fails will be a beneficiary of it,some
  people still see it somehow as more of a calamity for the UK than the
  REAL event that cost us billions.
  
  Anyone remember the abject failure of the banks?
  
  The utter greed and incompetence that HAS cost us so dearly?
  
  Oh well,back to bashing the 'Europeans'.
  
  
  
  
  
  
• 
  +4 Comment number 312.
  
  Ryan1356
  4 Hours ago I'm
  sick of hearing about stimulating growth and progress. The EU needs to
  be disbanded. Its a corrupt dictatorship and I really hope it collapses
  along with the euro before its too late and Europe becomes a police
  state run by a handful of evil morons. Down with the EU, who the hell
  gives a handful of uneleceted nobodies the right to rule hundreds of
  millions of people like some sort of slaves.
  
  
  
  
  
  
• 
  +12 Comment number 232.
  
  JKW1976
  7 Hours ago I
  have nothing against the European Union, I just don't want to be part
  of it. Self-determination please. Especially considering the mess that
  the rest of Europe's making for itself.
  
  
  
  
  
  
• 
  +11 Comment number 221.
  
  Macin Tosh
  7 Hours ago This
  is a sticking plaster over a flaw of a single currency with neither
  single government nor a single people. Could one of the BBC economists
  explain what replaces the safety valve of floating currencies within the
  eurozone? Without floating currencies the euro becomes artificially
  weak in a strong German economy, cripplingly strong in a weak Greek
  economy, entrenching both. Debt is a symptom.
  
  
  
  
  
  
• 
  +11 Comment number 210.
  
  maybemaybenot
  7 Hours ago Those
  who think that Cameron has made a bad call, not agreeing when 25 others
  have, I ask this - do you really think all that agreed to this compact
  actually wanted to? That they thought it a good idea?
  No many of the
  Eurozone countries agreed this because they had to! They had no choice,
  they need assistance and this is the price.
  I rather think some would quietly like be ''isolated' right now.
  
  
  
  
  
  
• 
  -30 Comment number 53.
  
  JP Cota
  30th January 2012 - 22:29 If
  Cameroon is too adamant to allow any further fiscal integration with
  the EU, then why the hell doesn't he do an Alex Salmond and opt for
  'independence' from the EU? He is an hypocrite who wants the benefits of
  being part of EU but not the pain of it. At home, we love to pick up
  the fresh eggs - that we all enjoy - from our chicken coop, but we all
  got used to the coop smell yoo. That's life!
  
  
  
  
  
  
• 
  +44 Comment number 52.
  
  irk
  30th January 2012 - 22:29 No
  populace of any European Union or eurozone country ever voted Yes to
  handing complete control of their country's finances to the European
  Court of Justice, but that is now what they've got. They will have no
  say in the matter, there will be no referendums. Lobbying their own
  governments will do nothing because individual governments will have no
  option but to bow to their EU masters.
  
  
  
  
  
  
• 
  -17 Comment number 36.
  
  SleepingSpurs
  30th January 2012 - 22:20 Sad
  thing is Cameron is not taking a stand for Britain, he is looking after
  the banks. Were it our interests he'd gladly sell us down the river.
  
  
  
  
  
  
• 
  +20 Comment number 18.
  
  GT1973
  30th January 2012 - 22:11 Well
  done Cameron. I am pro European but I do not hold out much hope for
  this new fiscal compact. It has taken two years to get to this point,
  and we still do not know whether they are prepared to take the tough
  decisions to save the currency. We are better of out of it for the time
  being.
  
  
  
  
  
  

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European Leaders Agree to New Budget Discipline Measures

By STEPHEN CASTLE and JAMES KANTER

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BRUSSELS — All but two European Union countries agreed Monday to new and tougher measures to enforce budget discipline in the euro zone, but the bloc still showed few signs of producing a comprehensive solution for the sovereign debt crisis or a credible plan to revive fragile economies across Europe’s weakened Mediterranean tier.

Enlarge This Image

Philippe Wojazer/Reuters

President Nicolas Sarkozy of France, Chancellor Angela Merkel of Germany and Italian Prime Minister Mario Monti in Brussels.

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The meeting of 27 European Union heads of state and government here in Brussels was aimed at completing the text of a so-called fiscal compact for the 17 nations relying on or intending to join the euro zone — with only Britain and the Czech Republic opting not to adopt the measures.
After a meeting lasting seven hours, the leaders also issued a declaration calling for a new push to restart growth and combat joblessness across the Continent.
But a number of politicians and analysts said the pledge by the European leaders to create new jobs was mostly empty, and others complained that the proposed rules to keep deficits under control contained little to actually help nations with high borrowing costs.
The summit declaration also skirted the continuing problems in Greece, where a second bailout is being held up by the inability of the government in Athens to complete a deal with private holders of Greek bonds over the losses they should accept.
Until Athens and its private-sector creditors can agree on a $132 billion writedown on Greek government debt, the International Monetary Fund and the European Union are not prepared to sign off on a further bailout. Chancellor Angela Merkel of Germany said the Greek situation would not be addressed until after representatives of Greece’s so-called troika of creditors — the European Union, the I.M.F. and the European Central Bank — report back on their investigation into what will be needed for Greece to manage its finances on its own.
Nicolas Sarkozy, the French president, told a news conference at the end of the summit that there would be a “definitive agreement” on the private sector’s involvement in reducing Greek debt in coming days. After Monday night’s summit meeting, informal talks continued between the Greek prime minister, Lucas Papademos, and European officials.
Despite the various other problems to deal with, an agreement on the fiscal compact could clear the way for Germany to accept stronger efforts by the European Central Bank to support ailing countries and a more comprehensive bailout fund aimed at protecting Italy and Spain against the risk of default.
“It is an important step forward to a stability union,” Mrs. Merkel told reporters. “For those looking at the union and the euro from the outside, it is a very important to show this commitment.” Britain, which clashed openly with France and Germany last month over the pact, did not give any ground Monday and was joined by the Czech Republic, which also elected to stay outside.
“We are not signing this treaty,” David Cameron, the British prime minister, said. “We are not ratifying it. And it places no obligations” on the United Kingdom, he said.
He added: “Our national interest is that these countries get on and sort out the mess that is the euro.”
Mr. Sarkozy sounded philosophical about the Britons’ intransigence. “There are different degrees of integration and everyone is free to choose where they stand,” he said.
While European leaders agreed to bring a permanent bailout fund into existence earlier than previously foreseen, they postponed any final decisions on its ultimate size and how it will be financed. The International Monetary Fund has been pressing Europe to commit enough money to provide a credible backstop that would insure that Italy and Spain could pay their bills and continue to finance their debts.
Germany backed away from a suggestion that it wanted the government in Athens to cede temporarily control over tax and spending decisions to a new, all-powerful, budget commissioner before it can secure further bailouts. Italy won its battle to restrict the scope of the fiscal compact, which calls for making it easier to impose sanctions against countries that break European Union budget rules. The text said the compact would make it harder to block sanctions against countries that exceed annual deficit targets but that the same tough system would not apply to nations with excessive overall debt, like Italy.
The compact will come into force in those nations that agree to its terms once 12 euro zone nations have ratified it. That would prevent the project being held up if one or two nations hold referendums on the deal.
Still, impatience with the German focus on belt-tightening loomed large over the summit meeting.
“You don’t have to be an economics professor to know that if you have zero growth you are not going to sort things out,” said Martin Schulz, the president of the European Parliament. Critics of austerity point to Greece, which is being strangled by a vicious cycle of deficit cutting, declining tax revenues and more budget cutting, while making little if any progress on its overall budget deficit.
Guy Verhofstadt, leader of the centrist liberal and democrat group, and a former prime minister of Belgium, took a similar stand.
“The new agreement consolidates fiscal discipline but omits completely to address the other side of the coin — that of solidarity and investment that will create jobs and growth,” Mr. Verhofstadt said. “E.U. leaders should act instead of producing more paper.”


A version of this article appeared in print on January 31, 2012, on page A4 of the New York edition with the headline: European Leaders Agree to New Measures to Enforce Budget Discipline.

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36 Comments

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Portugal may need a second bail-out, but the Prime Minister says it does not have the same problems as Greece. He points out that Portugal has met all austerity measures.

Papademos says he expects a deal will be struck by Bondholders by Friday.Most analysts expect a default.

Draghi is stuck by Trichet remark that Eurobonds will not be so far away.

Germany's unemployment rate is 6.7% very good, but just announced the Nokia/Siemens partnership have announced job cuts, 2,900 in Germany.

analyst Mark Glazer says rally will not last. political solutions are needed.

The EURO resilience has been the resuilt of fiscal sustainability and at the EU meeting yesterday it was agreed to act more quickly in future and agrees
the austerity p[rogramme.

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31 January 2012
Last updated at 11:44











Eurozone unemployment hits new record











Unemployment is at the highest rate since the euro was launched in 1999


Continue reading the main story













Global Economy

• 
  What caused the eurozone crisis?
  
• 
  How will the euro crisis end?
  
• 
  Crisis jargon buster
  
• 
  Europe's four big dilemmas
  

Unemployment in the eurozone hit a record high at the end of last year, the Eurostat agency has said.

The jobless rate in the 17 countries that use the single
currency was 10.4% in December, unchanged from November's figure which
was revised up from 10.3%.

Some 16.5 million people were out of work in the eurozone in December, up 751,000 on the year before.

The highest unemployment rate remains in Spain (22.9%), while the lowest is in Austria (4.1%).

Unemployment has been rising throughout 2011, as the debt
crisis in the region has continued. In December 2010, the unemployment
rate in the euro area was 10%.

Investment delays
Guillaume Menuet, economist at Citigroup, said he expected the number of people out of work to increase throughout 2012.

"If you think about the direction of employment expectations
that you see across various business surveys, the outlook for employment
doesn't look particularly enticing, simply because the uncertainty is
very high.

"In many cases you find firms continuing to delay investment
projects. For those that are still making profits, hiring is being
frozen, and for those which are under pressure to hit results or losing
money, job losses are becoming the only solution that they have," he
said.

In the 27 EU countries, the unemployment rate was 9.9% in
December, with 23.8 million people out of work. November's figure was
also revised up from 9.8% to 9.9%.

The biggest increases over the past year were seen in Greece, Cyprus and Spain.

The largest falls took place in Estonia, Latvia and Lithuania.

Deteriorating situation
The issue of jobs and economic growth was a key area for discussion at this week's summit of EU leaders in Brussels.

On Monday, figures showed that the Spanish economy shrank by
0.3% in the last quarter of 2011. It is now widely expected that Spain
will enter recession in the first quarter of this year.

Also on Monday, France cut its growth forecast for this year
to 0.5% from 1% "to take into account the deterioration of the economic
situation".

At the Brussels summit, 25 of the 27 member states agreed to
join a fiscal treaty, aimed at much closer co-ordination of budget
policy across the EU to prevent excessive debts accumulating.

The UK and the Czech Republic did not sign up to it. UK Prime
Minister David Cameron said he had "legal concerns" about the use of EU
institutions in enforcing the treaty, while the Czechs cited
"constitutional reasons" for their refusal.

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verty in a time of economic diktat



30 January 2012


Libération
Paris

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New Year's meals for the homeless, organised by the city of Athens on 1 January 2012.


AFP







While negotiations on the write-down of Greek debt remain
ongoing, Athens city hall is supplying two meals a day to jobless
workers who are now threatened with famine in the wake of austerity
measures: a situation that some Greeks readily compare with the
occupation of the country during World War 2.


Maria Malagardis




In a scene that is played out daily, at midday the silent crowd
gathers outside the gates of the Athens City Hall which is only a
stone’s throw from Omonia Square. How many are there? A hundred? Even
more?

“In the evening, there are twice as many,” sighs Xanthi, a young
woman employed by the City Hall “to manage the crowd.” The atmosphere
is tense when the gates finally open, and a long queue forms for a
stand distributing diet Coke and what looks like mashed potato in
plastic dishes.

There are shouts and arguments. Everything has to happen very quickly: the stand will only be open for half an hour.

Amid the down-and-outs and the pensioners in threadbare clothes,
there are members of a new category of soup kitchen customers who are
clearly not used to scrounging for food, most of whom refuse to talk to
journalists. “They are ashamed,” explains Sotiris, aged 55, who found
himself living on welfare after 20 years spent working for a security
company. “But in Greece, unemployment benefit only lasts for a year,”
he reminds us.

In Greece, they call them the “neo-poor” or the “iphone homeless:”
former employees of many of the small and medium sized companies that
have gone to the wall, or civil servants who were laid off as a result
of the austerity measures introduced over the last two years.

"Distributing food like we do in Third World countries"


Not only are they unemployed, but also deep in debt from consumer
loans taken out during the boom years. Not so long ago – between 2000
and 2007 – Greece still had a promising growth rate of 4.2%. Then
the 2008 banking crisis followed by the bombshell announcement of a
record budget deficit of 12.7% of GDP at the end of 2009 brought down
an economy built on foundations too weak to resist the speculative
attacks of the markets like a house of cards.

Moonlighting, tax fraud, inefficient administration: the issues are
well known and most of the population accepts the need for the
structural reforms demanded by “Merkozy,” a.k.a. the Angela
Merkel-Nicolas Sarkozy duo, which has dominated negotiations in
Brussels.

But the austerity packages imposed on the country since the spring
of 2010 have been hard to swallow. The wage earners and pensioners, who
have been the worst affected, have seen their incomes dwindle, or even
disappear in the wake of job cuts, while their taxes which are
deducted at source have increased exponentially. As a result, in just
two years the number of homeless has risen by 25% and many people are
now facing a daily battle with hunger.

“I began to worry when in my consultancy I saw one, then two, then
ten children who came for treatment with an empty stomach, without
having had a meal the previous evening,” says Nikita Kanakis, President
of the Greek branch of Doctors Without Borders.

Ten years ago the French NGO opened an office in Greece to cope with
the sudden massive influx of penniless migrants. “Over the last year,
we have seen more and more Greeks. Middle-class people, who have lost
their social security status and can no longer obtain treatment in
public hospitals. Six months ago, we began distributing food like we do
in Third World countries,” remarks Dr Kanakis, who adds: “The debt
problem is real, but how far is Brussels going to take its demands,
when just a three-hour plane ride away from Paris and Berlin there are
children who have no access to health care or even adequate food?”

"Greece is the laboratory"


On Thursday, a bizarre scene takes place in Syntagma Square, just
opposite the parliament building in the centre of Athens: farmers, who
have traveled 83 kilometres from Thebes to the capital, are giving out a
free 50 tonnes of potatoes and onions. Announced on television, the
distribution quickly turns into a riot, with everyone battling to get to
the stalls. There are more disputes and shouts. “There hasn’t been
anything like it since the occupation,” remarks Andreas, observing the
spectacle from distance. The terrible famine caused by the WWII German
occupation is still a strong memory.

However, the use of the term when describing the hunger that is now
affecting the middle class is also in part a reference to the diktats
from Brussels, and worse still Berlin. “Every three months, they
threaten us with immediate bankruptcy and order us to squeeze the poor
even more. And as for the money they promise, all we get is loans so
that we can reimburse our creditors!” exclaims Andreas.

The shipping company worker laughs when we mention plans to cut 13th
and 14th month salary payments. Like many companies, Andreas’ employer
has not paid his wages for several months. “The bosses are using the
crisis as an excuse so as not to pay their workers,” he complains.

Then turning towards the former royal palace which houses the
national parliament, he adds: “There are 300 cretins in there who have
fallen in step behind an unelected government. Do you think they have
cut back on their own spending? The civil servants at the parliament
are still receiving 16th month payments and no one in Brussels is the
least bit concerned.”

Far from paving the way for a national mobilisation against the
crisis, like the new government in Italy, the November appointment of
Lukas Papademos has been followed by a largely unbroken silence. At a
time when the country is negotiating for its survival and promising yet
more austerity measures, the only interview accorded by the technocrat
Prime Minister was with the … New York Times, which leads Andreas to
conclude: “We are living in an economic dictatorship. And Greece is the
laboratory where they are testing the resistance of the people. After
us, it will be the turn of other countries in Europe. There will be no
more middle class.”

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Fiscal compact


Prague keeps its distance



31 January 2012


Presseurop

Hospodářské noviny

• 
  
• 
  
  

“Neither yes or no. The Czech Republic stands alone in the union,” announces Hospodářské Noviny
in the wake of yesterday’s adoption of the fiscal compact by the
European Council. Prague and London were the only two governments to
refuse to sign the budgetary discipline pact adopted by 25 other EU
member states. “The treaty offers no political benefits and does not
enable all EU countries to participate in European summits on an equal
footing,” insisted Prime Minister Petr Nečas, who also had to take into
account Czech President Václav Klaus’ opposition to any additional
European integration.

The Prague daily does not believe
that the Brussels summit has prompted a division in Europe, but
instead argues that the event has highlighted “different points of view
on integration that will allow everyone to take up a position of their
choosing.” As it stands -


... the Czech Republic will not be seated at the round table, or in
the anteroom (...). It prefers to “listen” through the walls of a
minuscule room, from which it will be difficult to influence the course
of events in Europe

[Panda]

31 January 2012
Last updated at 11:44









Eurozone unemployment hits new record











Unemployment is at the highest rate since the euro was launched in 1999


Continue reading the main story













Global Economy
















Unemployment in the eurozone hit a record high at the end of last year, the Eurostat agency has said.

The jobless rate in the 17 countries that use the single
currency was 10.4% in December, unchanged from November's figure which
was revised up from 10.3%.

Some 16.5 million people were out of work in the eurozone in December, up 751,000 on the year before.

The highest unemployment rate remains in Spain (22.9%), while the lowest is in Austria (4.1%).

Unemployment has been rising throughout 2011, as the debt
crisis in the region has continued. In December 2010, the unemployment
rate in the euro area was 10%.

Investment delays
Guillaume Menuet, economist at Citigroup, said he expected the number of people out of work to increase throughout 2012.

"If you think about the direction of employment expectations
that you see across various business surveys, the outlook for employment
doesn't look particularly enticing, simply because the uncertainty is
very high.


Continue reading the main story
“Start Quote

Much energy and argument has been
spent on this agreement. It is questionable, however, whether it will
have much influence on the immediate crisis. ”

Gavin Hewitt
BBC Europe editor








"In many cases you find firms
continuing to delay investment projects. For those that are still making
profits, hiring is being frozen, and for those which are under pressure
to hit results or losing money, job losses are becoming the only
solution that they have," he said.

In the 27 EU countries, the unemployment rate was 9.9% in
December, with 23.8 million people out of work. November's figure was
also revised up from 9.8% to 9.9%.

The biggest increases over the past year were seen in Greece, Cyprus and Spain.

The largest falls took place in Estonia, Latvia and Lithuania.

Deteriorating situation
The issue of jobs and economic growth was a key area for discussion at this week's summit of EU leaders in Brussels.

On Monday, figures showed that the Spanish economy shrank by
0.3% in the last quarter of 2011. It is now widely expected that Spain
will enter recession in the first quarter of this year.

Also on Monday, France cut its growth forecast for this year
to 0.5% from 1% "to take into account the deterioration of the economic
situation".

At the Brussels summit, 25 of the 27 member states agreed to
join a fiscal treaty, aimed at much closer co-ordination of budget
policy across the EU to prevent excessive debts accumulating.

The UK and the Czech Republic did not sign up to it. UK Prime
Minister David Cameron said he had "legal concerns" about the use of EU
institutions in enforcing the treaty, while the Czechs cited
"constitutional reasons" for their refusal.

[Badboy]

PEOPLE BEING FORCED TO RELY ON FOOD HANDOUTS,MIGHT BECOME MORE COMMON PLACE AS AUSTERTY BITES.

[Panda]

PEOPLE BEING FORCED TO RELY ON FOOD HANDOUTS,MIGHT BECOME MORE COMMON PLACE AS AUSTERTY BITES.

Spain is in a bad way with 23% unemployed. There is a lot of colncern among Analysts about this new Fiscal policy and Merkel's insistance that this takes
priority over growth. Many analysts are saying Greece will default anyway .

[Panda]

European Council


The Don Quixotes of Brussels



31 January 2012


El País
Madrid







Faber








At best, the measures adopted at the January 30 summit –
the fiscal treaty and the economic growth plan – are meant, at best, to
overcome the mistakes of the past year and a half, says columnist Xavier
Vidal-Folch. At worst, they’re part of a recurring sham.



Xavier Vidal-Folch




“The leaders are spending a great deal of their time at their
summits discussing how to get out of the mess they got into at the
previous summit,” whispers one player high in the political echelons of
the EU.

The inanity of the repetitive and circular conversations about
Greece, Portugal or on the size of the bailout fund confirmed yesterday
just how difficult it is to extract oneself from the mess. The
politicians have been stuck in it at least since Merkel and Sarkozy
released from its bottle the goblin of state bankruptcy (Deauville,
October 19, 2010), lurking in the write-off for private creditors
(i.e., the decline in the value of their bonds). The meeting did make
two great contributions to the saga of recurring stubbornness: giving the green light to a sham “Fiscal Treaty” and endorsing a plan for economic growth that is not a plan. It’s a joke.

Or does it just look like one?

Let's suppose the new fiscal treaty is necessary to ensure the
discipline of eurozone members and to design, or open the door to, the
resulting “compensations” in favour of growth. Which is a lot to
assume: the European Parliament has expressed “its doubts about the
necessity” for the agreement (Resolution of January 18), and Wolfgang Munchau
(in Monday’s Financial Times) endorses and amplifies those doubts:
“The Treaty is unnecessary,” because its provisions are “either in
existing treaties or in legislation” and because the excessive
restrictions of those provisions “will encourage” recessionary
policies.

Byzantine tweaks



Let's suppose the doubters are wrong and that the Treaty, with its
pompous title “for Stability, Coordination and Governance in the
Economic and Monetary Union”, is worth something. Well, the text
develops only the idea of “stability”, of budgetary discipline. The
rest of the title is not mentioned in the actual text.

It has to be repeated ad nauseam that only Article 9 (of the 16)
mandates “promoting economic growth.” And it requires that the
signatories “take the actions and measures necessary” for that growth.
But it specifies none. There is nothing that is actually obligatory.
There are no fines for those who don’t take those actions and measures
for growth. There are no threats to haul off to the Court of Luxembourg
those who fall by the wayside.

And yet, in contrast to all that, the Treaty sets out very precisely
the sanctions to be meted out to all who fail to follow the provisions
for cutting deficits. In this asymmetry lies the joke: the package is
being sold as a tool to drive the two poles of economic policy, yet
only develops one.

But there's more. The fifth version of the text, the one that made
it to the conference, is even more convoluted than the last. The [new]
tweaks are essential not because they are Byzantine, but because their
very Byzantineness reveals how the planners and drafters of the text
have fallen ill: fighting illusory windmills – i.e., the most obscure
routes for incurring deficits and circumventing the sanctions – like
mad Don Quixotes.

For the good people who have not fallen ill, it is enough to point
out that one of the obsessions of these tweaks is to empower any
government to pursue a defaulting partner, if the Commission itself
refrains from doing so.

Snake oil


And so the text probably is necessary, dear Wolfgang – but it will
be useless. Because all the historical actions in this area that have
marginalised or minimised the power of institutions – from the Lisbon
agenda of 2000, to the revolts in Paris and Berlin in order to evade
sanctions from Brussels for failing to hew to the Stability Pact in 2003
– have led to the place that nobody wants to think about: irrelevance.

The other false “snake oil” is the “Declaration” on reviving
economic growth. The issue has worried the Franco-German couple – the
last to find out that if GDP falls it will not be enough even to
service the debts – since their bilateral get-together on January 9,
the first time they proposed combining the sackcloth with vitamin
shots.

The Berlin-Paris axis, and the Commission and Council have deployed
two techniques of proven inefficiency for reviving economic growth. One
is to shake out the drawers (as with the Lisbon Agenda) for a few
beautiful ideas and scrapped plans: youth employment, and financing for
SMEs (Small and Medium Enterprises).

The other is to rake over the Community budget and reallocate items.
The money left over, i.e. that has neither been spent nor returned to
the governments, is chump change – about 30 million euros. And
reorganising the 82 billion euros of the structural and cohesion funds
not yet allocated for the two years (2012 and 2013) still remaining in
the current Financial Perspectives septennial (i.e., in the 2007-2013
budget cycle) may be premature. In any case, it’s misleading, since
those funds are already geared towards growth: roads, schools, water
treatment plants. And following the “Luxembourg employment strategy” of
1997, not one cent is to be spent on projects that do not create jobs.

There is, therefore, not a single new euro. Just juggling games.

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ANGELA MERKEL IS TO CAMPAIGN FOR SARKOZY DURING THE FRENCH ELECTIONS.

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