New EC Thread
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Re: New EC Thread
Panda Wed 12 Dec - 9:19
Some interesting comments to the above article.
Kristian
28 minutes ago
The thing is Cameron's options are very limited when it comes to the City.
The latest few years have proven beyond doubt that City is a de-facto an independent state and the UK government has very little powers to regulate and navigate.
If City wants to leave, it will leave and Cameron or Miliband etc. will not be able to stop it, because the amount of millions available to save the City's butt is running dry.
And that City's departure from London is inevitable within months after backbench Vitorians drag the UK out of the EU, is pretty much given.
(Edited by author 28 minutes ago)
David Camerpong
19 minutes ago
If the UK leaves the eu it will be over for the eu UNLESS you are going to fork out to fill in the hole in the eu's finances by us not paying into the ponzi scheme??
londonguy
43 seconds ago
You need to look up the definition of ponzi scheme - the EU is not one - ponzi schemes are what have been operating with little in the way of detection in the casino capitals of London and New York.
londonguy
43 minutes ago
Go into battle to protect the fraudsters, money launders and criminals in The City - great.
I would prefer to have our financial services regulated by the ECB - at least they might stand up to the bankers.
David Camerpong
23 minutes ago
Nonsense!
What bit about HSBC being fined $1.9 BILLION do you not understand... If the banks were running things do you think they would allow themselves to be fined for allegations??
Do you think Standard Chartered would be fined $320 MILLION??
Do you think Barclays woul have paid £453 MILLION
Do you think 3 bankers would have been arrested yesterday???
Do you think they would volunteer to have their bonuses taxed if they were in charge.?
Fact is Governments are in charge & that the banks are being used as fig leaves to cover up government incompetence & fool hardy schemes!! AND the public fall for it!
londonguy
4 minutes ago
1. The amounts of money you mention are trivial compared to the sums these banks have made and the amounts of money these banks have cost us.
2. 3 bankers have been arrested (not charged let alone convicted 4/5 years after the alleged crime) - call that justice? The City is awash with fraud and corruption.
robertsonjames
28 minutes ago
Don't you understand that the French and the Germans don't care remotely about financial probity and fair play? These are the people, after all, who cooked their books to get into the Euro and then cooked their banks' books to ensure they "passed" the ludicrous EU stress tests last year, when every sane person knows many Continental banks are actually insolvent. They're the same people who given half the chance would abolish ratings agencies, set up their own and then miraculously declare all Club Med governments AAA.
As with the pretence that the single currency was merely about the convenience of holidaymakers so EU-run banking regulation is being sold as tackling fraud. And gullible fools like you fall for it every time.
It's about power. Nothing more and nothing less. And once regulation is run out of Frankfurt it'll be used to protect French and German interests and damage British ones using whatever corrupt means are thought necessary.
(Edited by author 27 minutes ago)
londonguy
2 minutes ago
There is no evidence for what you have said - there is however considerable evidence that The City has been involved in money laundering, sanctions busting and fraud.
It might be a good idea to put our own house in order before we start throwing things at other people.
maria21
28 minutes ago
londonguy
I agree with everything you write but ....
Britain relies on the City to "earn" (steal) huge amounts of money to help our ailing economy. It would be great to see these thieving bastards thrown into jail, but we simply can't afford it!
Better to start closing down the tax havens, like the Isle of Man, where the City "exports" a lot of its dirty work - society would be better served if these places were destroyed ...
woohoo02
44 minutes ago
In other news , the electricity companies are going to hike their prices again due to City speculators and green TAXES , piss off Cameron.
David Camerpong
54 minutes ago
cameron takes dive in the first!
george2osborne0
55 minutes ago
Save the City and obliterate the population.
Way to go .....................
Being the expert in everything I'm sure Cameron will forge ahead regardless.
itsafunnyoldworldsaint
Today 02:55 AM
Things in the EU do move slowly, but inexeroably.
The ECB (and therefore the Eueozone) set out its stall with the ECB location policy over clearing houses for large Euro denominated transaction to be located within the EZ.
The UK has filed suit against this but there seems to be no resolution as yet.
The banking union regulation (mutualisation of deposit insurance is not on the table in any shape or form) stumbling block is that Germany wants cross barder banking only regulated whilst the French want all, as a means of acquiring mutualisation. The French have no chance.
Sometime in 2013 cross border regulation is likely to emerge. Obviously that effects the City and one way of resolving the clearing house issue is that the City comes under the control of the ECB in this respect. You want to trade with the EZ (EU) then it's on our terms.
Cameron has nothing to negotaite with. After the debacle of his veto on EU institutions in November 20011 in a pathetic attempt to gain a 'repatriation of powers' that earned him plaudits from his rag bag of a party but the finger from the rest of the EU who just ignored him, he has little or no goodwill.
Osborne has pointed out repeatedly the importance of the Euro to the UK economy, so a repeat of that exercise is neither of benefit to the UK economy nor to his party, increasingly focused on the UKIP Mad Hatter's Tea Party.
In addition, the den of thieves and fraudsters in the City demonstrate how sharp practice is as rife in the wholesale as it has been in the retail market with various City firms in court
http://www.bbc.co.uk/news/busi...
To mis-quote Oscar Wilde
The unpleasant in full support of the untrustworthy
genghis
31 minutes ago
'You want to trade with the EZ (EU) then it's on our terms.'
I think that summarises the aspirations of some quite nicely and it is not limited to finance. And therein lies the problem. Does the EU see itself as an internal trading block with limited external trade? Probably not: certainly not as far as Germany and the UK (amongst others) are concerned
Or does it believe that its goods and services are so unique and essential to the world that it can impose its will as it sees fit? If so then it is going to have a nasty shock as there is little or nothing that cannot be provided by suppliers elsewhere. They may even be off shoots of companies head-quartered in the EU who might then find it essential to move out.
The third alternative - that the EU becomes a dynamic and vibrant centre of excellence freely trading with countries and other customs unions around the world - is so far fetched as to be not worthy of analysis.
Kristian
28 minutes ago
The thing is Cameron's options are very limited when it comes to the City.
The latest few years have proven beyond doubt that City is a de-facto an independent state and the UK government has very little powers to regulate and navigate.
If City wants to leave, it will leave and Cameron or Miliband etc. will not be able to stop it, because the amount of millions available to save the City's butt is running dry.
And that City's departure from London is inevitable within months after backbench Vitorians drag the UK out of the EU, is pretty much given.
(Edited by author 28 minutes ago)
David Camerpong
19 minutes ago
If the UK leaves the eu it will be over for the eu UNLESS you are going to fork out to fill in the hole in the eu's finances by us not paying into the ponzi scheme??
londonguy
43 seconds ago
You need to look up the definition of ponzi scheme - the EU is not one - ponzi schemes are what have been operating with little in the way of detection in the casino capitals of London and New York.
londonguy
43 minutes ago
Go into battle to protect the fraudsters, money launders and criminals in The City - great.
I would prefer to have our financial services regulated by the ECB - at least they might stand up to the bankers.
David Camerpong
23 minutes ago
Nonsense!
What bit about HSBC being fined $1.9 BILLION do you not understand... If the banks were running things do you think they would allow themselves to be fined for allegations??
Do you think Standard Chartered would be fined $320 MILLION??
Do you think Barclays woul have paid £453 MILLION
Do you think 3 bankers would have been arrested yesterday???
Do you think they would volunteer to have their bonuses taxed if they were in charge.?
Fact is Governments are in charge & that the banks are being used as fig leaves to cover up government incompetence & fool hardy schemes!! AND the public fall for it!
londonguy
4 minutes ago
1. The amounts of money you mention are trivial compared to the sums these banks have made and the amounts of money these banks have cost us.
2. 3 bankers have been arrested (not charged let alone convicted 4/5 years after the alleged crime) - call that justice? The City is awash with fraud and corruption.
robertsonjames
28 minutes ago
Don't you understand that the French and the Germans don't care remotely about financial probity and fair play? These are the people, after all, who cooked their books to get into the Euro and then cooked their banks' books to ensure they "passed" the ludicrous EU stress tests last year, when every sane person knows many Continental banks are actually insolvent. They're the same people who given half the chance would abolish ratings agencies, set up their own and then miraculously declare all Club Med governments AAA.
As with the pretence that the single currency was merely about the convenience of holidaymakers so EU-run banking regulation is being sold as tackling fraud. And gullible fools like you fall for it every time.
It's about power. Nothing more and nothing less. And once regulation is run out of Frankfurt it'll be used to protect French and German interests and damage British ones using whatever corrupt means are thought necessary.
(Edited by author 27 minutes ago)
londonguy
2 minutes ago
There is no evidence for what you have said - there is however considerable evidence that The City has been involved in money laundering, sanctions busting and fraud.
It might be a good idea to put our own house in order before we start throwing things at other people.
maria21
28 minutes ago
londonguy
I agree with everything you write but ....
Britain relies on the City to "earn" (steal) huge amounts of money to help our ailing economy. It would be great to see these thieving bastards thrown into jail, but we simply can't afford it!
Better to start closing down the tax havens, like the Isle of Man, where the City "exports" a lot of its dirty work - society would be better served if these places were destroyed ...
woohoo02
44 minutes ago
In other news , the electricity companies are going to hike their prices again due to City speculators and green TAXES , piss off Cameron.
David Camerpong
54 minutes ago
cameron takes dive in the first!
george2osborne0
55 minutes ago
Save the City and obliterate the population.
Way to go .....................
Being the expert in everything I'm sure Cameron will forge ahead regardless.
itsafunnyoldworldsaint
Today 02:55 AM
Things in the EU do move slowly, but inexeroably.
The ECB (and therefore the Eueozone) set out its stall with the ECB location policy over clearing houses for large Euro denominated transaction to be located within the EZ.
The UK has filed suit against this but there seems to be no resolution as yet.
The banking union regulation (mutualisation of deposit insurance is not on the table in any shape or form) stumbling block is that Germany wants cross barder banking only regulated whilst the French want all, as a means of acquiring mutualisation. The French have no chance.
Sometime in 2013 cross border regulation is likely to emerge. Obviously that effects the City and one way of resolving the clearing house issue is that the City comes under the control of the ECB in this respect. You want to trade with the EZ (EU) then it's on our terms.
Cameron has nothing to negotaite with. After the debacle of his veto on EU institutions in November 20011 in a pathetic attempt to gain a 'repatriation of powers' that earned him plaudits from his rag bag of a party but the finger from the rest of the EU who just ignored him, he has little or no goodwill.
Osborne has pointed out repeatedly the importance of the Euro to the UK economy, so a repeat of that exercise is neither of benefit to the UK economy nor to his party, increasingly focused on the UKIP Mad Hatter's Tea Party.
In addition, the den of thieves and fraudsters in the City demonstrate how sharp practice is as rife in the wholesale as it has been in the retail market with various City firms in court
http://www.bbc.co.uk/news/busi...
To mis-quote Oscar Wilde
The unpleasant in full support of the untrustworthy
genghis
31 minutes ago
'You want to trade with the EZ (EU) then it's on our terms.'
I think that summarises the aspirations of some quite nicely and it is not limited to finance. And therein lies the problem. Does the EU see itself as an internal trading block with limited external trade? Probably not: certainly not as far as Germany and the UK (amongst others) are concerned
Or does it believe that its goods and services are so unique and essential to the world that it can impose its will as it sees fit? If so then it is going to have a nasty shock as there is little or nothing that cannot be provided by suppliers elsewhere. They may even be off shoots of companies head-quartered in the EU who might then find it essential to move out.
The third alternative - that the EU becomes a dynamic and vibrant centre of excellence freely trading with countries and other customs unions around the world - is so far fetched as to be not worthy of analysis.
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Re: New EC Thread
malena stool Wed 12 Dec - 10:37
Quote
The third alternative - that the EU becomes a dynamic and vibrant centre of excellence freely trading with countries and other customs unions around the world - is so far fetched as to be not worthy of analysis.
Unquote.
A masterpiece.
:Applaud:
The third alternative - that the EU becomes a dynamic and vibrant centre of excellence freely trading with countries and other customs unions around the world - is so far fetched as to be not worthy of analysis.
Unquote.
A masterpiece.
:Applaud: 
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Re: New EC Thread
Panda Wed 12 Dec - 10:53
malena stool wrote:Quote
The third alternative - that the EU becomes a dynamic and vibrant centre of excellence freely trading with countries and other customs unions around the world - is so far fetched as to be not worthy of analysis.
Unquote.
A masterpiece.:Applaud:
Yes malena, there are some very good comments there, obviously from Guys in the finance industry who know more than us. Especially the comment that if Britain leaves the EU the Banks will move their business elsewhere.
Pretty ironic really when the Banks and their shady dealings have been responsible for the recession around the World. I think Sharia banking will increase , or if Cameron rushes through a split like Vince Cable advocates Retail Banking and Investment banking there might be some hope.
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Re: New EC Thread
Panda Wed 12 Dec - 16:44
European Union: Banking union pipe dream
12 December 2012Polityka Warsaw
Raul Arias
Banking union has already been delayed by more than 10 years and yet there are few indications this will change at the upcoming EU summit on Thursday. Clearly, national interests of some member states are about to prevail over the common good, laments Polityka’s columnist.
Wawrzyniec Smoczyński
Whatever the EU leaders give birth to at Thursday’s summit, it will not be the banking union they have been talking about for months.
It was to consist of four elements: integrated banking supervision, a deposit insurance scheme, a resolution scheme for the orderly winding down of non-viable institutions, and a common regulatory framework on supranational banks.
At best, only the first of those will be realised, and even that is highly dubious. And even if single European banking supervision is indeed introduced, it would be a gross exaggeration to call it a “union”.
Missed opportunity
Banking union should have happened 10 or 15 years ago. We have long had what effectively amounts to a single financial market – European banks operate transnationally, investors buy neighbouring countries’ bonds, citizens set up accounts in other member states – and it is only the financial watchdogs that remain national.
As a result, big banks are less regulated in Europe than in the US; worse still, the EU lacks Chapter 11-style protection regulations [allowing firms to be reorganised in case of] large-scale bankruptcies.
Once again national interests are preventing a closer union. Germany does not want the single banking supervision meddling with their Sparkassen [regional savings banks]. France would like to avoid common regulations, especially on required equity levels.
The Netherlands doesn’t want to pay for the deposit insurance scheme. But it is the United Kingdom that is banking union’s greatest opponent, fearing a deadly attack against the City, the financial heart of Europe and main driving engine of the British economy. David Cameron is coming to the summit with a veto in his pocket.
Eurozone banking union
Banking union was to be a step towards a European economic recovery. Instead, we are in for yet another summit of political helplessness – an even more embarrassing one since it will take place shortly after EU officials have accepted the Nobel Peace Prize in Oslo.
But the impossibility of reaching an EU-wide agreement will have one very specific consequence: The eurozone countries will set up their banking supervision.
If a summit of 27 states ends in a fiasco, 18 of them will have received a clear mandate to pursue closer integration between themselves. The proposition of a separate eurozone budget has already been tabled.
On the web
Negotiations
Sweden and Czech Republic could stay out
Sweden, the second biggest banking centre outside the eurozone, is set to join Britain and remain outside Europe’s banking union, because it feels that non-eurozone members would be given too limited rights. “This gives Britain a steadfast ally in insisting that the European Central Bank does not become dominant in setting the EU’s technical rules when it takes over supervision responsibilities,” writes the Financial Times.
The Czech government is also threatening to veto the banking union plans over objections to giving bank supervision powers to the ECB. Many Czech banks are subsidiaries of euro area banks, and Prime Minister Petr Nečas wants to avoid the the Czech banking system becoming a cash pot for eurozone lenders. “Either the EU agrees to the special declaration proposed by Czechs or the banking union will not be created,” notes economic daily Hospodářské noviny.
12 December 2012Polityka Warsaw
Raul Arias
Banking union has already been delayed by more than 10 years and yet there are few indications this will change at the upcoming EU summit on Thursday. Clearly, national interests of some member states are about to prevail over the common good, laments Polityka’s columnist.
Wawrzyniec Smoczyński
Whatever the EU leaders give birth to at Thursday’s summit, it will not be the banking union they have been talking about for months.
It was to consist of four elements: integrated banking supervision, a deposit insurance scheme, a resolution scheme for the orderly winding down of non-viable institutions, and a common regulatory framework on supranational banks.
At best, only the first of those will be realised, and even that is highly dubious. And even if single European banking supervision is indeed introduced, it would be a gross exaggeration to call it a “union”.
Missed opportunity
Banking union should have happened 10 or 15 years ago. We have long had what effectively amounts to a single financial market – European banks operate transnationally, investors buy neighbouring countries’ bonds, citizens set up accounts in other member states – and it is only the financial watchdogs that remain national.
As a result, big banks are less regulated in Europe than in the US; worse still, the EU lacks Chapter 11-style protection regulations [allowing firms to be reorganised in case of] large-scale bankruptcies.
Once again national interests are preventing a closer union. Germany does not want the single banking supervision meddling with their Sparkassen [regional savings banks]. France would like to avoid common regulations, especially on required equity levels.
The Netherlands doesn’t want to pay for the deposit insurance scheme. But it is the United Kingdom that is banking union’s greatest opponent, fearing a deadly attack against the City, the financial heart of Europe and main driving engine of the British economy. David Cameron is coming to the summit with a veto in his pocket.
Eurozone banking union
Banking union was to be a step towards a European economic recovery. Instead, we are in for yet another summit of political helplessness – an even more embarrassing one since it will take place shortly after EU officials have accepted the Nobel Peace Prize in Oslo.
But the impossibility of reaching an EU-wide agreement will have one very specific consequence: The eurozone countries will set up their banking supervision.
If a summit of 27 states ends in a fiasco, 18 of them will have received a clear mandate to pursue closer integration between themselves. The proposition of a separate eurozone budget has already been tabled.
On the web
Negotiations
Sweden and Czech Republic could stay out
Sweden, the second biggest banking centre outside the eurozone, is set to join Britain and remain outside Europe’s banking union, because it feels that non-eurozone members would be given too limited rights. “This gives Britain a steadfast ally in insisting that the European Central Bank does not become dominant in setting the EU’s technical rules when it takes over supervision responsibilities,” writes the Financial Times.
The Czech government is also threatening to veto the banking union plans over objections to giving bank supervision powers to the ECB. Many Czech banks are subsidiaries of euro area banks, and Prime Minister Petr Nečas wants to avoid the the Czech banking system becoming a cash pot for eurozone lenders. “Either the EU agrees to the special declaration proposed by Czechs or the banking union will not be created,” notes economic daily Hospodářské noviny.
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Re: New EC Thread
Panda Wed 12 Dec - 17:45
EU to Dilute Timeline for Euro-Area Overhaul, Draft Shows
By Rebecca Christie & James G. Neuger - Dec 12, 2012 4:47 PM GMT
European Union leaders are set to dilute the timeline for overhauling the euro zone, as German Chancellor Angela Merkel steps on the brakes.
A draft statement for tomorrow’s EU summit drops a three-stage timetable that would commit euro leaders to consider as of 2014 paying into a budget to help absorb economic shocks.
Such a budget could be weighed as the euro area “evolves toward deeper integration,” the document obtained by Bloomberg News said, without giving a deadline. Advances toward fiscal federalism “will take more time and will require in-depth consultations.”
With Merkel running for a third term in late 2013, the Berlin government has chafed at offering further debt-crisis aid or venturing into a longer-term euro remake potentially bearing hidden costs for German taxpayers.
Merkel’s objections had already led EU President Herman Van Rompuy to banish talk of moves toward common debt issuance from a roadmap for the euro’s future issued last week.
Pushback from Germany and northern creditor-country allies was reflected in today’s proposed summit statement, which abandoned the stage-by-stage timetable for deeper integration that featured in a Dec. 3 draft.
German Stance
While the three-stage timetable lives on in Van Rompuy’s Dec. 6 roadmap, it won’t be binding on euro governments. Merkel dismissed the roadmap as “preliminary” yesterday, according to a German official who sat in on a closed-door session with the chancellor.
Germany’s focus is on steps to increase Europe’s competitiveness, leaving questions such as a euro-area “fiscal capacity” to an indeterminate point in the future, another German official told reporters in Berlin today.
German emphasis on economic discipline clashes withFrance’s call for the pooling of financial burdens, echoing the ideological battles of the 1980s and 1990s that led to the euro’s fragmented management.
For now, the upper hand rests with the German-led bloc, the main underwriters of 486 billion euros ($634 billion) in rescue loans for four countries since the outbreak of the debt crisis three years ago.
Germany’s plea for sounder economic policies was endorsed in the latest summit draft, which foresaw “individual arrangements of a contractual nature with EU institutions” to keep governments on the reform path.
Bank Supervisor
France wants the tighter discipline to go hand in hand with financial support. While Merkel has dangled the prospect of European funding for national reforms, she has stopped short of backing France’s call for a European unemployment insurance program.
As debate swirls over what the euro will look like in five to 10 years, the near-term priority is to set up a single bank supervisor followed by a common bank-resolution system, a European official told reporters in Brussels.
With European leaders coming to town tomorrow, finance ministers returned to Brussels today to tackle the bank-supervision proposals. German Finance Minister Wolfgang Schaeuble spoke of a “good chance” of an accord, if not today, then before the Christmas break.
The summit draft set a target of June 2013 for finance ministers to agree on common norms for handling failing banks and setting minimum standards for deposit guarantee schemes.
More ambitious proposals for a “single resolution mechanism” for countries that take part in common bank supervision will be made by the European Commission in 2013, the draft said. Creditor countries have resisted putting up extra money to fix bank failures elsewhere.
Separately, there are no plans for tomorrow’s summit to appoint a successor to Luxembourg Prime Minister Jean-Claude Juncker as chairman of euro finance meetings, the Brussels official said. Juncker plans to step down in early 2013.
By Rebecca Christie & James G. Neuger - Dec 12, 2012 4:47 PM GMT
European Union leaders are set to dilute the timeline for overhauling the euro zone, as German Chancellor Angela Merkel steps on the brakes.
A draft statement for tomorrow’s EU summit drops a three-stage timetable that would commit euro leaders to consider as of 2014 paying into a budget to help absorb economic shocks.
Such a budget could be weighed as the euro area “evolves toward deeper integration,” the document obtained by Bloomberg News said, without giving a deadline. Advances toward fiscal federalism “will take more time and will require in-depth consultations.”
With Merkel running for a third term in late 2013, the Berlin government has chafed at offering further debt-crisis aid or venturing into a longer-term euro remake potentially bearing hidden costs for German taxpayers.
Merkel’s objections had already led EU President Herman Van Rompuy to banish talk of moves toward common debt issuance from a roadmap for the euro’s future issued last week.
Pushback from Germany and northern creditor-country allies was reflected in today’s proposed summit statement, which abandoned the stage-by-stage timetable for deeper integration that featured in a Dec. 3 draft.
German Stance
While the three-stage timetable lives on in Van Rompuy’s Dec. 6 roadmap, it won’t be binding on euro governments. Merkel dismissed the roadmap as “preliminary” yesterday, according to a German official who sat in on a closed-door session with the chancellor.
Germany’s focus is on steps to increase Europe’s competitiveness, leaving questions such as a euro-area “fiscal capacity” to an indeterminate point in the future, another German official told reporters in Berlin today.
German emphasis on economic discipline clashes withFrance’s call for the pooling of financial burdens, echoing the ideological battles of the 1980s and 1990s that led to the euro’s fragmented management.
For now, the upper hand rests with the German-led bloc, the main underwriters of 486 billion euros ($634 billion) in rescue loans for four countries since the outbreak of the debt crisis three years ago.
Germany’s plea for sounder economic policies was endorsed in the latest summit draft, which foresaw “individual arrangements of a contractual nature with EU institutions” to keep governments on the reform path.
Bank Supervisor
France wants the tighter discipline to go hand in hand with financial support. While Merkel has dangled the prospect of European funding for national reforms, she has stopped short of backing France’s call for a European unemployment insurance program.
As debate swirls over what the euro will look like in five to 10 years, the near-term priority is to set up a single bank supervisor followed by a common bank-resolution system, a European official told reporters in Brussels.
With European leaders coming to town tomorrow, finance ministers returned to Brussels today to tackle the bank-supervision proposals. German Finance Minister Wolfgang Schaeuble spoke of a “good chance” of an accord, if not today, then before the Christmas break.
The summit draft set a target of June 2013 for finance ministers to agree on common norms for handling failing banks and setting minimum standards for deposit guarantee schemes.
More ambitious proposals for a “single resolution mechanism” for countries that take part in common bank supervision will be made by the European Commission in 2013, the draft said. Creditor countries have resisted putting up extra money to fix bank failures elsewhere.
Separately, there are no plans for tomorrow’s summit to appoint a successor to Luxembourg Prime Minister Jean-Claude Juncker as chairman of euro finance meetings, the Brussels official said. Juncker plans to step down in early 2013.
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Re: New EC Thread
Panda Thu 13 Dec - 9:24
Debt Crisis: Britain wins safeguards as EU secures deal on banking union - live
Britain secures coveted bank union safeguards as EU finance ministers lay cornerstone of wider economic union.
The talks over the wider ECB deal were boosted when Germany indicated willingness to compromise over the scope of the reforms Photo: AP
By Denise Roland
9:01AM GMT 13 Dec 2012
11 Comments
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2012-12-13 09:01:49.0
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• No Cyprus bail out deal this year: Juncker
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09.01 German Chancellor Angela Merkel has said she "cannot overstate the importance of the EU banking union deal", adding that she was satisfied her finance minister Wolfgang Schaeuble managed to push through the main demands.
She added she is convinced Europe will emerge stronger from its crisis, and hopes EU leaders can agree on a roadmap to strengthen the bloc's competitiveness when they meet today and tomorrow. Her comments come in stark contrast to remarks made behind closed doors on Tuesday, when she warned her cabinet she was not expecting much progress from the banking union talks. Addressing the lower house in Germany's parliament, she said:
This courage to bring about change is what we need, and therefore I am convinced that Europe will manage to come out of this crisis stronger than we went into it. This is the great mission of our times.
Related Articles
08.20 Jean-Claude Juncker, outgoing president of the Eurogroup set of finance ministers from the 17-nation eurozone bloc, has warned it is unlikely a deal will be reached on a bail out package for ailing Cyprus when they gather on Thursday. He added an agreement may be reached in January. The Mediterranean island sought financial aid - which could be up to €17.5bn, equal to its entire gross domestic product - from the European Union and IMF in June, after its banks were battered by their exposure to the Greek crisis.
Jean-Claude Juncker
07.50 Our columnist Jeremy Warner, meanwhile, argues that us that when it comes to UK monetary policy, we should follow the Fed's lead and make growth a specific objective, and stop dwelling on interest rate alone. Read his piece here.
07.36 Today Prime Minister David Cameron heads to Brussels for a two-day EU leaders' summit. Top of the agenda will be the banking union, on which topic the talks will get off to a good start after last night's accord that ECB should be given powers to supervise the single currency bloc's 200 or so biggest banks. But, writing in the FT, former Polish finance minister and Polish central bank president Leszek Balcerowicz argues this is misguided. He said:
Europe-wide approaches cannot subsitute for improved domestic political culture. This should stress the positive role of fiscal discipline and of market forces. Creating such a culture is the challenge for opinion leaders in eurozone countries, which display a strong statist bias. At the minimum opinion leaders should stop equating "the European social model" with a large (and often badly structured) welfare state, and stop blaming markets for the problems produced by faulty poilcies.
07.11 Overnight we had news the EU finance ministers reached a deal for a eurozone banking union after 14 hours of talks, and months of painstaking negotiations. The ECB will have power to supervise the eurozone's biggest banks - those which hold at least €30bn in assets - amounting to around 200 of the bloc's 6,000 lenders. Meanwhile the UK and Sweden secured safeguards to insure a degree of influence over decision affecting all EU banks.
06.00 Good morning and welcome to our live coverage of the eurozone debt crisis.
Britain secures coveted bank union safeguards as EU finance ministers lay cornerstone of wider economic union.
The talks over the wider ECB deal were boosted when Germany indicated willingness to compromise over the scope of the reforms Photo: AP
By Denise Roland
9:01AM GMT 13 Dec 2012
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09.01 German Chancellor Angela Merkel has said she "cannot overstate the importance of the EU banking union deal", adding that she was satisfied her finance minister Wolfgang Schaeuble managed to push through the main demands.
She added she is convinced Europe will emerge stronger from its crisis, and hopes EU leaders can agree on a roadmap to strengthen the bloc's competitiveness when they meet today and tomorrow. Her comments come in stark contrast to remarks made behind closed doors on Tuesday, when she warned her cabinet she was not expecting much progress from the banking union talks. Addressing the lower house in Germany's parliament, she said:
This courage to bring about change is what we need, and therefore I am convinced that Europe will manage to come out of this crisis stronger than we went into it. This is the great mission of our times. Related Articles
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08.20 Jean-Claude Juncker, outgoing president of the Eurogroup set of finance ministers from the 17-nation eurozone bloc, has warned it is unlikely a deal will be reached on a bail out package for ailing Cyprus when they gather on Thursday. He added an agreement may be reached in January. The Mediterranean island sought financial aid - which could be up to €17.5bn, equal to its entire gross domestic product - from the European Union and IMF in June, after its banks were battered by their exposure to the Greek crisis.
Jean-Claude Juncker
07.50 Our columnist Jeremy Warner, meanwhile, argues that us that when it comes to UK monetary policy, we should follow the Fed's lead and make growth a specific objective, and stop dwelling on interest rate alone. Read his piece here.
07.36 Today Prime Minister David Cameron heads to Brussels for a two-day EU leaders' summit. Top of the agenda will be the banking union, on which topic the talks will get off to a good start after last night's accord that ECB should be given powers to supervise the single currency bloc's 200 or so biggest banks. But, writing in the FT, former Polish finance minister and Polish central bank president Leszek Balcerowicz argues this is misguided. He said:
Europe-wide approaches cannot subsitute for improved domestic political culture. This should stress the positive role of fiscal discipline and of market forces. Creating such a culture is the challenge for opinion leaders in eurozone countries, which display a strong statist bias. At the minimum opinion leaders should stop equating "the European social model" with a large (and often badly structured) welfare state, and stop blaming markets for the problems produced by faulty poilcies. 07.11 Overnight we had news the EU finance ministers reached a deal for a eurozone banking union after 14 hours of talks, and months of painstaking negotiations. The ECB will have power to supervise the eurozone's biggest banks - those which hold at least €30bn in assets - amounting to around 200 of the bloc's 6,000 lenders. Meanwhile the UK and Sweden secured safeguards to insure a degree of influence over decision affecting all EU banks.
06.00 Good morning and welcome to our live coverage of the eurozone debt crisis.
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Northern Ireland: United under one flag
12 December 2012The Irish Times Dublin
Cartoonist
Martyn Turner (1948) is a British cartoonist and writer based in Ireland. His cartoons have appeared in the The Irish Times since 1976. He is also a contributor to The Scotsman, The Sunday Express, The Independent, The Guardian, The Spectator et Courrier International.
=============================
Greece is to receive E34 billion bail out immediately but Ollie Rehn says it is essential for Greece to continue its reform, who are they kidding????
Cyprus has been refused a bail-out .....very strange,.
Angela Merkel has put the EU decision making on hold until after Germanys' Election.
12 December 2012The Irish Times Dublin
Cartoonist
Martyn Turner (1948) is a British cartoonist and writer based in Ireland. His cartoons have appeared in the The Irish Times since 1976. He is also a contributor to The Scotsman, The Sunday Express, The Independent, The Guardian, The Spectator et Courrier International.
=============================
Greece is to receive E34 billion bail out immediately but Ollie Rehn says it is essential for Greece to continue its reform, who are they kidding????
Cyprus has been refused a bail-out .....very strange,.
Angela Merkel has put the EU decision making on hold until after Germanys' Election.
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False hope springs eternal in the eurozone
It’s remarkable that the single currency has survived – but the worst is far from over
José Manuel Barroso, President of the European Commission. A year ago, there was widespread pessimism about the euro’s chances of survival in its present form. It was thought that Greece and Portugal would soon be gone Photo: AFP/Getty Images
By Jeremy Warner
7:55PM GMT 13 Dec 2012
77 Comments
One thing you can say about the euro – it’s proving much more resilient than conventional economic analysis suggested it was ever likely to be. Those who bet the ranch on it falling apart this year have been left badly out of pocket; those that took the contrary view and piled into Greek assets when they were flat on the floor have done well.
When politics and economics collide, it’s nearly always economics that wins, but with the single currency – so far – the politics has triumphed over the economics. Large parts of the eurozone periphery have suffered economic collapse as bad as anything seen since the destruction of the Second World War, yet still they cling to monetary union as if it were the only possible hope of salvation. The appetite for economic torture seems to know no bounds.
Financially, too, the whole thing is holding together rather better than you might have expected. Whenever it looks as if it’s all about to come apart, just enough is done to stop collapse. On this front at least, the politicians have been as good as their word in promising to do as much as it takes.
First there was the establishment of a common bail‑out mechanism, then there was European Central Bank intervention to prop up the banking system, and then finally this autumn there was the ECB pledge to support sovereign bond markets. Sheer force of political will is allowing this dysfunctional economic construct to struggle on.
Surprise at this resilience is not confined to Eurosceptics. Even the Eurocrats have been somewhat taken aback by their apparent “success”. A year ago, there was widespread pessimism about the euro’s chances of survival in its present form. It was thought that Greece and Portugal would soon be gone, and possibly others too.
Related Articles
With survival has come confidence that the worst is now over, however delusional this might be. With the clichés spilling forth like confetti, Olli Rehn, the EU commissioner for economic affairs, this week announced that “there is light at the end of the tunnel, confidence is returning, and we need to stay the course”.
As Jonathan Portes of the National Institute of Economic and Social Research has pointed out, Mr Rehn said almost exactly the same thing two years ago. No doubt he will still be saying it in another two. And that’s the point – the euro has survived, but only to enter a state of chronic long-term illness for which there appears no relief. If 25 per cent unemployment in Greece and Spain counts as light at the end of the tunnel, what would be the correct metaphor for, say, 20 per cent? The arrival of sunlit uplands?
In any case, no one can admit failure, so they trumpet the mere fact of the euro’s survival as evidence of success. Once upon a time, the single currency was meant to be about mutual economic advancement and cooperation; today, merely getting through the next year seems purpose enough.
Slowly but surely, the institutions, responsibilities and obligations are being put in place that will ensure at least a functioning single currency, if not a healthy one. The latest example is this week’s agreement on a banking union.
Encouragingly, from Britain’s point of view, the eurozone has grown confident enough in its future to be able to accommodate the UK’s position of being both within the European Union and outside the banking union and the single currency. Voting on new banking regulation will require a “double majority” of both eurozone nations and those EU members outside the eurozone. British negotiators have also ensured a “non-discrimination” clause to prevent the European Central Bank, in its position as banking supervisor, doing things that disadvantage those outside the single currency. In theory at least, the City’s position as Europe’s pre-eminent financial centre is protected.
The concession sets an important precedent, for if repeated in other areas it formalises the internal market as something for Europe as a whole, and not just the eurozone. The sort of EU-lite relationship the Tory hierarchy aspires to might be possible. Few would have believed it even a few months back.
All these things are well and good. Eurogeddon would not have been in Britain’s interests, nor would ejection from the single market, which, for all its faults, is still a powerful force for free trade and open borders. But none of this fixes the economic sickness at the heart of Europe, or does anything to address the apparent determination of creditor nations to punish debtors with repeated rounds of self-defeating austerity.
Amid all the hoopla surrounding the Autumn Statement, it went barely noticed that, in the same week, Ireland pushed through a further austerity budget so severe that it makes Britain’s seem like Christmas come early by comparison.
There is no doubt that being outside this economic madhouse is much better than being in it. Yet despite the smugness Britons are prone to feel at having avoided the calamity of the euro, it’s not as if our economy is doing any better for it. We have managed, miraculously, to keep the lid on unemployment, but that’s about the only bright spot in an economy which otherwise looks almost as deeply impaired as anywhere else.
Even Greece is managing more of an export revival than the UK, while our primary deficit remains the highest in the OECD. Having your own currency, it seems, is no guarantee of economic success. We are now more than five years into the crisis, with lasting solutions as far away as ever.
It’s remarkable that the single currency has survived – but the worst is far from over
José Manuel Barroso, President of the European Commission. A year ago, there was widespread pessimism about the euro’s chances of survival in its present form. It was thought that Greece and Portugal would soon be gone Photo: AFP/Getty Images
By Jeremy Warner
7:55PM GMT 13 Dec 2012
77 Comments One thing you can say about the euro – it’s proving much more resilient than conventional economic analysis suggested it was ever likely to be. Those who bet the ranch on it falling apart this year have been left badly out of pocket; those that took the contrary view and piled into Greek assets when they were flat on the floor have done well.
When politics and economics collide, it’s nearly always economics that wins, but with the single currency – so far – the politics has triumphed over the economics. Large parts of the eurozone periphery have suffered economic collapse as bad as anything seen since the destruction of the Second World War, yet still they cling to monetary union as if it were the only possible hope of salvation. The appetite for economic torture seems to know no bounds.
Financially, too, the whole thing is holding together rather better than you might have expected. Whenever it looks as if it’s all about to come apart, just enough is done to stop collapse. On this front at least, the politicians have been as good as their word in promising to do as much as it takes.
First there was the establishment of a common bail‑out mechanism, then there was European Central Bank intervention to prop up the banking system, and then finally this autumn there was the ECB pledge to support sovereign bond markets. Sheer force of political will is allowing this dysfunctional economic construct to struggle on.
Surprise at this resilience is not confined to Eurosceptics. Even the Eurocrats have been somewhat taken aback by their apparent “success”. A year ago, there was widespread pessimism about the euro’s chances of survival in its present form. It was thought that Greece and Portugal would soon be gone, and possibly others too.
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With survival has come confidence that the worst is now over, however delusional this might be. With the clichés spilling forth like confetti, Olli Rehn, the EU commissioner for economic affairs, this week announced that “there is light at the end of the tunnel, confidence is returning, and we need to stay the course”.
As Jonathan Portes of the National Institute of Economic and Social Research has pointed out, Mr Rehn said almost exactly the same thing two years ago. No doubt he will still be saying it in another two. And that’s the point – the euro has survived, but only to enter a state of chronic long-term illness for which there appears no relief. If 25 per cent unemployment in Greece and Spain counts as light at the end of the tunnel, what would be the correct metaphor for, say, 20 per cent? The arrival of sunlit uplands?
In any case, no one can admit failure, so they trumpet the mere fact of the euro’s survival as evidence of success. Once upon a time, the single currency was meant to be about mutual economic advancement and cooperation; today, merely getting through the next year seems purpose enough.
Slowly but surely, the institutions, responsibilities and obligations are being put in place that will ensure at least a functioning single currency, if not a healthy one. The latest example is this week’s agreement on a banking union.
Encouragingly, from Britain’s point of view, the eurozone has grown confident enough in its future to be able to accommodate the UK’s position of being both within the European Union and outside the banking union and the single currency. Voting on new banking regulation will require a “double majority” of both eurozone nations and those EU members outside the eurozone. British negotiators have also ensured a “non-discrimination” clause to prevent the European Central Bank, in its position as banking supervisor, doing things that disadvantage those outside the single currency. In theory at least, the City’s position as Europe’s pre-eminent financial centre is protected.
The concession sets an important precedent, for if repeated in other areas it formalises the internal market as something for Europe as a whole, and not just the eurozone. The sort of EU-lite relationship the Tory hierarchy aspires to might be possible. Few would have believed it even a few months back.
All these things are well and good. Eurogeddon would not have been in Britain’s interests, nor would ejection from the single market, which, for all its faults, is still a powerful force for free trade and open borders. But none of this fixes the economic sickness at the heart of Europe, or does anything to address the apparent determination of creditor nations to punish debtors with repeated rounds of self-defeating austerity.
Amid all the hoopla surrounding the Autumn Statement, it went barely noticed that, in the same week, Ireland pushed through a further austerity budget so severe that it makes Britain’s seem like Christmas come early by comparison.
There is no doubt that being outside this economic madhouse is much better than being in it. Yet despite the smugness Britons are prone to feel at having avoided the calamity of the euro, it’s not as if our economy is doing any better for it. We have managed, miraculously, to keep the lid on unemployment, but that’s about the only bright spot in an economy which otherwise looks almost as deeply impaired as anywhere else.
Even Greece is managing more of an export revival than the UK, while our primary deficit remains the highest in the OECD. Having your own currency, it seems, is no guarantee of economic success. We are now more than five years into the crisis, with lasting solutions as far away as ever.
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No federal Europe this winter
13 December 2012Libération Paris
Nicolas Vadot
The last EU summit of the year will not take the path of economic and monetary union closer. The fault lies with Berlin and Paris, who have agreed to bury the roadmap which was presented to them by Herman Van Rompuy. The debate on the future of the Union has been kicked into the long grass to return in 2014, after the German and European elections.
Vincent Giret
François Hollande and Angela Merkel are doing a stark disservice to the European Union. The Franco-German duo, for once in agreement, yesterday decided to bury a strategic debate on the future of Europe. It’s a debate that has been delayed, confuscated or even prohibited.
Before the meeting, the 27 EU countries had committed to adopting a "roadmap" policy before the end of the year. This was to set out the milestones of an “intégration solidaire” (united integration), to use a cryptic utterance dear to French President Holland. What financial solidarity? What common budgetary capacity? What democratic oversight?
It was not about wrapping up every issue, or engaging in an irresponsible headlong rush, but about setting in motion all the institutions of the Union, and, above all, about opening up a major and open debate. For at least two reasons: the survival of the eurozone is at stake, and the 27 member states have not averted the disaster by deciding, at each one of the numerous “last chance” summits, on another move forward regarding financial solidarity amongst themselves.
Market pressure
However, this sideways shift – and this is the second reason – was done under pressure from the markets, without any political vision, and, above all, out of the public view.
Disagreeing about the contours of a new European federalism, the French and the Germans prefer to take the stance of the ostrich.
Angela Merkel is entering an election period and wants to avoid the slightest risk, while François Hollande fears nothing more than reopening old wounds in his majority government. End of story.
But this petty politics is based on risky assumptions – as if the crisis were finally behind us, and that the peoples of Europe would settle for a short-sighted austerity.
On the web
View from Lisbon and Rome
A decisive summit - another one
“Today and tomorrow, the European Council will discuss a roadmap for the reform and completion of the Economic and Monetary Union, which will play a decisive role in overcoming the eurozone crisis,” writes Maria João Rodrigues in Público. The EU affairs specialist and former politician continues –
13 December 2012Libération Paris
Nicolas Vadot
The last EU summit of the year will not take the path of economic and monetary union closer. The fault lies with Berlin and Paris, who have agreed to bury the roadmap which was presented to them by Herman Van Rompuy. The debate on the future of the Union has been kicked into the long grass to return in 2014, after the German and European elections.
Vincent Giret
François Hollande and Angela Merkel are doing a stark disservice to the European Union. The Franco-German duo, for once in agreement, yesterday decided to bury a strategic debate on the future of Europe. It’s a debate that has been delayed, confuscated or even prohibited.
Before the meeting, the 27 EU countries had committed to adopting a "roadmap" policy before the end of the year. This was to set out the milestones of an “intégration solidaire” (united integration), to use a cryptic utterance dear to French President Holland. What financial solidarity? What common budgetary capacity? What democratic oversight?
It was not about wrapping up every issue, or engaging in an irresponsible headlong rush, but about setting in motion all the institutions of the Union, and, above all, about opening up a major and open debate. For at least two reasons: the survival of the eurozone is at stake, and the 27 member states have not averted the disaster by deciding, at each one of the numerous “last chance” summits, on another move forward regarding financial solidarity amongst themselves.
Market pressure
However, this sideways shift – and this is the second reason – was done under pressure from the markets, without any political vision, and, above all, out of the public view.
Disagreeing about the contours of a new European federalism, the French and the Germans prefer to take the stance of the ostrich.
Angela Merkel is entering an election period and wants to avoid the slightest risk, while François Hollande fears nothing more than reopening old wounds in his majority government. End of story.
But this petty politics is based on risky assumptions – as if the crisis were finally behind us, and that the peoples of Europe would settle for a short-sighted austerity.
On the web
- Original article at Libération fr
- Draft conclusions of December EU summit
- Público opinion piece pt
- La Stampa article it
View from Lisbon and Rome
A decisive summit - another one
“Today and tomorrow, the European Council will discuss a roadmap for the reform and completion of the Economic and Monetary Union, which will play a decisive role in overcoming the eurozone crisis,” writes Maria João Rodrigues in Público. The EU affairs specialist and former politician continues –
“The final summit of a difficult year for the EU will be marked by an atmosphere fraught with worry and alarming uncertainty over just about everything relating to Europe – its future, its identity, its integration process and its federal dream,” writes Enzo Bettiza in La Stampa. For the Italian columnist –
after three years of inadequate measures that allowed the crisis to spread, major proposals have at last been tabled for discussions, in which Portugal will have to play an active role to ensure that the decision making process is not dominated by an intergovernmental logic favouring the most powerful countries. The equality of Europe’s member states and citizens, which has been significantly undermined in recent times, can only be served by the community method, which is based on the European Commission’s right of initiative and an active role for the European parliament.
the summit on December 13 and 14 will be fragmented into 48 hours of secretive corridor encounters and discreet bilateral meetings. Now that they have avoided the stumbling block of Greece and temporarily frozen the Spanish deficit, the French and the Germans who are the main protagonists at the summit will get to grips with the two major threats to the cohesion of the EU, that is to say the political turmoil in Italy and the drift towards Euroscepticism in an anti-bureaucratic United Kingdom, behind the closed doors of private diplomatic dinners.
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Eurozone crisis: Germany’s pact with the devil
14 December 2012The Irish Times Dublin
"Faust and Mephistopheles", by Eugène Delacroix (1826-27). The Wallace Collection (London).
In Goethe's most famous fable, Faust, the German author demonstrates his opinion that paper money is a continuation of alchemy by other means. This view, argues The Irish Times Berlin correspondent, is clearly evident in Germany’s current stance on the eurozone crisis.
Derek Scally
For anyone struggling to grasp German attitudes to money and debt in the eurozone crisis, all roads lead to Frankfurt.
Germany’s financial capital is not just home to two central banks, the Bundesbank and the European Central Bank, but also a yellow, baroque building in the shadow of the ECB tower.
It was here that Germany’s literary genius, Johann Wolfgang Goethe, was born in 1749. Now a museum, the Goethe Haus is home to a fascinating exhibition, Goethe and Money (Goethe und das Geld), exploring how societal attitudes to money informed Goethe’s writing which, in turn, has shaped German attitudes to money.
Goethe was born with a silver spoon in his mouth thanks to a thriving family business and some advantageous marriages.
Though friendly with several banking families – Goethe almost married into one – losses sustained by institutions after the Napoleonic wars gave the writer a life-long suspicion of banks.
Thirsty work
The writer’s household accounts show he was far from the frugal German stereotype, often spending 15 per cent of his annual earnings on wine. Bailouts from his mother and employers were a regular affair. As the exhibition curators note, Goethe defended his spendthrift ways as “crucial for the development of his personality”.
He was more stringent when he became finance minister of the duchy of Saxe-Weimar, around what is now the eastern state of Thuringia, from 1782. This experience shaped his thinking and contributed to the creation of his literary masterpiece, Faust, obligatory reading in all German schools, which centres on the notorious “Faustian pact” between the eponymous scholar and the devil Mephistopheles.
The devil promises to do Faust’s bidding on earth. But if Faust ever wishes for a moment in his life to last forever, Mephisto gets his soul.
The second part of Faust, published posthumously, opens in the bankrupt court of a hedonistic emperor. The royal treasurer reports that the “coffers are still empty”, as are the royal cellars thanks to regular parties.
The persuasive Mephistopheles turns up to propose, turning paper into money. The debt-burdened emperor is intrigued: “I’m sick and tired of how and when/We’re short of money so make it, then.” The notes signed by the emperor spark a consumer boom where “half the world seems obsessed with eating well/the other half with showing off new clothes”.
Only after Mephisto and his partner Faust vanish does anyone notice the value of the notes refer not to any real equivalent – gold in a vault, for instance – but to the promise of gold yet to be mined.
The parallels were not lost on Goethe’s contemporary readers, between the Faust fable and the capital needed to drive the industrial revolution. His warnings are once more relevant for countless German public figures who have seized on Faust to articulate their own concerns about the eurozone crisis.
ECB’s Faustian pact?
The modern role of the emperor’s chancellor in Faust, who warns against the paper money scheme, has been assumed by Bundesbank president Jens Weidmann.
“If a central bank can potentially create unlimited money from nothing, how can it ensure that money is sufficiently scarce to retain its value?” he asked a Frankfurt audience in September. “The temptation certainly exists, and many in monetary history have succumbed to it.”
He warns that the ECB’s unlimited bond-buying programme to stabilise the eurozone is a potential Faustian pact if it offers politicians a more palatable financing alternative to painful economic reform.
The ECB argues that this is not the case and their differing views has revived a cultural ambivalence in Germany to money and debt. This is, after all, the country where the word Schuld means both monetary debt and moral guilt. The ECB’s bond-market interventions have been condemned by the same moralist economists who attack indebted euro zone countries as Schuldensünder or “debt sinners”.
So is there a link between attitudes today and Goethe’s Faust, described by German literary theorist Werner Hamacher as a critique of “credit aesthetics and persuasion economics”.
Former ECB executive board member Ottmar Issing suggests Germans are not doubtful about money itself, but pessimistic that it is ever used wisely. In an essay for the Goethe and Money catalogue, entitled Inflation – the Devil’s Work? Issing argues that “the choice between blessing and curse” offered by paper money “lies in the hand of humankind”.
Former ECB president Jean-Claude Trichet agrees. In another essay, he praises Goethe’s lifelong debate about the dual nature of paper money which “produces the best and the worst in the economic sphere”.
Living within your means
For Prof Hans Christoph Binswanger, author of the Faust study Money and Magic, Goethe saw paper money as “the continuation of alchemy by other means”. To transform paper money into real wealth, argues Prof Binswanger, Goethe worried that everything would be “dragged down into the smouldering process of world production”.
“The apparently magical modern alchemy bears a profane price, it transforms the world into nothingness,” he adds. Goethe’s fear has resurfaced in the widespread German view that the eurozone crisis is the destructive result of uncontrolled, careless borrowing by societies refusing to accept the natural limits of their finances.
Economic collapse is thus a common thread running through Germany’s national trauma and its national drama. Faust and Mephisto lurk in the wings of the euro zone crisis, colouring Berlin’s demands for pan-European fiscal discipline and sparking a debate in Germany on the limits of economic growth.
“Goethe saw that money, when used properly brings with it positive opportunity, such as the rise of his own family,” said Dr Vera Hierholzer, co-curator of Goethe and Money.
“At the same time, like many of his class, he had a fear of the consequences of excess and exorbitance, of always pushing for more. It is a very German view, even today, to see the limits and to try and control things within these limits.”
The debate about monetary self-control has a relevance beyond Goethe’s Germany, particularly among crisis countries impatient to cast off their troika yoke and “return to markets”.
Interestingly, some of Ireland’s last sovereign debt auctions were chaired by the late Brian Lenihan at the hulking Frankfurter Hof hotel, located halfway between the ECB tower and the Goethe Haus.
After regaining economic sovereignty, it’s up to Ireland where it goes next. In the direction of the Goethe Haus, heeding the limits of its financial means, or back to the five-star Frankfurter Hof hotel to host expensive breakfast meetings for banks happy to lend us more Mephisto money.
14 December 2012The Irish Times Dublin
"Faust and Mephistopheles", by Eugène Delacroix (1826-27). The Wallace Collection (London).
In Goethe's most famous fable, Faust, the German author demonstrates his opinion that paper money is a continuation of alchemy by other means. This view, argues The Irish Times Berlin correspondent, is clearly evident in Germany’s current stance on the eurozone crisis.
Derek Scally
For anyone struggling to grasp German attitudes to money and debt in the eurozone crisis, all roads lead to Frankfurt.
Germany’s financial capital is not just home to two central banks, the Bundesbank and the European Central Bank, but also a yellow, baroque building in the shadow of the ECB tower.
It was here that Germany’s literary genius, Johann Wolfgang Goethe, was born in 1749. Now a museum, the Goethe Haus is home to a fascinating exhibition, Goethe and Money (Goethe und das Geld), exploring how societal attitudes to money informed Goethe’s writing which, in turn, has shaped German attitudes to money.
Goethe was born with a silver spoon in his mouth thanks to a thriving family business and some advantageous marriages.
Though friendly with several banking families – Goethe almost married into one – losses sustained by institutions after the Napoleonic wars gave the writer a life-long suspicion of banks.
Thirsty work
The writer’s household accounts show he was far from the frugal German stereotype, often spending 15 per cent of his annual earnings on wine. Bailouts from his mother and employers were a regular affair. As the exhibition curators note, Goethe defended his spendthrift ways as “crucial for the development of his personality”.
He was more stringent when he became finance minister of the duchy of Saxe-Weimar, around what is now the eastern state of Thuringia, from 1782. This experience shaped his thinking and contributed to the creation of his literary masterpiece, Faust, obligatory reading in all German schools, which centres on the notorious “Faustian pact” between the eponymous scholar and the devil Mephistopheles.
The devil promises to do Faust’s bidding on earth. But if Faust ever wishes for a moment in his life to last forever, Mephisto gets his soul.
The second part of Faust, published posthumously, opens in the bankrupt court of a hedonistic emperor. The royal treasurer reports that the “coffers are still empty”, as are the royal cellars thanks to regular parties.
The persuasive Mephistopheles turns up to propose, turning paper into money. The debt-burdened emperor is intrigued: “I’m sick and tired of how and when/We’re short of money so make it, then.” The notes signed by the emperor spark a consumer boom where “half the world seems obsessed with eating well/the other half with showing off new clothes”.
Only after Mephisto and his partner Faust vanish does anyone notice the value of the notes refer not to any real equivalent – gold in a vault, for instance – but to the promise of gold yet to be mined.
The parallels were not lost on Goethe’s contemporary readers, between the Faust fable and the capital needed to drive the industrial revolution. His warnings are once more relevant for countless German public figures who have seized on Faust to articulate their own concerns about the eurozone crisis.
ECB’s Faustian pact?
The modern role of the emperor’s chancellor in Faust, who warns against the paper money scheme, has been assumed by Bundesbank president Jens Weidmann.
“If a central bank can potentially create unlimited money from nothing, how can it ensure that money is sufficiently scarce to retain its value?” he asked a Frankfurt audience in September. “The temptation certainly exists, and many in monetary history have succumbed to it.”
He warns that the ECB’s unlimited bond-buying programme to stabilise the eurozone is a potential Faustian pact if it offers politicians a more palatable financing alternative to painful economic reform.
The ECB argues that this is not the case and their differing views has revived a cultural ambivalence in Germany to money and debt. This is, after all, the country where the word Schuld means both monetary debt and moral guilt. The ECB’s bond-market interventions have been condemned by the same moralist economists who attack indebted euro zone countries as Schuldensünder or “debt sinners”.
So is there a link between attitudes today and Goethe’s Faust, described by German literary theorist Werner Hamacher as a critique of “credit aesthetics and persuasion economics”.
Former ECB executive board member Ottmar Issing suggests Germans are not doubtful about money itself, but pessimistic that it is ever used wisely. In an essay for the Goethe and Money catalogue, entitled Inflation – the Devil’s Work? Issing argues that “the choice between blessing and curse” offered by paper money “lies in the hand of humankind”.
Former ECB president Jean-Claude Trichet agrees. In another essay, he praises Goethe’s lifelong debate about the dual nature of paper money which “produces the best and the worst in the economic sphere”.
Living within your means
For Prof Hans Christoph Binswanger, author of the Faust study Money and Magic, Goethe saw paper money as “the continuation of alchemy by other means”. To transform paper money into real wealth, argues Prof Binswanger, Goethe worried that everything would be “dragged down into the smouldering process of world production”.
“The apparently magical modern alchemy bears a profane price, it transforms the world into nothingness,” he adds. Goethe’s fear has resurfaced in the widespread German view that the eurozone crisis is the destructive result of uncontrolled, careless borrowing by societies refusing to accept the natural limits of their finances.
Economic collapse is thus a common thread running through Germany’s national trauma and its national drama. Faust and Mephisto lurk in the wings of the euro zone crisis, colouring Berlin’s demands for pan-European fiscal discipline and sparking a debate in Germany on the limits of economic growth.
“Goethe saw that money, when used properly brings with it positive opportunity, such as the rise of his own family,” said Dr Vera Hierholzer, co-curator of Goethe and Money.
“At the same time, like many of his class, he had a fear of the consequences of excess and exorbitance, of always pushing for more. It is a very German view, even today, to see the limits and to try and control things within these limits.”
The debate about monetary self-control has a relevance beyond Goethe’s Germany, particularly among crisis countries impatient to cast off their troika yoke and “return to markets”.
Interestingly, some of Ireland’s last sovereign debt auctions were chaired by the late Brian Lenihan at the hulking Frankfurter Hof hotel, located halfway between the ECB tower and the Goethe Haus.
After regaining economic sovereignty, it’s up to Ireland where it goes next. In the direction of the Goethe Haus, heeding the limits of its financial means, or back to the five-star Frankfurter Hof hotel to host expensive breakfast meetings for banks happy to lend us more Mephisto money.
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Re: New EC Thread
Panda Sat 15 Dec - 12:44
News Analysis: Message, if Murky, From U.S. to the World
The United States’ refusal to sign a global treaty on telecommunications — even though it got most of what it wanted — is seen as taking a stand for Internet freedom.
After Fighting Markets, Europe Now Prefers Working With Them
An agreement on bank supervision is the latest attempt by the European Union to calm worries about banks, government finances and, by extension, its fundamental institutions.
With E.C.B. in Spotlight, Bundesbank Finds Itself in the Shadows
The United States’ refusal to sign a global treaty on telecommunications — even though it got most of what it wanted — is seen as taking a stand for Internet freedom.After Fighting Markets, Europe Now Prefers Working With Them
An agreement on bank supervision is the latest attempt by the European Union to calm worries about banks, government finances and, by extension, its fundamental institutions.
With E.C.B. in Spotlight, Bundesbank Finds Itself in the Shadows
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Re: New EC Thread
Panda Sat 15 Dec - 13:01
After Fighting Markets, Europe Now Prefers Working With Them
By ANDREW HIGGINS
Published: December 14, 2012
Mr. Barroso’s triumphal comments, made at the end of a two-day summit meeting of the European Union’s 27 member states, could still prove premature, but they do signify a noteworthy evolution in the thinking of a Brussels bureaucracy that has long either ignored financial markets or denounced them as an alien and predatory force.
When the Greek debt crisis exploded three years ago, European officials often tended to vilify global markets and rating agencies, blaming “speculators” for the turmoil then stirring serious doubts about the long-term viability of the euro currency and even the entire “European project,” a six-decade-old venture to knit the region together through a gradual pooling of sovereignty.
As the crisis has developed, however, officials at the union’s headquarters in Brussels have stopped denouncing markets and learned instead to argue with them, presenting concrete steps to address their concerns. The banking supervisor deal, which will place about 150 of the most important banks in the 17 countries that use the euro under the supervision of the European Central Bank, is just part of a wide array of measures introduced over the last year to calm worries about the stability of Europe’s banks, government finances and, by extension, the union’s fundamental institutions.
“One of the big problems of Brussels has been that it is so remote from financial markets,” said Guntram B. Wolff, a former European Commission official who is deputy director of Bruegel, an independent economic research center in Brussels, the Belgian capital. “Now there is much more of a view of what is going on in the markets. This is a good thing.”
The traditional remoteness from, and often distaste for, financial markets, Mr. Wolff said, is largely a function of Brussels’ distance from major financial centers. The nearest is London, which for reasons of British domestic politics and fears in the city’s financial sector of meddling by the European Union, has often had testy relations with functionaries of the European Commission, the group’s main administrative and policy-making arm.
But ideology has also played a role, with many Brussels officials looking askance at what they have tended to scorn as an Anglo-Saxon preoccupation with markets, a phenomenon exemplified by the former British prime minister, Margaret Thatcher. Mrs. Thatcher is despised by many so-called Eurocrats because of her robust hostility to the organization’s goal of an “ever closer union,” a mission laid out in the 1957 Treaty of Rome, and her insistence that Europe should focus instead on building a common market for goods and services and keeping the sovereign powers of individual states intact.
“The European Parliament has many rooms named after famous Europeans, but there is no Margaret Thatcher room and there never will be one,” predicted Derk-Jan Eppink, a Dutchman elected to the parliament by voters in Belgium and vice president of the European Conservatives and Reformists Group. A member of the legislature’s budget and economic monitoring committees, Mr. Eppink said he had nonetheless noticed a sharp shift in attitudes toward markets among his colleagues and also E.U. officials since the debt crisis began shaking investors’ faith in the euro’s future.
“At the beginning of the crisis, everyone was always talking about greedy speculators and Wall Street sharks,” but such views were now “limited mainly to the hard left,” he said. “There has been a change in thinking. These markets and rating agencies are not widely seen anymore as an alien force of evil but as basically investors who don’t want to lose their money.”
“This changed over the past year,” Mr. Eppink added, when officials and politicians in Brussels “realized that many problems in the euro zone were bought on by ourselves, not by sharks and speculators.”
Carsten Brzeski, senior economist at ING Bank in Brussels, said, “It has been a steep learning curve, not just for the commission but also for markets.”
Accustomed to viewing the European Union through an American prism, many investors took fright at Europe’s fragmented and glacial decision-making process, Mr. Brzeski said. European officials, for their part, he added, often viewed the wild swings of the market, and the pain this caused as borrowing costs in Greece and Spain soared, with uncomprehending horror.
A big reason anxiety about markets has waned is that they have stayed calm in recent months, largely in response to a pledge this summer by the president of the European Central Bank, Mario Draghi, to “do whatever it takes” to defend the euro. The previous panic among investors has lifted to the point that the central bank has so far not needed to make any of the bond purchases Mr. Draghi vowed to make to shore up the debt of troubled countries.
Mr. Wolff, of the Bruegel research center, said this week’s summit meeting, far more tranquil and methodical than many previous conclaves, was an important step forward, but by no means the end of Europe’s troubles.
“There is a sense of direction at the moment, but the crisis is not over,” he said, warning that a grim economic outlook for next year, which will see much of the euro zone in recession, could upend the current optimism, especially if anger over unemployment — now at over 25 percent in Greece and Spain — leads to serious social unrest and political tumult.
James Kanter contributed reporting.
A version of this article appeared in print on December 15, 2012, on page A8 of the New York edition with the headline: After Fighting Markets, Europe Now Prefers Working With Them.
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By ANDREW HIGGINS
Published: December 14, 2012
Mr. Barroso’s triumphal comments, made at the end of a two-day summit meeting of the European Union’s 27 member states, could still prove premature, but they do signify a noteworthy evolution in the thinking of a Brussels bureaucracy that has long either ignored financial markets or denounced them as an alien and predatory force.
When the Greek debt crisis exploded three years ago, European officials often tended to vilify global markets and rating agencies, blaming “speculators” for the turmoil then stirring serious doubts about the long-term viability of the euro currency and even the entire “European project,” a six-decade-old venture to knit the region together through a gradual pooling of sovereignty.
As the crisis has developed, however, officials at the union’s headquarters in Brussels have stopped denouncing markets and learned instead to argue with them, presenting concrete steps to address their concerns. The banking supervisor deal, which will place about 150 of the most important banks in the 17 countries that use the euro under the supervision of the European Central Bank, is just part of a wide array of measures introduced over the last year to calm worries about the stability of Europe’s banks, government finances and, by extension, the union’s fundamental institutions.
“One of the big problems of Brussels has been that it is so remote from financial markets,” said Guntram B. Wolff, a former European Commission official who is deputy director of Bruegel, an independent economic research center in Brussels, the Belgian capital. “Now there is much more of a view of what is going on in the markets. This is a good thing.”
The traditional remoteness from, and often distaste for, financial markets, Mr. Wolff said, is largely a function of Brussels’ distance from major financial centers. The nearest is London, which for reasons of British domestic politics and fears in the city’s financial sector of meddling by the European Union, has often had testy relations with functionaries of the European Commission, the group’s main administrative and policy-making arm.
But ideology has also played a role, with many Brussels officials looking askance at what they have tended to scorn as an Anglo-Saxon preoccupation with markets, a phenomenon exemplified by the former British prime minister, Margaret Thatcher. Mrs. Thatcher is despised by many so-called Eurocrats because of her robust hostility to the organization’s goal of an “ever closer union,” a mission laid out in the 1957 Treaty of Rome, and her insistence that Europe should focus instead on building a common market for goods and services and keeping the sovereign powers of individual states intact.
“The European Parliament has many rooms named after famous Europeans, but there is no Margaret Thatcher room and there never will be one,” predicted Derk-Jan Eppink, a Dutchman elected to the parliament by voters in Belgium and vice president of the European Conservatives and Reformists Group. A member of the legislature’s budget and economic monitoring committees, Mr. Eppink said he had nonetheless noticed a sharp shift in attitudes toward markets among his colleagues and also E.U. officials since the debt crisis began shaking investors’ faith in the euro’s future.
“At the beginning of the crisis, everyone was always talking about greedy speculators and Wall Street sharks,” but such views were now “limited mainly to the hard left,” he said. “There has been a change in thinking. These markets and rating agencies are not widely seen anymore as an alien force of evil but as basically investors who don’t want to lose their money.”
“This changed over the past year,” Mr. Eppink added, when officials and politicians in Brussels “realized that many problems in the euro zone were bought on by ourselves, not by sharks and speculators.”
Carsten Brzeski, senior economist at ING Bank in Brussels, said, “It has been a steep learning curve, not just for the commission but also for markets.”
Accustomed to viewing the European Union through an American prism, many investors took fright at Europe’s fragmented and glacial decision-making process, Mr. Brzeski said. European officials, for their part, he added, often viewed the wild swings of the market, and the pain this caused as borrowing costs in Greece and Spain soared, with uncomprehending horror.
A big reason anxiety about markets has waned is that they have stayed calm in recent months, largely in response to a pledge this summer by the president of the European Central Bank, Mario Draghi, to “do whatever it takes” to defend the euro. The previous panic among investors has lifted to the point that the central bank has so far not needed to make any of the bond purchases Mr. Draghi vowed to make to shore up the debt of troubled countries.
Mr. Wolff, of the Bruegel research center, said this week’s summit meeting, far more tranquil and methodical than many previous conclaves, was an important step forward, but by no means the end of Europe’s troubles.
“There is a sense of direction at the moment, but the crisis is not over,” he said, warning that a grim economic outlook for next year, which will see much of the euro zone in recession, could upend the current optimism, especially if anger over unemployment — now at over 25 percent in Greece and Spain — leads to serious social unrest and political tumult.
James Kanter contributed reporting.
A version of this article appeared in print on December 15, 2012, on page A8 of the New York edition with the headline: After Fighting Markets, Europe Now Prefers Working With Them.
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Apologies for the "extras", Iv'e tried to delete a lot but still there's more !!! . | . |
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Re: New EC Thread
Panda Sun 16 Dec - 11:41
David Cameron signs up to more joint military operations with Europe
Britain will be expected to plan national defence with the rest of the European Union after David Cameron agreed to accelerate joint military operations.
Europe is considering more joint military operations Photo: Reuters
By Tim Ross, and Bruno Waterfield in Brussels
10:23AM GMT 16 Dec 2012
Under a deal reached in Brussels yesterday, leaders of all 27 EU countries promised to “strengthen” Europe’s ability to deploy troops “rapidly and effectively” in any future crisis.
They committed to “systematically considering cooperation” across Europe whenever EU member states begin drawing up their national defence plans.
Downing Street sources said the Prime Minister was “entirely happy” with the new arrangements. Britain already has a formal treaty with France for sharing defence capabilities, such aircraft carrier capacity.
Government sources said the new agreement would pave the way for Britain to extend this collaboration beyond France to other countries.
However, the Prime Minister immediately faced a backlash from his own Conservative MPs, who warned it was the first step to creating a European army.
Related Articles
The development comes as five countries - France, Germany, Spain, Italy and Poland – prepare to step up moves for a formal joint EU military command structure and an operational headquarters.
Some fear the new arrangement will provide a European rival to Nato.
Douglas Carswell, Conservative MP for Clacton, said: “This really shows that we can’t trust our negotiating team. You turn your back for two minutes and they go and sign up to something as daft as this.
“This might look like a good deal for those in Number 10 but outside Westminster it is anything but a good deal.
“If anyone seriously believes that it is in our national interest to hand over our defence to the people running the euro then we would need our heads examined.”
The British diplomats who are permanently based in Brussels are “beyond scrutiny so they end up negotiating their way into these ludicrous positions”, he said.
“In the 1970s, this country was run by those who believed in managing decline. To me, this is decline management. I thought to Conservative Party was supposed to try and stop this sort of thing.”
Tory MP Peter Bone said: “The Conservative Party position has always been that Nato is the bedrock of the defence of Europe.
“The idea of a European defence force is something that we’ve absolutely been against.
“The Prime Minister will have to come to the House of Commons on Monday and clarify the position. Even if this is only a first step it is worrying.
“We know how the European Union behaves. Slice by slice they will expand their influence and what begins as cooperation will end up as a Euro Army, which is something we have always been opposed to.
“The Prime Minister will have to answer that. If this is a shift in position it won’t be acceptable to the party or the country.”
Francois Hollande, the French President, said that France was a strong supporter of “defence Europe”.
“There is a willingness to strengthen defence capacity and to develop a European defence industry,” he said.
“We want to act in Europe. In order to be heard at the international level, defence resources are fundamental. So we agree to cooperate, we agree to hold joint missions.”
Britain will be expected to plan national defence with the rest of the European Union after David Cameron agreed to accelerate joint military operations.
Europe is considering more joint military operations Photo: Reuters
By Tim Ross, and Bruno Waterfield in Brussels
10:23AM GMT 16 Dec 2012
Under a deal reached in Brussels yesterday, leaders of all 27 EU countries promised to “strengthen” Europe’s ability to deploy troops “rapidly and effectively” in any future crisis.
They committed to “systematically considering cooperation” across Europe whenever EU member states begin drawing up their national defence plans.
Downing Street sources said the Prime Minister was “entirely happy” with the new arrangements. Britain already has a formal treaty with France for sharing defence capabilities, such aircraft carrier capacity.
Government sources said the new agreement would pave the way for Britain to extend this collaboration beyond France to other countries.
However, the Prime Minister immediately faced a backlash from his own Conservative MPs, who warned it was the first step to creating a European army.
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15 Dec 2012
What a week that was for idiotic politics
15 Dec 2012
The development comes as five countries - France, Germany, Spain, Italy and Poland – prepare to step up moves for a formal joint EU military command structure and an operational headquarters.
Some fear the new arrangement will provide a European rival to Nato.
Douglas Carswell, Conservative MP for Clacton, said: “This really shows that we can’t trust our negotiating team. You turn your back for two minutes and they go and sign up to something as daft as this.
“This might look like a good deal for those in Number 10 but outside Westminster it is anything but a good deal.
“If anyone seriously believes that it is in our national interest to hand over our defence to the people running the euro then we would need our heads examined.”
The British diplomats who are permanently based in Brussels are “beyond scrutiny so they end up negotiating their way into these ludicrous positions”, he said.
“In the 1970s, this country was run by those who believed in managing decline. To me, this is decline management. I thought to Conservative Party was supposed to try and stop this sort of thing.”
Tory MP Peter Bone said: “The Conservative Party position has always been that Nato is the bedrock of the defence of Europe.
“The idea of a European defence force is something that we’ve absolutely been against.
“The Prime Minister will have to come to the House of Commons on Monday and clarify the position. Even if this is only a first step it is worrying.
“We know how the European Union behaves. Slice by slice they will expand their influence and what begins as cooperation will end up as a Euro Army, which is something we have always been opposed to.
“The Prime Minister will have to answer that. If this is a shift in position it won’t be acceptable to the party or the country.”
Francois Hollande, the French President, said that France was a strong supporter of “defence Europe”.
“There is a willingness to strengthen defence capacity and to develop a European defence industry,” he said.
“We want to act in Europe. In order to be heard at the international level, defence resources are fundamental. So we agree to cooperate, we agree to hold joint missions.”
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Re: New EC Thread
Panda Sun 16 Dec - 13:04
Banking union flatters Germany’s financial physique
14 December 2012
French President François Hollande, German Chancellor Angela Merkel and Italian Prime Minister Mario Monti
Alex Ballaman
After the euphoria following the agreement on banking supervision that was finally reached between the 27 member states – the embryo of a banking union – the European press, given the details of the mechanism worked out in Brussels, has lost some enthusiasm.
The widespread feeling that ground was ceded under pressure from the "Diktat" of Germany, which insisted that the single European supervisor would have no oversight of its local banks, has spurred criticisms.
"The agreement seems to be on a large scale, but in reality it is not enough," writes NRC Handelsblad. "Coming four years after the start of the subprime crisis, it's disappointing." The Dutch newspaper particularly regrets that –
In Germany, the Frankfurter Allgemeine Zeitung unleashes a salvo of arguments that the new banking supervision is very bad news, coming as it does just when banks in the eurozone are carrying three times more debt than the member states. For the FAZ, the central problem is the omnipotence of the European Central Bank (ECB) – an unelected institution, the daily observes. Wearing two hats – central bank and supervisory authority – it will not be able to fulfill its function of guaranteeing price stability.
An ”erroneous model" has been chosen for the banking union notes the El País daily. It's been a decision "imposed" by Germany and it will "fracture" the European financial market into two major blocks: the big institutions, under the supervision of the ECB, and those with assets of less than €30bn left under the supervision of national governments. The Madrid daily has some criticisms –
It’s an argument that its colleague ABC takes up: ”What Germany is hiding", it writes, is the poor state of the regional banks. This
14 December 2012
French President François Hollande, German Chancellor Angela Merkel and Italian Prime Minister Mario Monti
Alex Ballaman
After the euphoria following the agreement on banking supervision that was finally reached between the 27 member states – the embryo of a banking union – the European press, given the details of the mechanism worked out in Brussels, has lost some enthusiasm.
The widespread feeling that ground was ceded under pressure from the "Diktat" of Germany, which insisted that the single European supervisor would have no oversight of its local banks, has spurred criticisms.
"The agreement seems to be on a large scale, but in reality it is not enough," writes NRC Handelsblad. "Coming four years after the start of the subprime crisis, it's disappointing." The Dutch newspaper particularly regrets that –
The vast majority of the 6,000 [European] banks remain the responsibility of the national regulators, and therefore depend on mutual trust between banks, which in the past has been more wobbly than we thought. The subprime crisis has revealed just how interlinked all the banks are. No one saw that clearly until it all fell apart. Look at what happened in Iceland and especially in the Fortis affair, where national interests took precedence over the general interest. Only a centralised monitoring authority for all banks can combat that. In addition, decisions have not yet been made on two critical follow-up steps: the closure of banks that fail, and a common financial safety net that would separate the fate of the states from that of the banks.
In Germany, the Frankfurter Allgemeine Zeitung unleashes a salvo of arguments that the new banking supervision is very bad news, coming as it does just when banks in the eurozone are carrying three times more debt than the member states. For the FAZ, the central problem is the omnipotence of the European Central Bank (ECB) – an unelected institution, the daily observes. Wearing two hats – central bank and supervisory authority – it will not be able to fulfill its function of guaranteeing price stability.
While joint supervision of European banks makes sense, placing that supervisory authority under the roof of the ECB is very far from being a sound idea. Until now, the sole obligation of the ECB was to ensure price stability. Henceforth, the supervisory role will force it to live with a conflict of objectives. How will it decide if inflation requires an increase in interest rates, when that is precisely what may bring down the banks? Finally, one may doubt whether the ECB will come down all that harshly on financial institutions that they have been keeping alive as zombie banks for years by injecting money into them.
An ”erroneous model" has been chosen for the banking union notes the El País daily. It's been a decision "imposed" by Germany and it will "fracture" the European financial market into two major blocks: the big institutions, under the supervision of the ECB, and those with assets of less than €30bn left under the supervision of national governments. The Madrid daily has some criticisms –
The agreement corresponds point by point to the German demands. Angela Merkel has already told the Bundestag that the agreement was a German triumph; and now the time has come to explain why a triumph for Germany can turn into a financial mistake for Europe. The objective of the triumphal proposal of [Finance Minister Wolfgang] Schäuble is to hide the bleak situation of the German savings banks and the banks of the German Länder. The pretext used to achieve this was to suggest putting only those banks that would present a systemic risk to Europe under the supervision of the ECB. The reality, however, as shown by the case of Spain, is that smaller institutions are also capable of injecting toxins into the national banking system. And this circumstance invalidates the German argument that supervision of its regional banks is irrelevant, because Germany would pay for any eventual consolidation of these institutions. The risk is not bankruptcy, but the contamination of assets.
It’s an argument that its colleague ABC takes up: ”What Germany is hiding", it writes, is the poor state of the regional banks. This
explains a good deal of the political manoeuvring of Angela Merkel, who has been able to defend her financial system and to mask her misdeeds like no other leader in Europe. Brussels has never liked the savings banks, but the new Iron Lady has managed to turn Germany into their last bastion, despite their complicity in the [financial] problems. The *Landesbanken* are engaged in highly risky international operations that have left a steep bill. The problems of Germany remain in Germany, [which] has made it clear that it does not like others to ferret about in its finances. Despite any banking union, only the Bundesbank can do that for the moment.
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Re: New EC Thread
Panda Sun 16 Dec - 13:10
Why on Earth did David Cameron sign up to this??? Admittedly ALL Banks need monitoring since they were culpable for the mess we are in now but yet again Germany dictates what will be included. Who is going to pay for all this? The stress tests ordered on all Banks a couple of years ago proved pointless and so will this.
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Re: New EC Thread
Panda Mon 17 Dec - 0:15
Berlusconi Engaged: Age Gap 'Little Excessive'
Italy's former PM announces he is engaged to a woman 49 years his junior, who he describes as bringing "continuous joy".
11:58pm UK, Sunday 16 December 2012
Silvo Berlusconi with fiancee Francesca Pascale at a football match
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Former Italian prime minister Silvio Berlusconi has announced he is engaged to a woman almost 50 years younger than him - an age gap he admitted was "a little excessive".
Speaking on one of his own TV channels, the tycoon, 76, said he was due to marry his 27-year-old girlfriend Francesca Pascale.
He told an interviewer: "Yes, I'm engaged, to a Neapolitan (a person from Naples). It's official. She is so much younger that there is an age difference of 49 years between me and her - so a little excessive.
He added: "She is 27-years-old, she is called Francesca and she is a beautiful girl, beautiful from the outside, but even more beautiful inside.
"She brings continuous joy. She's very close to me, she loves me very much and I love her back."
Mr Berlusconi has been married and divorced twice and has five children.
In October, he was sentenced to four years in prison for tax fraud connected to his television channels.
At a separate trial that month, he denied hosting raunchy parties, having sex with an underage girl and abusing his powers by pressuring police.
Mr Berlusconi described Ms Pascale as 'beautiful'
Mr Berlusconi is accused of paying for sex with Moroccan exotic dancer Karima El Mahroug, better known as Ruby the Heart Stealer, when she was 17.
Referring to the 'Bunga Bunga' parties at his villa near Milan, he said: "I can exclude with absolute certainty that there were ever scenes of a sexual nature."
The 'Bunga Bunga' - described by many of his female guests as a type of lap dance he enjoyed - was "only a joke I used to tell which then got picked up by the press", he told the court's three female judges.
In the latest TV interview, he also spoke about his possible plans to become Italy's PM once again.
Mr Berlusconi repeated he would only withdraw as a candidate if current leader Mario Monti agreed to run as head of an alliance of moderates.
Mr Monti's government of non-political technocrats had been supported by Mr Berlusconi's People of Freedom party (PDL).
But the PDL withdrew its support about 10 days ago, prompting Mr Monti to announce his resignation and bring forward elections to a likely date in February.
However, shortly after his party withdrew support, Mr Berlusconi announced he would pull out as an election candidate if Mr Monti were to run, in an apparent u-turn.
Italy's former PM announces he is engaged to a woman 49 years his junior, who he describes as bringing "continuous joy".
11:58pm UK, Sunday 16 December 2012
Silvo Berlusconi with fiancee Francesca Pascale at a football match
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Former Italian prime minister Silvio Berlusconi has announced he is engaged to a woman almost 50 years younger than him - an age gap he admitted was "a little excessive".
Speaking on one of his own TV channels, the tycoon, 76, said he was due to marry his 27-year-old girlfriend Francesca Pascale.
He told an interviewer: "Yes, I'm engaged, to a Neapolitan (a person from Naples). It's official. She is so much younger that there is an age difference of 49 years between me and her - so a little excessive.
He added: "She is 27-years-old, she is called Francesca and she is a beautiful girl, beautiful from the outside, but even more beautiful inside.
"She brings continuous joy. She's very close to me, she loves me very much and I love her back."
Mr Berlusconi has been married and divorced twice and has five children.
In October, he was sentenced to four years in prison for tax fraud connected to his television channels.
At a separate trial that month, he denied hosting raunchy parties, having sex with an underage girl and abusing his powers by pressuring police.
Mr Berlusconi described Ms Pascale as 'beautiful' Mr Berlusconi is accused of paying for sex with Moroccan exotic dancer Karima El Mahroug, better known as Ruby the Heart Stealer, when she was 17.
Referring to the 'Bunga Bunga' parties at his villa near Milan, he said: "I can exclude with absolute certainty that there were ever scenes of a sexual nature."
The 'Bunga Bunga' - described by many of his female guests as a type of lap dance he enjoyed - was "only a joke I used to tell which then got picked up by the press", he told the court's three female judges.
In the latest TV interview, he also spoke about his possible plans to become Italy's PM once again.
Mr Berlusconi repeated he would only withdraw as a candidate if current leader Mario Monti agreed to run as head of an alliance of moderates.
Mr Monti's government of non-political technocrats had been supported by Mr Berlusconi's People of Freedom party (PDL).
But the PDL withdrew its support about 10 days ago, prompting Mr Monti to announce his resignation and bring forward elections to a likely date in February.
However, shortly after his party withdrew support, Mr Berlusconi announced he would pull out as an election candidate if Mr Monti were to run, in an apparent u-turn.
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Re: New EC Thread
Panda Mon 17 Dec - 5:17
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The Parliamentary Commission on Banking Standards is due to publish its first report on Friday Photo: Getty Images
By Louise Armitstead, Chief Business Correspondent
7:12PM GMT 16 Dec 2012
31 Comments In a report due on Friday, which is thought to be more Volcker than Vickers, the Parliamentary Commission on Banking Standards is expected to call for legislation to be drafted that would allow the banks to be broken up, rather than just ring-fenced.
The report, which is a response to the Bank Reform Bill, is not yet finished, but members of the Commission are said to be determined to beef up the Coalition’s reforms in the wake of more fines and criticism of the sector.
UBS is braced for a fine of more than $1bn (£618m) in settlement with regulators investigating the global Libor rigging scandal. The penalty could be as high as $1.5bn, according to Swiss reports, and is expected to be unveiled this week.
Over the weekend it was also reported that the state-controlled Royal Bank of Scotland could be fined as much as £350m for its role in rate-rigging, although the settlement is not due until the new year.
Meanwhile Barclays, which has already paid a £290m Libor settlement, has been forced to defend itself from another $470m (£291m) penalty from America’s Federal Energy Regulatory Commission (FERC). In a defence filed in a US court on Friday night, Barclays said FERC’s claim that the bank had manipulated electricity markets was “baseless” and “hollow.”
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George Osborne, who established the Banking Commission in July, recently warned it members against “unpicking a consensus” on his plans to ring-fence retail banking operations – as proposed by Sir John Vickers in his report.
But Andrew Tyrie, chairman of the Commission, is under pressure from members to toughen the proposals. The Tory MP is an admirer of Paul Volcker, the former chairman of the US Federal Reserve whom he credited with giving “extremely impressive evidence” on the separation of the banks.
During evidence sessions, Lord Lawson has pushed along the argument for total separation. Lord Turnbull, former head of the Civil Service, has also argued for radical reforms. However Mr Tyrie has also complained that the Commission is being rushed and needs more time.
Writing in The Daily Telegraph today, Antonio Horta-Osorio, the chief executive of Lloyds Banking Group, has argued that as well as “cultural change, there needs to be structural change in banking.” Although he stops short of calling for a Volcker-style division of banks, Mr Horta Osorio argues that “financial stability will be greatly enhanced from an ex-ante separation of retail and investment banks”. He adds: “That is why I fully support ring-fencing as the right way forward.”
However business leaders have urged the Government not to put economic recovery above their reforms. Archie Norman, chairman of ITV, warned of “political indulgence” in pushing regulatory reforms. He told The Sunday Telegraph that “regulation and reserve capital does not come for free. It comes with a cost and the price of the attack on banks will be lower growth.”
Last edited by Panda on Mon 17 Dec - 11:15; edited 1 time in total (Reason for editing : This post has been moved to Bl***y Banks where it should have been posted.)
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Debt Crisis - Banking system still 'not fully prepared' for collapse warns ECB's Liikanen -live
A senior European Central Bank official has said the system is still not fully prepared for a big banking collapse, urging lawmakers to craft a legal framework for the closure and settlement of lenders.
ECB governing council member Erkki Liikanen told German daily Die Welt the system must be set up so 'owners are the first to pay the bill and not the taxpayers'.
By Denise Roland
10:26AM GMT 17 Dec 2012
49 Comments runUpdate = true;
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2012-12-17 10:33:08.0
http://www.telegraph.co.uk/finance/debt-crisis-live/9749598/Debt-Crisis-Banking-system-still-not-fully-prepared-for-collapse-warns-ECBs-Liikanen-live.html?service=artBody
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• Banks still 'not fully prepared' for collapse
• DAX climbs highest in nearly five years
• Europe must 'work very hard' to maintain welfare system: Merkel
• Bank of Italy governor rejects need for ECB bail out
• Cyprus calls on state-backed companies to help government
• 'Europe is for life' Hollande tells Cameron
10.26 Eurozone exports in October surged 14pc year on year, driving a €10.2bn trade surplus compared with a €0.7bn deficit in October 2011. The shift is partly due to crisis-ridden Greece, Spain and Portugal cutting their trade deficits by wide margins between January to September, with Italy swinging into surplus. The Mediterranean nations are also seeing only modest wage rises, which is helping the region regain competitiveness.
09.41 Italian statisticians have played down the good news that exports have had their strongest year-on-year rise since August last year, leading to an October trade surplus of €2.5bn, compared with a deficit of €1.11bn in October 2011. Sales of Italian goods to the rest of the world in October rose 12pc year-on-year, but the country's national institute of statistics said this was largely due to there being two more trading days in October this year than in October 2011.
09.13 European markets have had a mixed opening this morning.
The FTSE fell 0.22pc, the CAC dropped 0.29pc, the DAX rose 0.23pc, the IBEX in Madrid edged up 0.07pc and the MIB in Milan gained 0.29pc. 09.08 European markets have opened and the German DAX has hit a near five-year high, hitting 7627 points in early trading.
The DAX is creeping up to levels last seen five years ago. Source: Bloomberg
08.32 ECB governing council member Erkki Liikanen told German daily Die Welt the system is still not fully prepared for a banking collapse. In an interview with the paper, he said:
The world would be better prepared than before but not fully prepared. It's positive that banks these days are better capitalised. But that's not enough. We urgently need a legal framework for the closure and settlement of banks. The top goal must be that, in the case of a bank collapse, the owners are the first to pay the bill and not the taxpayers. 
08.00 Now for a look at the papers this morning. We report that governor of the Bank of Italy, Ignazio Visco, has played down the country's need for a bail out from the European Central Bank, saying the current economic situation is "characterised by lower tension" than a ear ago when bond yields exceeded the 7pc threshold, above which borrowing is considered unsustainable.
Also in the Telegraph is news that Cyprus has called on state-backed companies to cough up around €200m in three-month loans to the government, "to cover the state's financing needs." We also report the French actor Gerard Depardieu's planned move to Belgium due to the government's taxes on the rich, which he laid out in a fierce open letter to prime minister Jean-Marc Ayrault, in which he accused the government of thinking that "success, creativity and talent...must be sanctioned."
The Financial Times has interviewed German chancellor Angela Merkel, who said Europe will have to "work very hard" to maintain the most generous welfare system. She said government spend should prioritise research and education, and hinted at cuts in social welfare budgets, pointing out that "If Europe today accounts for 7pc of the world's population, produces around 25pc of global GDP and has to finance 50pc of global social spending, then it's obvious it will have to work very hard to maintain its prosperity and way of life. All of us have to stop spending more than we earn every year."
07.45 Roger Bootle, managing director of Capital Economics, has given reasons to be cheerful about the economy in this morning's Telegraph.
Today, I want to discuss the prospects for long-term increases in productive capacity. This may seem arcane, but it isn’t. It holds the key to prospects for living standards – and much else besides. Not so long ago, it would have seemed incredible that this was up for discussion. My own generation, when we were young, didn’t entertain any doubts.
More recently, of course, living standards have been falling. And many people now feel gloomy about the future – including some distinguished economists.
Read his piece here.
07.29 Founder and executive chairman of the World Economic Forum, Klaus Schwab, has argued today a eurozone break-up would undo a raft of achievements under the single currency, and the bloc should push ahead to closer monetary and fiscal union.
The euro itself has provided major economic rewards: it eliminated exchange risk, lowered inflation, increased trade across the eurozone and more tightly integrated European financial markets. More generally, the single currency has contributed to an underlying culture of monetary stability and predictability within the eurozone, a critical point often forgotten in today’s discussions. The crisis, however, surfaced critical flaws in the eurozone’s structure.
Europe lacked a strong and common fiscal policy; divergence in competitiveness between the northern and southern economies created a risk of default that had gone unrecognized; and the absence of a banking union created intolerable systemic risks.
Adding fuel to the fire, the complexity of European political institutions, and the increasing democratic deficit that it represents in the view of the public, has led to an “executive deficit”: an inability to make real decisions.
What is clear is that the euro must survive in more or less its current form, but the deficiencies in the institutions that surround it must be addressed.
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Panda Mon 17 Dec - 11:25
Mario Monti’s Resignation May Slow Year of Euro Agreement
By Patrick Donahue - Dec 17, 2012 8:57 AM GMT
Italian Prime Minister Mario Monti’s looming resignation may threaten progress in fighting the three-year debt crisis even as European leaders wrap up the year with newly won breathing room.
Monti, under pressure from euro-area and business leaders to enter the Italian election campaign, plans to quit once parliament passes his budget this week following former Prime Minister Silvio Berlusconi’s withdrawal of support on Dec. 6. The Italian upper house may vote as early as today on the budget, which then passes to the lower house.
Enlarge image
Italian Prime Minister Mario Monti
Jock Fistick/Bloomberg
Italian Prime Minister Mario Monti.
Italian Prime Minister Mario Monti. Photographer: Jock Fistick/Bloomberg
The European Union summit last week closed out a year in which policy makers bolstered the 17-nation single currency by setting up fiscal rules for indebted states, a permanent bailout fund, a central-bank bond-buying program and a road map for tighter banking and fiscal union. Work was overshadowed this month when Berlusconi pulled his support and pledged to return to power for the fourth time, only to backtrack as long as Monti forms what he called a “coalition of moderates.”
“None of the likely outcomes will derail last year’s reform process,” Erik Nielsen, London-based chief global economist at UniCredit SpA (UCG), wrote in a note to clients yesterday, referring to the Italian election, which will probably be held in February. “That said, it requires close monitoring.”
Euro Climbs
The euro last week climbed to the highest level against theU.S. dollar since May and Spanish bonds advanced for a third week in four on optimism that the turmoil is being contained. EU policy makers last week made progress in creating a central bank supervisory body and signed off on the next aid tranche forGreece, where the crisis began in October 2009.
EU leaders will be challenged in 2013 as they try to overcome Franco-German differences on how to forge closer fiscal ties and as an economic downturn complicates efforts to scale back debt while buoying employment.
“We still have a stretch ahead and we’re beginning to sense in Germany that we can’t ignore economic growth and employment in other countries,” German Chancellor Angela Merkelsaid Dec. 15 in a weekly podcast. “I’m going into the new year optimistically, but also prudently, because we’re seeing here that economic growth is slowing a bit.”
Yields Slide
Italy was on the front line of the crisis this year, when yields on its on 10-year bonds exceeded 7 percent in January and climbed again through the summer before sliding to less than 4.5 percent this month under Monti’s premiership. European leaders, some Italian politicians and even Berlusconi have exhorted the prime minister to surrender his independence and declare his candidacy in elections.
Monti won’t be an official candidate in the next election, though he may endorse a party list, Corriere della Sera reported today, citing a meeting between Monti and Italian President Giorgio Napolitano late yesterday. The premier may allow a group to use his name in the election campaign and will outline his intentions in a speech, the newspaper said.
Monti’s 13-month government wins regular praise from the likes of Merkel and Fiat SpA (F) Chief Executive Officer Sergio Marchionne, though the German-backed tax increases and spending cuts that have helped lower Italy’s borrowing costs have soured many voters to the idea of a second term.
“While Monti has received a glowing endorsement from the international community, he’s struggling to convince people on main street,” Nicola Marinelli, who oversees $180 million at Glendevon King Asset Management in London, said in an interview.
Monti Coalition
Ferrari SpA Chairman Luca Cordero di Montezemolo will hold a convention with the Union of Centrists and the Freedom and Liberty for Italy parties on Dec. 20 to form a pro-Monti coalition to try to entice the premier to join the race.
Polls show Monti, 69 as the country’s most popular politician. And while having a ready-made party would make it easier for the premier, he would still need to win over voters weary from a fourth recession since 2001 and a jobless rate at a 13-year high.
Support for the three-party pro-Monti alliance trails the pro-union Democratic Party under Pier Luigi Bersani, according to a Dec. 12 SWG Institute poll. Monti’s alliance would jump to 15 percent from 9.3 percent were he to run, still half of the Democratic Party’s 31.1 percent. Berlusconi’s People of Liberty had 16.5 percent, SWG showed.
Last week Berlusconi stepped back from his pledge to run again and called on Monti to lead a “coalition of moderates”into the campaign that would include Berlusconi’s PDL and his former coalition ally, the Northern League. Roberto Maroni, leader of the League, rejected the overture, saying he could never ally with “the world champion of tax increases.”
Once Monti resigns, Napolitano will dissolve parliament and must schedule elections within 45 to 70 days. Interior Minister Anna Maria Cancellieri last week said Feb. 17 would be the probable election day.
By Patrick Donahue - Dec 17, 2012 8:57 AM GMT
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Italian Prime Minister Mario Monti’s looming resignation may threaten progress in fighting the three-year debt crisis even as European leaders wrap up the year with newly won breathing room.
Monti, under pressure from euro-area and business leaders to enter the Italian election campaign, plans to quit once parliament passes his budget this week following former Prime Minister Silvio Berlusconi’s withdrawal of support on Dec. 6. The Italian upper house may vote as early as today on the budget, which then passes to the lower house.
Enlarge image
Italian Prime Minister Mario Monti
Jock Fistick/Bloomberg
Italian Prime Minister Mario Monti.
Italian Prime Minister Mario Monti. Photographer: Jock Fistick/Bloomberg
The European Union summit last week closed out a year in which policy makers bolstered the 17-nation single currency by setting up fiscal rules for indebted states, a permanent bailout fund, a central-bank bond-buying program and a road map for tighter banking and fiscal union. Work was overshadowed this month when Berlusconi pulled his support and pledged to return to power for the fourth time, only to backtrack as long as Monti forms what he called a “coalition of moderates.”
“None of the likely outcomes will derail last year’s reform process,” Erik Nielsen, London-based chief global economist at UniCredit SpA (UCG), wrote in a note to clients yesterday, referring to the Italian election, which will probably be held in February. “That said, it requires close monitoring.”
Euro Climbs
The euro last week climbed to the highest level against theU.S. dollar since May and Spanish bonds advanced for a third week in four on optimism that the turmoil is being contained. EU policy makers last week made progress in creating a central bank supervisory body and signed off on the next aid tranche forGreece, where the crisis began in October 2009.
EU leaders will be challenged in 2013 as they try to overcome Franco-German differences on how to forge closer fiscal ties and as an economic downturn complicates efforts to scale back debt while buoying employment.
“We still have a stretch ahead and we’re beginning to sense in Germany that we can’t ignore economic growth and employment in other countries,” German Chancellor Angela Merkelsaid Dec. 15 in a weekly podcast. “I’m going into the new year optimistically, but also prudently, because we’re seeing here that economic growth is slowing a bit.”
Yields Slide
Italy was on the front line of the crisis this year, when yields on its on 10-year bonds exceeded 7 percent in January and climbed again through the summer before sliding to less than 4.5 percent this month under Monti’s premiership. European leaders, some Italian politicians and even Berlusconi have exhorted the prime minister to surrender his independence and declare his candidacy in elections.
Monti won’t be an official candidate in the next election, though he may endorse a party list, Corriere della Sera reported today, citing a meeting between Monti and Italian President Giorgio Napolitano late yesterday. The premier may allow a group to use his name in the election campaign and will outline his intentions in a speech, the newspaper said.
Monti’s 13-month government wins regular praise from the likes of Merkel and Fiat SpA (F) Chief Executive Officer Sergio Marchionne, though the German-backed tax increases and spending cuts that have helped lower Italy’s borrowing costs have soured many voters to the idea of a second term.
“While Monti has received a glowing endorsement from the international community, he’s struggling to convince people on main street,” Nicola Marinelli, who oversees $180 million at Glendevon King Asset Management in London, said in an interview.
Monti Coalition
Ferrari SpA Chairman Luca Cordero di Montezemolo will hold a convention with the Union of Centrists and the Freedom and Liberty for Italy parties on Dec. 20 to form a pro-Monti coalition to try to entice the premier to join the race.
Polls show Monti, 69 as the country’s most popular politician. And while having a ready-made party would make it easier for the premier, he would still need to win over voters weary from a fourth recession since 2001 and a jobless rate at a 13-year high.
Support for the three-party pro-Monti alliance trails the pro-union Democratic Party under Pier Luigi Bersani, according to a Dec. 12 SWG Institute poll. Monti’s alliance would jump to 15 percent from 9.3 percent were he to run, still half of the Democratic Party’s 31.1 percent. Berlusconi’s People of Liberty had 16.5 percent, SWG showed.
Last week Berlusconi stepped back from his pledge to run again and called on Monti to lead a “coalition of moderates”into the campaign that would include Berlusconi’s PDL and his former coalition ally, the Northern League. Roberto Maroni, leader of the League, rejected the overture, saying he could never ally with “the world champion of tax increases.”
Once Monti resigns, Napolitano will dissolve parliament and must schedule elections within 45 to 70 days. Interior Minister Anna Maria Cancellieri last week said Feb. 17 would be the probable election day.
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Re: New EC Thread
Panda Mon 17 Dec - 15:41
European Stocks Decline Amid U.S. Budget Talks; KPN Falls
Q
European stocks declined for a third day as concern U.S. lawmakers won’t agree on a budget before the holiday offset the election in Japan of a party that backs more economic stimulus.
UBS Said to Face $1.6 Billion Libor Penalty This Week
Q
UBS AG is set to pay as much as $1.6 billion to settle claims of Libor manipulation by the U.S. Justice Department, the Commodity Futures Trading Commission, the U.K. Financial Services Authority and the Swiss Financial Market Supervisory Authority, said a person familiar with the probes.
London Property ‘Less Frothy’ as Asking Prices Fall: Economy
Q
London home sellers cut asking prices by the most for a December in five years as an influx of supply and seasonal factors undermined pricing power.
Euro-Area Exports Decline for Second Month Amid Recession
Q
Euro-area exports fell for a second month in October as the economy struggled to pull out of its second recession in four years.
Santander to Buy All of Banesto, Shut 700 Branches in Spain
Q
Banco Santander SA, Spain’s biggest lender, will offer 263 million euros ($345 million) in stock to buy out minority investors in its Banco Espanol de Credito SA retail unit and close 700 local branches to cut costs.
Q
European stocks declined for a third day as concern U.S. lawmakers won’t agree on a budget before the holiday offset the election in Japan of a party that backs more economic stimulus.
UBS Said to Face $1.6 Billion Libor Penalty This Week
Q
UBS AG is set to pay as much as $1.6 billion to settle claims of Libor manipulation by the U.S. Justice Department, the Commodity Futures Trading Commission, the U.K. Financial Services Authority and the Swiss Financial Market Supervisory Authority, said a person familiar with the probes.
London Property ‘Less Frothy’ as Asking Prices Fall: Economy
Q
London home sellers cut asking prices by the most for a December in five years as an influx of supply and seasonal factors undermined pricing power.
Euro-Area Exports Decline for Second Month Amid Recession
Q
Euro-area exports fell for a second month in October as the economy struggled to pull out of its second recession in four years.
Santander to Buy All of Banesto, Shut 700 Branches in Spain
Q
Banco Santander SA, Spain’s biggest lender, will offer 263 million euros ($345 million) in stock to buy out minority investors in its Banco Espanol de Credito SA retail unit and close 700 local branches to cut costs.
Last edited by Panda on Mon 17 Dec - 16:03; edited 1 time in total
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Re: New EC Thread
Panda Mon 17 Dec - 15:54
Forget The Fiscal Cliff, And Worry About ‘Spaxit’ Instead
The Euro Crisis HOME PAGE »
- By David Román
Bloomberg News
A Spanish national flag flies from the roof of City Hall beyond a red traffic beacon in Madrid, Spain, in October.
There’s the U.S. fiscal cliff, but mostly everyone is expecting some sort of muddle-through compromise. There’s Greece, but last-minute deals have so far been enough to keep a relatively small economy within the euro zone.
Then, as Charles Robertson of Renaissance Capital wrote in a report Tuesday, there’s what really matters:
The issue is not new. Mr. Robertson himself acknowledges that he’s long been of the opinion that Spain sits uneasily within the euro zone, and used to see a 50% chance that the country would push through the tough reforms needed—basically, an internal devaluation—to make it competitive within a German-style strong currency union.
“The most important question for investors over the next few years is whether Spain will leave the eurozone. If it does, we should assume a Lehman’s-style market reaction.”
That chance has now dropped to 40%, he adds, largely because Spain appears incapable of generating job growth in the absence of a strong economic recovery, one that few see as likely. Faced with chronically high unemployment and no light at the end of the tunnel, the argument goes, Spain’s populace are likelier to support a “Spaxit” by 2014-2015 than not.
Mr. Robertson has some interesting facts in support of this view: since 1981, around the time when the country’s welfare state was set in place, Spain has not created jobs when gross domestic product increased less than 2.4% a year; meanwhile, the International Monetary Fund in October said that the growth Spain can aspire to in its predicted recovery, by 2017, would be a meager 1.7%.
Spain’s government own forecasts are only marginally more optimistic—they call for 1.9% growth by 2015, still be not enough to create jobs under historical trends.
As for the breaking point, Mr. Robertson notes unemployment rose to 33% during the Great Depression in the Netherlands—one of the last countries to abandon the gold standard, in a comparable instance of a massive breakdown in a currency system.
Investors would be well advised not to see Mr. Robertson as a crank. A significant number of economists believe Spain will struggle to reconcile euro-zone membership, a still rigid labor market and a massive debt overhang—a struggle that will make the allure of a return to an easily devalued peseta more attractive, whatever its actual merits.
Those potential merits are already the subject of much debate. Last week, the analysts of Capital Economics said a post-Spaxit currency devaluation could drive Spain’s economic growth to an average of 3.7% in coming years. That would be less of a boost than that for the likes of Greece and Portugal, and about the same as Italy would get.
At the very least, Capital Economics adds, “it could be a lot better than the desperate future some appear to face inside the currency union.”
============================
SANTANDER IS REPORTEDLY CLOSING 700 BRANCHES
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Re: New EC Thread
wjk Mon 17 Dec - 16:41
Dear god!!Panda wrote:Berlusconi Engaged: Age Gap 'Little Excessive'
Italy's former PM announces he is engaged to a woman 49 years his junior, who he describes as bringing "continuous joy".
11:58pm UK, Sunday 16 December 2012
Silvo Berlusconi with fiancee Francesca Pascale at a football match
Former Italian prime minister Silvio Berlusconi has announced he is engaged to a woman almost 50 years younger than him - an age gap he admitted was "a little excessive".
Speaking on one of his own TV channels, the tycoon, 76, said he was due to marry his 27-year-old girlfriend Francesca Pascale.
He told an interviewer: "Yes, I'm engaged, to a Neapolitan (a person from Naples). It's official. She is so much younger that there is an age difference of 49 years between me and her - so a little excessive.
He added: "She is 27-years-old, she is called Francesca and she is a beautiful girl, beautiful from the outside, but even more beautiful inside.
"She brings continuous joy. She's very close to me, she loves me very much and I love her back."
Mr Berlusconi has been married and divorced twice and has five children.
In October, he was sentenced to four years in prison for tax fraud connected to his television channels.
At a separate trial that month, he denied hosting raunchy parties, having sex with an underage girl and abusing his powers by pressuring police.
Mr Berlusconi is accused of paying for sex with Moroccan exotic dancer Karima El Mahroug, better known as Ruby the Heart Stealer, when she was 17.
Referring to the 'Bunga Bunga' parties at his villa near Milan, he said: "I can exclude with absolute certainty that there were ever scenes of a sexual nature."
The 'Bunga Bunga' - described by many of his female guests as a type of lap dance he enjoyed - was "only a joke I used to tell which then got picked up by the press", he told the court's three female judges.
In the latest TV interview, he also spoke about his possible plans to become Italy's PM once again.
Mr Berlusconi repeated he would only withdraw as a candidate if current leader Mario Monti agreed to run as head of an alliance of moderates.
Mr Monti's government of non-political technocrats had been supported by Mr Berlusconi's People of Freedom party (PDL).
But the PDL withdrew its support about 10 days ago, prompting Mr Monti to announce his resignation and bring forward elections to a likely date in February.
However, shortly after his party withdrew support, Mr Berlusconi announced he would pull out as an election candidate if Mr Monti were to run, in an apparent u-turn.
wjk- Platinum Poster
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Re: New EC Thread
Panda Mon 17 Dec - 17:29
I know wjk, do you think she loves HIM or his MONEY.
He is loaded wjk but very corrupt and has a b****y cheek trying to get into politics again.If he ever becomes President again he will ruin the Country, Monti was doing a hard job and like all the Southern Countries the populations will not accept the fiscal remedy Merkel demands.
He is loaded wjk but very corrupt and has a b****y cheek trying to get into politics again.If he ever becomes President again he will ruin the Country, Monti was doing a hard job and like all the Southern Countries the populations will not accept the fiscal remedy Merkel demands.
Panda- Platinum Poster
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Re: New EC Thread
wjk Mon 17 Dec - 17:43
It MUST be his good looks, surely Panda. Who could resist?Panda wrote:I know wjk, do you think she loves HIM or his MONEY.
He is loaded wjk but very corrupt and has a b****y cheek trying to get into politics again.If he ever becomes President again he will ruin the Country, Monti was doing a hard job and like all the Southern Countries the populations will not accept the fiscal remedy Merkel demands.
wjk- Platinum Poster
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Number of posts : 7815
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