Re: New EC Thread

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Economy

Greece is our vanguard


28 March 2012
Hospodářské noviny Prague Comment53




Rodrigo / Expresso


The near-collapse of Greece is the scenario that awaits other countries if they fail to get their debt under control. The aid to Athens is a sign that the European Union is still alive, but without the discipline of the fiscal pact, it won’t be enough, says a Czech economist.

Tomáš Sedláček

Economies look for differences, and they converge. By now we are so interconnected commercially that for us the fall of a minor economy threatens such a huge emotional and economic-financial shock that we will do anything to avoid it, so long as there is at least one straw to clutch at.

Because of the two world wars that pushed Europe into a Union – we're not threatened by external attack, nor by famine, nor by “lack of living space” – we have begun to feel that we have lost the moral, political, economic, military and philosophical right to lead the world, and therefore to be a superpower.

Europe emerged from the dust and confusion of post-war reconstruction thanks to the substantial aid of the Marshall Plan. It was an American plan, to help the continent where the Second World War had broken out and from where it had spread across the whole world – and the aid came not as loans, but as gifts. Europe did get back on its feet and built something totally unprecedented out of its history: a free union of nations, which don't go to war with each other, but negotiate and trade.

Increase in solidarity

Another precept, however, is more important: to ruin (or fail to help) economically stricken nations or regions is unwise. Once we thought that we could profit only at the expense of someone else. But today the opposite is true. We can profit best working together, not against each other.

This is the beauty of economics: seeking out differences, and converging. We are so interconnected commercially today that the collapse of a small economy deals us such a huge emotional and economic-financial blow that we will do anything to avoid it, so long as there is at least a straw to clutch at.

And by the way, if the Greek (or Hungarian or Irish) bankruptcy had happened sixty years or more ago, our strong-minded politicians and our bar-stool strategists would probably have tried to work out one thing only: how to occupy the weakened country militarily as elegantly as possible. Today we set out to help these nations with nearly all of our (remaining) strength. One may object that we are helping them to help themselves. Yes, perhaps, but that is a great thing.

Whether this increase in solidarity and checks on the waging of wars may be down to lessons from history, to an increase in the European spirit or to the EU institutions (which actually preclude the use of weapons of trade wars, such as devaluation, tariffs, protectionism), I will leave to the judgement of the reader. One thing only is certain: never has there been such a long period of peace in Europe. So if the project of an integrated Europe has been quite successful at its main goal, then we should be grateful for it, though it sometimes comes at a cost.

Common rules for the unindebted states

Greeks, just like in antiquity, are ahead of us. They went bankrupt about a decade earlier than Italy and Spain, and before us too – and even Germany. Because if we all continue on an unchanged course, as we have for a generation now, we'll end up bankrupt ourselves. Markets, which appear to be too weak and too far behind the custodians who are watching over the size of the government debt, are simply unable to influence states in time to exercise prudence in their borrowing. A democratic nation, and its politicians, must also stand watch on their own.

As has been demonstrated clearly enough, we're not capable of that, and that's why we need common rules for the unindebted states, and particularly rules on paying debt back in the good years. This was and is the whole point of the fiscal compact that we recently turned down. The Czech Republic will have to come up with their own fiscal rule pretty quickly, because otherwise we'll start to stand out. Just to make things amusing, I'll bet that our rule will prove to be rather similar to the one we just rejected. And we, unlike the rest of the EU, have major enforcement issues, because there is no EU whip hand over us.

We're actually fortunate that countries in Europe threatened with bankruptcy were themselves small economies. Perhaps this warning to us (thanks to which, it's quite possible, our current government won the last election) will be enough. How many other and bigger bankruptcies will we still need before we get it right?

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MORE RUSSIAN TOURISTS ARE VISITING THESSALONIKI.
TOURISM WILL INCREASE IN GREECE IN 2012,IT IS THOUGHT

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Draghi sees economic stability .

Nourini, Economist at New York University says the Eurozone has too much debt and will last through 2012 during which time the Euro should fall sharply
or the Euro is doomed. He sees a severe recession deepening and queries whether France should be part of a major Country with regard to it's fiscal
situation.

Ken Rogoff Economist at Harvard Uni. says the Euro Governments can't make decisions and Europe is Ground Zero . He was very scathing of the Merkel
decision to introduce such a tight fiscal policy when Europe , like most Countries, is in recession.

The ECB printing money is not going to work and what happens if some Banks can't repay the Loans in 3 years time.?

George Soros says the Greek default is inevitable and should have happened two years ago , now Greece has so much more debt.

Finland Finance Minister says E940 Billion firewall is too high and Countries should not be asked to contribute any more.

The Spanish budget is not tough enough but Rogay faces a big problem with Catalonia and Andalucia who have autonomy and no guarantee that these
areas will not continue spending.

The decision has been made to cap the firewall at E800 billion . E300 billion of this committed to Greece and Spain and the E500 borrowed.

Portugal is cause for concern because it 's economy has decreased

Britain should wholly reject Transaction Tax as unworkable says top Lawyer.

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Spain

We are building a “war economy”


28 March 2012
El País Madrid Comment29





Turcios


In the midst of deep recession and massive unemployment, with a higher than expected deficit and a general strike round the corner, Spain – despite reforms and deep budget cuts – is struggling to emerge from the crisis and is causing new concern within the euro area.

Joaquín Estefanía

One hundred days after the inauguration of his government with its absolute majority, Mariano Rajoy can point to at least three major economic reforms: in labour, in finances, and in budgetary stability. Looking beyond the opinions that might be expressed on each of them (all point in the same direction: to satisfy the obligations imposed by Brussels and to reassure the markets) the PP government cannot be accused of inaction.

The result so far, however, has not been the intended one. The EU is suspicious, and Spain has overtaken Italy at the forefront of problems associated with risk premium, moving into the red zone of eurozone investor concerns. Moreover, in recent days, the Spanish economy has come in for the severest attacks from the main bibles of the global economic press, from various reports by investment banks and, most ironically, from the Italian prime minister himself, Mario Monti, who said "Spain is giving Europe serious concerns".

Monti has probably pointed the finger at Spain to distract the eyes of the markets from Italy’s difficulties and the political fragility of his own reforms. Such policies – of deflecting harm onto one’s neighbour, of every man for himself – abounded in the Great Depression.

Managing distrust

The criticisms converging on Spain’s economic policy are of three kinds: the fear that deficit ceilings will not be met this year (since the delay in approving the budget means that cost-cutting and tax-hikes will have to be concentrated into just eight months); that financial reform is much less "extremely aggressive" [declaration of Minister of Finance, Luis de Guindos] than the labour reform and that it will slow down now that gloom continues to build and credit to retract; and that there is no indication in the government’s actions of any spurs to renewed growth.

The 2012 Budget will be rolled out on Friday against this disturbing backdrop. No one doubts that it will lay out a path for a kind of wartime economy, if the metaphor is permitted. The government will face two conflicting but legitimate claims. Firstly, from citizens, who want the gigantic unemployment market, bigger in Spain than in any other OECD country, to be tackled first, and the safety net to be maintained. Secondly, external demands, whose priority is to draw down the public deficit.

This contradiction, increasingly present, prompts Ivan Krastov, founder of the European Council on Foreign Relations, to define a growing dilemma: "We are witnessing a collapse of confidence in political and business elites (...) Elections are losing their significance as a choice between alternatives and are becoming processions of elites. Thus, democracy is no longer a matter of trust, but rather a matter of managing distrust."

We need a historic compromise

The idea of an exit that will not resemble the exit from the Great Depression is beginning to spread among some analysts. Depending on the impact of new contractionary shocks (oil, raw materials, emerging countries,...) the world may gradually recover from its problems, while the economies of a few countries (including Spain’s) stay trapped in long-term stagnation.

To avoid this would require a consensus on the diagnosis and an agreement among the major political, economic and social forces. Such is the degree of deterioration that not even the power of an absolute majority as large as that of the Spanish government may be enough.

We need a historic compromise between different forces that represent the majority of citizens, without subjecting that compromise to any ideology, and with mutual concessions: working for the welfare of the people with a comprehensive pact that covers the various regions and incorporates stabilisation measures and structural reforms, but policies for growth as well.

Translated from the Spanish by Anton Baer

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For Britain, Spain Is The Triple Whammy

Ed Conway
March 29, 2012 9:20 PM

Recommend post (4) When someone asks you why we should be worried about the increasing squeaks of economic trouble in Spain, it's worth remembering this chart from the Bank of England.

The story told by the blue bits of those little bars is a stark one: British banks are directly exposed to the Spanish economy - both in terms of the money they have lent to consumers and to households - than any other European nation.

And that is before you take into account the billions of euros worth of Spanish government debt owned by British investors and pension funds.

On top of which there is the hundreds of thousands of British ex-pats living in Spain who face direct impact if the country suffers a Greece-style slide into oblivion.



In other words, as far as Britain is concerned, Spain represents the triple-whammy: direct exposure to our banks; direct risk of losing money on government debt and direct prospect of British citizens being affected.

This is why it is particularly worrying that with Greece now having semi-defaulted, there are worries that Spain will have to be the next recipient of a bail-out programme from the European authorities.

That is the prediction of Citigroup chief economist Willem Buiter, and while the European Commission and OECD insist that will not be necessary, the threat of it is a major one.

According to the International Monetary Fund, Spain will have to raise over 220bn euros worth of government debt this year and over 200bn euros in 2013 (more, incidentally, than Britain).

If the country is unable to raise that from capital markets, it will have to turn to its European neighbours and the IMF.

But it is deeply questionable that - having fo

rked out hundreds of billions already to rescue Greece, Ireland and Portugal - they will want to spend a further 400bn euros-plus supporting Spain.

That is more than a little worrying, given that the amount Eurozone leaders are considering setting aside for medium-term emergencies is only around 240bn euros, according to leaked early drafts from the finance ministers' summit taking place this weekend in Copenhagen.

The fact this is barely enough to cover Spain's financing needs for a year - let alone Italy's - is deeply perturbing.

Now, it is too early to presume Spain is on the brink of needing that kind of extraordinary support.

The government's cost of borrowing (for 10 years) has gone up from under 5% to around 5.5%, but is still shy of the 6.5% level they hit in November, and is well below Portuguese levels of around 12%.

But Spain is one of the most vulnerable economies in Europe. It is deeply uncompetitive - which has been disguised in its first decade of euro membership by the fact that it could borrow so cheaply (because investors treated its debt as if it were as reliable as Germany's).

That money was poured directly into the construction sector, which has collapsed. The country is facing unemployment rates of over 30% and youth unemployment knocking on 50%.

The only solution is for the country to devalue so the prices of its goods become cheaper - except that it cannot do that with its currency so it needs to do so through internal deflation, imposing wage cuts and austerity on its population.

To say that will not be easy is an understatement - and those pictures of demonstrations on the streets of Madrid are likely only to be the start.

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30 March 2012 Last updated at 18:32 Share this pageEmail Print Share this page



Spain is cutting 27bn euros ($36bn; £22.5bn) from its budget this year as part of one of the toughest austerity drives in its history.

Changes will include freezing public sector workers' salaries and reducing departmental budgets by 16.9%.

The government says it will raise 12.3bn euros this year, aided by an increase in tax for large companies.

Deputy Prime Minister Soraya Saenz de Santamaria said the nation was in an "extreme situation".

"Our top priority is to clean up public accounts," she said.

"This is a moment that demands serious efforts to reduce spending but also structural reforms to cause the economy to grow and create jobs."

But economists are questioning whether the cuts will be enough to satisfy Spain's European partners.

'Insufficient' cuts
Continue reading the main story
Key points
Ministries' budgets cut by up to 50%
Civil servants' wages frozen
Electricity bills up 7% and gas up 5%
Unemployment benefit frozen
No rise in VAT
Pensions to rise in line with inflation
Corporation tax revenue to rise by reducing deductions companies can make
Amnesty on tax evasion in return for 10% fee

Last month Prime Minister Mariano Rajoy agreed with the European Commission to reduce Spain's deficit from 8.5% to 5.3% of GDP in 2012.

Javier Diaz Gimenez, professor of economics at IESE Business School in Madrid, said: "This [budget] seems to be non-credible.

"They will not be making the 5.3% target agreed with Brussels, because the cuts are insufficient given the growth forecast," he told BBC News.

This could mean further cuts are needed before long.

"I suspect that the government could be forced to implement further austerity measures later this year, with lingering economic downturn set to place additional strains on an already perilous budget deficit reduction plan," said Raj Badiani, an economist at IHS Global Insight.

Continue reading the main story
“
Start Quote
"You have the Greek model, or the Irish model. You can either go kicking or screaming, or you can bite the bullet, like people have done in Ireland."”
End Quote
Gayle Allard

Economist

Why Spain has no choice

The main risk is that the government's tax revenue projections for 2012 look too optimistic," he said.

There are concerns, however, that even the latest spending cuts could further damage the chances of getting the Spanish economy growing again. It is in recession and is expected to shrink by 1.7% this year.

Soraya Saenz de Santamaria said this would not happen.

"Our obligation towards Spanish people and the rest of the EU citizens is to get public accounts into shape," she said.

"Not at any cost, but with measures that support those citizens who need it the most and not paralysing a possible recovery or job creation."

Budgets slashed

Under the 2012 budget the unemployed will see their benefits maintained and pensions will continue to rise.

Consumers have also been spared some pain as VAT will remain at its current level.

Continue reading the main story
Analysis
Gavin Hewitt

Europe editor

--------------------------------------------------------------------------------
A government minister said Spain needed to tighten up its finances to meet EU targets for reducing deficits without stifling economic growth and job creation.

That is the challenge.

Privately some in government accept these calculations involve a risk.

The economy is in recession and some predict it will shrink by around 2% this year - even before these savings are made.

The fear is that Spain could be tipped into a downward spiral.

Read more from Gavin

But they can expect higher living costs as Energy Minister Jose Manuel Soria announced a 7% rise in electricity bills and 5% rise gas bills from 1 April.

The government is also going ahead with a previously-announced increase in income tax by 1.9%.

The 27bn euros of cuts is equivalent to 2.5% of the country's economic output.

Amongst government ministries, the big losers are the foreign office, whose budget has been halved. Industry, energy and tourism will get a 32% cut, while the public works budget will be slashed by 34%.

More details will be published next Tuesday when the budget goes before Parliament. It is expected to be passed formally in June.

'Not yielding'

On Thursday, police clashed with demonstrators as hundreds of thousands swamped the streets in Barcelona and other cities.

Unions said 800,000 people joined the protest in Barcelona. Police put the number at 80,000.

Planned labour market reforms have proved deeply unpopular in Spain
Some marchers in the city smashed windows and set rubbish bins alight. Police fired tear gas and shot rubber bullets at the ground, TV pictures showed.

In the capital, Madrid, unions said about 900,000 people took part. The government did not give a figure.

The BBC's Europe editor, Gavin Hewitt, says the size of the demonstrations on Thursday were an indication that many are losing patience with austerity.

Unemployment in Spain is currently the highest in the EU at 24%. Nearly half of Spain's under-25s are out of work.

The general strike was the government's first big challenge since Mariano Rajoy took office after elections last November.

Despite the opposition, the government says it is committed to reining in its spending.

"The question here is not whether the strike is honoured by many or few, but rather whether we get out of the crisis," Mr Montoro said.

"That is what is at stake, and the government is not going to yield."

Bailout fears

Separately, eurozone ministers have agreed the expansion of Europe's bailout reserves.

The ministers, meeting in Copenhagen, have decided to boost the joint lending power of the "firewall" to 800bn euros.

Investors - worried about a bailout for Spain or Italy - wanted the fund to increase from its current size of about 500bn euros to closer to 1 trillion euros. But there was resistance from Germany to an increase of that scale.

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The Pain In Spain Will Mainly Be A Drain
Ed Conway
March 30, 2012 2:55 PM

Recommend post (3) The Spanish Government has just committed itself to what it calls the most austere budget in the post-Franco era.

The measures read like a fiscal horror show: government spending to be cut by €27bn; central ministry expenditure slashed by 16.9%; civil servants’ salaries frozen; electricity bills will rise 7%; corporation tax up too - and the full, gory details don’t get spelled out until next Tuesday.

With all the austerity that’s been doled out elsewhere in Europe, it’s easy to feel anaesthetised to all this pain. But this matters. Why? In part because Spain is already deep in recession. Unemployment is already at a staggering 24% - in other words almost one-in-four of the population out of work. The country’s dominant construction sector has almost completely collapsed.

Imposing this kind of austerity on a country already facing US dust-bowl standard economic depression will almost certainly lead to further increases in unemployment and lapses in growth. The notion that higher corporation tax will draw in the desperately needed investment from overseas is as deeply implausible as it sounds.

Keeping your finances in order should, in the long run, help your economy to flourish. But austerity as savage as this, imposed on a country as economically eviscerated as Spain, is far more likely to push it into the kind of collapse we’ve already seen in Greece.

And yet, under the current political circumstances, there is little alternative option for the hapless new Prime Minister, Mariano Rajoy. To understand why, consider the green line on the following graph. It denotes Spain’s net international investment position – very simply the country’s total assets vs liabilities. It shows that the country’s total debts to overseas investors outweigh its assets by some 93% of its total economic output (you can find a slightly bigger version of the chart here - source is Eurostat, net international investment position as a percentage of GDP).



Compare it with the other countries on the graph – the only other places with as deeply indebted a position are countries like Greece and Portugal. Britain and Italy, as you can see, have far, far more healthy international investment positions.

This is why Spain is far more likely to face a Greece-style crisis than Italy, or indeed the UK.

That build-up of debt is a symptom of a deeply-ingrained competitiveness problem in the euro’s fourth biggest economy. Simply put, you get less bang for your buck in Spain than you do in Germany: the same quality haircut/car/pint of beer costs significantly more than it does in Berlin because Spain lacks that Germanic efficiency.

This chronic competitiveness issue was masked for most of the past decade by the fact that as euro members, the Spanish were able to borrow at the same rate as Germany. All that cheap credit flowed into Spain, leaving its balance sheet in a hideous position (refer, again, to the green line) and its workers used to being paid more than they economically merited.

The only way for Spain to get back to economic health is to become more competitive – in other words for workers to get used to lower wages in comparison with their international rivals. In a normal country (eg Britain) you can do that by devaluing your currency. But as a euro member, Spain has to devalue from within – in other words impose swingeing wage cuts on its workers. Hence today’s austerity.

There are two alternatives: first, “fiscal devaluation". This idea, gaining traction within the think-tank world, if not in policymaking circles, involves the country simulating a devaluation by raising VAT and cutting labour taxes, while richer countries like Germany do vice versa. However, today’s Budget doesn’t seem at first glance to have done that, and Germany seems unwilling to take budgetary measures that would boost its own spending.

The second option is a full-blown euro bail-out. That, according to Willem Buiter of Citigroup, looks increasingly likely. The problem, as I wrote this morning, is that the country needs to borrow over €400bn from capital markets in the next two years.

That would almost single-handedly exhaust today's newly-agreed expanded Eurozone bail-out fund which, although it has a face value of up to €800bn, in reality only has €500bn of actual hard cash to spend (see this from Open Europe for more).

All of which is why investors are worried about lending to the country. Its benchmark borrowing rate dropped slightly following today’s Budget, and is still well below the crisis peaks it hit last November. But if this deteriorates in the coming months the eurocrats may have to get their calculators out again and start working out whether they can afford to support the biggest of the crisis countries yet.

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You couldn't imagine this in Britain.....another Country's Leader helping to canvas with you.!!!! She is probably afraid the Labour Candidate will succeed.


Merkel to play lesser role in French campaigns





Nicolas Sarkozy and Angela Merkel at France's Elysee Palace on 6 February 2012
Reuters/Philippe Wojazer


By RFI

French President Nicolas Sarkozy said on Wednesday that German Chancellor Angela Merkel would not take a direct role in France’s election campaign. He said she would, however, visit France to “talk about Europe” with him. Merkel had previously offered to join Sarkozy on the campaign trail, in his bid for re-election.




During an interview on Europe 1 radio, Sarkozy said Merkel would not attend any campaign events, stating that “an election campaign is the French people’s business.”

He said Merkel would visit his country, where they would talk about the state of Europe, adding that it was not an unusual occurrence for the two of them to speak together.

Reports that Merkel would join Sarkozy on the campaign trail were criticised by some, who accused her of foreign interference.

Merkel defended her position last month in a joint interview with Sarkozy in Paris last month, where she said it was natural for her to support him because they “belong to the same political family.”

The French presidential elections will take place in a two-round vote in April and May.




tags: Angela Merkel - France - French politics - French presidential election 2012 - Germany - Nicolas Sarkozy

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The nebulous world of European agencies


30 March 2012
Die Presse Vienna Comment6





Beppe Giacobbe


Lacking in transparency, costly, and subject to conflicts of interest: the independence of more than 20 EU specialist agencies has led both to financial difficulties and a loss of democratic control, argues Die Presse.

Oliver Grimm

The exact amount is 6,157 euros: that is what it costs to hold a meeting of the board of directors of EFSA, the European Food Safety Authority. And yes, this is the figure per head. We do not know how the 15 board members travelled to Parma [the location of EFSA’s headquarters] – they may have arrived there in litters carried by porters. Nor do we know what was on the menu – perhaps they tucked in to poached quails eggs while they looked over the agenda for the meeting.

However, thanks to the tireless efforts of Monica Macovei, a Romanian MEP who specialises in the fight against corruption, we can safely say that the board members have very unusual notions about the role they are supposed to play. In 2010 alone, EFSA spent 49 million euros on “communications and management” outsourcing.

How could such a level of dysfunction be possible?

This is not the only anomaly to be observed in the EU agencies, of which we now have 24. No doubt we should conclude that it was perfectly natural for the former chief of the European Medicines Agency in London, Thomas Lönngren, to take up a post in the pharmaceuticals industry at the beginning of this year. Ditto for Mella Frewen, who spent years working as a Brussels lobbyist for the American seed producer Monsanto, before becoming the Director General of the Confederation of the Food and Drink Industries of the EU (CIAA), who is now about to be appointed to the EFSA.

Even NGOs appear to be unable to distinguish between what is and is not acceptable: to wit, a recent fact-finding mission to the Caribbean undertaken by the the boss of the Copenhagen based European Environment Agency an a number of her staff. The official goal of the trip organised by the NGO "Earth Watch" – but billed to the taxpayer to the tune of 2,000 per head – was to study biodiversity. That does not just look like an example of cross subsidization: it is one.

You might be forgiven for wondering how such a level of dysfunction could be possible. In fact, the reason for it is quite simple: no one is willing to take responsibility. When representatives of the European Commission are asked how they intend to address the issue of malfunctioning agencies, they always give the same answer: our hands are tied because the agencies are governed by specific rules that do not allow us to interfere, and there is nothing we can do apart from recommending that supervisory procedures be reformed, which we already did years ago.

Much of the blame for this situation should be laid at the door of Europe’s national governments, which have engaged in fierce competition to have agencies established in their respective states. Every country wants its own agency. And not surprisingly, when talks grind to halt, as they often do, at European summits, proposals to open offices to this or that in individual states are often just what is needed to promote consensus on other topics.

When faced with this kind of incentive, even Austrian politicians, who are known for their zeal in criticising "the civil servants in Brussels", are suddenly in rush to reach agreement. When the Fundamental Rights Agency opened in Vienna, on 1st March, 2007, the members of the government were falling themselves to express their enthusiasm to express their enthusiasm to the point where declarations read like parodies of pop songs.

Close superfluous agencies

Foreign Affairs Minister Ursula Plassnik announced that the the creation of the Fundamental Rights Agency would "once again confirm Vienna’s position as a headquarters for major international organisations".

Federal Chancellor Alfred Gusenbauer spoke of a "the EU’s message to men and women". In passing it should be noted that in the five years of its existence the only time Fundamental Rights Agency made any waves whatsoever was when a project to translate the EU Charter of Fundamental Rights into verse was criticised by the then Commissioner for Fundamental Rights, Viviane Reding. MEP Martin Ehrenhauser is right when he says the Vienna agency should be closed and not replaced – not least because it is an expensive organisation which is supposed to undertake a mission that is already fulfilled by the Council of Europe.

Ironically, from 1st April Europeans who group together a million or more supporters for a cause will be able to launch citizens’ initiatives. In accordance with the buzzwords in vogue, we will have more democracy, more participation, more transparency. However, procedures to authorise our medicines and analyse risks posed by food products we consume will continue to be conducted behind closed doors and outside of any legal framework.

This situation is unacceptable. Europe’s governments should take advantage of talks on the EU’s financial framework for 2014-2020 to close superfluous agencies and to reinforce the supervision of those that remain. If this is not done, these shadowy agencies will continue to set their own agenda and there will be no turning back.

On the web
Original article at Die Presse de

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Democracy

When will there be a virtual European salon?


27 March 2012
Dagens Nyheter Stockholm Comment61


Beppe Giacobbe


First there were books, then came the press, and now we have Internet. For almost two centuries, media have provided a virtual space for discussion that has enabled democracy to develop. Today, however, a Swedish columnist remarks Europe lacks a virtual space that is not constrained by national boundaries.

Maja Hagerman

One hundred and fifty years ago, that is to say in the time of my great-great-great-grandmother, none of the countries in Europe had embraced democracy. Universal suffrage was only introduced towards the end of the 19th century, and was not extended to include women until much later – particularly in Sweden which was slow off the mark.

In considering the far reaching consequences of this reform for all of the countries involved, it is important to bear in mind that it only came about as a result of a long period of sustained pressure for change.

This pressure was exerted outside of the sphere of power, in the free press, in novels, in theatres and in trade unions. In short, this democratic breakthrough was preceded by a media revolution which was not very different to the one that we are experiencing today.

Participation in debate was extended, and people who had hitherto been unable make themselves heard suddenly had a say and a right to vote. The doors to vast "virtual salon" had been thrown open to all comers.

In the 1840s, new ideas on the future of society took shape in the new public sphere, in newspapers, and the letters of the period. The emergence of a new forum for discussion offered by the free press in the nineteenth century was a heady adventure which has many parallels modern adventure of the internet.

No such thing as a European opinion magazine

Democracy begins with public debate, and in the wake of the Arab Spring it is clear that the Internet has opened channels of communication with the potential to bring people onto the streets and play an essential role in the instigation of change.

But how has this development affected the European Union? We are often told that a common currency like the euro can only exist if it is backed by a strong central power that is perceived as trustworthy.

Central governance is progressively being reinforced with the introduction of new rules, but the democracy that Europe proudly claims as its core value has remained distressingly discreet. Where are the major debates that are supposed to bring Europeans together?

Hour by hour, summit by summit, the European Union is omnipresent in the media which dutifully reports on its failures, an atmosphere of mistrust and the possibility of imminent catastrophe.

At a time when European policy appears to be mainly characterised by aggression between countries, the vast majority of European citizens depend on national television, and national news media for their understanding of events, and continue to be wholly immersed in national perspectives.

Even in a well-stocked newsagents with racks of foreign press titles, there is no such thing as a European opinion magazine.

Nationalism of times past

What you do find are historical reviews in German and English, devoted to the past glories of Germany and the UK: special editions of Die Zeit with articles on the "influence of Frederick the Great", and BBC History to tell you "All you need to know about the British Empire".

But does anyone write about what Europe has in common? About the history that transcends national borders? Rail companies were national, but the thrill of the first rail journeys was something that was shared, while the reduced time required for travel brought countries closer together.

When national museums sprang up in capitals across Europe, they did so at the same moment, and they were built with very similar plans. And the same is true of the struggle for the right to vote which extended well beyond national borders. But notwithstanding all of these examples, history is largely categorised under ethnic and national labels.

In libraries, you will find one shelf on Swedish art history and another on art in Denmark, as though they were radically different. And similar classifications are used in the music, economics and politics sections, even though the reality is that ideas, money and melodies have never paid much attention to borders.

Europe is now faced with the fresh challenge of fictional communities concocted from the nationalism of times past and their spokesmen who invite the reawakened masses "to kick out" those who "have no right to be here".

In the meantime, we are left to wonder if we will see the emergence of a wider European community with a European public sphere, in which Europeans can engage in a public dialogue that goes beyond European summits. Who will open the door to the new European ”virtual salon”? Who will launch a European public debate that is not simply confined to speculation about the winner of the next Eurovision.

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Daily Express Report 23rd March 2012

British Taxpayers will have to stump up a further £1.8 Billion to bolster the EU's bloated coffers. It means the U.K. will hand the European Commission a
colossal £33.1 Billion by the end of 2014. The huige rise strengthens the DE crusade to get Britain out of the EU. Brussels wants to increase Britain's Annual EU contribution to £10 Billion a year , the equivalent of £400 for every family. A spokesman for Think Tank Open Europe said "It is deeply concerning that the government has grossly underestimated the UK's net contribution , especially when it mean that taxpayers are paying in even more to what is a flawed and wasteful EU Budget.

the U.K. recently loaned £4 billion to the IMF to help with the bailout of Greece.

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Single Market



Telecommunications

EU to end “rip-off” roaming charges


29 March 2012

Presseurop
Financial Times, The Guardian Comment2



“EU agrees mobile roaming price cuts,” headlines the Financial Times, as the union agrees to cut the cost of using mobile phones when travelling within Europe.


The charge for using data services such as email and web browsing will be capped at 70 cents a megabyte, a fraction of the €2-€5 charged by most operators across the EU. The cap will fall to just 20 cents by 2014, all but eliminating a lucrative sideline for telecoms operators. Many of their share prices dropped after the agreement.

The regulation was first proposed by the European Commission last summer to fight what it called “roaming rip-off”, with operators charging more than triple the normal rate for calls made while in another EU country. The European Parliament approved the move on March 27 and national governments the next day, with a final green light expected by June.

The move is sure to take the “summer bite out of mobile phone” charges racheted up over the holiday period, the Guardian notes, adding that this is –


… the culmination of a lengthy struggle between Brussels and mobile carriers, who say they will have to raise prices for other services. Cross-border charges are reckoned to generate up to 5% of revenues.

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A couple of comments to the above Article:-


Comments (2)


Presseurop
English
AnotherTommy44 | 29.03.2012 | 16:07


How many times have we heard this? I still think roaming charges are a disgrace in Europe, despite two tranches of 'action' by the EU in recent years.

My UK carrier will charge me a ridiculous 30c a minute to call home when I go to Germany next week. And several Euro per mb for data.

When you consider the gigantic amount that we all visit each other on business and for tourism, our mobile carriers are robbing us all blind.



Presseurop
English
Observer230 | 30.03.2012 | 08:38


There shouldn't be roaming at all. All these companies have partnerships with others in Europe, while others even operate in multiple countries (Vodafone and others). It's unclear why they keep pushing for a United Europe but keep applying rates as if we were years light afar from each other.

That would work also without a United Europe in any case.

My provider has drained my rechargeable card endless times without me even using my mobile phone. They also charge me for part of the costs when others call me abroad. It's madness, pure madness. Take the case of advertising companies that call random users. I reply from Asia and in 5 minutes they suck me 50 Euros. It's a robbery.

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Comments on the latest Meeting of EU leaders who raised the Firewall limit to E800 Billion, of which E300 billion is already set aside for the bail out of Greece.

Spain is the Country causing most concern and if Spanish Banks default shock waves around Europe's Financial system .

Monti says the Chinese Government and Companies are a danger to EU recovery, but analysts say the fact that Monti did not get co-operation from
Italian Unions is cause for concern.

Another Analyst says European Countries are only treading water, not growing. To get out of crisis is essential .

Italian debt is well funded , concessions to Monti were only temporary but if permanent Italy's Election would appoint militants who will undo all the work of Monti.

Ireland says 8.5% Tax on flights is ridiculous , especially now, and more protest marches are taking place.

Bails outs without ECB funding till be worse but Northern countries will not agree to any more bailouts.

Finnish Prime Minister says IMF must consent to lend more to firewall if required but G20 stated previously they will not countenance any more money
to help Europe. He says more fiscal Union must in future be introduced, possibly a Eurobond but there is a big divide between Northern and Southern
Countries which may never be overcome.

Standard and P:oors says 14 of the 17 Euro Countries are under scrutiny and balance of payments crisis is the problem.

OECD Economist says there must be a change in the EURO Countries Policy for more growth to come out of recession.

Bill Bain of Newedge Group says the size of the firewall doesn't matter , it will not be big enough if a major crisis arises in Spain or Italy, and the IMF has
already said it will not necessarily fund a firewall.

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Portugal

Angola continues to line its nest


2 April 2012
Visão Lisbon Comment



Spurred by the economic crisis, Angolans are eagerly buying up Portuguese firms, acquiring a wide range of businesses including banks, oil companies, media outlets and telecom operators. The trend is in part due to the lack of funds on one side and the abundance of cash on the other, but that is not the only explanation.

Paulo M. Santos | Filipe Luís | Sónia Sapage

They infiltrate discretely, first purchasing a few shares in a company. Then they wait until the firm, or a shareholder, is short of money – the Angolan investors, for their part, are not strapped for funds.

Little by little, they increase their stake until they reach a dominant position allowing them to appoint the managers and to take control.

The banking sector, a visible symbol of power (Angola is well-positioned in several Portuguese financial institutions) is not the only target of this Portuguese-speaking, African country.

Multiple targets

Other sectors are increasingly whetting the appetite of those close to Angola's wielders of power. While authority is concentrated in the hands of President José Eduardo dos Santos, the investors have their own strategies, although these are not as coordinated as one might think.

The Angolans have invested in the media, energy and even in agro-business. In the past few years, the biggest farms throughout Portugal, from the Douro River Valley in the north to the Algarve region in the south, have been bought up by Angolans.

"Wine and oil are in high demand and the price of these products is exorbitant in Luanda [the Angolan capital]. That's why the Angolans decided to buy up the farms that produce these commodities in Portugal, thus allowing them to control the entire cycle," explains the head of an export-import firm.

The case of Banco Comercial Português (BCP) provides the most symbolic example of Angola's strategy in Portugal. In 2008, when the crisis first hit, Angola's national oil company Sonangol (Sociedade Nacional de Combustíveis de Angola) had no trouble buying up 469 million of the bank's shares, or 9.9% of its capital.

By the end of 2011, the Angolan oil company's share in the Portuguese bank was up to 12.44%. As the majority shareholder, it then took control of the bank and modified its management structure.

A personal challenge for the Angolan President's daughter

The appetite of the Angolans does not stop at the BCP. Through Santoro Finance, Isabel dos Santos, daughter of the head of State, controls 9.99% of the Banco Português de Investimento (BPI). She is the third largest shareholder behind Spain's La Caixa bank and Brazil's Itaú Group. This well-informed business executive also holds 25% of Banco BIC Angola, the main beneficiary of the reprivatisation of Banco Português de Negócios.

In spite of its current problems, the banking sector, which needs to increase its equity capital and has cash flow problems, remains one of the most attractive investments to Angolans.

Why? "It gives one a certain standing, especially when one obtains a share sufficient to appoint a representative in the company's governing board," explains a source close to the banking sector. Furthermore, adds a high-level Portuguese diplomat, "the bank can act as a springboard to other sectors".

Taking a look at the oil sector, a familiar investor pops up: Sonangol. The Portuguese firm Galp was well targeted and the acquisition strategy began with buying 45% of Amorim Energia, which itself holds 33.4% of Galp. The goal is obviously to go farther. Clearly, money is no object, as can be seen by the many investments in other sectors such as telecommunications and media.

As for ZON, a pay-tv station, it is Isabel dos Santos' personal challenge. Though her holding company, Kento, she has acquired 10% of the station run by Rodrigo Costa. It is unlikely she will settle for that.

In the publishing sector, Newshold, 91.25% owned by Pineviews Overseas (headquartered in Panama City), has a stake in the Portuguese press.

Officially, it holds 15% of Cofina, which owns several newspapers including Record, Correio de Manhã and Jornal de Negócios. Newshold also has a stake in Impresa, the parent company of the magazines Visão and Expresso as well as in the SIC television channel.

Politicians act as traveling salesmen

But why has Angola taken such an interest in Portugal over the past ten years? Economics – we are in recession while they are experiencing full growth – is only part of the response.

Another part is political. The 1991Bicesse Accords [which ended the Angolan Civil War], signed under Portugal's auspices, were a turning point in relations between the two countries. Likewise, there is a before and an after Aníbal Cavaco Silva [then Prime Minister of Portugal, now the country's President].

Lisbon was then (and still is) favourable to a climate of entente between the institutions of both countries and contributed to definitely open the doors, to Portuguese investors, to the newly pacified Angolan economy.

Political proximity brought business with it. On each state visit (José Eduardo dos Santos came to Lisbon in 2008), neither delegation is limited to ministers, junior ministers and MPs.

Systematically there is also a group of business leaders, generally rounded up by the Agência para o Investimento e Comércio Externo de Portugal (AICEP), the Portuguese Office for Investment and Foreign Trade. In fact, political leaders act as traveling salesmen. And the greater the bilateral ties, the more they benefit

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.

Swiss arrest warrants fuel tax row with Germany German politicians have long complained about Switzerland's strict banking secrecy Continue reading the main story
Related Stories
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German opposition politicians are threatening to block a deal with Switzerland to tackle tax dodgers after the Swiss issued arrest warrants for three German tax officials.

The warrants accuse the three of industrial espionage by getting the secret details of accounts at the Swiss bank Credit Suisse.

The data about German tax dodgers was on a CD bought by German investigators.

The German parliament has not yet approved the tax deal with Switzerland.

Berlin estimates that 130-180bn euros (£108-150bn; $173-240bn) of German citizens' deposits in Swiss banks are liable for tax.

Berlin has reached a deal with Switzerland to tax the deposits at 26.4% minimum - the same rate as in Germany - from next year, German media report.

But the opposition Social Democrats (SPD) and Greens, who control several German states, are not happy with the deal, saying it has too many loopholes. They can block it in the upper house of parliament, the Bundesrat.

In 2010 tax officials from North Rhine-Westphalia state, governed by the SPD, paid a whistleblower 2.5m euros for a CD containing the names of people evading tax in Germany by using Swiss bank accounts.

Switzerland accuses the officials of violating its banking secrecy laws and industrial espionage.

Tax inspectors also raided branches of Credit Suisse in Germany in 2010.

Tax haven criticised

Switzerland's secretive banks have faced growing pressure internationally as governments try to recover taxes in the wake of the financial crisis.

The Economy Minister of Germany's Baden-Wuerttemberg state, Nils Schmid (SPD), said the Swiss warrants were "a bad sign" that "does not contribute towards a tax agreement between Germany and Switzerland".

North Rhine-Westphalia's Finance Minister, Norbert Walter-Borjans of the SPD, called the Swiss move "an attempt at intimidation" and vowed that his officials would buy such CDs again if necessary in future.

The BBC's Steve Evans in Berlin says the Swiss move is a sign of the tensions between governments trying to maximise tax revenues and countries with powerful banks who want to protect the identities of rich customers.

The SPD deputy leader in the Bundestag (lower house), Joachim Poss, said German Finance Minister Wolfgang Schaeuble "has apparently not yet grasped the scale of the conflict [with Switzerland]".

"Instead of expressing understanding for the Swiss position I expect from him a crystal-clear statement of the German state's legal position", he told the Saarbruecker Zeitung.

He said Mr Schaeuble must urge the Swiss to abandon their policy of "sheltering cross-border tax crimes".

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Carmen Minoz from Fitch says Spanish Banks have a weak economic future and too much real estate exposure . Measures taken by several Countries
rely on cheap money from the ECB. The IMF will not wish to lend more money to Euro Countries.

Spanish unemployment has reached 4.76 million, of which 50.5% are young people. Total unemployed figure is 23.6%. Daiwa Capital Markets say Spain
will not acheive its' target in 2012 or 2013 , but to its'credit , the Governemt hads tackled the Labour Market , which, like Italy have a monopoly
situation .Spain does have a relatively low debt to GDP so Bond yields should remain quite low.

An OECD Report for G7 says Euro area is still delicate, sees de-coupling of U.S. as EU growth lags.

Schauble says Euro cris is over , it's not so much the firewall which is the most important, but the continued austerity measures.

German unemployment declines , but it's Car Export is affected by the risinf value of the Euro.

A Bloomberg analyst says the IMF and Euro Countries are sparring , Merkel saying if you lend us more money we will lower debt, the IMF saying if you lower debt we will lend more money. He says you cannot resolve the debt problem with yet more debt and it may well be the answer will be to ease up
on the 3%GDP fiscal policy to give growth a chance.

Risks to the euro already showing th the Market and the next 3 to 6 months could see a worsening of tyhe Spanish or Portugese situation.

Half the Home Owners in Ireland refused to pay the new Property Tax of E100 deadline. a deficit in the new fiscal policy will show an expected 8.5% GDP this Year and growing unrest and protest marches could see the public voting to opt out of the Euro Countries when the Referendum takes place.

[Badboy]

I READ IN THE GUARDIAN THAT IRELAND AND AUSTRIA HAS INCREASED THEIR MANUFRACTURING OUTPUT?
UNEMPLOYMENT HAS INCREASED THROUGHOUT THE EU EXCEPT GERMANY WHERE IT HAS FALLEN.

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I READ IN THE GUARDIAN THAT IRELAND AND AUSTRIA HAS INCREASED THEIR MANUFRACTURING OUTPUT?
UNEMPLOYMENT HAS INCREASED THROUGHOUT THE EU EXCEPT GERMANY WHERE IT HAS FALLEN.

It's looking very serious for Spain and Portugal Badboy and madness to continue with this 3% GDP. Ireland too is feeling the pinch and the population when they vote may well vote to leave the euro. The reason Germany is doing alright is their export Market is very strong, but they import very
little.

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Germany

Oberhausen, the “Greece of the Ruhr”


3 April 2012
De Volkskrant Amsterdam Comment




Beautiful Oberhausen

Postkartenderwelt


Located in the ancient heart of the economic miracle, now in decline, this city in the Ruhr has the biggest debts in Germany. The blame can be laid at the door of severe austerity policies and the cost of solidarity with the former GDR. Just weeks before regional elections, it’s a contribution that’s now being questioned.

Merlijn Schoonenboom

The Centro luxury mall on the outskirts of Oberhausen does not exactly exude an air of poverty. But if one is to believe Gabriele Daume, an elegant patron with a pearl necklace, all the money is heading east into the former GDR, while the west is getting poorer.

According to her, the Centro mall is trying to hide the misery. Oberhausen has closed five of its seven swimming pools, the concert hall has been shut down, and so has the bookmobile. Jobs are disappearing, and young people are leaving. “And that's happening everywhere in the west.”

The new poor and needy East

Suddenly, the separation between East Germany and West Germany is back on the agenda. This time, though, it has swung about 180 degrees. Ask here in Oberhausen and, 22 years after the fall of the Wall, you will hear an unexpected message: once at the heart of the West German economic miracle, the Ruhr basin has become the new East, poor and needy.

With an election campaign underway in North Rhine-Westphalia, the political class has made its contribution to the show of anger. Four Social-Democratic mayors in the Ruhr have called for the “Solidarpakt II”, the solidarity pact drawn up twenty years ago by the government to let West Germans contribute to help their brothers in the East after the fall of the Wall, and recently extended to 2019, to instead be abandoned.

The mayors seem to have touched a raw nerve. Even Joachim Gauck, the new Federal president and first East German to hold the highest office of the State, shows some understanding for the anger of the West.

The Ruhr still has wealthy regions, but in cities like Duisburg and Dortmund there are area that, according to Gauck, “look like the GDR after the fall of the Wall.” The streets are full of potholes and lined with houses that have been condemned.

Nicknamed the “Greece” of Germany, Oberhausen is Germany’s most indebted city. A debt of nearly €2 billion spread over a population of 211,000 inhabitants comes to €8,000 per person.

Severe austerity policies have been imposed on the city. At 12 percent, unemployment here corresponds to the average of the Länder of the former East Germany. Oberhausen has also paid 270 million euros to the former East Germany, even though it had to borrow the money to pay it.

Gabriele Daume and her friend know how things got to such a state. The Ruhr basin has had its problems because of the gradual closure of many iron ore and coal mines starting in the 1980s. The region has failed to move towards a new and modern economy.

“What do I have to do with what my ancestors did?”

The old mining city is trying to get there through expensive projects. It built zealously outside the centre: the Centro, an industrial building converted into a luxury shopping centre; a golden casino; the Sea Life Centre, where Paul the octopus made his legendary predictions at the 2010 World Cup.

But it is in the city centre, with its many old and run-down working-class neighbourhoods, where we see the harsh reality. The unemployment rate there is significant: stores are closing one after the other and thousands of public service jobs are being wiped out.

Christian Barth, 26, from Oberhausen, is one of the last representatives of the long tradition of the Ruhr. He is a miner in a salt mine and thinks he pays a contribution of “between 25 and 50 euros per month” to the east. He wants that to stop. This money is wasted on luxury projects, he feels, and “if things go badly here, they don’t help us, do they?” He feels no ties to the East: “What do I have to do with what my ancestors did?”

The only place we hear of “mutual solidarity” is at a container in the city centre. The Geheimagentur art group has mounted an idealistic project to find solutions to the problems of poverty in the city.

They are distributing “Kohle für alle“ (‘coals’ – slang for money – for everyone): a fictitious currency that citizens can take into some fifty stores in exchange for goods and services, so promoting “solidarity”. Citizens can also earn the ‘coals’ by doing good deeds for the community – unpaid work, for example. For the artists, the anger of the West towards the East is an expression of “jealousy” – fuelled by the electoral struggles.

For Hannelore, 72, who just registered for “Coals for all”, the solidarity pact “should not operate only from West to East”. Of one thing, after all, she is sure: “The need today is right here. Here there are potholes in the street everywhere, and over there they all have new streets, right?”

In some East German cities the infrastructure was indeed restored, thanks to hundreds of billions in “funds from the West”. Dresden now looks better than Duisburg. Jena has an unemployment rate of 7.3 percent, which is significantly lower than in the Ruhr basin. But in terms of economic power, the East is still far behind the West, with a 12 percent unemployment in the East against seven percent nationally.

On the web
De Volkskrant homepage nl

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Unemployment in Europe rising higher than before the introduction of the EURO

Spanish debt has risen at an alarming speed to 70% Rojay must convince the market that he has the situation under control , but the rise in debt is
cause for concern.

IMF says Spain will get aid this year and Christine La Garde says the IMF needs more resources and the European situation remains very fragile.

Car sales across Europe have dropped dramatically, adding to Italy's problems.
Rising inflation could be very serious for Germany .

There could be closure of 40 Car Plants across Europe causing yet more problems .

European Bond sales today have increasing yields, including German Bonds.

There is a meeting of the ECB today, fears that Draghi's lending ,while essential at the time, has increased chances of inflation. The ECB's main
function as adopted by Trichet was to keep the lid on inflation.

There is pressure on the ECB to keep lenmding money but analysts are saying it is a default firefighter and just creating more debt and that the fiscal
policy of trying to achieve a 3%GDP should be abandonded now , until such time as the World Economy is in better shape .

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The Secret To Germany's Low Youth Unemployment



by Eric Westervelt








EnlargeWaltraud Grubitzsch/DPA/Landov
Metal-working apprentices train in Leipzig, Germany, in 2010. Germany has Europe's lowest youth unemployment rate, thanks in part to its ancient apprentice system, which trains about 1.5 million people each year.








text size AAA
April 4, 2012
For as long as he can remember, German teenager Robin Dittmar has been obsessed with airplanes. As a little boy, the sound of a plane overhead would send him into the backyard to peer into the sky. Toys had to have wings. Even today, Dittmar sees his car as a kind of ersatz Boeing.

"I've got the number 747 as the number plate of my car. I'm really in love with this airplane," the 18-year-old says.






It's a quite expensive way we go. The benefit we get from the system later, that's a great benefit and makes everything economical.



- Hans-Peter Meinhold, Lufthansa's head of vocational training

Less-than-perfect school grades dashed Dittmar's dream of becoming a commercial pilot. But they were good enough to earn him a coveted apprenticeship slot with Lufthansa Technik, the technical arm of Europe's largest airline, responsible for aircraft maintenance and repair across the globe.

One-third of the way through his three-and-a-half years of training at Lufthansa technical headquarters in Hamburg, Dittmar is honing the skills required to become an aircraft mechanic — and all-but-guaranteeing himself a job.

The protracted European debt crisis and austerity measures have made career prospects for many of the continent's youth bleaker than ever. In Spain and Greece, nearly half of all those under age 25 are unemployed.

But as Dittmar's experience illustrates, that's not the case in Germany. In stark contrast, Germany's youth employment is the highest in Europe, with only a 7.8 percent jobless rate. At the heart of that success is a learn-on-the-job apprenticeship system that has its roots in the Middle Ages but is thriving today in Germany's modern, export-oriented economy.

On-The-Job Training

A brightly lit Lufthansa workshop in Hamburg is part of that apprenticeship system. Teenagers like Dittmar, many dressed in the company's navy blue shirts and overalls, are busy learning the basics: drilling, filing, soldering and manipulating sheet metal.

Dittmar's apprenticeship is part of Germany's well-established and successful "dual system," so-called because training is done both in-house at a company and partly at local vocational colleges.

About two-thirds of his time is spent on the job at Lufthansa — split between workshops and classrooms, and actually working on real aircraft and engines supervised by an experienced full-time mechanic, a "training buddy."

"[The training buddies] are taking the apprentice with them in their work. They are integrating them in their work and they are making real training on the job," says Hans-Peter Meinhold, Lufthansa's head of vocational training. "So it's a one-to-one situation."

For an aviation buff like Dittmar, getting to work on real machines so soon is not only a sign that his employers see potential in him, but also fuels his passion for planes.

"I could work anyplace in the world. I like the system here," the teenager says. "I know that I will be a good aircraft mechanic when I'm out of the apprenticeship, so that's very cool to know."

Long-Term Benefits


EnlargeEric Westervelt/NPR
Robin Dittmar, 18, works at the Lufthansa Technik training center in Hamburg. He is about a third of the way through his apprenticeship as an aircraft mechanic and is confident his training will translate into a full-time job.






About 60 percent of German high school graduates travel the same path as Dittmar, choosing vocational over academic education. Throughout his training, Lufthansa pays Dittmar the equivalent of $1,000 a month, one-third of the starting wage a qualified mechanic would get. That's part of the system that some foreign visitors can't comprehend, director Meinhold says.

"I tell them [the apprentices] don't pay anything for it, they get paid by the companies. They get money for their training," Meinhold says. "'You are training them and you are paying them for that?' They can't understand this."

Once qualified, these skilled aeronautical and engine mechanics feed into a fairly robust European aviation industry, either directly at Lufthansa or at one of its subsidiaries or competitors.

For many, the potential of being hired permanently is the key attraction. Germany's industry still offers a majority of skilled workers the elusive "job for life," a long-gone legend in many other Western countries.

Meinhold believes that despite the costs, the apprentice system is an investment vital to the ongoing success of Germany's export-dependent economy by creating loyal, well-trained employees.

"It's a quite expensive way we go," he says. "The benefit we get from the system later, that's a great benefit and makes everything economical."

A Model For The Rest Of Europe?

Germany's dual system trains 1.5 million people annually. Across the board, from bakers and car mechanics to carpenters and violin-makers, about 90 percent of apprentices successfully complete their training, German government figures show. The apprenticeships vary in length, between two and three-and-a-half years. The average training "allowance" is 680 euros a month (approximately $900), and about half of the apprentices stay on in the company that trained them.

British Prime Minister David Cameron recently called for his country to emulate parts of the German system by reinvigorating British apprenticeships with higher-level training.

"I think what we are going to see with the expansion of the higher level apprenticeships is many people going into them as they leave school, spending time doing that and then going on and doing a university degree linked to their apprenticeship skill," Cameron said. "That is what has happened for years in Germany and it is going to be happening much more in Britain."

But Rolf von Luede, an economic sociologist at the University of Hamburg, isn't so sure the German system would translate well to other parts of Europe. He notes that German industry and its powerful trade unions have a unique relationship marked by what he calls "antagonistic cooperation," a far cry, he says, from the more confrontational policies pursued by unions in Spain and Britain.

"One of the crucial aspects of the German dual system is that it is created by a cooperation of the employers and the trade unions," von Luede says. "[It is] really a model that ensures that the qualifications that are needed within the industry are supported by this apprenticeship."

Not Enough Skilled Workers


EnlargeEric Westervelt /NPR
Apprentices are trained at the Lufthansa Technik training center in Hamburg last month. About 60 percent of German high school students opt for vocational training over further academic education.






Today Germany has a problem that Britain, Spain and other European countries can only dream of: It doesn't have enough skilled workers to meet the demands of its economy. Almost one-third of German companies could not fill open jobs in 2011. And some 30,000 apprenticeship placements went unfilled — or about 2 percent.

According to von Luede, this deficit is the result of a dramatic demographic shift. Birth rates are falling across Europe, but the effect is pronounced in what was once East Germany: There are half as many high school graduates in the East as there were only five years ago. Von Luede believes the solution is for Germany to relax its immigration policies because Germany's population is shrinking.

"Migration has to be orientated at people who are qualified or who may be qualified in the future by the educational system of Germany," he says.

But while 30,000 apprenticeships went unfilled, 85,000 high school graduates failed to find a placement. The reason for this mismatch, a recent study by the German Federal Institute for Vocational Education and Training found, is that the education system is failing to adequately prepare the children of recent immigrants for the job market.

Analyst von Leude agrees, adding that many school districts still divide children into blue- or white-collar career tracks while in elementary school.

To address the mismatch between jobs and the labor market, the German government just made it a little easier for skilled foreign workers outside the EU to come to Germany by lowering the income requirement — to about $60,000 from $88,000.

Under the rules change, non-EU workers who meet the new requirement will be able to stay in Germany permanently after a three-year period, if they are still employed. People with particularly good German language skills will be allowed to stay after a two-year period.

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Energy



Germany

The sun goes down on solar


4 April 2012
Der Spiegel Hamburg Comment







The company was one of the drivers of Germany’s energy turn-about. Today, solar cell manufacturer Q-Cells is the fourth and most symbolic of the solar energy companies to be sliding into bankruptcy. Competitive pressure from China can be blamed, but so too can Berlin’s subsidies policy.

Stefan Schultz

It wasn’t that long ago that Q-Cells, once the biggest solar cell manufacturer in the world, was seen as an energy company of the future. Even in the midst of the financial crisis it was still considered a money-making machine and candidate for DAX, a blue-chip stock market index trading at the Frankfurt stock exchange.

It was around Q-Cells’ manufacturing plants in the town of Bitterfeld-Wolfen, in a former brown-coal area in Saxony-Anhalt, that the so-called Solar Valley, named after California's Silicon Valley, grew up.

Since then it has grown a lot darker in Solar Valley. With the collapse of Q-Cells, the valley is going through its darkest hour. The energy company of the future is threatening to become an energy company with no future. In 2011 Q-Cells lost €846 million. Today Solar Valley is threatened with a clearcutting of jobs, though many of the 2,200 employees of Q-Cells are still at work.

Thousands of small companies will suffer

Bankruptcy is a new shock for the German solar industry. This is the fourth major bankruptcy so far, exposing the serious crisis in the industry and making it clear just how far behind Germany's solar companies have been left by their Asian competitors – despite the billions in funding. And now, of all times, just when solar power is gradually becoming competitive. The blows keep coming faster.

In December 2011, two industry giants slid into bankruptcy: the Berlin-based Solon, and Erlangen’s Solar Millennium. At Solon, the Indian company Microsol took over the core business, and of nearly 1,000 former employees only around 400 still have their jobs. The demise of Solar Millennium hit thousands of small investors.

In March 2012, more companies reported bankruptcy. One was Scheuten Solar, which just eight years ago in Freiburg unveiled the largest solar panel in the world.

The German solar energy crisis is hitting all those companies that made the wrong business decisions – those that were aware that the market was changing at a record pace, but who were too late or too slow to react.

The solar subsidies were a highly effective political tool for jump-starting the new eco-technology, but now, in a quickly maturing market, they are swiftly losing their significance. This is not so much because the government cut back on the funding, however. For those companies that made mistakes in management years ago, the subsidies could not have saved them anyway.

Q-Cells is the best example. The company first started to try to shift more of its production to Malaysia in the summer of 2011 – but it had already been clear for a long time that the Germans could not compete with the Asian producers.

Products that are easily copied

Warnings had been in the air for years. As a product, after all, solar cells are technologically relatively simple to produce and to copy.

Although the production is done by machine, in a country like China almost everything in a factory is cheaper, from the bricks in the walls to the cleaning staff. The solar industry is also currently enjoying a high priority in Beijing, and many manufacturers are tapping into loans from the Chinese government on very good terms.

Companies like Q-Cells that were established in Germany have not had a hope for years; they simply have not felt the full weight of the competition. It was the subsidies for solar power between 2009 and 2011 that caused demand to skyrocket, a demand that grew so fast that even competitors Q-Cells had left behind were able to shift huge volumes of their modules.

Ironically, it was the boom in subsidies that proved the German solar companies’ undoing, because the great demand fuelled the industrial mass production of cells, particularly in China.

In 2011 alone prices for modules dropped by 30 to 40 percent – far faster than the Germans were able to push down production costs – and strong falls in price are also expected for 2012. And the competitive advantage of the Asians over the Germans is still growing. In 2008 only 33 percent of world production came from China; last year that had risen to 57 percent.

On April 1, the Federal Government will make significant cuts to the solar subsidies, and over the medium term competition will likely arrive in other areas of the German solar industry as well – for companies such as Centrotherm, which builds machines that make solar cells. Although developing such machines is more complex, more and more Asian machine manufacturers are now exhibiting their own products at industry trade shows such as Intersolar.

There are, though, German solar companies that have not just cashed in on the high subsidies, but that have used them to develop a competitive business model. One is the Juwi company, which has drawn up plans for extensive solar farms and is developing a second business area in wind energy.

In addition, new businesses can be expected to crop up in the German solar market, especially in the service sector. Some may be companies that take over the maintenance of solar parks, or direct marketers that help plant operators sell their electricity on the energy exchange.

In Germany’s Solar Valley, though, most of the lights may be out soon.

Translated from the German by Anton Baer

On the web
Original article at Der Spiegel de


OUTLOOK

Solar not the only one to falter

According to the Frankfurter Rundschau, it is now the second pillar of the renewable energy sector, which Germany can boast of having been in the forefront of, that is now under threat: wind-power –


Thousands of jobs [in solar energy] have disappeared or will vanish in the coming days. The same fate is reserved for skills in the field of industrial development and research, which have long enjoyed massive support from the taxpayer. All because of a neoliberal policy

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Rajoy Says Spain in ‘Extreme Difficulty’ as Bond Demand Drops

By Emma Ross-Thomas - Apr 4, 2012 2:25 PM GMT+0100
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Prime Minister Mariano Rajoy said Spain’s situation is one of “extreme difficulty” and signaled that his budget cuts are less painful than a bailout would be, as demand for the nation’s debt slumped at an auction.

“Spain is facing an economic situation of extreme difficulty, I repeat, of extreme difficulty, and anyone who doesn’t understand that is fooling themselves,” Rajoy told a meeting of his People’s Party today in the southern coastal city of Malaga.













A police officer at the main door of the stock exchange during the general strike in Barcelona on March 29, 2012. Photographer: Manu Fernandez/AP Photo





April 4 (Bloomberg) -- Lena Komileva, chief economist at G+ Economics Ltd., discusses European Central Bank monetary policy and Spain's debt levels. She speaks with Owen Thomas and Linda Yueh on Bloomberg Television's "Countdown." (Source: Bloomberg)




Spanish Prime Minister Mariano Rajoy. Photographer: Javier Soriano/AFP/Getty Images
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Rajoy raised the threat of an international bailout for the second time this week as he sought to defend the deepest austerity moves in at least three decades. While “no one likes” the budget presented last week, he said “the alternative is infinitely worse.”

Spain sold 2.59 billion euros ($3.4 billion) of bonds today, just above the minimum amount it planned for the auction and below the 3.5 billion-euro maximum target. The average yield on the bonds due in October 2016, which act as the five-year benchmark, rose to 4.319 percent from 3.376 percent at last month’s sale. Secondary-market yields rose to 4.48 percent.

Spain’s 10-year borrowing costs are approaching the levels seen in December, before the European Central Bank said it would make unlimited three-year loans to banks. Some of the 1 trillion euros taken in the so-called LTROs has been recycled into high- yielding government debt, which initially helped shave as much as 95 basis points off Spanish yields before they began to rise again in March.

Bond Yields

Spanish borrowing costs have been going up since Rajoy announced on March 2 that his government wouldn’t comply with the deficit target the previous administration had set with the European Union. Euro-region finance ministers then settled on a target of 5.3 percent of gross domestic product for Spain. The country hasn’t met the EU’s 3 percent deficit ceiling since 2007, and the government forecasts debt to reach 79.8 percent of GDP this year, the highest in more than three decades.

“It’s back to reality now, the auction shows the LTRO effect has been exhausted and now demand for Spanish paper is becoming much more price sensitive,” Peter Chatwell, a London- based fixed-income strategist at Credit Agricole Investment Bank, said in a telephone interview.

Bailout Risk

Rajoy, in power since Dec. 21, first raised the specter of a bailout in a speech to senior party members on April 2. The risk of losing access to markets isn’t “theoretical” and “has already happened to some in the European Union,” he said.

Some local administrations in Spain have also been shut out of capital markets, preventing them from refinancing their debt, Rajoy said. The government has created a 35 billion-euro credit facility to help regions and town halls pay their bills and is demanding spending cuts in exchange.

The government, which failed to win a majority in a regional election in Andalusia on March 25 and faced a general strike four days later, is trying to defend the 2012 budget it sent to Parliament yesterday. The plan pledges more than 27 billion euros in deficit reduction to cut 3.2 percentage points from a budget shortfall that reached 8.5 percent of GDP last year. The plan includes an amnesty for tax-evaders and higher corporate taxes, while slashing ministries’ spending by 17 percent.

The budget sets aside almost 29 billion euros for interest payments in 2012, up from 22 billion euros last year. That’s about the same amount it plans to spend on the unemployed, as the jobless rate approaches 24 percent, the highest in the European Union.


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Ireland

A virtual home away from home


3 April 2012
The Irish Times Dublin Comment1






For emigrants, staying in touch with the home country has been transformed in recent years by new technologies, but does it make the experience of exile easier or more difficult?

Ian Kilroy

For Dorothy in The Wizard of Oz, it was always a matter of just clicking her heels together three times and repeating to herself: “There’s no place like home; there’s no place like home.” These days, it’s just as simple.

Skype, the internet, satellite television and other newer technologies mean it’s now possible to live your life in a virtual version of your homeland – no matter where you are.

Take Françoise Letellier, a former French honorary consul in Cork, for example. After 43 years in Ireland, she still watches the French news every day, speaks more French than English, and reads French newspapers whenever she can.

“When I first came in 1969, you could get a French newspaper once a week, and that was that,” says Letellier. “Now I have 21 French television channels; I can watch the coverage of the forthcoming presidential elections just as if I were in France.”

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