Re: New EC Thread

[Panda]

Miners in Spain have taken 19 days to walk 450k's to protest because of cuts to their subsidies saying all Rajoy worries about is the Banks. They will
arrive in Madrid today .

New austerity measures are announced including an increase in VAT from 18% to 20%.

The Bailout of E30 billion with an extension of 1 year to reach the required GDP level is ridiculous and will mean more unemployment in Spain.

The ILO has forecast the Eurozone could face another 4.5 million unemployed over the next four years, the Global Economy is at risk and austerity will
not work.

[Panda]

11 July 2012 Last updated at 08:25 Share this pageEmail Print Share this page

Spanish Prime Minister Mariano Rajoy has begun addressing parliament, setting out a new raft of austerity measures aimed at balancing the budget.

His speech comes as hundreds of Spanish miners arrived in Madrid to protest against government cuts to subsidies.

Mr Rajoy is expected to unveil a rise in VAT as well as cuts to social security and unemployment benefits.

The measures are in return for a eurozone bank bailout and an extension to Spain's deficit reduction targets.

Eurozone finance ministers have agreed to provide 30bn euros (£24bn) for Spain's troubled banks by the end of the month and to give Madrid an extra year - until 2014 - to hit its budget targets.

The prime minister told parliament that the measures he was announcing had to be adopted without delay.

The door had been opened to a new EU model, he said, and the summit agreements had committed everyone equally.

Analysts say European leaders want to see a credible Spanish plan for viability and deficit reduction.

Mr Rajoy warned on Saturday that further austerity was on its way, in a country with unemployment running at more than 24% and rising street protests over drastic spending cuts.

On Monday, budget minister Cristobal Montoro warned of an impending VAT rise, telling a business forum: "If VAT was paid by more of those who are supposed to pay, it would not have to be raised by so much."

Clashes

Most of the miners arriving in Madrid late on Tuesday had walked hundreds of miles since 22 June from northern Spain where protests outside coal mines have resulted in clashes with police.

They were greeted by thousands of supporters as they marched on Gran Via in the centre of the Spanish capital.

A second mass rally of miners is due to take place on Wednesday and unions hope it will draw at least 25,000 people.

The miners are angry at plans to slash coal industry subsidies from 301m euros last year to 111m euros this year.

Spanish Prime Minister Mariano Rajoy has warned that further austerity is needed
Unions say the cuts threaten 30,000 jobs and could destroy their industry.

The Spanish government argues that it pays disproportionately high subsidies to a small and unprofitable part of the economy.

Overnight the miners streamed down Madrid's streets with their helmet lamps shining in the dark.

Crowds lined the streets, chanting support.

"We didn't expect such a big welcome," said Roberto Quintas, a miner of 22 years from Villablino near Leon.

"The fact that people are coming into the street and mobilising is a good sign."

Manuel Cinoceda, a retired miner from the Aragon region, added: "The fight is for something just, we are just coming to claim what is ours."

Spain's 30bn-euro bank bailout will be the first instalment of a package worth up to 100bn euros agreed in June.

Eurozone ministers must get approval from their own parliaments and hope to make the payment by the end of July.

[Badboy]

SPAIN HAS ANNOUNCED DEEP FISCAL CUTS INCLUDING BENEFITS.
YIELD ON SPANISH GOVERNMENT BONDS HAS GONE DOWN?

[Panda]

Spain

High price for financial aid




El País, 11 July 2012


"EU puts Spain under guardianship," headlines Spanish daily El País following the signing of a memorandum of understanding between the government of Prime Minister Mariano Rajoy and the European Union setting the terms for the bailout of Spanish banks –


The 32 conditions contained in the memorandum could qualify as de facto, though not official, foreign intervention on the entire Spanish banking sector. Because the Eurogroup imposed a total revision of the operation of the Bank of Spain; forced the Finance Minister to transfer his power to impose sanctions to the Bank [of Spain] and demanded the creation of an independent supervisor of fiscal policy. [...] There is, however, some non-negligible, good news: approval for the bank bailout, the release, at the end of the month, of 30 million euros of the 100 million allotted, a moderate re-payment schedule (14 years) and an interest rate of about 4%. The Eurogroup makes it clear that the Troika (EU Commission, European Central Bank, International Monetary Fund) will control the bailout operation.

On July 11, PM Mariano Rajoy confirmed new budget cuts of 65 million euros over the next two years. These will include a reform of the public sector, lower unemployment benefits and an increase in VAT from 18% to 21%. Nonetheless, the Madrid daily criticises the "tardy" government reaction –


This memorandum can be read in a political light. Faced with the European demands, we can conclude that the reforms undertaken by the Finance Ministry are insufficient, that the budget cuts in Education or Health were not enough to master the deficit. The management of the crisis by the government was not sufficiently credible to inspire confidence to the markets or to European partners.

Conservative daily El Mundo stresses the surrender of sovereignty and the loss of control over "a key sector" of the country's economy. The paper points the finger at the current government's management as well as that of its predecessor, led by socialist José Luís Rodríguez Zapatero –


This is an enormous failure of the Zapatero government [...] but also a fiasco for the Rajoy administration because its timid banking reforms amplified the sector's serious problems. The hasty nationalisation of Bankia [in June] is the perfect example. [...] One wonders what would happen to Spain if the EU were to bailout the economy as a whole, it would be humiliating and would cast doubt on the survival of the conservative Popular Party government. Rajoy has one card up his sleeve to prevent such an intervention: engage far-reaching State reform.

[Panda]

Island for sale, due to crisis


11 July 2012
El Mundo Madrid Comment2



Deanna Keahey


Times are hard for private owners of Greece’s islands. Faced with a new troika-imposed property tax and rising interest rates, they are selling off their land. Prospective buyers, however, will need to deal with the local bureaucracy.




Fancy savouring the fresh air of the Aegean Sea from your own private island? If you have the money, it’s time to start exploring the option. The crisis has led to a doubling in the supply of private islands in Greek waters (the islands owned by the state are not for sale). Idyllic beaches, dream views and an exceptional temperature throughout the year are just some of their attractions.

“Before the crisis we always had between six and ten islands on offer, but now we have almost 20,” says Chris Krolow, director of Private Islands, a Canada-based Internet company specialised in selling islands all around the world. Their website lists a good number of Greek islands for sale, ranging in price from one and a half million euros, for the small island of St. Athanasios, to the 150 million euros asked for Patroclos. This majestic island of 260 hectares, very near Athens, boasts beaches that are “large and sandy, with unpolluted waters rich in fish,” according to the website.

Although experts say that the prices have not fallen far, good buys can still be found. “We’ve seen properties going for four million fall to two,” says Nicolas Mugni, broker at the top-tier Grece Demeures agency. The economic crisis, which is keeping almost 28 percent of Greeks below the poverty line, has also hit property landowners.

Tough negotiators

One of the factors forcing some owners to sell more cheaply – either the entire island, or plots of land or buildings on it, such as recreational luxury villas – is Greece’s new property tax. “Most of those landowners have money invested in other assets or land, and the new taxes that have been approved under the austerity pact for Greece means the wealthy will have to pay a lot. The percentage varies, but if you own an island or a large villa it could come to a small fortune. For an expert buyer it’s easier to haggle with such sellers,” says Mugni.

In addition, many landowners in the islands are unable to pay the interest on their bank loans and have to sell cheaply. Stavros Stellas, a realtor very familiar with Aegean real estate, admits this too. He himself has been forced to lower the price of a plot of land he owns: “I have a large plot of 17,000 square metres, and a few years ago I started to sell it for 1.7 million euros. Now I’m offering it for a million, because I’m under pressure from the bank,” he says.

However, if you have money and want to buy a Greek island, you have to work tirelessly to find it: almost everyone who owns an island property is rich enough not to fall victim to a speculative chaos. Nor do they fear that prices will fall if Greece exits the euro. “A luxury property will not fall in price even if the country goes back to the drachma and the currency gets devalued. He who has no economic problems doesn’t sell cheaply,” Mugni stresses. The Greeks also have a reputation for being tough negotiators.

Proverbial Greek bureaucracy

Another problem scaring off potential buyers is the proverbial Greek bureaucracy: “For an investor it’s an irksome task to buy an island in Greece, knowing that decades will pass before you can build something on it,” Krolow emphasises.

Nevertheless, eager new entries have boosted demand across the battered Greek real estate market dramatically: “We used to have buyers from some 70 countries, but in the last ten months alone that number has climbed to 120”, says Georgios Stroumboulis of the online agency Greek Property Exchange.

“As with any economy in trouble, there are a lot of people out there hunting for a good buy,” the broker adds. Indeed: Greece’s financial problems have turned the country into a stomping ground for professional bargain hunters.

Translated from the Spanish by Anton Baer

[fuzeta]

I would advise anyone not to get involved with Greek bureaucracy. I am still trying to deal with it 17 years after I left and that is the truth!!!

[Badboy]

I would advise anyone not to get involved with Greek bureaucracy. I am still trying to deal with it 17 years after I left and that is the truth!!!

EXPLAIN PLEASE

[Panda]

I was watching a discussion on BBC News yesterday at the concern over the Eurozone now affecting emerging economies like Brazil, India and China.
It was felt that the crisis, if not resolved will lead to a world-wide recession since the U.S. is not doing too well either. This latest news from France will not help.

======================================



Peugeot to Close Plant as Reorganization Cuts 9,600 Jobs

By Mathieu Rosemain - Jul 12, 2012 7:01 AM GMT+0100
.





..
PSA Peugeot Citroen (UG), Europe’s second-biggest carmaker, will close one French factory and reduce output at another plant in the country as the region’s auto sales drop for a fifth straight year.

The moves will help the automaker eliminate another 3,600 positions, lifting its overall job-reduction target to 9,600 jobs, the Paris-based automaker said in an e-mailed statement today. Peugeot previously planned to cut 6,000 jobs.










PSA Peugeot Citroen will close one French factory and reduce output at another plant in the country as the region’s auto sales drop for a fifth straight year. Photographer: Fabrice Dimier/Bloomberg
.
Peugeot will close its 39-year-old factory in Aulnay and lower production at a plant in Rennes to slash operational costs, it said in the statement.

Peugeot’s automotive division will report a first-half operating loss of 700 million euros ($857 million). The group has been burning about 200 million euros in cash monthly since the middle of last year, Peugeot said today. Peugeot, Renault SA (RNO) and Fiat SpA (F) have posted the biggest sales declines this year in Europe, where Peugeot now expects the market to contract 8 percent versus an earlier estimate of a 5 percent drop.

“I am fully aware of the seriousness of today’s announcements as well as of the shock and emotions that they will arouse in the company and its stakeholding environment,” Chief Executive Officer Philippe Varin said.

Industrywide deliveries in the European Union will probably fall to 12.2 million vehicles this year, the least since 1995 and 21 percent below the 2007 peak, according to ACEA figures. Renault sales chief Jerome Stoll yesterday scrapped the carmaker’s sales-growth target for 2012 and said the European market may not recover to pre-crisis levels until 2018.

Deliveries Drop

Peugeot’s worldwide deliveries slumped 13 percent in the first half to 1.62 million vehicles, the automaker said last week. Chief Financial Officer Jean-Baptiste de Chatillon said in March that Europe’s auto market probably won’t recover for years to come. Renault yesterday reported a 3.3 percent drop in sales for the period as gains outside its home region were unable to offset the region’s slump.

Peugeot’s stock has tumbled 73 percent in the last year, valuing the carmaker, which posted 59.9 billion euros in revenue last year, at 2.54 billion euros. The shares have traded around a 23-year low for most of the last month, with investors concerned about the accelerating drop in deliveries.

The French company entered into a strategic alliance with General Motors Co. (GM) earlier this year in which the American carmaker took a 7 percent stake to become the second-largest shareholder after the founding family. The two plan to cooperate on purchasing and vehicle development to help lower costs.

Raising Funds

Peugeot also sold 1 billion euros in new stock to existing shareholders this year and has announced asset sales to raise cash and lower its debt load. Peugeot is planning to sell a majority stake in its profitable Gefco trucking unit, Luc Nadal, the unit’s chief, said this week. Peugeot aims to complete the sale by October, he added.

Asset disposals thus far have included the Citer vehicle- rental unit that the carmaker sold to Enterprise Holdings Inc. on Feb. 1 for 440 million euros and an agreement announced April 2 to sell Peugeot’s 48-year-old headquarters building in Paris to Ivanhoe Cambridge for 245.5 million euros.

Peugeot employed 100,356 people on permanent and temporary contracts in France at the end of 2011. Worldwide, it had 209,019 workers at the end of last year.

[Panda]

Portugal’s international creditors may soon have to ease terms of the country’s bailout to prevent the plan from derailing as the government faces setbacks in attaining its deficit goals.

Prime Minister Pedro Passos Coelho’s struggle to meet deficit pledges were further hampered last week when about 2 billion euros ($2.5 billion) of planned cuts to pensions and civil servants’ holiday pay were ruled unconstitutional. With Portugal’s 10-year bond yield above 10 percent, returning to the markets next year may be untenable, requiring more international aid despite the premier’s insistence he won’t seek concessions.













Portugal's Prime Minister Pedro Passos Coelho. Photographer: Jock Fistick/Bloomberg





Play Video


July 11 (Bloomberg) -- Charles Dumas, chairman of Lombard Street Research Ltd., talks about the outlook for Europe's debt crisis. Dumas speaks with Tom Keene and Sara Eisen on Bloomberg Television's "Surveillance." (Source: Bloomberg)
.
“Lisbon’s strategy is to continue to be the good student among bailed-out countries until it becomes clear that Brussels and Berlin must ease the rules of the game for it to succeed,” said Antonio Barroso, a London-based analyst at Eurasia group.

Portugal completed the fourth review of its 78 billion-euro bailout plan on June 4 and progress helped bring down the benchmark yield from a euro-era record of 18.3 percent on Jan. 31. Now a deepening recession and the court ruling are putting pressure on government finances, and raising doubts about the chances of the nation reducing its deficit to within the European Union’s limit of 3 percent of gross domestic product next year.

Bond Gains

Portuguese bonds gained almost 30 percent this year as the government stuck to terms of the international rescue, the most among euro-area government debt, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. In the same period, German securities returned 3.6 percent and Spanish debt declined 5.3 percent.

Finance Minister Vitor Gaspar signaled the government’s intentions not to seek concessions yesterday in Brussels even after euro-region finance ministers agreed to give Spain an extra year to meet its deficit goals and eased terms of its 100 billion-euro bank bailout. The Portuguese and Spanish cases are different and the government won’t be deterred by the court ruling, Gaspar said.

“The Portuguese government is studying measures of equal impact on the budget” to compensate for the court’s ruling, he said.

After seeking a bailout last year, Portugal has increased taxes, reduced spending to shrink the size of government and sold stakes in companies, including utility EDP-Energias de Portugal SA and power-grid operator REN-Redes Energeticas Nacionais (RENE) SA, to bolster public finances.

Austerity Plans

The austerity measures have deepened the recession with Portugal’s economy forecast to contract 3 percent this year and unemployment set to rise to a euro-era record 15.9 percent in 2013, according to government estimates. Economic growth has averaged less than 1 percent a year for the past decade, placing Portugal among Europe’s weakest performers.

Portugal has pledged to have a budget deficit equal to 4.5 percent of GDP this year and to trim that to the EU limit of 3 percent in 2013. The central government’s shortfall widened to 7.9 percent in the first quarter from 7.5 percent a year earlier, leaving those goals looking optimistic. The budget gap probably will be on the agenda, when Portugal’s creditors carry out the fifth review of the bailout plan starting on Aug. 28.

Portugal may end the year with a deficit of more than 5.5 percent of GDP, missing the rescue plan’s target by more than 1 percentage point and prompting an easing of bailout terms, said Ricardo Santos, a London-based economist at BNP Paribas SA. (BNP)

Deficit Slippage

“Because of the size of the slippage, however, the new targets will have to be combined with further fiscal tightening, putting at risk the domestic political consensus on the program,” Santos said in a June 28 research report.

Portugal’s 10-year bond yield was little changed today at 10.44 percent, while the rate on Spanish debt of similar maturity rose 2 basis points to 6.83 percent. The difference in yield that investors demand to hold Portugal’s 10-year bonds instead of German bunds has narrowed to 9.1 percentage points from 10.8 percentage points on June 1.

The government’s decision last year to cut pensions and public-sector workers’ summer and Christmas salary payments through 2014 was central to its deficit-reduction effort. The 2 billion euros a year in projected savings are more than 1 percent of the country’s GDP. Even after the ruling, which affects cuts in 2013 and 2014, Passos Coelho insisted that he won’t seek easier terms.

Political Tension

The response shouldn’t be to “renegotiate everything,” Passos Coelho said in July 9 comments broadcast by SIC Noticias. “We must redouble our effort and attention to meet those goals and objectives.”

His determination to stick with the current targets is heightening political tension at home. He faced a wave of criticism from the main opposition Socialist Party for failing to push for concessions even after euro-area leaders agreed to ease terms for Spain and to relax conditions on potential help for Italy.

Socialist Party leader Antonio Jose Seguro said in a June 3 interview with Diario Economico that Portugal needs at least another year to complete the program.

The good news for Portugal is the country’s austerity trap may prompt the EU and the International Monetary Fund to heed Seguro’s calls and grant the government more time to carry out its aid plan, even if Passos Coelho won’t ask for an extension.

“It may be that, given the impact simultaneous austerity is having on economic activity within Europe, the EU might be open to reassess the targets set in the bailout program to Portugal,” said Goncalo Pascoal, chief economist at Banco Comercial Portugues (BCP) in Lisbon.

[Panda]

Why do Europeans know more about Obama and Romney than Barroso and Van Rompuy? Because they cannot elect the leaders of the EU, writes Swedish journalist Martin Ǻdahl. The best way to address this European "democratic deficit" would be to put the candidate to the electoral test.

Martin Ǻdahl


At the height of the euro crisis, I met a high-level civil servant of the European Commission. He described his professional situation this way: since the election of François Hollande to the French presidency, the Commission has finally regained a little power.

Previously, "Merkozy," the duo formed by German Chancellor Angela Merkel and then-French President Nicolas Sarkozy, systematically placed the rest of the European apparatus before a fait accompli. But with François Hollande, Germany and France quarrelled and the Commission had to be called in to mediate. This is how one of the world's three largest economies is governed in times of acute crisis.

What is diplomatically called a "democratic deficit" – the fact that we, European citizens, do not choose those that run the European Union, as well as the fact that they are not accountable to us – is now so flagrant that it is embarrassing troublesome.

The major countries – in practice, two countries – hold the levers. Decisions are made behind closed doors. Political leaders elected to national functions govern all Europeans. None of them is invested with a mandate to speak in the name of Europe.

That is why what was once wishful thinking is today becoming a demand from the people as well as a political necessity: Europe must be able to choose its leader through direct universal suffrage. The primary function of a democracy is undoubtedly the ability to sack, via the ballot box, an unwanted leader and to elect a new one instead.

Merge the “real” parliaments

Voters do not know what to do. The citizens of the Union know more about Romney, Obama, [Bill] Clinton and [John] McCain than about Barroso and Van Rompuy. We get more excited about campaigns in the United States, where we do not vote, than in European campaigns.

It is often said that greater powers should be accorded to the European Parliament. But it lacks legitimacy; it is no more than a way for voters to let off steam in between elections. There is no real alternative within the European Parliament. The parliamentary groups do not hold common election campaigns and have neither the same platforms nor clearly identifiable political lines.

Another proposal is to merge the 'real' parliaments, that is the national parliaments and to ensure that these have a permanent European Affairs Commission whose members would meet in Brussels. That would reinforce the legitimacy but it would not solve the underlying problem: how can I use my ballot to change EU policies?

This is the reason for which we must be able to directly elect those who govern us. Only then will ideas throughout Europe crystalize around the candidates and their programmes. The President of the Council would be elected, preferably in a two stage ballot in which the winner and second place candidate would confront each other in a run off for the majority of the vote.

Candidates from small countries might have an advantage

European political currents would be forced to rally behind the candidates. The person elected and who would sit at the side of Angela Merkel and François Hollande would be backed by the voices of millions of Europeans. Whatever the leader's official attributions, he or she would be authorised to speak in the name of Europe.

An often-heard falsehood claims that this will introduce more federalism and lead to a United States of Europe. Yet, someone with the confidence of the European people could decide to reduce the powers of the Union and to return some of the decision-making power back to the member states. The goal of the reform is not to determine what can or cannot be decided at the European level but how these decisions should be made.

Another error is to assert that the Germans, the French or the Italians would win all of the elections. The large nations also – unfortunately – engender hostility and rivalries. Candidates from inoffensive small countries might also find themselves at an advantage. In the large countries, one can trust that atypical, cosmopolitan people such as former German foreign minister, the Green Party's Joschka Fischer, would be as interested in Brålanda [a small town in southern Sweden] as in Berlin.

It is best if this idea is not elaborated in the upper echelons of Europe after a new series of never-ending talks in Brussels, or in the minds of leaders such as the ten foreign ministers who recently launched the idea of a presidential election as part of their project to create a hard-core of super states. Rather, the pressure in favour of a direct European ballot must come from Europe's rank and file.

[Panda]

European Futures, Asian Stocks Fall on Growth Concern

By Richard Frost - Jul 12, 2012 7:55 AM GMT+0100
.

European stock futures and Asian shares (MXAP) fell as South Korea unexpectedly cut interest rates and Australia’s jobless rate rose, underscoring concern the global economy is faltering. The won dropped and German bonds rose.

Futures on the Euro Stoxx 50 Index dropped 0.5 percent at 7:50 a.m. in London, while those for the Standard & Poor’s 500 Index declined 0.5 percent. The MSCI Asia Pacific Index sank 1.5 percent. The won weakened the most since May 16 against the dollar, the so-called Aussie sank 0.8 percent and the yen rallied against all 16 of its major peers. German two-year yields fell less than one basis point to minus 0.021 percent, the lowest since at least 1990.


















Kim Choong Soo, governor of the Bank of Korea, and his board lowered the benchmark seven-day repurchase rate by 25 basis points to 3 percent. Photographer: Jean Chung/Bloomberg











The Australian dollar slid 0.6 percent to $1.0192. Photographer: Brendon Thorne/Bloomberg
.
Australian employers unexpectedly cut payrolls in June, while a report today may show manufacturing output in the euro region remained stagnant in May. Chinese companies from Cosco Shipping Co. to Dongfeng Automobile Co. reported slumping profit before the country releases economic data tomorrow. The U.S. Federal Reserve signaled that a further economic slowdown would bring growing support among policy makers for additional steps to spur growth.

“The global economy is deteriorating faster than central banks can ease policy,” said Tomomi Yamashita, a senior fund manager in Tokyo at Shinkin Asset Management Co., which oversees about $6.3 billion. “Your best bet is to hold on to cash.”

Governor Kim Choong Soo and his board at the central bank lowered the benchmark seven-day repurchase rate by 25 basis points to 3 percent, the first cut since February 2009, the central bank said today. Two of 16 economists surveyed by Bloomberg News predicted the move. Brazil cut its benchmark interest rate for an eighth straight time late yesterday.

Fed Minutes

A few members of the Federal Open Market Committee said the Fed should ease policy to move the economy toward its targets for full employment and stable prices, according to minutes of the June 19-20 meeting released in Washington yesterday. Several others said more action could be warranted if growth slows, risks intensified or inflation seemed likely to fall “persistently” below their goal.

More than four stocks fell for each one that rose on MSCI’s Asian Pacific gauge, which extended a five-day, 2.3 percent decline. Commodity producers and technology companies reliant on discretionary spending by consumers led losses.

Infosys Ltd., India’s second-largest software exporter, plunged 8.6 percent after cutting its sales forecast and reporting profit that missed estimates. Chow Tai Fook Jewellery Group Ltd., (1929) the world’s biggest listed jewelry retailer, tumbled 9.6 percent in Hong Kong after Piper Jaffray Asia Securities Ltd. downgraded it on “disappointing” first-quarter sales.

Earnings Concern

The Nikkei 225 Stock Average retreated 1.5 percent. The Hang Seng China Enterprises Index (HSCEI) sank 2 percent, heading for its lowest close since October.

China’s economy grew 7.7 percent in the three months through June from a year earlier, according to a Bloomberg poll. That would be the weakest growth in three years and compares with an 8.1 percent increase in the previous quarter.

“Earnings, rightly, are the new worry for investors,” said Gerard Minack, global strategist at Morgan Stanley in Sydney. “We remain cautious regarding risk assets given the downside risks to growth and earnings.”

The won dropped 0.9 percent to 1,151.38 per dollar, while the Australian dollar slid 0.9 percent to $1.0164.

The number of people employed fell by 27,000, almost erasing a revised 27,800 gain in May, Australia’s statistics bureau said in Sydney today. The jobless rate rose for a second month, to 5.2 percent from 5.1 percent.

Yen Climbs

The yen rose 0.4 percent to 79.41 per dollar. While the central bank expanded its asset-purchase program to 45 trillion yen ($564 billion) from 40 trillion yen, its loan facility was cut by the same amount to 25 trillion yen, according to a policy statement released in Tokyo today.

Industrial production in the euro area probably failed to grow in May after two months of decline, according to the median estimate of economists in a Bloomberg survey before the European Union’s statistics office publishes the data today.

[Panda]

Time For Cuts

By Ben Sills - Jul 11, 2012 11:01 PM GMT+0100
.

..
European leaders are testing the latest version of their debt crisis strategy in Spain, granting Prime Minister Mariano Rajoy more time to reduce the budget deficit in exchange for deeper spending cuts.

Rajoy yesterday announced 65 billion euros ($80 billion) of austerity measures in a renewed effort to meet European Union budget targets after he was granted a one-year extension on the deadline to meet EU limits.










July 11 (Bloomberg) -- Juan Fernando Lopez Aguilar, a member of European Parliament and Spain's Socialist Party, talks about the outlook for Spain after Prime Minister Mariano Rajoy announced 65 billion euros ($80 billion) of cuts. He speaks from Brussels with Francine Lacqua and Guy Johnson on Bloomberg Television's "City Central." (Source: Bloomberg)









Spanish miners wave banners and shout slogans after marching from Asturias to the capital to protest against government budget cuts in Madrid, Spain. Photographer: Angel Navarrete/Bloomberg
.
“Europeans are learning from past mistakes,” said Christian Schultz, a senior economist at Berenberg Bank in London and a former European Central Bank official. “The stick is necessary but the carrot is also good.”

Europe’s concession to recession-wracked Spain has raised expectations in Ireland and Portugal that they can win more time to rein in their budget deficits after Germany’s hardball tactics in Greece spurred a rebellion against bailout politics there.

Spanish bonds and equities rose yesterday. The extra yield investors demand to hold Spanish 10-year debt instead of the benchmark German bunds dropped 19 basis points yesterday to 531 points and the main stock index, the Ibex 35, rose 1.2 percent.

IMF Role

“People can see that they are serious,” said Javier Morillas, professor of international economics at San Pablo CEU University in Madrid. “I don’t think these are the last measures we’ll see, and they certainly aren’t the last cartridges Rajoy has left.”

Rajoy’s budget package came as Spain finalizes the conditions of a 100 billion-euro bank rescue bank that will allow International Monetary Fund officials to intervene in the process of restructuring the banking system and tightens scrutiny over spending plans.

European leaders also held out the prospect of buying Spanish debt to trim yields as long as Rajoy complies with their conditions, which include transfering powers from the Economy Ministry to the Bank of Spain and bolstering the central bank’s independence.

Rajoy is also seeking additional cuts from the 17 regional governments, which control health and education. Even as Spain’s own access to capital markets is narrowing, the central government is planning to help states fund themselves on markets. Budget Minister Cristobal Montoro meets regional finance chiefs today at 4 p.m. in Madrid to discuss the plan.

Greek Recession

With the extra year, Spain has until 2014 to bring its deficit within the EU’s 3 percent limit. European finance ministers agreed to loosen the 2012 deficit goal to 6.3 percent of GDP from 5.3 percent. Still, ministers urged Spain to step up budget cuts.

Even after the concessions on the timing, Europe’s demands may end up pushing Spain deeper into recession like Greece, which has been in recession since 2008. The Spanish program brings the fiscal tightening for this year to about 65 billion euros, Schultz estimates, after three previous packages.

“Just when you think reason and pragmatism are returning, European policymakers resort to type,” said Dario Perkins, an economist at Lombard Street Research Ltd. in London, in research note. “Significant fiscal tightening was the last thing the economy needed.”

Voter Backlash

Rajoy is already facing a backlash from Spanish voters with unemployment at 25 percent and the economy sliding deeper into its second recession since 2009. Miners who’ve been striking for the past seven weeks clashed with police outside the industry ministry in Madrid yesterday as they demanded the government reinstate subsidies they say are needed to keep their industry alive.

The premier also scrapped a mortgage rebate, reversing a policy he implemented in December at his second Cabinet meeting to enact an election promise. At the same time, he had raised pensions to meet another pledge. Yesterday, he said he’d present parliament’s pension committee with a bill to make retirement benefits more sustainable.

Even with the new targets, Spain needs to cut the deficit by 2.6 percent of GDP as the economy shrinks. The deficit overshot last year as the economic downturn bit into tax revenue and regions unearthed undeclared bills. The government forecasts a contraction of 1.7 percent this year and Rajoy said today the slump would continue next year.

“We have very little room to choose,” Rajoy told the national parliament in Madrid. “I pledged to cut taxes and now I’m raising them. But the circumstances have changed and I have to adapt to them.”

[Panda]

Germany

Media all lined up behind the Chancellor


12 July 2012
Die Tageszeitung Berlin Comment32


Since the outset of the eurozone crisis, the German media has been guilty of promulgating stereotypes and clichés about other countries. This has shaped Angela Merkel's divisive European polices, argues Austrian author Robert Misik.

Robert Misik


“Europe's Most Dangerous Leader” headlined the British magazine New Statesman in a recent profile of Angela Merkel. In the inside pages, it promoted the German chancellor at the same time to the "most dangerous person in the world.”

The conclusion of the well-researched story reads like this: “In denial and bent on austerity über alles, Merkel is destroying the European project, pauperising Germany’s neighbours and risking a new global depression. She must be stopped.”

For sure, there’s something of the typical journalistic penchant for superlatives here. Ultimately, however, the author crams into a nutshell what almost everyone in Europe thinks about the German Chancellor and her “fiscal self-flagellation”, as well as about the German refusal to finally take some bold steps to escape the flames of the crisis.

In one country, however, people think fundamentally differently: in Germany. Normally in EU politics, if the talk is about the “German position” or the “French position”, it’s always the attitude of the respective government that’s meant. In the current euro crisis, though, there is an alliance between the government, the German public and virtually all the media that is so wide-ranging that the opposition no longer dare oppose it.

The media can be “harmonised”

And if, as we saw at the recent EU summit, the German Chancellor is forced to step back a few millimetres from her fundamentalist position, then she gets a beating for it at home too. Then she's “toppled", and the mainstream press asks frantically: “Who is going to pay for all this?”

And, yes, this involves not just the loudmouths from the Bild, shouting in ten-centimetre letters: “More money for the bankrupt Greeks? BILD says No.” Even normal, supposedly objective and serious journalism has been chiming the same tune for months now.

Often it is the seemingly innocuous phrases that express most ostentatiously this national opinion that has closed ranks, this chauvinism that sets Europe a crucial test of how far it can go before it breaks. With words such as “debtor-country” or “unsound” – coined, obviously, for the southern European countries in the euro-zone like “debtor-country Spain." But wait – what’s the government debt ratio in Spain? Earlier this year it was 68 percent of GDP. In comparison, Germany’s government debt ratio is 81 percent. Who is the “debtor country” here?

Or the “Heute-journal” of the public broadcaster, ZDF. The first report is on the Greek elections. Right in the middle comes the sentence: “The worst has just been averted.” The worst? That, obviously, would have been a victory for the leftist Syriza, which was staved off by the election victory of the conservatives – the band of thieves that rode the country into the mess it’s in in the first place. Two minutes later, the next report, the next reporter. This time it's on the G-20 summit. Right in the middle, almost lapidary, comes the sentence: “The others want to get at Germany’s money.”

Zapping to other channels brings no relief: everywhere one hears similar sentences, which are the product of a climate of opinion and that at the same time stabilise that climate. It’s the clearest demonstration of how the media can be “harmonised” without the need for anyone to harmonise it. Because the journalists no longer even notice that they’re dishing out propaganda: after all, they’re “only” using phrases that have long been common sense.

Propagandistic phrases

Not even Die Zeit finds something amiss in cluttering the news with rubbish, most recently with the lurid headline and the huge letters on its front page: “The whole world wants our money.” Perhaps the most dreary journalism is that which holds itself to be objective, yet does nothing but bleat out the prejudices of its environment.

Of course, there are other voices that repeatedly point out, with great patience, that Germany has done well so far out of the suffering of others and is also not innocent of the economic imbalances, and that we will only be able to deal with the eurozone crisis if we correct the faulty design of the eurozone, and that it is pointless to bluster on about imaginary “limits of German strength" when in reality the costs of the crisis are only driven up and the breaking point thus reached much faster. Sure, such reasonable voices are out there. They form flecks of colour in the grey cloud of opinion.

One can analyze it all and so understand it. But one is also left standing slack-jawed before it all. And in this climate of opinion is it not cheap as well to criticise Angela Merkel for stubbornly staying her course on austerity? Or the Socialists for not coming up with any trenchant political opposition? Given this drunken national us-versus-those -who-want-our-money climate of opinion it is hardly surprising when politicians who want to be elected – or re-elected – do not stray far from common sense.

From parroting simple prejudices. From spouting, without any economic expertise, the most rousing propagandistic phrases. From positioning themselves, in all their professional arrogance, as clearheaded and farsighted. Or simply from just playing it safe by running with the pack. That's what the vast majority of German journalists are up to in the euro crisis.

Translated from the German by Anton Baer

[fuzeta]

I would advise anyone not to get involved with Greek bureaucracy. I am still trying to deal with it 17 years after I left and that is the truth!!!

EXPLAIN PLEASE

I will try badboy, we had a business on an island called Leros in the Dodecanese. We had to pay out a hell of a lot of money on taxes and loads of money, similar to our national health contributions on healthcare for us and our staff, which should never have been paid at the amount charged.

We never got the benefit of it because after five years we still had not got our books to say we could have healthcare or prescriptions on the state. So we kept paying for nothing and had to pay through the nose for everything we needed! We did get seen at the local hospital for free though because they were just coming into Europe at the time. Mind you if we mentioned them being in the EU to help ourselves along, the police used to say " Not yet we are not"

The police used to come to our business on a regular basis to look through everthing and shout at us. Gave them something to do I suppose. Not much crime about, apart from tax dodging and friendly cons

Taxed at an alarming rate on everything we did. We were the honest ones and did not know the Greek system! Hence we were fleeced badly.

With the help of a Greek lawyer friend we tried to claim some of it back, she knew we had a case, this was after coming back to the UK, I am talking many thousands of pounds. Well we hardly got anywhere letters were never answered, always lost in the system. Now and again we would get a letter saying 'send proof' . We would not let our books out of our hands so got a solicitor here to authenticate copies. Again no answers. Sent again and again no answers. Now of course with the state that Greece is in, we gave up long ago. No point.

The landlord who we rented our business premises from was putting our rent down at half the rate we actually paid him (on the advice of his accountant) so you can imagine where that left us when we were putting down twice as much in our books! Who do you think it worked out for? not us that is for sure Our accountant was putting one thing his another:lol!: Of course you have to realise that the Greeks only deal in cash and not cheques!!!

Never meddle with the Greeks in business, I still like them though ( well with caution now!) and I still love Greece.

Tried to explain quickly but I could write a book, wish I had done whilst all fresh in my memory!!

[Panda]

The EU is a Mammoth and completely incapable of administering such a vast "Union". This is one small example.

Poland

Claiming benefits for coal plant that never was


12 July 2012




“Poland demands free carbon allowances for ghost coal plants,” headlines Euractiv.com. The Brussels based news website has revealed that of the €7 billion of free carbon allowances under the EU Emissions Trading System (ETS), Warsaw has been claiming €33 million for a coal plant which does not exist.

A Polish government official told EurActiv that the plant in Łęczna coal plant, near the Ukrainian border, falls into a category of sites for which “construction is in progress”. However –


... a 20 kilometre drive around the backwaters of Łęczna’s Stara Wieś-Stasin site on 5 July revealed a rural landscape of green fields, crop allotments, and country paths.

No buildings, installations or other power plant-related activity were evident at the coordinates for the installation submitted by the GDF Suez group to the regional authorities in June 2011.

[Panda]

Steve West


Eurosceptics may rail against losing sovereignty to Brussels. But why do they never complain that since 1945, nations have also ceded power to institutions like the UN, Nato, and the IMF? asks Bill Emmott.

Bill Emmott


The issues are simple. That is what the massing ranks of Eurosceptics say, whether in bar rooms, tearooms or TV studios. The British people must be allowed to decide whether to stay in the European Union, and soon, for two big reasons. First, because inside the EU we are not a fully sovereign democracy and might not be happy about that fact. And second, because in the only previous vote, in 1975, we were simply asked whether we wanted to be a member of a Common Market, so we were conned. We need another chance to vote on what the EU has really become.

During the next months, years, decades and probably centuries, those are the two big sticks with which the Out Party will beat us all over the head. Sovereignty and the 1975 con may even seem convincing. The only snag is that both arguments are tosh; bogus; utter stuff and nonsense. Sorry to mince words, but you know how easily people can be offended.

On a recent BBC Newsnight debate, Jeremy Paxman drew applause by popping up on a screen a photo of Herman Van Rompuy, the rather nondescript Belgian president of the European Council, and asking the audience whether they had voted for him and even knew who he was. Argument over: of course we’d rather not be bossed about by unelected officials whom we can’t even name.

Except for this. It was tosh. Why didn’t he also put up photos of the Secretary General of Nato, or the head of the World Trade Organisation, or the United Nations, the World Bank, the International Monetary Fund, the International Maritime Organisation, or even the head of Fifa? We didn’t vote for any of those either; they come from funny foreign countries and we don’t even know their names – except perhaps the President of Fifa.

Read Adam Smith, Eurosceptics

Yet all of them hold pieces of our sovereignty in their sweaty, unelected palms. Our elected representatives chose to hand over that power without even thinking about referendums. Membership of Nato obliges us to go to war if another country were to attack, say, Turkey. No ifs and buts: unless we are prepared to renege upon the founding treaty of Nato, we would then be at war, whether we like it or not. Makes the sacrifices that go with EU membership seem trivial.

Membership of the WTO restricts our ability to subsidise our industries or use tariffs to discourage imports. Membership of the UN, under a charter we helped to write ourselves, makes our own actions subject to international law. Membership of the International Maritime Organisation, along with the associated UN Convention on the Law of the Sea, regulates shipping and sets what are our “exclusive economic zones” around our coasts.

The point is that a crucial part of British policy since 1945 has been that of setting up, and joining, international organisations to agree upon common rules for various activities, to foster co-operation rather than conflict, to increase collective security, or to promote freer trade. All of them involve the pooling of sovereignty in exchange for an expected benefit – rather as the FA joined Fifa to play in international tournaments and to all follow the same rules of football. We could be independent and set our own rules. But it wouldn’t get us very far.

So, whatever the Eurosceptics, and especially UKIP, try to say, the debate about British membership of the EU cannot be reduced to a choice of black or white, shackled or free, servile or sovereign. Unless we want to pull out of all of these organisations, that is. It is a matter of degree, of shades of grey, of how much loss of sovereignty is too much, of much more boring issues of benefits and costs.

Which is where the Great Common Market Myth comes in. Here, the pro-EU brigade are often also at fault. When challenged about the 1975 referendum, they say that the antis didn’t pay proper attention, didn’t read the booklets properly, so it wasn’t a con. Yet that is the wrong answer. The right answer is that the 1975 vote was indeed about membership of a Common Market and that is what the vast bulk of the EU’s activities and directives are about. It is just that the antis don’t understand what a Common Market entails.

Read Adam Smith, Eurosceptics. For a market to work, he pointed out two centuries ago, it requires common, widely accepted rules, and a means of enforcement of those rules. You could make the rules just the rather basic ones of a free trade area, limiting the use of tariffs or obvious non-tariff barriers, but leaving businesses to have to abide by separate regulations in each national system in the area in order to sell in each country.

Pointless to have a vote soon

Or you can make them more profound, covering people as well as goods and services, protecting members against cartels as well as against tariffs, unifying regulations, dealing with non-tariff barriers and state subsidies, fake Scotch whisky and all the rest. That’s a real Common Market. It needs rules, officials to draft the rules, beastly inspectors and courts to enforce the rules. That is what the EU chiefly consists of – yes, including the ghastly Common Agricultural Policy, which is just a unified way to subsidise farmers.

Forget the “we need our sovereignty back” line. We won’t be sovereign even if we leave the EU. Throw the “I only wanted a Common Market” line in the bin. That’s what you got. All the real issues are about degree, not kind.

Which is why it would be especially pointless to have a vote soon, while the nature of the eurozone – a highly enhanced form of Common Market, but with a political flaw in its design – is so much in flux. All the degrees could change, dramatically. Or not.

Yet it is also why, when or if a vote does eventually take place, it is really going to be decided by whether people think it is worth bothering to leave the EU. It would be a once and for ever decision. Rather as for Scots voting for independence, there will be an emotional argument for leaving. But the question we ask is whether, the morning after that emotional moment, and on all subsequent mornings, the benefits that come from leaving are really large enough.

Is the extra degree of sovereignty regained enough to make it worthwhile? Is the then less Common Market still common enough? Is the loss of Britons’ automatic right to live and work in Spain, Italy, Germany or elsewhere a price worth paying?

The Times / NI Syndication


-------

https://missingmadeleine.forumotion.net/viewtopic.forum?t=21309

[Sponsored content]