Re: New EC Thread

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MANY GREEKS ARE BUYING GREEK PRODUCTS.
I GUESSTIMATE RETAIL GROWTH WILL BE POSITIVE BY DECEMBER.

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Back to Brussels

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Adam Boulton

January 30, 2012 3:37 PM

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Even more than usual the point of this European Union summit is
the fact that the leaders of all 27 member states are here, sitting in
collegiate fashion around the same table.

Above all this means
the worst has not happened (yet). The Eurozone is still in one piece,
even if Greece and Germany are still haggling fiercely over the next
urgently needed slice of bailout.

Perhaps it's complacency,
but, Greece apart, the sense seemed to be that the immediate crisis for
the Euro has passed, although it remains on the critical list.

Indeed
Mario Monti, the newly appointed technocrat running Italy, now seems to
have a place in the ultimate inner circle. He, Chancellor Merkel and
President Sarkozy held a private caucus of their own delaying the start
of the full meeting. That used to be the habit of just France and
Germany alone.

The
second most important thing about this summit is David Cameron’s
presence. Six weeks ago there were bitter words on both sides, as
Cameron played Britain’s veto and refused to sign up to Euro rescue
package.

According to Foreign Secretary William Hague the UK
still reserves its position on the Euro treaty which the other 26
nations are planning. But the British are no longer obstructing progress
or demanding explicit concessions as the price of acquiescence. This
means the green light for EU institutions such as the Court of Justice
to police a treaty to which only 26 out of 27 members at most will be
signatories.

Mr Cameron may have trouble with Eurosceptic
Conservatives when he reports back home but his conciliatory approach
has gone down well in Brussels.

At December’s summit Nicolas
Sarkozy snubbed Cameron on camera and Merkel cold shouldered him too.
This time both the German and the French leaders made smiling beelines
to greet him during the televised opening minutes of the meeting.

Even
as the continent is expected to dip back into recession and
unemployment soars, the official task here is to talk about plans for
growth and job creation. Their fundamental message is the age-old if
trite consolation for the gloomy: “Cheer up, it might never happen !”

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Germany is enjoying the greatest jobs boom in 20 years even as unemployment rises to post-EMU highs across southern Europe, stretching the euro's North-South divide ever closer to breaking point.


Germany's jobs miracle reflects its industrial structure. Its top-notch machines and cars are sought by China, Russia, and Mid-East sheikhdoms. Photo: Stefan Warter/Audi AG







By Ambrose Evans-Pritchard, International Business Editor

10:38PM GMT 31 Jan 2012
Comments


The latest Eurostat data shows that the two halves of the currency bloc have diverged dramatically. Germany's jobless rate dropped to 5.5pc in December, the lowest since reunification in 1990, with even lower rates of 4.9pc in Holland and 4.2pc in Austria.

The jobs miracle is in cruel contrast to the slump in the southern bloc, where unemployment has risen relentlessly as austerity bites.

Spain's jobless rate has reached 22.9pc – or 48.7pc for youths – with Greece fast catching it at 19.2pc. Italy, at 8.8pc, is climbing steadily but this is likely to accelerate as austerity bites and recession deepens.

The jobs data came as Europe's markets rallied on hopes that Germany will back a bigger rescue machinery after securing an EU "fiscal compact" on Monday.

FT Deutschland said Berlin is discussing plans for a €1.5 trillion "mega-fund" in conjunction with the IMF, but details are vague and Germany has yet to soften its hardline stand on Greece.

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Chancellor Angela Merkel said Berlin would not stump up more money for Athens as rescue costs escalate by €15bn to €145bn. The shortfall would have to be covered by "more action from the Greek government, more contributions from private creditors," she said.
Market opinion is split over whether Mrs Merkel is playing poker to enforce discipline, or seriously intends to push Greece into default and EMU exit.
Germany's jobs miracle reflects its industrial structure. Its top-notch machines and cars are sought by China, Russia, and Mid-East sheikhdoms.
The country shook up its labour markets under Harz IV reforms, allowing it gain labour competitiveness against southern Europe by compressing wages. Its economy is now 20pc-30pc undervalued within EMU against Club Med.
It is hotly disputed whether this was deliberate mercantilism. "A slice of educated opinion in Germany went into monetary union with this idea in mind, seeing the advantage," said Charles Dumas of Lombard Street Research.
For Spain, the jobs crisis can only get worse with the IMF expecting its economy to contract 1.7pc this year. Private analysts say unemployment could top 26pc by year-end.
The new premier Mariano Rajoy has vowed to shake up Spain's rigid labour laws. That risks a fight with trade unions, and will inevitably lead to more jobs losses at first.
Just four years ago the jobless rates in Germany and Spain were similar. That was an illusion of the cycle, with Germany coming out of slump and Spain at the top a bubble. The harsh reality is now painfully clear.








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Greece says there is no need for the EU to monitor its Finance and if the EU insist rioting in Greece will ensue

Portugal is feeling the effect of the Greece crisis because sale of their Bonds are affecting the Yields which are up. The Portugese Prime Minister says
it's debt is sustainable.

Santander , a Spanish Bank made a 98% loss which is very worrying, it may affect their Banks in Britain.

Greek finance Minister says they are one step away from a deal with Bondholders which would mean only a 3% loss. The deadline is 5th Feb.

Schnauble says Greece MUST meet conditions before the tranche can be released .

It is rumoured that Germany wants Greece out but is too cowardly to admit it. If other Countries, ie, Finland, Austria, Norway are so fed up they will
say let Greece default that will be the cue Germany needs. Germany is making it too painful for Greece to remain.

It has to be said, why was Greece not allowed to default over two years ago, they have borrowed so much money they will be in debt for generations
to come, meanwhile Germany has benefitted for a weak Euro caused by this crisis.

Analysts are predicting Greece and Portugal will leave the Euro by the end of the Year.

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Life at 27










EU Summit


Poland not 100% happy



31 January 2012


Presseurop

Gazeta Wyborcza, Dziennik Gazeta Prawna

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Gazeta Wyborcza, 31 January 2012








“Eurosummits with and without Poland”, leads Gazeta Wyborcza
on the compromise reached at the January 30 EU summit which allows
Poland to participate in eurozone meetings, but only those dedicated to
“the implementation of the fiscal pact and eurozone reforms”.

Polish PM Donald Tusk insists that he is not “100% happy with the compromise”, but Poland will nevertheless sign the pact. Dziennik Gazeta Prawna paints a gloomy picture of this week’ summit, drawing the following conclusions-

Firstly, Europe has broken up. The fiscal pact is the founding act
of the new EU, where non-euro countries will become second tier
members. Secondly, it offers an excellent opportunity to do away with
the myth that we [Poland] are hitched up to Germany and sucking up the
benefits. Germany will not sacrifice its co-operation with France on
the altar of Foreign minister Sikorski’s Berlin speech
calling for more German leadership. Thirdly, we can congratulate
France and Germany on conducting an effective policy with clearly
defined national goals. We [Poland] just improvise.

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Blog















Slump pact



Europe's lurch backward



31 January 2012










Borne of failure and fear, the EU moves toward
political union not in strength, but in weakness. The latest proposed
treaty for a "fiscal compact" continues this inglorious tradition, says
Jason Walsh


And so, 25 European countries will now, we are told, sign a pact, the
objective of which is to reinforce the euro by toughening and
regularising budget rules. Sold as a step forward, this move in fact
underscores just how politically incoherent Europe has become.

At once high-minded and a product of failure, the European Union had
its genesis in the maelstrom of the Second World War. Devised as a means
of politically and economically aligning the power blocs of France and
Germany in the – quite correct – belief that they would never again
go to war with one-another, plunging the rest of the continent into hell
with them, if they shared a common interest.

European Coal and Steel Community founding father Jean Monnet was
remarkably clear about his designs for Europe: political union. Those
who followed, however, have been less open.

In fact, the seeds of European Union disregard for the masses we see
being played out today are a direct result of the EU's gradualist
approach. Instead of taking the bull by the horns and straightforwardly
arguing for political union, successive generations of EU leaders have
balked at the, admittedly Sisyphean, task of uniting European nations
and instead trod a piecemeal path, fiddling here, meddling there and all
the while refusing to admit that the ultimate logic of going beyond a
mere trade bloc is political union.

And so, Europe lurches forward, if you can call it that, not as a
united social entity or political demos, but driven by the fear and
failure of the various national political elites. The latest proposed treaty,
or "fiscal compact" if you prefer, ties 25 supposedly sovereign EU
nations together under German-led anti-growth economic policy in the
name of safeguarding the future of euro and with it, in the darkest and
most apocalyptic visions, that of the entire EU.

To some small degree it has already succeeded: markets have rallied in response to the announcement. But in the longer term this plan will not work.

German-inspired "fiscal discipline" is not the only way to run an
economy, nor is it the necessarily the right way to run one. For
instance, Greece's spending cuts have worsened the country's debt
crisis, not alleviated it.

There is, and has been, much that is good in European co-operation, even integration, but this madness must stop. Greece is being immiserated,
crushed underfoot by Franco-German diktat that cares only about the
country's (entirely imaginary) ability to repay its debts. And so, more money will be thrown
at Greece, though it will slide through the country without so much as
touching the ground, making its way to Greece's creditors while
unemployment and poverty will continue to grow.

Ireland, Italy, Portugal and Spain are all also getting a raw deal,
though none quite as egregious as that foisted in Greece, and now the
rest of the EU, with the exception of the United Kingdom and Czech
Republic, have signed this mutual suicide pact that will do nothing but
depress consumer demand and, with it, the wider economy.

No country being forced to implement swingeing cuts will ever be able
to emulate Germany's enviable export-driven economy even if they
desired to do so – and, in truth, few seem so inclined anyway. Germany
too will suffer, with the European market for its goods going into
decline. Next to the absence of workable industrial policy and the
ability to make strategic investment in industry, talk of stimulating
the small and medium enterprise and tackling youth unemployment melts
into so much blather. What we will get is a longterm slump.

When the warnings start about the growth of far-right and populist
movements, and they will surely come soon, the European elites will cast
around looking for scapegoats before finding one in the supposedly
backward, nationalist and selfish European publics. But they will have
no-one to blame but themselves.

Image by Chesi. CC licenced.

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Member States










Fiscal treaty


Ireland begins bitter referendum debate



1 February 2012


Presseurop

The Irish Times

The Irish Times, 1 February 2012








“Fiscal treaty designed to avoid Irish referendum,” headlines the Irish Times.
According to Irish law, all new EU treaties must be put to a national
plebiscite. However, an anonymous EU official has told the Dublin daily
that the fiscal treaty agreed on Monday January 30 “was specifically
crafted” to avoid the scenario of the Lisbon treaty referendum of 2008,
which was rejected, thus delaying its coming into force.

Conceding that the decision to hold a vote could well go to the
Irish Supreme Court, the official argued that a referendum has “nothing
to do with democracy.” The Irish Times notes that –

While it is not absolutely clear which parts of the treaty were
written to suit the Government, Irish officials are known to have
sought scope to adopt strict new limits to debt and deficits in
legislation rather than through the Constitution.

Nevertheless, Irish opposition parties including Fianna Fáil and
Sinn Féin are lining up mount a legal challenge to force a vote, writes the Irish Examiner, in a context of increasingly bitter debates in parliament.

Irish Times European correspondent Arthur Beesley notes
that while Ireland has been “no stranger” to “intrusive external
oversight of its internal affairs” since the €85 billion EU/ECB/IMF
bailout of 2010, the new treaty could bind the country to such
oversight “forever.”

It is one thing, of course, to submit to the unforgiving writ of the
troika in an emergency situation in which the State is shut out of
private debt markets. It is quite another to accept the hands of future
governments will be tied by Ireland’s expanding obligations to Europe –
even when the State can stand on its own two feet again.

Beesley also suggest that if the mooted referendum were rejected, this “would seriously impede Ireland’s return to markets.”

More importantly still is the fact that countries which do not
ratify the pact within 13 months will have no further right to aid from
the permanent bailout fund of the European Stability Mechanism.
Observers may well see something decidedly nasty in that provision,
which was a German idea.

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Poverty trap for middle classes of Europe



1 February 2012


El País
Madrid








Dario








Unemployment has hit record levels in the EU, putting
nearly a quarter of those Europeans who until now had a decent standard
of living at risk of sliding into social exclusion. The phenomenon is
undermining the EU’s strategies against poverty.


María Antonia Sánchez-Vallejo




Dimitris Pavlópulos’s pension is €550 per month. His monthly
medical expenses come to around €150. The slash in subsidies for
prescription drugs forces him to choose between buying a litre of milk
(€1.5) or filling one of the prescriptions for his illness, because he
can’t pay for both.

In Greece, the spectre of hunger has become awful reality. Since the
first adjustment plan (2010) cut out many subsidies, Mr. Pavlópulos
spends his pension in ten days, then falls back on the food and
medicines handed out by the NGO Medecins du Monde-Greece.

Manuel G. is one of Spain’s long-term unemployed. He yearns for the
€1,000 a month he used to make back when the crisis first hit. Three
years ago he lost his job as a clerk, and by now he has exhausted his
unemployment benefits. With no family to fall back on, he lives in a
rented room, eats at soup kitchens and gets clothing from an NGO.

These are just two of the victims of the crisis. Elements of society
that were in the middle classes or lower middle classes just five
years ago are today’s new poor. People who must choose between cooking a
hot meal or heating the house, between paying the mortgage or making a
meal.

They are social cases that destroy the traditional association of
poverty with begging. Increasingly, poverty is becoming more and more
the norm. “The volunteers of yesterday are our beneficiaries of today,”
explains Jorge Nuño, Secretary General of Caritas Europa.

One of every four Spanish children is in poverty


According to the EU, in 2009 there were 115 million people at risk
of poverty and social exclusion in the lands of the twenty-seven member
states (23.1% of the population) – “not counting another 100 or 150
million on the razor's edge” says Nuno. “Two months of unemployment and
carrying a mortgage at the same time can sink anyone.” In 2007, 85
million Europeans (17% of the population) were below the relative
poverty line. The list includes countries like Greece, Spain and
Ireland, “but also France, Germany and Austria,” Nuno notes.

The examples show how the system breaks down: household debt; the
bankruptcies of states that gave out subsidies too freely; and the
profusion of casual and uncertain jobs, like the millions lost in the
construction sector in Spain.

How is the hardship measured? There are two types of poverty:
moderate or relative (60% of the average national income), and severe
(40%). “Most of the poor are increasingly found far below this
threshold. The poor have become poorer, but it is also true that the
soup kitchens are feeding people who never dropped in on them before.
The poverty rates have gone up dramatically in children – one of every
four Spanish children is in poverty – and quite a lot among immigrants
and the young,” says sociologist Paul Mari-Klose of the CSIC.

“We are talking about deprivation, of being unable to make it to the
end of the month, or eating meat less than twice a week. In Spain, as
in Greece, Portugal and Italy, however, it’s not so much that poverty
has spread into new classes, but that it has become more severe and
focused in certain groups. During the economic boom many young people
struck out on their own prematurely, and now they’re in borderline
situations. Iceland has seen a dramatic increase in poverty, especially
in children,” Mari-Klose adds.

Lower middle classes have not been in the spotlight


In the Eurostat statistics on poverty and exclusion the crisis is
bringing countries like Portugal, Ireland, Greece and Spain closer to
eastern European countries that recently joined the EU and to ever
broader layers of the populations of stable states and model welfare
states that have come down in the world, as in Iceland, due to the
collapse of its banking system.

But the EU average on poverty has a high dispersion around the mean.
Bulgaria (46.2%) and Romania (43.1%) are almost double the mean,
according to Eurostat. At the other extreme are the Czech Republic
(14%), the Netherlands (15.1%) and Sweden (15.9%). Spain is in the
middle, at 23.4%. But being in the middle ground is to go unnoticed: for
Spain the structural risk (in 2007, about 20%), the lack of social
protection, and record unemployment (22.8%) all add up to a less than
rosy future.

As social spending cuts amplify the effects of the crisis, the four
social groups traditionally more exposed to poverty – children, the
elderly, women, and immigrants, i.e., age, gender and ethnicity as
factors that intensify poverty – are joined by a host of citizens not
so easily labelled.

These are “people with a very precarious job, which makes it hard to
make ends meet, and on top of that they have no support; people
between 30 and 45, with or without family responsibilities, and getting
no subsidies because they have some income. If they want to keep
paying the mortgage, they’re forced to go back to their parents,” says
Joan Subirats, of the Autonomous University of Barcelona. “The other
sectors are more closely studied. These lower middle classes, however,
have not been in the spotlight,” he adds.

Good intentions on the rubbish heap


The semi-starvation of large sections of European society is not
only a social problem, but also has clear political repercussions as
more and more citizens find themselves on the margins of the system.

Although most of the experts consulted warn against the temptation
to make the “new poor” the only victims of the crisis, and highlight
the deterioration in previously impoverished areas, what is undeniable
is that after almost fifteen years of good times and new wealth, the
crisis has knocked flat part of the population that, until 2007, had
their basic needs met.

But there are many more factors at play in the bad dream of the new
poor. Among the newest members of the EU, most of which are former
communist regimes converted to market economies by forced marches, such
as Latvia (a 37.4% risk of poverty and exclusion), Lithuania, Hungary,
Bulgaria and Romania, the biggest drag is the inherited structural
deficit.

2010 passed almost unnoticed as the European Year for Combating
Poverty and Social Exclusion. It thus concluded the Lisbon Strategy,
which sought to make “a decisive impact on eradicating poverty,” and
got the 2020 Strategy underway. The crisis, though, has left those good
intentions on the rubbish heap. The main objective of the Strategy
2020 – to reduce the number of poor by 20 million in this decade –
threatens to become a dead letter.

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Euro










Greece


Leaving the euro, a risky business?



4 January 2012


Presseurop

Presseurop




The euro or the drachma? That is the question asked by the Greek
press while the government continues to negotiate with the European
Union and the International Monetary Fund to find a new bailout plan. Athens daily To Vima writes-

Faced with this challenge, the most crucial for our country since the
overthrow of the dictatorship of the colonels in 1974, we must choose
between taking all the measures necessary to stay in the eurozone or
sinking into uncontrolled bankruptcy and thus return de facto to the drachma.

The paper attacks the political parties that encourage instability.
PASOK (socialist), LAOS (extreme right) and New Democracy (right-wing)
"support the government [and] at the same time lead the political
opposition."

To Ethnos notes that -

... the dilemma over the euro or the drachma leaves no one
indifferent, even the left parties that have a different view on the
issue. The truth is that this dilemma hides a major truth. The measures,
the bailout plans imposed by the EU and the Greek government in the
name of the euro these last two years, as well as all those that were
implemented for the good of the country have drawn us closer to the
drachma.

But the daily warns that while "a majority of Greeks do not want the drachma, many no longer feel implicated in the debate".

Yet, as highlighted by news site protagon.gr-

... a return to the drachma would impoverish 90% of the population.
We must thus realise that, like it or not, we must do everything to stay
in the euro clan in order not to become the poor little neighbour of
'Grand Turkey'. This requires much, much work with major sacrifices but
the choice is ours to make.

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2 February 2012
Last updated at 03:23











German Chancellor Merkel in China on eurozone talks











China and Germany enjoy strong economic relations with each other



Continue reading the main story Related Stories

• Impasse at UN Syria crisis debate
  
• EU approves Iran oil imports ban
  
• 'Helping euro will help China'
  

Angela
Merkel, the German chancellor, has arrived in Beijing for a two-day
visit expected to focus on the eurozone crisis, Iran and Syria.

Accompanied by a 20 strong trade delegation, she is scheduled to meet President Hu Jintao and Premier Wen Jiabao in the capital.

On Friday, she will visit Guangdong province with Mr Wen and executives from various industries.

This is her fifth visit to China, a strategic economic partner for Germany.

The two countries need each other, says the BBC's correspondent in Berlin, Steve Evans.

Chinese purchases of German goods have kept the German
economy growing much faster than that of other European countries, he
adds, and Chinese imports of German technology embodied in machinery for
Chinese factories has allowed the Chinese economy to improve.

Ms Merkel is expected to deliver a speech on the economic
crisis in the European Union - a key item on her agenda - at the Chinese
Academy of Social Sciences on Thursday.

She is also likely to seek support from China for a UN
Security Council resolution against Syria and urge Beijing not to
increase its imports of Iranian oil, following EU bans last month.

Also on the agenda is access to what are called "rare earth
elements" used in the manufacture of many electronics components. China
mines 97% of the global supply and has been accused of limiting its
supply to fetch higher prices.

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Italy


Relax, Germans!



30 January 2012


Die Zeit
Hamburg





Mario Monti and Angela Merkel at a press conference in Berlin, January 11 2012


AFP








Italy has long cursed Germany as a know-it-all, and yet
respects it 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. Excerpts.


Birgit Schönau




It was a Monday afternoon at Rome's Leonardo da Vinci airport.
The queue outside the security checkpoint in the departure hall was
getting longer. Losing their patience, two Germans began to shout
loudly: “Chaos like this you only find in Italy!”

An Italian in the queue turned to the annoyed Germans, anger on his
face. “Germans never change,” he said in English, stressing each word.
“You always know everything better and you always look down on us.” The
Germans fell silent, and from then on the Italian ignored them.
Because they both were flying to different destinations, a little later
neither heard the captain of the Lufthansa flight to Düsseldorf come
on over the public address. “We should be taking off in half an hour,”
he said. “With the Italians, though, you never know.”

The episode happened around the time the Berlusconi government was
on its last legs. Half of Europe was laughing at Italy then, and
perhaps Germany was laughing a little louder. The third-largest economy
in Europe was seen mostly as a scenic backdrop for bunga-bunga parties
– seriously in debt, and for that very reason not taken seriously.

The Chancellor had never openly criticised Berlusconi, merely
largely ignored him – and Italy. Relations between the countries were
at the freezing point, as was the personal relationship between the
East German pastor's daughter and the party animal from Lombardy who
loved a dirty joke.

That helped explain Merkel’s enormous popularity in Italy. For many
of those Italians who suffered under Berlusconi, she embodied those
German virtues that the political class in Rome had long parted company
with: an appreciation for the common good, restraint, and integrity.

Berlusconi era already seems years in the past


But for two months now Italy has been ruled by a man who, apart from
these qualities, possesses a few that Merkel lacks. A certain
cosmopolitanism for example, as well as profound economic expertise and
the determination that comes with it.

There was some amusement in Italy when the German media tagged Mario
Monti and the new ECB chief Mario Draghi as “Prussian Italians”. Monti
had hardly moved into the Palazzo Chigi before the pristine image of
Angela Merkel began to tarnish. The luminary reduced to the role of
maestrina, a somewhat narrow-minded teacher who raps the knuckles of
the rebellious students in the class, never grasping that sometimes
they’re precisely the ones who actually have the better ideas.

When Berlusconi stepped down, to relief all round, Germany was
swiftly singled out in Rome as the biggest problem for Europe. In
Germany, “policies are made by the barometer of public opinion,”
remarked Giovanni Moro, a son of the assassinated Christain Democrat
Aldo Moro. “With its rigid dogmatism Merkel's Germany is risking not
only the euro but the entire Union,” wrote one journalist close to
Monti.

Inexorably, the feeling is getting around Rome: “We can do it
differently – the Germans can’t.” In his first appearance before the
foreign press Mario Monti rhapsodised at length about Scandinavia. The
merits of the northern European countries have been overlooked by
Europe for far too long. Europe need not convalesce, the message goes,
strictly German-style. There are other models too.

With Monti, Italy has won back its self-confidence. Within a
strikingly short time, drastic austerity measures and reforms have been
implemented, privileges stripped away, and tax evaders convicted. The
Berlusconi era already seems years in the past.

Italian way of life assiduously copied


Before his first official visit to Berlin, Monti did something that
Berlusconi would have never dared: he presented some demands to his
German colleague. Germany and France, he declared, should no longer
take an “overly authoritarian” stance. He reminded both big partners of
their EU policy mistakes, and warned Angela Merkel of anti-German
protests in Italy if Berlin fails to acknowledge his government’s
efforts.

Angela Merkel's praise for Monti's reform policy was accepted with
some relief in Rome – but with annoyance, as well, that this praise is
always a little condescending. “The culture of stability imposed by
Germany is extremely valuable,” Monti told the Financial Times, “but
the more clearly the indebted countries show they have understood the
need for the discipline, the more the Germans ought to relax.”

The Germans will have to get used to the Italians reading the riot
act to them, as among friends. For a long time it was the other way
around. German nationalism has always defined itself in contrast to
Italy.

The Italian way of life, however, has been assiduously copied by the
Germans. Pasta, balsamic vinegar and olive oil are as widespread north
of the Alps as south of them, and more espresso machines are now sold
in Germany than in Italy. Sometimes it seems as if the Germans are
better at being Italian than the Italians are.

But what will happen now if all at once the Italians want to be the better Germans? Both efforts can only be good for Europe.

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Deutsche Bank shares fall 76% as a direct result of the Euro crisis.

ECB may hold out any bail until with Bondholders is reached.

Antonmucci of Morgan Stanley says Europe is still in dangerous Territory as Sovereign Debt turned into crisis of confidence.

He says the ECB will weaken significantly , challenges need to construct solid firewall to fend off contagion risk.

He predicts the Eujro will be vbalued at E1.2p0 by the end of the year.

Portugal is under pressure but Fitch says it doesn"t see any danger because although Portugal might need another bail out it"s debt is sustainable and it has implemented austerity measures to contain the debt.

Rory O'Connell, Economics adviser says Ireland still has more to do although Bond Prices have reduced the yield.

Spain sells 4.56 billion Bonds , target was 4.5 spread over 3 and 5 yr Bonds.

[Panda]

EU Students Not Repaying Loans.

• 
  
  
  
  
  

Jason Farrell

February 02, 2012 10:34 AM














The
numbers of EU students taking out loans for tuition fees in the UK is
on the rise, and the number not paying them back is also increasing at a
worrying rate. 45 per cent of students from European Union countries
who were liable to start repaying UK student loans have disappeared or
are in arrears.
The
government released the figures last week after we asked for details
under the freedom of information act. Sky News also learned that only a
fraction of these outstanding debts have been reclaimed through the
courts.
EU
students have been able to get loans for higher education in the UK
since 2006. By 2009/10 the debt of nearly 19,000 EU graduates already
amounts to 47.4 million pounds. Like UK graduates they can make
repayments over time once they reach a certain earnings bracket.
The
Student Loans Company has powers to deduct money directly from the
wages of those who find jobs in Britain, but for graduates who live
overseas it is forced to rely on their co-operation in giving
information about their earnings and making arrangements to pay. Many are qualifying for repayment and failing to pay, or they have failed to provide their earnings details.
Already around 9,000 are avoiding their repayments and between them they owe the UK tax payer 20 million pounds.
Despite
government pledges to pursue non-payment through the courts, so far
they have reclaimed just over £8,000 according to figures from the
Department of Business Innovation and Skills.
What’s
concerning is the figure of unpaid debt could rise dramatically in the
coming years, for two reasons. Firstly because, as UCAS figures show
this week, the number of English students applying to go to University
is in decline: 9% down this year. Universities may then be tempted to
top-up their places with more applicants from abroad.
Secondly
EU students, like UK Students, will take out much larger loans in the
future. That’s because they will be paying for higher tuition fees which
are being allowed to treble to a maximum of £9,000 from this September.

So it seems the non-payment of EU student debt is a problem that’s only going to get bigger.

[Panda]

Can you believe this!! While U.K Students have had rises in their tuition Fees, European Students can owe £20 million which with the current crisis will never be repaid. Why on Earth have European Students been al;lowed the same facility as U.K Students.....no wonder this Country is in such a State!!!

[Panda]

TEurozone: Greece Is The Word

• 
  
  
  
  
  

Robert Nisbet

February 02, 2012 12:25 PM

• 
  

After
all the talk of fiscal compacts, Euro-ins and Euro-outs and whether the
hands of Prime Minister Cameron and President Sarkozy merely brushed or
were firmly clasped in greeting, one could be forgiven for forgetting
the real crisis here.

Greece is still in serious trouble.

I
understand the talks over the so called PSI (private sector
involvement) deal, which would involve banks agreeing to write-off most
of the real value of their Greek debt paper, are effectively completed,
but both sides have been told to wait before going public.

That's
because the Greek government has to convince debt inspectors from the
so-called Troika of international creditors (IMF, ECB and EU) that it
will follow through on its austerity plans.

Both conditions have to be in place to unlock a second, 130 billion Euro bailout which Athens needs to pay its bills.

The
inspectors are not encouraged by what they've unearthed in terms of
asset selling, job cuts and tax collection, but how much more can you
make the Greek people suffer?

That's the dilemma: should the
Troika be squeezing the central banks to restructure their debts (as
well as the private sector) instead of punishing the people even more?

Of
course as these talks are drawn out, the Greek economy continues to
shrink at a fairly alarming rate, which means the bailout may need to be
bigger.

It's probably likely the European Central Bank will have to take a hit on its holdings of Greek debt.

A
meeting's been scheduled between finance ministers of countries which
use the Euro on Monday, so expect some movement before then, or else we
may start to see a return of that 2011 nervousness in the markets.

[Panda]

Eurozone crisis


Save the ECB from the danger of Greece



2 February 2012


De Tijd
Antwerp

• 
  
  

• 
  

Arend van Dam








A Greek default can still not be ruled out, and it would
place the European Central Bank in considerable danger. To avoid this,
states should pay up and provide guarantees, believes economist Melvyn
Krauss.


Melvyn Krauss




The European Central Bank’s significant holdings of Greek
government bonds have left it exposed to considerable risks, much more
than the markets or what we read in the business press would lead us to
believe (perhaps 100 billion euros).

The currency of a country whose central bank has suffered a mortal
blow has little chance of survival. Athens understands this very well
and takes advantage of it. Why should Europe give to Greek politicians,
who clearly have shown no intention of introducing reforms worthy of the
name, a weapon that can be turned against her? We must protect the ECB,
and now.

Of course, giving guarantees would entail a risk to the taxpayer, and
that is precisely what explains the immobility of Europe’s leaders.

The cunning game played by Greek politicians


They must grasp, though, that if they take this threat out of the
hands of their blackmailers, the risk they are exposed to will lessen.
If the Greek politicians perceive that their cunning little game is not
working, they might change their tone and make real efforts to undertake
reforms.

The European taxpayer will then get a good deal: giving guarantees,
as discussed above, lowers the risk of a costly default. Prevention is
better than cure.

Putting larger amounts into the European Stability Mechanism (MES),
the permanent relief fund [to come into force July 1], will on the
contrary save money. And committing more money to protect the ECB would,
for the same reasons, also save money. This is what is called
"promising to increase spending," but that does not mean that the money
will actually be spent.

Whether Greece defaults or not, the Germans want to exclude it from
the eurozone and are trying to gain time to bring Italy and Spain
on-side to get those countries’ support in coping with the turbulence
that Greece’s exit may provoke. But that very fear could merely speed up
a default by Greece. Like a bee about to die, it can still inflicts a
fatal sting.

European policymakers cannot afford the risk that Greece, feeling
that it is about to excluded from the euro, will launch a final attack
like a dying bee and default. They must protect the ECB from what could
be a fatal sting.

Guarantees for the ECB


The International Monetary Fund (IMF) is also entering this game. The
more Europe protects itself, the less likely the possibility that the
IMF will intervene with an additional contribution to the bailout funds.
European leaders are reluctant to seek a greater contribution from the
IMF. For the ECB, though, it’s a dangerous game. If the IMF decides not
to put in additional funds and Greece does default, the ECB will be
totally exposed. Better to take protective measures and let the IMF play
the cards it wants to play.

The factor that could most swiftly trigger a Greek default could be a
dispute over the losses that private investors in Greek bonds would
have to accept if the relief fund had to be deployed for Greece.

Agreement alone, however, is unlikely to be enough to stave off a
default. The haircut for private investors would be so large that the
rating agencies would not be able to call it "voluntary”, and would
therefore claim that it is a form of default. No one knows what this
could entail. It could trigger mechanisms to compensate the bond holders
for their losses, and it could nullify the ECB guarantees for banks. In
this climate of uncertainty, protecting the ECB is the top priority.

Almost all the attempts by European leaders so far have failed, which
explains why the crisis persists. This may be their last chance. If
they fail to demonstrate greater competence in defending the ECB, it may
be too late both for it and for the euro. The ECB must be able to use
tax revenues. The time to provide guarantees to the ECB is now.

[Panda]

Economy



Sarkozy fascinated by German model



2 February 2012


Presseurop

Le Monde, Le Figaro, La Croix, Libération





Schneider







A probable candidate for re-election, the French
President seems intent on proposing an economic project calqued on the
German model — a strategy which has surprised the French press.


With the announcement, in the course of a 29 January TV
interview, of his intention to apply measures inspired by German
competitiveness to the French economy, Nicolas Sarkozy has made the
German model a campaign issue in the French presidential race.






Le Monde remarks that references to Germany are becoming an “obsession” for the president and future candidate:

Having
fallen behind in the polls, he has decided to form a campaign duo: now
it is he and Angela Merkel, and France and Germany. And two is so much
better than one. Since the financial crisis of last summer, which nearly
destroyed the Eurozone, Nicolas Sarkozy has made Germany the only
argument and the sole reference in his campaign. [But] France is not
Germany and there is no situation where only one policy is possible. The
election campaign is there to prove it.

For Le Figaro, which even wonders
"if the presidential election is likely to be a referendum on the
German economic model," Nicolas Sarkozy has “good reasons for playing
this particular card."

It
is difficult to ask voters to tighten their belts in a period of crisis,
and much more effective to ask them to follow the example of a country
which is clearly the most successful in Europe. The French are much more
likely to be swayed by this argument: never before has Germany had such
a high public approval rating.

In this context, the front page of La Croix focuses on the inevitable question: “Is Germany a model?”

Is
there a such a thing as a model country, a perfectly mature political
system, or an ideal economic orientation that has the capacity to
transcend borders, cultures and mentalities? [...] Amid the current
crisis, which has threatened the finances of European states, Germany
stands out as good student, greatly appreciated by the ratings agency
examiners for managing its budget without running up deficits. [...] We
have reached a point where even the Germans, who are not all convinced
of their country’s excellence, are surprised. It follows that Germany’s
success should be subject to detailed analysis: once this has been done,
we will then be able to see if it can be transposed elsewhere.

On this point, Libération remains sceptical:

Obviously,
no one is disputing the value of Franco-German entente, which has
always been an indispensable driving force in the construction of Europe
and a “treasure” that should be preserved. And no doubt France should
seek inspiration in the success of its neighbour. However, the President
has forgotten to point out that the deregulation of the labour market
on the other side of the Rhine has considerably increased precarity and
the numbers of working poor. And that the drive for competitiveness has
had a negative impact on German social cohesion.

[Panda]

Saudi Arabia may offer the IMF more funds for more clout. LaGarde is considered too European when the Fund is meant to help poor Countries around
the World.

Greek Bondholders likely to face 70% loss and a decision is expected today.

Stephen Major of HSBC says if the Portuges Bonds were issued under English Law they would be protected, but not under Portugese Laws.

It is unlikely that private bondholders will buy from any European Country because of the loss with Greece.

David Blanchflower , Economist , says ignore Merkel , she has wasted two years and made the situation in Europe worse.

George Osborne, should have started with a growth plan and his bungling will mean the longest depression in 100 years.

The European Commission has blocked a merger between Deutsche Bank and the NYSE on the grounds it would be a monopoly.

The ECB loan collateral plan is said to be avoided by some EURO Nations

Inflation is creeping up in Europe, stocks opened higher today on hopes for the US jobless claims to be released today

[Panda]

For Greek Tax Reformers, Good Ideas Aren’t Enough

Eirini Vourloumis for The New York Times
Files and forms continue to pile up around a tax office in Athens. Greece’s tax collection system is plagued by inefficiency and resistance from powerful groups.

By RACHEL DONADIO

Published: February 2, 2012

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ATHENS — For nearly two years, as the debt crisis worsened, Diomidis Spinellis led a team that devised innovative software to help Greece crack down on tax cheats. He sent daily reports to his superiors showing which regional tax offices lagged in closing cases and collecting tax revenue.








But last September, Mr. Spinellis, who interrupted a brilliant career as a computer science professor in 2009 to work for the Greek Finance Ministry, resigned, frustrated that officials did little or nothing with the data he generated.
“I cannot remember getting an enthusiastic response,” Mr. Spinellis, 45, said with characteristic understatement in an interview in his tiny, book-filled office at Athens University of Economics and Business, where he has returned to teaching.
In exchange for the bailout money that Greece needs by March to avoid what could be a catastrophic default, the country’s foreign lenders have demanded radical changes to make the state more efficient and bring in more tax revenue. But as Mr. Spinellis’s experience showed, good intentions and directives can easily be evaded or sabotaged by the political class, if its members have not signed on.
In Greece, the government of the technocratic prime minister, Lucas Papademos, is proving powerless to transform an inefficient public administration that has long served as a power base for the same political leaders — including most of the current government’s ministers — who are now being asked to dismantle it.
It is a formula for gridlock that virtually guarantees, political and financial experts say, that the Greek government will never carry out the kind of basic changes that are being demanded of it.
“In Greece, the real power is the power of resistance, the power of inertia,” said Giorgos Floridis, a former member of Parliament from the Socialist Party who recently founded a reform-minded civic movement. Today, he said, the main power centers in Greece — political parties, business leaders, professional guilds, public sector unions and the media — are fighting to preserve their privileges, blocking structural changes that could make the economy more functional.
The slow pace of change is one reason the government and its so-called troika of foreign lenders — the European Union, the European Central Bank and the International Monetary Fund — have relied more heavily on swifter measures, like hard-to-evade tax increases and across-the-board wage cuts, that have helped push the economy deeper into recession.
Change is all the more difficult when corruption appears to be woven into the fabric of the Greek state. Last month, Yiannis Kapeleris, the Finance Ministry’s general secretary for tax and customs affairs was forced to resign after being placed under criminal investigation in a complex case involving failure to collect fines imposed on fuel companies. He denies the charges.
Also last month, the man in charge of the Finance Ministry’s Financial Crimes Unit in the northern city of Salonika, Christos Papachatzis, was among 53 people arrested on charges of extortion and leading a protection racket that lent money at usurious rates. According to a wiretapped telephone conversation reported in the Greek news media, he reassured the leader of the gang, Markos Karaberis, that he would not act on a complaint against him.
Asked about the arrest in an interview, Pantelis Economou, the deputy finance minister and also a high-ranking member of the Socialist Party, said: “He’s alleged to be a member of a gang, and it seems it’s true. He was the chief there. He was also my party’s member. I sacked him the next day.”
Mr. Papachatzis denied the charges through his lawyer, who said his client was the target of politically motivated prosecutors intent on demonizing the finance minister, Evangelos Venizelos, who is widely seen to be vying to become the leader of the Socialist Party.
In another sign of the nexus between the criminal underworld and Greek politics, all those arrested in the Salonika investigation had ties to the three parties supporting Mr. Papademos’s coalition: the Socialists, the center-right New Democracy party and the hard-right Popular Orthodox Rally, known as L.A.O.S. (Mr. Karaberis ran for a regional office last year with L.A.O.S., using the campaign motto “Clean hands, clear ideas.”)
Mr. Spinellis was supposed to be part of a new generation. He was hired through an open government initiative started by the Socialist Party to promote meritocracy over cronyism, but which critics now say was largely cronyism under another guise.
Next Page »
Dimitris Bounias and Nikolas Leontopoulos contributed reporting.

This article has been revised to reflect the following correction:
Correction: February 3, 2012

An earlier version of this article misstated the Greek Finance Ministry official to whom Diomidis Spinellis, a computer scientist, reported. He answered directly to the finance minister

[Panda]

Europe abroad










Eurozone crisis


Beijing tells Merkel “to do her homework”



3 February 2012




Handelsblatt














Handelsblatt, 3 February 2012








Angela Merkel was outgunned in Beijing. “People’s Republic of China gets rid of Chancellor,” headines Handelsblatt,
in its report on Angela Merkel’s three-day visit to the Middle
Kingdom, during which she was hoping to solicit help from China to save
the euro. Beijing is considering participation in a solution to the
crisis but it does not plan on losing money. Prime Minister Wen Jiabao
coldly announced that there would be no promises to Europe of direct
investment,” reports the economic daily. “Indebted countries will first
have 'to make painful decisions and do their homework.’” That is to say,
as Handelsblatt explains –

...reduce debt, reinforce control mechanisms and adopt a clear,
frank and reliable position with regard to the rest of the world. […]
The money China wants to invest in Europe should not be viewed as
development aid but must be a successful investment. And in a best case
scenario this means both from an economic and a political point of
view.

From Germany’s point of view, China could play a key role with its 3.2 trillion dollars of foreign currency reserves. However, Frankfurter Rundschau points out that the People’s Republic will expect a gesture from Europe in return: for example –

EU recognition of China’s status as a market economy, which would
make it more difficult for European companies to take action against
unfair competition or price dumping.

As a result, Handelsblatt remarks: the Chancellor, who can claim to
be the leader that the Chinese believe "has taken charge of the drive
to restore the euro," had no opportunity to promote bi-lateral
relations as she had planned, and will now have to wait for further
meetings later in the year to extract promises from the Chinese Prime
Minister.

[Badboy]

IT WAS BEING SAID IN AN GUARDIAN ARTICLE THAT GREECE IS IN EFFECT IN A DEATH SPIRAL WITH NO WAY OUT OF THE DEBT CRISIS,DEPENDING ON MORE BORROWING TO PAY THE PREVIOUS DEBTS.

[Panda]

IT WAS BEING SAID IN AN GUARDIAN ARTICLE THAT GREECE IS IN EFFECT IN A DEATH SPIRAL WITH NO WAY OUT OF THE DEBT CRISIS,DEPENDING ON MORE BORROWING TO PAY THE PREVIOUS DEBTS.

Hi Badboy, Greece should have been allowed to default at the beginning , but this would have caused huge problems , not just foe the Euro Countries,
but around the world. In the 2 years since Merkel and Sarkozy, the ECB and IMF have tried to reach a solution Greece is more in debt , to such an extent that it will take at least 3 generations on starvation diet to clear it.

[Panda]

Germany


Call us Nazis if it makes you happy



3 February 2012


Die Zeit
Hamburg





Protestors outside German embassy in Athens in 2011 demanding reparations for Nazi Germany's occupation of Greece during WW2.


Kostas Tsironis/AP/SIPA








“Hitler”, “Occupying Power" – it’s always the same.
Berlin is asserting its stance on the euro crisis and, in turn, is being
abused with comparisons to the Nazis. Die Zeit ponders how Germans
should respond.


Bernd Ulrich




“A noi Schettino, a voi Auschwitz.” So wrote the
Italian newspaper Il Giornale recently: “We have Schettino, you have
Auschwitz”, responding to a similarly subtle Spiegel Online criticism
of the cowardly captain of the Costa Concordia, who was called a
“typical Italian”. The riposte the Italian paper had in mind was: “You
Germans just keep your mouths shut – you have the Holocaust to answer
for!”

Now, one might say that Il Giornale is a populist rightwing
newspaper, from Berlusconi’s publishing empire no less, and so not to
be taken too seriously. One could also take some comfort from the fact
that Nazi comparisons have always been trotted out from time to time
against Germans. But at the moment the comparisons are accumulating
around Europe. It's a discourse we hear in Greece daily, often formulated in an even more virulent manner.

At a book reading in Portugal the sensible East German writer Ingo Schulze was even asked
if the Germans intended to take with the euro what they had failed to
take with their panzers, i.e. become the masters of the continent. From
Greece we can hear the same sort of remarks every day, often put more
dramatically.

Elsewhere the reproach is dressed up with more gentility, when for
example Germany’s current austerity policy is compared with that of
Reich Chancellor Brüning, whose successor was Adolf Hitler. Frequently,
too, German’s “special path” is brought up, as when the Merkel
government fails to print as much money as the others are demanding.
The so-often quoted “special path” ends where, historically? In
Auschwitz, of course. Thus is the circle closed.

We must not let ourselves be intimidated



It does not take long, really, to work out the riddle of why the
Nazi comparisons are being flung about so thick and fast. It’s because
for the first time since 1945 Germany is back at full strength, not
because it wanted to be, but because the European debt crisis has left
it the economically strongest and politically most powerful country in
Europe. German interests now reach deeply into the internal affairs of
other states.

Gradually the country is taking on a role in Europe similar to the
role the U.S. long played for the entire world: as a power that used
its power, and sometimes abused it, that was to blame for everything,
that had to rescue everyone, and that had to put up with insults for
how it did it.

But there was one thing you could never accuse the Americans of:
sending six million Jews to their deaths and plunging half the world
into war. When it comes to the Germans, the humanly understandable and
often justified ranting against the biggest power too often takes on a
different, conversation-killing tone.

How should one, as a German, handle it? Ingo Schulze got outraged
and offended, as he self-critically admitted. His reaction was
definitely the wrong one for that reason alone, because it was
precisely what his audience wanted. Secondly, it is surely wrong to
respond with German arrogance, as Volker Kauder, parliamentary leader
of the Christian Democratic Union, did when he declared that “Europe is
speaking German”; only the word “again” was missing.

Thirdly, we must not let ourselves be intimidated by comparisons to
the Nazis. The notion of the “special path”, or German exceptionalism,
must not lead a German government either to cave in or to insist now
more than ever on getting its own way – especially since we are all
aware that Auschwitz gets deployed as a moral lever in political
conflicts. A friendly imperviousness to being pressured, sometimes an
unoffended rebuff, are therefore the most judicious responses. And then
we can get back to the substantive issues, like money or military
intervention.

The German historical paradox


The new German role will lead for some time to an accumulation of
comparisons to the Nazis. We will have to put up with them, rightly or
wrongly, and weather them out. In this very stoicism, however, there
lurks a serious problem, which has to do with the German historical
paradox. Germany’s past, that paradox goes, will surely never return
only if the Germans are never quite sure whether it will return.

What should we do now? Ask the others to quit this Nazi crap, to
please insult us Germans in every imaginable way but that one? Yes,
that could be done. The Germans could also admit that they want to be
loved, much more than the French or the British, who already love
themselves very well indeed. However, the Germans cannot deny
themselves out of the sheer need for love, if only because the others
would despise us even more.

Finally, a certain coolness to what foreigners think must be
combined with very high historical sensitivity to what is happening
inside Germany. Anti-Semitism, neo-Nazi terror, historical amnesia,
bouts of arrogance – these are the real dangers and temptations.

The Germans must be very brave now – and very sensitive.

Translated from the German by Anton Baer

[Panda]

Europe spoils WEF party in Davos

Image Caption: People came to talk about a dizzying
number of issues but Europe's problems took over (Keystone)


Related Stories

• Davos
  Open Forum gives lessons in leadership
  
• WEF
  reform message likely to fall on deaf ears
  
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  Indignados take to streets
  
• Indignados’
  revolt spreads to Switzerland
  

by Matthew Allen, swissinfo.ch

---

The continuing European debt crisis dominated debate in Davos and cast a
huge cloud over the World Economic Forum’s (WEF) showpiece event.


German
Chancellor Angela Merkel set the tone early on by reiterating a strategy of
enforcing austerity on Greece and other debt laden eurozone countries in favour
of increasing a bailout fund.

Merkel’s
keynote speech on the opening day urging “more Europe” was greeted with
scepticism by the international array of leading business people, politicians,
academics and civil society representatives.

If the WEF conference was a
weather vane pointing to how global leaders interact in the outside world, the
overriding impression was one of Germany against the rest of the world on how to
solve Europe’s problems.

The televised addresses and over-subscribed
discussion panels that were on public view represented just the tip of the
iceberg of activity in Davos.

Are banks safer?


Behind
the scenes Greek government officials were busy meeting with private sector
creditors in an effort to agree this weekend how much of a haircut (writedown on
the value of their investment) bondholders could accept.

Heads of state
and finance ministers were also busy in back corridors trying to find a route
out of the current political impasse on Europe. The results of those meetings
will play out in the coming weeks and months.

An area that has seen a
lot more progress in the last 12 months is banking regulation, even though the
various steps taken by different jurisdictions to contain the threat of another
financial crisis appear disjointed and fragmented.

Economist Nouriel
Roubini pointed out that the post-crisis consolidation of the banking sector had
created even bigger leviathans, such as Bank of America/Merrill Lynch. The too
big to fail problems had become an “even bigger to fail” situation, he
argued.

At an earlier session, just ten members out of a 140-strong
audience agreed that the financial system is a safer place than a year ago. The
straw poll showed far more hands raised to show they thought the system is now
more dangerous.

Progress blocked


Roubini
was one of many delegates to point out that economic growth, employment and the
search for greater income equality were all being held back by the unresolved
European debt and banking regulation issues.

From an Asian perspective,
Japanese Prime Minister Yoshihiko Noda labelled the European debt crisis as the
number one risk to the global economy.

In fact, many people in Davos
were wondering aloud if Europe is in the midst of suffering a Japanese-style
lost decade.

US business executives in Davos were in an upbeat mood
following the Federal Reserve’s promise to keep interest rates low, if at all
possible, for the next two years.

Some reasonably positive economic data
coming out of the US had these executives all saying the same thing: “Europe is
the only weak link in the chain that leads to economic recovery. If Europe could
only sort its problems out, confidence would be restored to the markets and get
the whole system could work properly again.”

Tinker, not tear down


Only
then could more jobs be created, helping to haul the 1.1 billion unemployed or
impoverished people in the world (International Labour Organization estimate)
out of their rut.

But such sentiments seemed to miss the whole point of
the “Great Transformation” theme of this year’s Forum. Before delegates started
arriving in Davos, WEF founder Klaus Schwab was briefing journalists that the
current model of capitalism “no longer fits the world”.

Occupy Davos
demonstrators camped in igloos on the edge of town also tried to drive the same
point home, albeit using different tactics.

The challenge put to Davos
participants this year was to address ways of revamping capitalism,
globalisation and established leadership models to fit a rapidly changing
world.

Despite objections from trade unionists and civil rights groups,
the overwhelming reaction was that these systems did not need tearing down and
rebuilding from scratch. Most participants believed that capitalism just needs a
bit of a tweak to start functioning properly again.

Maybe business
executives in the West would like to borrow from Morocco’s trick of reforming
just enough to avoid a full-blown revolution last year.

“The reforming
movement was warm enough to force changes but not warm enough to burn what we
already had,” new Moroccan Prime Minister Abdelilah Benkirane told
Davos.

Matthew Allen, swissinfo.ch

[Panda]

This is going to go down well with the Euro fiscal policy.


French air workers to hold strike next week

Security workers at French
airports staged a last-minute strike before Christmas
Continue reading the main story
Related Stories

• French flights stopped by
  strikes
  

Unions representing French pilots,
cabin crew and ground staff have announced a four-day strike next week.

Workers plan to strike from Monday to Thursday to protest against a bill
currently going through parliament.

The bill, put forward by President Nicolas Sarkozy's party, would require
aviation workers to give more notice of industrial action.

Unions say the bill, which has already passed through the lower house, would
affect workers' rights.

Air France says its customers due to travel between 6 and 9 February can
change their flights.

In
a statement, the airline said it was doing "all it can to limit the impact
of this strike on its operations".

The French pilots' union SNPL said the right to strike was non-negotiable and
the union had decided to mobilise all its energies "against a bill which is
unfair and destructive to our profession".

Before Christmas a last-minute strike by security staff at French airports
led to the government deploying police to try and minimise disruption.

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