New EC Thread
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Re: New EC Thread
Panda Sun 10 Mar - 12:29
Ireland: ‘ECB calls on Coalition to step up its reforms of bank sector’The government must increase the pace of its banking reforms, the president of the European Central Bank (ECB) Mario Draghi said on March 7, as new Irish financial data revealed that mortgages on 23,500 properties have not been paid for two years or more.
Draghi congratulated Ireland on its economic reforms but said there had been insufficient progress in the banking sector.
His comments have come just days after the EU’s 27 finance ministers approved a plan to postpone repayment of part of Ireland’s €40bn bailout.
Draghi congratulated Ireland on its economic reforms but said there had been insufficient progress in the banking sector.
His comments have come just days after the EU’s 27 finance ministers approved a plan to postpone repayment of part of Ireland’s €40bn bailout.
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Re: New EC Thread
Panda Mon 11 Mar - 12:58
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Germany's anti-euro party is a nasty shock for Angela Merkel
Political revolt against the euro construct has spread to Germany.
Alternative for Germany has
greater potential to unsettle Mrs Merkel than previous Eurosceptic
groups Photo: Getty
Images
By Ambrose Evans-Pritchard
5:00PM GMT 10 Mar 2013
1420 Comments A new party led by economists, jurists, and Christian Democrat rebels will
kick off this week, calling for the break-up of monetary union before it can do
any more damage.
"An end to this euro," is the first line on the webpage of Alternative für
Deutschland (AfD). "The introduction of the euro has proved to be a fatal
mistake, that threatens the welfare of us all. The old parties are used up. They
stubbornly refuse to admit their mistakes."
They propose German withdrawl from EMU and return to the D-Mark, or a
breakaway currency with the Dutch, Austrians, Finns, and like-minded nations.
The French are not among them. The borders run along the ancient line of
cleavage dividing Latins from Germanic tribes.
The plans draw on work by Hans-Olaf Henkel, former head of Germany's industry federation (BDI)
and a chastened europhile -- the "worst error of my professional life", he told
me.
The appeal of German exit is obvious. It is the least traumatic way to end
the 20pc to 30pc misalignment between North and South, the cancer eating Europe.
Club Med keeps the euro. It enjoys instant devaluation, while still able to
uphold euro debt contracts. The spectre of sovereign defaults recedes.
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The party hopes to contest the federal elections in September, winning enough
votes to scramble a tight race. Chancellor Angela Merkel suddenly has a "UKIP
problem" on the her right flank.
Should she sign off on a bail-out out for Cyprus -- safeguarding the "dirty
funds of Russian oligarchs", as the AfD puts it -- she will be raked by heavy
fire.
That will test her solidarity mantra, and she can turn on a Pfennig. She
ditched her nuclear energy policy days after surveying the post-Fukushima polls.
Nobody knows how much support AfD could command. Protest parties usually flop
in Germany, but the Free Voters won 10pc in Bavaria in 2008 on a Right-leaning,
eurosceptic ticket, and there have never been circumstances quite like this
before.
The slide towards fiscal union is a constitutional revolution. It erodes the
budgetary supremacy of the Bundestag and threatens to eviscerate Germany's
vibrant post-war democracy. Large matters.
The AfD leader Bernd Lucke says Beppe Grillo's threat to default on Italy's
external debt has demolished claims that Germany's rescue pledges will never be
called.
"The Italian election shows how dangerous the whole euro crisis really is.
Whether countries can and will pay back their debts is dependent on the
unpredictable voting choices of their peoples," he said.
Professor Lucke, an expert on Real Business Cycle Theory, says German voters
may not have mastered EMU mechanics but they can see it is going off the rails.
"Everybody understands that 50pc youth unemployment in Greece and Spain is a
catastrophe," he said.
The latest ZDF poll shows that 65pc of Germans think the euro is damaging,
and 49pc think Germany would be better outside the EU. This is no doubt "soft",
yet what is clear is that the all-party consensus on EMU gives voters nowhere to
turn.
The rebels may struggle to cross the 5pc threshold for seats in the
Bundestag, but they do not have to take seats to plague Angela Merkel over the
next six months. She is already in trouble. Her Free Democrat (FDP) allies have
crashed to 4pc in the polls.
Alternative für Deutschland threatens to take votes from the Right. On the
other side, the Green resurgence to 16pc makes up for the sluggish Social
Democrats. As things stand, the Left is slightly ahead. Angela Merkel is on
course to lose office.
"Merkel will have to be even tougher on Europe, she cannot allow herself to
be outflanked," said David Marsh, author of books on the euro and the
Bundesbank. "She will try to keep up a steely facade and hope everything stays
calm until September, but the next crisis may come to a head before that."
Indeed it may. Italy does not have a government, and putatitve premier Pier
Luigi Bersani has vowed break out of the "austerity cage", explicitly rejecting
policies that anchor the EU backstop for Italian bonds.
Fitch expects Italy's public debt to hit 130pc of GDP this year, up from
125pc forecast a few months ago. The country has one foot in a debt compound
trap already. One more shock will do it.
This latest deterioration is self-inflicted, the result of contractionary EU
policies that have pushed Euroland into a double-dip slump, and ravaged Italy in
particular with fiscal tightening of 3pc of GDP in 2012.
This policy was deranged. Italy's primary budget was already near balance.
Fiscal overkill caused to the economy to contract by 2.6pc in 2012, and the debt
ratio to rise even faster. In flogging Italy's economy to death, EU elites have
destroyed political consent for the reforms that are most needed.
For Germany's Alternative, September may come too soon. Michael Wohlgemuth
from Open Europe says they lack the organization for a quick breack-through, but
their moment may come in next year's vote for Euro-MPs.
"By then the real costs of the bail-outs for German taxpayers will be
clearer. People sense that at a crisis is looming, but they have not yet felt
it," he said.
The tragedy for Germany is that the bill for EMU will come due just as the
country's aging crunch hits. Germany will have impoverished itself for no useful
purpose, and without winning much love in the process.
Some say Germany is "winning" because its firms are conquering Club Med
markets with a rigged exchange rate, but that is a Pyrrhic triumph. Latins will
not tolerate this, once they grasp that the "gains" of their internal
devaluations -- ie 1930s wage cuts -- are dwarfed by the greater losses of a
wasted youth.
There are no winners. Each country is blighted in turn, and in different
ways. Like Goethe's Sorcerer's Apprentice, they have launched an experiment they
cannot control. The broom has a fiendish will of its own
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Re: New EC Thread
Panda Mon 11 Mar - 17:12
Debate: Europe has lost its citizens
11 March 2013El País Madrid
Tools
Len
The latest Eurobarometer figures are showing clearly what the election results have been hinting at one by one: hit by the crisis, Europeans have lost their confidence in the EU. After having saved the euro, we must rescue the legitimacy of the EU – and before the 2014 elections.
José Ignacio Torreblanca
To be saved, the euro needed two things: an unambiguous political decision that would put an end to speculation about its future and a financial instrument that would make that promise credible.
In 2012, after several years of hesitation, blunders and errors, the European leaders have done both those things. The euro has been plucked back from the edge of the cliff and set down on a stable path that had been unknown in recent years.
The very limited outwards ripple of the post-election chaos in Italy speaks of the strength the euro has gained, at least temporarily. Looking back, the shock brought about in October 2011 by the decision of George Papandreou to call a referendum to validate or reject the adjustment policies dictated by the Troika sent some of the indices of uncertainty managed by financial analysts rocketing to levels higher than those that followed the September 11 attacks in the United States. Italy is, no doubt, in a mess. The euro, though, is holding fast, at least for now.
While showing the strength of the euro, the results in Italy, however, also point to the political weakness of Europe and signal a crisis of legitimacy that is becoming ever more obvious, and ever more dangerous, from election to election. The data of the Eurobarometer opinion poll, which the European Commission carries out twice a year, clearly shows just how far the crisis has battered the confidence of the citizens in the European Union.
Spectacular crash and burn
In countries like Spain, the “net” confidence in the EU (a measure that subtracts the percentage of doubters from the percentage of the faithful) was, in 2007, before the crisis began, at 42 points (65 per cent of those who had trust minus the 23 per cent who did not). Today, however, that has been turned upside down into a net mistrust of 52 points (72 per cent express mistrust, while just 20 per cent still have faith). It's been a spectacular crash and burn.
This run from 42 points ahead to 52 points behind should make us reflect deeply, especially in such a traditionally pro-European country like Spain. In Greece, Ireland, Portugal, Italy, and Cyprus, the EU is viewed with a distrust as overwhelming as we see in Spain. Significantly, however, the leap of distrust in the EU is taking place not only in the debtor countries, but in the creditor countries, or those financially better off: the people of Germany, Austria, France, the Netherlands and Finland have also lost their trust in the EU. Clearly, the distrust is not just directed at the EU, but at other countries of the EU and their citizens. As things stand, everyone is coming out a loser, it seems.
What is facing us, therefore, is a grave problem of legitimacy. In Europe, where a collective identity, shared values and democratic procedures are still very much in their infancy, legitimacy has come mostly from economic performance: higher economic growth leads to greater public support for European integration, and vice versa. That means that the reserve of legitimacy, in being almost exclusively associated with economic growth, is weak and tends to drain away quickly in a crisis.
‘Interwoven disaffection and distrust’
That is what we are living through now. On one hand, although the austerity policies may be succeeding in controlling deficits (though not in reducing debt), they are producing neither jobs nor growth, and so are failing to generate the support from the public that they need to sustain themselves. What's worse, forcing governments to systematically violate their election promises and to push through the same policies regardless of their political colouration also undermines the legitimacy of the national political institutions. As witnessed in the countries that saw intervention, political systems are wearing out (as in Spain and Portugal) or breaking down (as in Greece and Italy). Meanwhile, on the other hand, the dominant mood in the creditor countries, where there is no economic growth either, is that the countries of the south are a heavy burden, eating up scarce resources and dragging down their own progress.
It is with this interwoven disaffection and distrust, so sharply deteriorated, that the EU must complete an indispensable political and economic integration. The euro has been saved, but it will not survive over the long term without a banking union that includes crisis resolution mechanisms and pan-European deposit insurance. Nor will it survive without a budget worthy of the name, pooling of debt and a much more effective coordination of economic policies.
But those decisions require exactly what Europe is lacking today: confidence in the EU and mutual trust. To make Europe work, its citizens, from north and south, from creditor countries and debtor states, from the centre and from the periphery, must be willing to provide the European institutions with adequate financial instruments and, at the same time, with government agencies that are both effective and have democratic legitimacy. But for the taxes of a German to support the savings of a Spaniard and for the taxes of a Spanish saver to back up the savings of a Greek or Portuguese person, we need a confidence in Europe that we are currently lacking.
In June 2014, in just over a year, Europe's citizens will be called to the polls. If the citizens' confidence in the EU is not restored by then, we may be in for a rather unpleasant surprise. Saving the euro was essential; but the euro is a means, not an end. The end is the citizens: a euro without them does not make much sense.
11 March 2013El País Madrid
Tools
Len The latest Eurobarometer figures are showing clearly what the election results have been hinting at one by one: hit by the crisis, Europeans have lost their confidence in the EU. After having saved the euro, we must rescue the legitimacy of the EU – and before the 2014 elections.
José Ignacio Torreblanca
To be saved, the euro needed two things: an unambiguous political decision that would put an end to speculation about its future and a financial instrument that would make that promise credible.In 2012, after several years of hesitation, blunders and errors, the European leaders have done both those things. The euro has been plucked back from the edge of the cliff and set down on a stable path that had been unknown in recent years.
The very limited outwards ripple of the post-election chaos in Italy speaks of the strength the euro has gained, at least temporarily. Looking back, the shock brought about in October 2011 by the decision of George Papandreou to call a referendum to validate or reject the adjustment policies dictated by the Troika sent some of the indices of uncertainty managed by financial analysts rocketing to levels higher than those that followed the September 11 attacks in the United States. Italy is, no doubt, in a mess. The euro, though, is holding fast, at least for now.
While showing the strength of the euro, the results in Italy, however, also point to the political weakness of Europe and signal a crisis of legitimacy that is becoming ever more obvious, and ever more dangerous, from election to election. The data of the Eurobarometer opinion poll, which the European Commission carries out twice a year, clearly shows just how far the crisis has battered the confidence of the citizens in the European Union.
Spectacular crash and burn
In countries like Spain, the “net” confidence in the EU (a measure that subtracts the percentage of doubters from the percentage of the faithful) was, in 2007, before the crisis began, at 42 points (65 per cent of those who had trust minus the 23 per cent who did not). Today, however, that has been turned upside down into a net mistrust of 52 points (72 per cent express mistrust, while just 20 per cent still have faith). It's been a spectacular crash and burn.
This run from 42 points ahead to 52 points behind should make us reflect deeply, especially in such a traditionally pro-European country like Spain. In Greece, Ireland, Portugal, Italy, and Cyprus, the EU is viewed with a distrust as overwhelming as we see in Spain. Significantly, however, the leap of distrust in the EU is taking place not only in the debtor countries, but in the creditor countries, or those financially better off: the people of Germany, Austria, France, the Netherlands and Finland have also lost their trust in the EU. Clearly, the distrust is not just directed at the EU, but at other countries of the EU and their citizens. As things stand, everyone is coming out a loser, it seems.
What is facing us, therefore, is a grave problem of legitimacy. In Europe, where a collective identity, shared values and democratic procedures are still very much in their infancy, legitimacy has come mostly from economic performance: higher economic growth leads to greater public support for European integration, and vice versa. That means that the reserve of legitimacy, in being almost exclusively associated with economic growth, is weak and tends to drain away quickly in a crisis.
‘Interwoven disaffection and distrust’
That is what we are living through now. On one hand, although the austerity policies may be succeeding in controlling deficits (though not in reducing debt), they are producing neither jobs nor growth, and so are failing to generate the support from the public that they need to sustain themselves. What's worse, forcing governments to systematically violate their election promises and to push through the same policies regardless of their political colouration also undermines the legitimacy of the national political institutions. As witnessed in the countries that saw intervention, political systems are wearing out (as in Spain and Portugal) or breaking down (as in Greece and Italy). Meanwhile, on the other hand, the dominant mood in the creditor countries, where there is no economic growth either, is that the countries of the south are a heavy burden, eating up scarce resources and dragging down their own progress.
It is with this interwoven disaffection and distrust, so sharply deteriorated, that the EU must complete an indispensable political and economic integration. The euro has been saved, but it will not survive over the long term without a banking union that includes crisis resolution mechanisms and pan-European deposit insurance. Nor will it survive without a budget worthy of the name, pooling of debt and a much more effective coordination of economic policies.
But those decisions require exactly what Europe is lacking today: confidence in the EU and mutual trust. To make Europe work, its citizens, from north and south, from creditor countries and debtor states, from the centre and from the periphery, must be willing to provide the European institutions with adequate financial instruments and, at the same time, with government agencies that are both effective and have democratic legitimacy. But for the taxes of a German to support the savings of a Spaniard and for the taxes of a Spanish saver to back up the savings of a Greek or Portuguese person, we need a confidence in Europe that we are currently lacking.
In June 2014, in just over a year, Europe's citizens will be called to the polls. If the citizens' confidence in the EU is not restored by then, we may be in for a rather unpleasant surprise. Saving the euro was essential; but the euro is a means, not an end. The end is the citizens: a euro without them does not make much sense.
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Re: New EC Thread
Panda Tue 12 Mar - 8:11
Italy’s Rating Cut by Fitch as Vote Result May Deepen Slump
By Lorenzo Totaro - Mar 8, 2013 5:57 PM GM
Italy’s credit rating was cut one level by Fitch Ratings as an inconclusive election in February produced political paralysis that threatens the country’s ability to respond to a recession and the European debt crisis.
The rating company lowered Italy’s government bond rating to BBB+ from A- with a negative outlook, according to a statement released today. That’s three levels above junk and one higher than Spain, according to data compiled by Bloomberg.
“The increased political uncertainty and non-conducive backdrop for further structural reform measures constitute a further adverse shock to the real economy amidst the deep recession.,” Fitch said. “The ongoing recession in Italy is one of the deepest in Europe.”
Outgoing Prime Minister Mario Monti helped calm theEuropean debt crisis by taming Italy’s budget deficit and implementing reforms aimed at shoring up the country’s finances. Under Monti and prior to the election, Italy’s 10-year bond yield had fallen by almost half from a euro-era record 7.5 percent in November 2011. Monti’s departure coupled with the divided parliament produced by last month’s vote fueled concern Italy may reignite the region’s debt crisis.
Italian government bond futures fell after the Fitch cut. The contract maturing in June fell 0.3 percent to 108.84 at 5:15 p.m. London time. Italian 10-year bonds were little changed today at 4.6 percent.
Dwindling Impact
Investors are paying less attention to the views of ratings companies and relying more on their own analysis. Yields on sovereign securities moved in the opposite direction from what ratings suggested in 53 percent of 32 upgrades, downgrades and changes in credit outlook last year, according to data compiled by Bloomberg published in December.
Investors ignored 56 percent of Moody’s rating and outlook changes and 50 percent of those by Standard & Poor’s. That’s worse than the longer-term average of 47 percent, based on more than 300 changes since 1974.
Fitch also cited risks of “sustained deterioration in fiscal funding conditions with adverse implications for financial conditions for the private sector and public debt dynamics.”
Italy’s long-term debt is rated Baa2 by Moody’s Investors and BBB+ by Standard & Poor’s, according to data compiled by Bloomberg
Bond Gains
Italian government bonds returned 20 percent last year, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. That’s almost four times the 5.9 percent return on Spanish debt and dwarfs the 4.5 percent return on German bunds, the indexes show.
Italy, bearer of the euro’s second-biggest debt relative to gross domestic product, needs to sell more than 30 billion euros of bonds and bills a month.
The Feb. 24-25 vote produced a split parliament, and sent the country’s 10-year bond yield up 41 basis points the day after the election, the biggest increase in 14 months. Democratic Party leader Pier Luigi Bersani and his allies failed to win a majority in the Senate, leaving former Prime Minister Silvio Berlusconi and comic-turned-politician Beppe Grillo with blocking minorities.
Political Impasse
The political deadlock rattled markets as investors were betting on a government strong enough to tackle the country’s fourth recession since 2001, while maintaining fiscal rigor.
ECB President Mario Draghi said this week that the effect of Italy’s vote on financial markets was limited as Monti’s economic reforms will survive the political impasse. “After some excitement after the elections, markets have now reverted back more or less to where they were before,” Draghi told reporters in Frankfurt yesterday. “Much of the fiscal adjustment Italy went through will continue going on automatic pilot.”
The euro region’s third-biggest economy shrank 2.4 percent last year as the country’s budget deficit narrowed to match the European Union limit of 3 percent.
Italy will probably contract again this year and unemployment will continue rising to reach 12 percent next year, European Commission forecasts released on Feb. 2 showed.
Fitch said today it expects Italy’s GDP to fall 1.8 percent this year as public debt peaks at almost 130 percent, up from 127 percent in 2012.
By Lorenzo Totaro - Mar 8, 2013 5:57 PM GM
Italy’s credit rating was cut one level by Fitch Ratings as an inconclusive election in February produced political paralysis that threatens the country’s ability to respond to a recession and the European debt crisis.
The rating company lowered Italy’s government bond rating to BBB+ from A- with a negative outlook, according to a statement released today. That’s three levels above junk and one higher than Spain, according to data compiled by Bloomberg.
“The increased political uncertainty and non-conducive backdrop for further structural reform measures constitute a further adverse shock to the real economy amidst the deep recession.,” Fitch said. “The ongoing recession in Italy is one of the deepest in Europe.”
Outgoing Prime Minister Mario Monti helped calm theEuropean debt crisis by taming Italy’s budget deficit and implementing reforms aimed at shoring up the country’s finances. Under Monti and prior to the election, Italy’s 10-year bond yield had fallen by almost half from a euro-era record 7.5 percent in November 2011. Monti’s departure coupled with the divided parliament produced by last month’s vote fueled concern Italy may reignite the region’s debt crisis.
Italian government bond futures fell after the Fitch cut. The contract maturing in June fell 0.3 percent to 108.84 at 5:15 p.m. London time. Italian 10-year bonds were little changed today at 4.6 percent.
Dwindling Impact
Investors are paying less attention to the views of ratings companies and relying more on their own analysis. Yields on sovereign securities moved in the opposite direction from what ratings suggested in 53 percent of 32 upgrades, downgrades and changes in credit outlook last year, according to data compiled by Bloomberg published in December.
Investors ignored 56 percent of Moody’s rating and outlook changes and 50 percent of those by Standard & Poor’s. That’s worse than the longer-term average of 47 percent, based on more than 300 changes since 1974.
Fitch also cited risks of “sustained deterioration in fiscal funding conditions with adverse implications for financial conditions for the private sector and public debt dynamics.”
Italy’s long-term debt is rated Baa2 by Moody’s Investors and BBB+ by Standard & Poor’s, according to data compiled by Bloomberg
Bond Gains
Italian government bonds returned 20 percent last year, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. That’s almost four times the 5.9 percent return on Spanish debt and dwarfs the 4.5 percent return on German bunds, the indexes show.
Italy, bearer of the euro’s second-biggest debt relative to gross domestic product, needs to sell more than 30 billion euros of bonds and bills a month.
The Feb. 24-25 vote produced a split parliament, and sent the country’s 10-year bond yield up 41 basis points the day after the election, the biggest increase in 14 months. Democratic Party leader Pier Luigi Bersani and his allies failed to win a majority in the Senate, leaving former Prime Minister Silvio Berlusconi and comic-turned-politician Beppe Grillo with blocking minorities.
Political Impasse
The political deadlock rattled markets as investors were betting on a government strong enough to tackle the country’s fourth recession since 2001, while maintaining fiscal rigor.
ECB President Mario Draghi said this week that the effect of Italy’s vote on financial markets was limited as Monti’s economic reforms will survive the political impasse. “After some excitement after the elections, markets have now reverted back more or less to where they were before,” Draghi told reporters in Frankfurt yesterday. “Much of the fiscal adjustment Italy went through will continue going on automatic pilot.”
The euro region’s third-biggest economy shrank 2.4 percent last year as the country’s budget deficit narrowed to match the European Union limit of 3 percent.
Italy will probably contract again this year and unemployment will continue rising to reach 12 percent next year, European Commission forecasts released on Feb. 2 showed.
Fitch said today it expects Italy’s GDP to fall 1.8 percent this year as public debt peaks at almost 130 percent, up from 127 percent in 2012.
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Re: New EC Thread
Panda Wed 13 Mar - 16:15
MEPs reject EU spending cuts and demand extra £1.7bn from British
taxpayers
MEPs have rejected cuts to European Union budgets agreed at an all-night
summit last month and have demanded that national governments pay an extra £14
billion in spending for this year.
The European Parliament demands,
which hold the spending deal hostage, could cost the British taxpayer up to £1.7
billion in extra EU contributions in 2013 at a time of deep cuts to domestic
public spending. Photo:
Reuters
By Bruno Waterfield,
Brussels
2:35PM GMT 13 Mar 2013
299 Comments
Five weeks ago, at a marathon 32-hour Brussels summit, David Cameron secured a
reduction in long-term European spending plans, the first in the
EU's history.
The Prime Minister hailed the EU cuts as the implementation of long overdue
austerity in Brussels at a time when national governments were cutting back on
spending.
The European Parliament demands, which hold the spending deal hostage until
MEPs agree, could cost the British taxpayer up to £1.7 billion in extra EU
contributions in 2013 at a time of deep cuts to domestic public spending.
"The European Parliament cannot accept the proposal from the member states
without the fulfilment of certain essential conditions," said Martin Schulz, the
speaker of the EU assembly.
While accepting the overall figures for EU financing for the seven years 2014
to 2020, the parliament has tied its agreement to conditions including "unpaid
payment claims" for this year, a bill that would represent a 12 per cent
increase in national contributions.
Related Articles
Additionally, MEPs have demanded a "compulsory, legally binding and
comprehensive revision" of EU spending cuts in 2017 that could restore
expenditure by a vote of Europe's leaders, stripping Britain of its veto.
The parliament is also seeking more "flexibility" in spending to allow the EU
to go to the top of expenditure ceilings and to roll cash over from one year to
another between 2014 and 2020.
Most controversially, and without any prospect of agreement, MEPs have
demanded that the EU create new taxes to fund the Brussels budget.
"These issues are of fundamental importance for the parliament. The European
Parliament will not accept the proposal from the member states unless there is
movement on all of these issues," said Mr Schulz.
Diplomats have ruled out any talks on new EU taxes but have signalled that
negotiations could take place on other issues, including extra spending for
2013.
Martin Callanan MEP, the leader of European Conservatives, accused the
majority of the parliament, which rejected the cuts by 506 to 161 votes, of
"flying in the face of public opinion".
"The European Parliament is engaging in the worst kind of posturing, which
makes it look completely out of touch with reality," he said.
"The EU budget deal was a reasonable compromise between many competing
demands."
Ukip MEPs voted against the agreement. "We don't want to pay these fat
bureaucrats a penny piece. We also voted against the European Parliament call
for more spending. This is even more ridiculous," said Godfrey Bloom MEP.
Under the Lisbon Treaty, which entered into force in late 2009, MEPs have new
powers to block EU spending deals agreed by national governments whose annual
contributions are the source of Brussels funding.
Following the February 8 agreement to cut EU spending by £30 billion between
2014 and 2020, Mr Cameron warned MEPs not to try to override governments that
were responsible to national parliaments for budget expenditure.
The parliament was forced to back down on plans to hold a secret ballot on
the spending agreement after accusations that MEPs were trying to evade
accountability to their voters.
taxpayers
MEPs have rejected cuts to European Union budgets agreed at an all-night
summit last month and have demanded that national governments pay an extra £14
billion in spending for this year.
The European Parliament demands,
which hold the spending deal hostage, could cost the British taxpayer up to £1.7
billion in extra EU contributions in 2013 at a time of deep cuts to domestic
public spending. Photo:
Reuters
By Bruno Waterfield,
Brussels
2:35PM GMT 13 Mar 2013
299 Comments Five weeks ago, at a marathon 32-hour Brussels summit, David Cameron secured a
reduction in long-term European spending plans, the first in the
EU's history.
The Prime Minister hailed the EU cuts as the implementation of long overdue
austerity in Brussels at a time when national governments were cutting back on
spending.
The European Parliament demands, which hold the spending deal hostage until
MEPs agree, could cost the British taxpayer up to £1.7 billion in extra EU
contributions in 2013 at a time of deep cuts to domestic public spending.
"The European Parliament cannot accept the proposal from the member states
without the fulfilment of certain essential conditions," said Martin Schulz, the
speaker of the EU assembly.
While accepting the overall figures for EU financing for the seven years 2014
to 2020, the parliament has tied its agreement to conditions including "unpaid
payment claims" for this year, a bill that would represent a 12 per cent
increase in national contributions.
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Additionally, MEPs have demanded a "compulsory, legally binding and
comprehensive revision" of EU spending cuts in 2017 that could restore
expenditure by a vote of Europe's leaders, stripping Britain of its veto.
The parliament is also seeking more "flexibility" in spending to allow the EU
to go to the top of expenditure ceilings and to roll cash over from one year to
another between 2014 and 2020.
Most controversially, and without any prospect of agreement, MEPs have
demanded that the EU create new taxes to fund the Brussels budget.
"These issues are of fundamental importance for the parliament. The European
Parliament will not accept the proposal from the member states unless there is
movement on all of these issues," said Mr Schulz.
Diplomats have ruled out any talks on new EU taxes but have signalled that
negotiations could take place on other issues, including extra spending for
2013.
Martin Callanan MEP, the leader of European Conservatives, accused the
majority of the parliament, which rejected the cuts by 506 to 161 votes, of
"flying in the face of public opinion".
"The European Parliament is engaging in the worst kind of posturing, which
makes it look completely out of touch with reality," he said.
"The EU budget deal was a reasonable compromise between many competing
demands."
Ukip MEPs voted against the agreement. "We don't want to pay these fat
bureaucrats a penny piece. We also voted against the European Parliament call
for more spending. This is even more ridiculous," said Godfrey Bloom MEP.
Under the Lisbon Treaty, which entered into force in late 2009, MEPs have new
powers to block EU spending deals agreed by national governments whose annual
contributions are the source of Brussels funding.
Following the February 8 agreement to cut EU spending by £30 billion between
2014 and 2020, Mr Cameron warned MEPs not to try to override governments that
were responsible to national parliaments for budget expenditure.
The parliament was forced to back down on plans to hold a secret ballot on
the spending agreement after accusations that MEPs were trying to evade
accountability to their voters.
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Re: New EC Thread
Panda Wed 13 Mar - 16:22
What a b***dy mess the EU is, get out NOW David , hold the Referendum and you will have the support of the population to withdraw from the EU.
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Panda Wed 13 Mar - 16:41
More Barroso bombast
By Jeremy WarnerEconomicsLast updated: March 12th, 2013
104 CommentsComment on this article
Jose Manuel Barroso
It's no longer new to say the European Commission has its head buried in the sand over what to do about the eurozone crisis, but lest you thought that just maybe reality was beginning to dawn, up pops our old friend Jose Manuel Barroso to remind us that some things never change.
"Comrades", he begins in an open letter to fellow members of the European Council – ok, so I made that up. "Colleagues", he begins. There is indeed light at the end of the tunnel. Yes, it's true that there has been no economic recovery, and that unemployment has reached unprecedented levels in many member states, and as you might imagine, we are very worried about all that.
But there are also positive signs.
Except that the data doesn't show what is claimed. True enough, there has been some reduction in budget deficits over the past two years, both among programme countries and other Club Med nations. But the assumption of further progress is based on forecasts for this year and next, and may therefore be just a case of wishful thinking. Throughout this crisis, forecasters have been far too optimistic.
And as I have pointed out on several occasions in the past, most recently here, the improvements in current account deficits and labour productivity are basically just a statistical curiosity. If you collapse internal demand, which is what all these countries have done, you reduce imports and the trade gap begins to close. Fair enough, exports have grown in most of these countries – certainly by a lot more than they have here in the UK, despite the supposed advantage we have of devaluation – but not by nearly enough to compensate for the enforced plunge in domestic demand.
As for improving competitiveness, well yes, if you throw a quarter of your workforce out of work, your labour productivity does tend to rise – fewer workers equals more output per worker – but does that really count as a sign of improved competitiveness? In fact all it does is entrench the division between the haves and the have nots. No economy can call itself competitive with a 10 per cent plus unemployment rate.
But never mind. The euro is going to soldier on, and eventually you WILL be made to see that it has been a success, whatever the evidence to the contrary. There are too many careers riding on it to contemplate any alternative outcome.
By Jeremy WarnerEconomicsLast updated: March 12th, 2013
104 CommentsComment on this article
Jose Manuel BarrosoIt's no longer new to say the European Commission has its head buried in the sand over what to do about the eurozone crisis, but lest you thought that just maybe reality was beginning to dawn, up pops our old friend Jose Manuel Barroso to remind us that some things never change.
"Comrades", he begins in an open letter to fellow members of the European Council – ok, so I made that up. "Colleagues", he begins. There is indeed light at the end of the tunnel. Yes, it's true that there has been no economic recovery, and that unemployment has reached unprecedented levels in many member states, and as you might imagine, we are very worried about all that.
But there are also positive signs.
Some of the macro-economic imbalances built up before the crisis are being corrected and structural reforms initiated in several countries are contributing to a rebalancing of the EU economy, notably in the euro area. Moreover, there is progress in fiscal consolidation, with a reduction in headline fiscal deficits and a containment of the rise in debt-to-GDP levels.What is more:
Attached to this letter, you will find some key data presenting the latest trends in GDP, unemployment and public finances. I think you will find it interesting to see how some of our economies are adjusting, in particular the programme countries. You can see that the steadfast implementation of reforms is beginning to deliver results in terms of current accounts and regaining competitiveness.So the therapy is actually working, and the data proves it. We are therefore on the right course and we must redouble our efforts.
Except that the data doesn't show what is claimed. True enough, there has been some reduction in budget deficits over the past two years, both among programme countries and other Club Med nations. But the assumption of further progress is based on forecasts for this year and next, and may therefore be just a case of wishful thinking. Throughout this crisis, forecasters have been far too optimistic.
And as I have pointed out on several occasions in the past, most recently here, the improvements in current account deficits and labour productivity are basically just a statistical curiosity. If you collapse internal demand, which is what all these countries have done, you reduce imports and the trade gap begins to close. Fair enough, exports have grown in most of these countries – certainly by a lot more than they have here in the UK, despite the supposed advantage we have of devaluation – but not by nearly enough to compensate for the enforced plunge in domestic demand.
As for improving competitiveness, well yes, if you throw a quarter of your workforce out of work, your labour productivity does tend to rise – fewer workers equals more output per worker – but does that really count as a sign of improved competitiveness? In fact all it does is entrench the division between the haves and the have nots. No economy can call itself competitive with a 10 per cent plus unemployment rate.
But never mind. The euro is going to soldier on, and eventually you WILL be made to see that it has been a success, whatever the evidence to the contrary. There are too many careers riding on it to contemplate any alternative outcome.
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Re: New EC Thread
Panda Thu 14 Mar - 8:23
Beppe Grillo warns that Italy will be 'dropped like a hot potato'
Beppe Grillo, the comedian who has become the kingmaker of Italian politics,
has declared that his country is 'de facto' already out of the euro and northern
European countries were waiting to drop Italy "like a hot potato".
Mr Grillo repeated his call for
a referendum on Italian membership of the euro Photo:
REUTERS
By Jeevan Vasagar, Berlin
3:18PM GMT 13 Mar 2013
Mr Grillo's movement won more than a quarter of the vote in last month's
general election, making it the biggest single party in the Italian parliament.
Since then, the country has been in a state of political paralysis as Mr
Grillo refuses to contemplate a power-sharing deal with the centre-Left
Democratic party.
In an interview with the German business newspaper Handelsblatt, Mr Grillo
said: "The northern European countries are only holding onto us until their
banks have recouped their investments in Italian sovereign bonds. Then they'll
drop us like a hot potato." The comic-turned-political activist, who campaigned
against austerity measures implemented by Prime Minister Mario Monti, compared
the technocrat prime minister to "a bankruptcy trustee acting on behalf of the
banks" and described his Five Star Movement as: "the French revolution – without
the guillotine."
He repeated his call for a referendum on Italian membership of the euro and
insisted he was not anti-European, but a critic of the way the EU has evolved.
"I have only said we need a plan B. We need to ask 'What has become of
Europe? Why do we have no common tax or immigration policy? Why is only Germany
getting richer?'," he said.
Related Articles
Rival party leaders have been left attempting to form a coalition government
following the February 24-25 election, which saw the centre-Left scrape to
victory but fail to gain the crucial majority in the upper house of parliament.
Mr Grillo has refused to negotiate with the centre-left's Pier Luigi Bersani
and neither will enter into talks with billionaire former premier Silvio
Berlusconi's centre-right coalition, which came a close second.
"The old parties are finished. They should give back what they have stolen
and leave. Berlusconi is physically at the end. No one will be talking about
Bersani in 15 days. We are at the start of a new era but they don't see it," he
said.
In an interview with a German news magazine earlier this month, Mr Grillo
warned that "if conditions do not change" Italy will want to leave the euro and
return to the lira.
Beppe Grillo, the comedian who has become the kingmaker of Italian politics,
has declared that his country is 'de facto' already out of the euro and northern
European countries were waiting to drop Italy "like a hot potato".
Mr Grillo repeated his call for
a referendum on Italian membership of the euro Photo:
REUTERS
By Jeevan Vasagar, Berlin
3:18PM GMT 13 Mar 2013
Mr Grillo's movement won more than a quarter of the vote in last month's
general election, making it the biggest single party in the Italian parliament.
Since then, the country has been in a state of political paralysis as Mr
Grillo refuses to contemplate a power-sharing deal with the centre-Left
Democratic party.
In an interview with the German business newspaper Handelsblatt, Mr Grillo
said: "The northern European countries are only holding onto us until their
banks have recouped their investments in Italian sovereign bonds. Then they'll
drop us like a hot potato." The comic-turned-political activist, who campaigned
against austerity measures implemented by Prime Minister Mario Monti, compared
the technocrat prime minister to "a bankruptcy trustee acting on behalf of the
banks" and described his Five Star Movement as: "the French revolution – without
the guillotine."
He repeated his call for a referendum on Italian membership of the euro and
insisted he was not anti-European, but a critic of the way the EU has evolved.
"I have only said we need a plan B. We need to ask 'What has become of
Europe? Why do we have no common tax or immigration policy? Why is only Germany
getting richer?'," he said.
Related Articles
Italy’s Bersani on collision course with Germany
and ECB over austerity
06 Mar 2013
Italy in chaos as Grillo plots euro exit
02 Mar 2013
Beppe Grillo says Italy may soon have to pull out
of euro
02 Mar 2013
Can Cameron prove himself a winner?
01 Mar 2013
Italian Left rules out deal with Silvio
Berlusconi
01 Mar 2013
Rival party leaders have been left attempting to form a coalition government
following the February 24-25 election, which saw the centre-Left scrape to
victory but fail to gain the crucial majority in the upper house of parliament.
Mr Grillo has refused to negotiate with the centre-left's Pier Luigi Bersani
and neither will enter into talks with billionaire former premier Silvio
Berlusconi's centre-right coalition, which came a close second.
"The old parties are finished. They should give back what they have stolen
and leave. Berlusconi is physically at the end. No one will be talking about
Bersani in 15 days. We are at the start of a new era but they don't see it," he
said.
In an interview with a German news magazine earlier this month, Mr Grillo
warned that "if conditions do not change" Italy will want to leave the euro and
return to the lira.
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Re: New EC Thread
Panda Thu 14 Mar - 8:31
I agree with Grillo, the EU is too autocratic and maybe if they had just opted for free trade , and a combined Defense Force instead of trying to rule every Country from Brussels the EU would not be in the state it is in. How long can Draghi keep propping up these Countries, where is the money coming from , will some countries renege on their debt?
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Re: New EC Thread
Panda Thu 14 Mar - 21:12
: Stupidity and stinginess in Mali
14 March 2013Le Monde Paris
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Despite what its European partners say in public, France is alone in fighting the armed Islamists and helping rebuild the Malian state. The EU's inability to agree on major global issues will cost it dearly one day, argues Le Monde.
Le MondeThe meeting of the EU Foreign Ministers, held on March 11 in Brussels, has once again left the impression of an EU unable to agree on major international issues. This short-sighted attitude could have serious consequences.
More disenchantment with Europe is not what we want. With a great funk of depression hanging over the continent, we are reluctant to expose yet again the vacuity that distinguishes the European idea these days. In short, we still hesitate to play the pessimist by drawing attention to the discouraging absence of Europe in matters of defence and foreign affairs.
This is not a failure. A failure would imply that we gave it our best shot. No: it’s a debacle, a sad farce, and Mali has demonstrated that masterfully. This held especially true for the meeting of the foreign ministers of the 27 member states in Brussels on March 11. France has felt more isolated than ever since the start of the military operations in the Sahel.
Forgetting the Sahel
With the courteous, somewhat aloof firmness that is his trademark, French Minister of Foreign Affairs Laurent Fabius was reduced to begging for 30 soldiers from Belgium and Spain to be sent to Mali. Not 300. Only 30. Why? Because another 90 are still needed to protect the 500 instructors the EU has sent to Bamako to train the Malian army.
These 90 soldiers must be “prised” one by one away from the grip of the 27 countries of wealthy Europe, which prides itself on ranking amongst the greatest economic powers in the world. Let’s just call it as it is: the reluctance shown by the Belgians and the Spaniards is not political, or even financial. It’s much simpler than that: Brussels and Madrid could not care less about what may happen in the sands of the Sahel.
Hypocrisy has triumphed. On paper, the bloc are all in agreement. The stability of Africa depends heavily on extinguishing the jihadist fire spreading across the Sahel, say the Europeans; so too does the security of Europe, so close and so vulnerable to Islamist terrorism.
But these are just words. When it comes to acting jointly, no one, or almost no one, shows up. For sure, Paris was wrong at the start to send in its troops without consulting with its partners. But a true European solidarity would have been necessary then, a show of a common interest, a common defence – in short, the sharing of a burden that will have to be carried in the future.
‘Let France handle it’
The EU should have shown a strong presence in this part of the world, without leaving it to China, the United States or others to become the privileged partners of the Africans in the 21st century.
Unfortunately, Europe has displayed only pathological disunity and blind stinginess. Only five out of the 27 member states are really involved in the mission to train the Malian army. Beyond sententious declarations on the need for a “plan for the political and economic stabilisation of the Sahel”, the thinly veiled response of most of the 27 member states to events in Mali can be summed up in one sentence: “Let France handle it." So much for the contradiction between suspecting the French of postcolonial tendencies and letting them man the front line in Francophone Africa...
Europe is fleeing from history. It will pay for it one day.
14 March 2013Le Monde Paris
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Kichka Despite what its European partners say in public, France is alone in fighting the armed Islamists and helping rebuild the Malian state. The EU's inability to agree on major global issues will cost it dearly one day, argues Le Monde.
Le MondeThe meeting of the EU Foreign Ministers, held on March 11 in Brussels, has once again left the impression of an EU unable to agree on major international issues. This short-sighted attitude could have serious consequences.
More disenchantment with Europe is not what we want. With a great funk of depression hanging over the continent, we are reluctant to expose yet again the vacuity that distinguishes the European idea these days. In short, we still hesitate to play the pessimist by drawing attention to the discouraging absence of Europe in matters of defence and foreign affairs.
This is not a failure. A failure would imply that we gave it our best shot. No: it’s a debacle, a sad farce, and Mali has demonstrated that masterfully. This held especially true for the meeting of the foreign ministers of the 27 member states in Brussels on March 11. France has felt more isolated than ever since the start of the military operations in the Sahel.
Forgetting the Sahel
With the courteous, somewhat aloof firmness that is his trademark, French Minister of Foreign Affairs Laurent Fabius was reduced to begging for 30 soldiers from Belgium and Spain to be sent to Mali. Not 300. Only 30. Why? Because another 90 are still needed to protect the 500 instructors the EU has sent to Bamako to train the Malian army.
These 90 soldiers must be “prised” one by one away from the grip of the 27 countries of wealthy Europe, which prides itself on ranking amongst the greatest economic powers in the world. Let’s just call it as it is: the reluctance shown by the Belgians and the Spaniards is not political, or even financial. It’s much simpler than that: Brussels and Madrid could not care less about what may happen in the sands of the Sahel.
Hypocrisy has triumphed. On paper, the bloc are all in agreement. The stability of Africa depends heavily on extinguishing the jihadist fire spreading across the Sahel, say the Europeans; so too does the security of Europe, so close and so vulnerable to Islamist terrorism.
But these are just words. When it comes to acting jointly, no one, or almost no one, shows up. For sure, Paris was wrong at the start to send in its troops without consulting with its partners. But a true European solidarity would have been necessary then, a show of a common interest, a common defence – in short, the sharing of a burden that will have to be carried in the future.
‘Let France handle it’
The EU should have shown a strong presence in this part of the world, without leaving it to China, the United States or others to become the privileged partners of the Africans in the 21st century.
Unfortunately, Europe has displayed only pathological disunity and blind stinginess. Only five out of the 27 member states are really involved in the mission to train the Malian army. Beyond sententious declarations on the need for a “plan for the political and economic stabilisation of the Sahel”, the thinly veiled response of most of the 27 member states to events in Mali can be summed up in one sentence: “Let France handle it." So much for the contradiction between suspecting the French of postcolonial tendencies and letting them man the front line in Francophone Africa...
Europe is fleeing from history. It will pay for it one day.
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Re: New EC Thread
Panda Fri 15 Mar - 17:11
European Council: Why change a losing formula?
15 March 2013
Presseurop Il Sole-24 Ore, Ziarul Financiar, Les Echos
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The heads of state and government met in Brussels to discuss growth but have failed to reach any decision that might give a boost to a Europe exhausted by the crisis and by austerity, laments the European press.
The European Council of March 14, dedicated to growth, was another “predictable summit,” says Il Sole-24 Ore. Despite the glum indicators on employment and production, and despite the anti-austerity protesters who converged on Brussels from all across Europe, the newspaper writes –
15 March 2013
Presseurop Il Sole-24 Ore, Ziarul Financiar, Les Echos
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BojesenThe heads of state and government met in Brussels to discuss growth but have failed to reach any decision that might give a boost to a Europe exhausted by the crisis and by austerity, laments the European press.
The European Council of March 14, dedicated to growth, was another “predictable summit,” says Il Sole-24 Ore. Despite the glum indicators on employment and production, and despite the anti-austerity protesters who converged on Brussels from all across Europe, the newspaper writes –
It was business as usual in the palace. The conclusions were pre-defined: a little bending of the rules against deficits, and above all, a reduction in youth unemployment, the mantra of the moment. [...] No bright flashes, no surprise. As if Europe is not groaning under the weight of recession for the second year in a row. [...] It would take a little unexpected flash of brilliance, an unusual exercise of the collective will to drag Europe out of the tunnel of the crisis with less talk and some concrete action.”Europe is doomed to continue on the path of austerity, opened up by Berlin to lead the European Union out of the crisis” adds Ziarul Financiar. “It was clear from the moment Germany posted an exemplary budget model that promises the lowest deficit in the last 40 years” adds the Romanian newspaper, that –
The price to be paid is going to hurt the entire EU: youth unemployment just about everywhere, crippling recessions in all the countries hit hardest by the crisis... And, what’s more, Berlin is following down the same path in demanding that the term “fiscal consolidation”, i.e. austerity-oriented growth, be mentioned no less than four times in the summit’s conclusions.Since the Growth Pact was signed last June, “things have hardly progressed” deplores the business daily Les Echos. The newspaper recalls in particular that the “project bonds, these bond issues created to support major infrastructure projects, still hang in limbo, though the initial phase should have got underway last October.” Les Echos nonethess sees a ray of hope coming out of this lacklustre European Council meeting, especially as “France and Italy have won a little leniency from their partners” on the public deficits –
Some of their demands [have been] written into the conclusions of the summit. Paris welcomes the mention in the final text of the priority of “pursuing differentiated, growth-friendly fiscal consolidation”, [which] opens the way for a certain flexibility in the enforcement of a return to the 3 per cent deficit target [...] Italy, for its part, pushed for the conclusions to recognise the special status of public investment in the future when it comes to calculating deficits.
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Panda Fri 15 Mar - 18:08
European institutions: Grand ideas and empty jargon
15 March 2013Revue Politika Brno
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Each year the EU produces thousands of pages of reports, speeches and legislation designed to move the European project forward. They have one thing in common: a pompous language worthy of a regime lost in its own dogma, writes a Czech political scientist in Revue Politika.
Tomáš Břicháček Every week, European Union institutions and their leaders churn out dozens of documents and public utterances of all kinds. Legal regulations, legislative proposals, green and white papers, reports, resolutions, statements, speeches, etc. It piles up. One of their peculiar properties is the very distinctive language in which they are written or spoken.
The language of the European Union, at first glance, attains an extraordinary density using fixed constructions – various phrases, slogans, sayings – that are, with minor variations, endlessly recycled. Some of them are encoded in the primary legislation, part of which originates in key programme documents adopted, for example, in connection with the so-called Lisbon Agenda and Europe 2020. They are words that seem to have hardened into solid slabs, which using the cut-and-paste crane of the computer keyboard allows the quick erection of any kind of structure in writing or speech.
Among the most popular pre-fab “panels” is that concerning sustainable development based on a highly competitive social market economy aiming at full employment and social progress, the fight against social exclusion and discrimination, smart, sustainable and inclusive growth, and the European social model...
Hackneyed, platitudinous rhetoric
Even in places where the most hackneyed platitudes are absent, the language of the EU excels at a considerable stiffness and is stamped by rhetoric. For example, the Commission document entitled the Single Market Act (2011) contains a noteworthy sentence: “The common market – which has now become the internal market – has for over 50 years woven strands of solidarity between the men and women of Europe, whilst opening up new opportunities for growth for more than 21 million European businesses.”
The European Parliament, in its response to the Commission's Single Market Act echoed and, among other things, stressed the need to “put the citizens back at the centre of the single market” and further stated that “the single market offers a wide range of options in terms of employment, economic growth and competition, and that in order to exploit this potential to the full, a coherent structural concept must be created.”
In its 2007 White Paper on Sport, the Commission states: “Sport attracts European citizens, with a majority of people taking part in sporting activities on a regular basis. It generates important values such as team spirit, solidarity, tolerance and a sense of fair play, contributing to personal development and fulfillment. It promotes the active contribution of EU citizens to society and thereby helps to foster active citizenship.”
Pompous language
The EU institutions and their leaders particularly revel in pompous, extravagant formulations. Variously, the Union is described or projected as a “key player on the global scene”. It is a “European vision for mountain ranges” or the “European vision for the oceans and seas”. Other times, it seeks to “re-awakening the entrepreneurial spirit in Europe”, or heralds a call for “general political mobilisation for common, ambitious visions and goals.”
In the 2010 "communication" Europe 2020: A strategy for smart, sustainable and inclusive growth, the Commission states: “The crisis is a wake-up call. [...] If we act together, then we can fight back and come out of the crisis stronger. We have the new tools and the new ambition. Now we need to make it happen.”
Many statements and texts demonstrate a true fervour for building. In the already cited White Paper on Youth, which incidentally boasts the subheading “Young People to the Fore[JJ1]“, we read: “The EU must take shape with the people of Europe. It is important that consultations on the way the EU will develop and on its form of governance should include the people to whom tomorrow’s Europe belongs.”
Moralising and solicitous tone
EU texts and speeches are frequently filled with dogmas and propositions delivered in a moralising and solicitous tone. It’s as if the authors would like to set themselves up as teachers in front of their students, or rather as enlightened elites who know best and who spread goodness and knowledge among the common people.
Reading or listening to some of the language coming out of the European Union, our middle-aged and elderly fellow citizens may feel they are time-travelling back to their childhood [in the Czechoslovak Socialist Republic]. No surprise there. The characteristics of that language are traditionally associated with the left-wing worldview.
Our leftist parties have somewhat abandoned this tone, to distance themselves from the previous regime; in Western Europe, however, the situation is different. Language is just one of many proofs that the driving force behind the EU’s present direction is leftist, which the structures of the union are able to exploit to push through their political agenda.
The constant repetition of the same phrases and dogmas is, then, an expression of intellectual torpor, of the lack of a critical faculty, of indolence, of inertia, of wheels spinning in a rut. It is an illustration of just how much the Union’s elites lack self-reflection upon their failure to grasp that it is oversized ambitions that have plunged the Union into the crisis we have today, and of their inability to extricate themselves from the dead end of programmed centralisation.
Translated from the Czech by Anton Baer
15 March 2013Revue Politika Brno
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MaykEach year the EU produces thousands of pages of reports, speeches and legislation designed to move the European project forward. They have one thing in common: a pompous language worthy of a regime lost in its own dogma, writes a Czech political scientist in Revue Politika.
Tomáš Břicháček Every week, European Union institutions and their leaders churn out dozens of documents and public utterances of all kinds. Legal regulations, legislative proposals, green and white papers, reports, resolutions, statements, speeches, etc. It piles up. One of their peculiar properties is the very distinctive language in which they are written or spoken.
The language of the European Union, at first glance, attains an extraordinary density using fixed constructions – various phrases, slogans, sayings – that are, with minor variations, endlessly recycled. Some of them are encoded in the primary legislation, part of which originates in key programme documents adopted, for example, in connection with the so-called Lisbon Agenda and Europe 2020. They are words that seem to have hardened into solid slabs, which using the cut-and-paste crane of the computer keyboard allows the quick erection of any kind of structure in writing or speech.
Among the most popular pre-fab “panels” is that concerning sustainable development based on a highly competitive social market economy aiming at full employment and social progress, the fight against social exclusion and discrimination, smart, sustainable and inclusive growth, and the European social model...
Hackneyed, platitudinous rhetoric
Even in places where the most hackneyed platitudes are absent, the language of the EU excels at a considerable stiffness and is stamped by rhetoric. For example, the Commission document entitled the Single Market Act (2011) contains a noteworthy sentence: “The common market – which has now become the internal market – has for over 50 years woven strands of solidarity between the men and women of Europe, whilst opening up new opportunities for growth for more than 21 million European businesses.”
The European Parliament, in its response to the Commission's Single Market Act echoed and, among other things, stressed the need to “put the citizens back at the centre of the single market” and further stated that “the single market offers a wide range of options in terms of employment, economic growth and competition, and that in order to exploit this potential to the full, a coherent structural concept must be created.”
In its 2007 White Paper on Sport, the Commission states: “Sport attracts European citizens, with a majority of people taking part in sporting activities on a regular basis. It generates important values such as team spirit, solidarity, tolerance and a sense of fair play, contributing to personal development and fulfillment. It promotes the active contribution of EU citizens to society and thereby helps to foster active citizenship.”
Pompous language
The EU institutions and their leaders particularly revel in pompous, extravagant formulations. Variously, the Union is described or projected as a “key player on the global scene”. It is a “European vision for mountain ranges” or the “European vision for the oceans and seas”. Other times, it seeks to “re-awakening the entrepreneurial spirit in Europe”, or heralds a call for “general political mobilisation for common, ambitious visions and goals.”
In the 2010 "communication" Europe 2020: A strategy for smart, sustainable and inclusive growth, the Commission states: “The crisis is a wake-up call. [...] If we act together, then we can fight back and come out of the crisis stronger. We have the new tools and the new ambition. Now we need to make it happen.”
Many statements and texts demonstrate a true fervour for building. In the already cited White Paper on Youth, which incidentally boasts the subheading “Young People to the Fore[JJ1]“, we read: “The EU must take shape with the people of Europe. It is important that consultations on the way the EU will develop and on its form of governance should include the people to whom tomorrow’s Europe belongs.”
Moralising and solicitous tone
EU texts and speeches are frequently filled with dogmas and propositions delivered in a moralising and solicitous tone. It’s as if the authors would like to set themselves up as teachers in front of their students, or rather as enlightened elites who know best and who spread goodness and knowledge among the common people.
Reading or listening to some of the language coming out of the European Union, our middle-aged and elderly fellow citizens may feel they are time-travelling back to their childhood [in the Czechoslovak Socialist Republic]. No surprise there. The characteristics of that language are traditionally associated with the left-wing worldview.
Our leftist parties have somewhat abandoned this tone, to distance themselves from the previous regime; in Western Europe, however, the situation is different. Language is just one of many proofs that the driving force behind the EU’s present direction is leftist, which the structures of the union are able to exploit to push through their political agenda.
The constant repetition of the same phrases and dogmas is, then, an expression of intellectual torpor, of the lack of a critical faculty, of indolence, of inertia, of wheels spinning in a rut. It is an illustration of just how much the Union’s elites lack self-reflection upon their failure to grasp that it is oversized ambitions that have plunged the Union into the crisis we have today, and of their inability to extricate themselves from the dead end of programmed centralisation.
Translated from the Czech by Anton Baer
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Re: New EC Thread
Badboy Sat 16 Mar - 12:32
BANK ACCOUNT HOLDERS IN CYPRUS ARE TO LOSE 10% OF THEIR SAVINGS AS A CONDITION OF A BALOUT,AT LEAST I THINK I HAVE GOT THAT RIGHT.
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I havn't read that but I suppose it is better than having the Bank fail . I don' know where Draghi is getting all this money from to Bail out so many Banks, I hope he is not using non Euro Countries' contributions.!!!!Badboy wrote:BANK ACCOUNT HOLDERS IN CYPRUS ARE TO LOSE 10% OF THEIR SAVINGS AS A CONDITION OF A BALOUT,AT LEAST I THINK I HAVE GOT THAT RIGHT.
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There you go Badboy.....
Last Updated: 2:10PM 16/03/2013
Anyone with savings in a Cyprus bank will lose some of their money under a ground-breaking bailout deal agreed by European finance ministers.
Bank customers will pay a levy of up to 9.9% on their savings, a charge which will raise nearly 6bn euros (£5.1bn).
Cyprus is the fifth country to seek a bailout following Greece, Ireland, Portugal and Spain but the terms of the deal are a radical departure from previous schemes.
Finance ministers have agreed to lend the indebted island 10bn euros but in return, the public will be forced to forfeit part of their savings.
Savers with more than 100,000 euros (£86,500) in the bank will be charged a one-off levy of 9.9%. Those with less will be charged 6.7%.
It will apply to everyone from pensioners to Russian oligarchs, who are alleged to have billions stashed away in what officials say is a bloated Cypriot banking sector.
Private investors will also face a second hit under a "withholding tax" imposed on interest on bank deposits
More than a third - 37% - of cash held in the Cypriot banking system belongs to non-residents and the country has a large British ex-pat community.
Queues of people gathered at cash machines on the island on Saturday as they tried to withdraw their money ahead of the move.
And the country's cooperative banks had to shut their doors after seeing a rush of savers keen to protect their money.
Savers could apparently withdraw money but were not able to carry out electronic transfers.
British Cypriot Andy Georgiou, 54, moved his life savings to Cyprus last year after selling his home in London.
"I am extremely angry. I worked years and years to get it together and now I am losing it on the say-so of the Dutch and the Germans," he said.
Andri Menelaou, 25, had thought anything below 100,000 euros was protected by the state and said: "I don't have much but I don't see why I should pay for bank mistakes."
The move is expected to generate 5.8bn euros (£5bn) for Cyprus, which first applied for a bailout in June 2012.
Banks have already taken steps to freeze the required amount in deposit accounts and parliament is due to vote on the levy on Sunday.
Nicholas Papadopoulos, head of parliament's financial affairs committee, said: "My initial reaction is one of shock.
"This decision is much worse than what we expected and contrary to what the government was assuring us, right up until last night."
Mr Papadopoulos, vice-chairman of the Democratic Party which is a coalition partner in government, said he did not want to predict how parliament would vote.
"If we go ahead with this, there is a great risk it is not the end. The banking system will still face instability because it will face a significant capital flight," he said.
Cyprus was badly hit by the Greek financial crisis because of its close links to the country.
Its two largest banks saw combined losses of 4.5bn (£4bn) euros - equal to a quarter of the island's gross domestic product.
The rescue package was agreed after 10 hours of talks in Brussels and was significantly less than the 17bn euros (£14.7bn) asked for.
As part of the deal, the government will also have to hike corporate tax to 12.5% from 10% and sell off state assets to help balance the public finances.
Dutch finance minister Jeroen Dijsselbloem said: "As it is a contribution to the financial stability of Cyprus, it seems 'just' to ask a contribution of all deposit-holders."
He added: "The challenges we were facing in Cyprus were of an exceptional nature."
French Finance Minister Pierre Moscovici said: "We did what we had to."
Last Updated: 2:10PM 16/03/2013
Anyone with savings in a Cyprus bank will lose some of their money under a ground-breaking bailout deal agreed by European finance ministers.
Bank customers will pay a levy of up to 9.9% on their savings, a charge which will raise nearly 6bn euros (£5.1bn).
Cyprus is the fifth country to seek a bailout following Greece, Ireland, Portugal and Spain but the terms of the deal are a radical departure from previous schemes.
Finance ministers have agreed to lend the indebted island 10bn euros but in return, the public will be forced to forfeit part of their savings.
Savers with more than 100,000 euros (£86,500) in the bank will be charged a one-off levy of 9.9%. Those with less will be charged 6.7%.
It will apply to everyone from pensioners to Russian oligarchs, who are alleged to have billions stashed away in what officials say is a bloated Cypriot banking sector.
Private investors will also face a second hit under a "withholding tax" imposed on interest on bank deposits
More than a third - 37% - of cash held in the Cypriot banking system belongs to non-residents and the country has a large British ex-pat community.
Queues of people gathered at cash machines on the island on Saturday as they tried to withdraw their money ahead of the move.
And the country's cooperative banks had to shut their doors after seeing a rush of savers keen to protect their money.
Savers could apparently withdraw money but were not able to carry out electronic transfers.
British Cypriot Andy Georgiou, 54, moved his life savings to Cyprus last year after selling his home in London.
"I am extremely angry. I worked years and years to get it together and now I am losing it on the say-so of the Dutch and the Germans," he said.
Andri Menelaou, 25, had thought anything below 100,000 euros was protected by the state and said: "I don't have much but I don't see why I should pay for bank mistakes."
The move is expected to generate 5.8bn euros (£5bn) for Cyprus, which first applied for a bailout in June 2012.
Banks have already taken steps to freeze the required amount in deposit accounts and parliament is due to vote on the levy on Sunday.
Nicholas Papadopoulos, head of parliament's financial affairs committee, said: "My initial reaction is one of shock.
"This decision is much worse than what we expected and contrary to what the government was assuring us, right up until last night."
Mr Papadopoulos, vice-chairman of the Democratic Party which is a coalition partner in government, said he did not want to predict how parliament would vote.
"If we go ahead with this, there is a great risk it is not the end. The banking system will still face instability because it will face a significant capital flight," he said.
Cyprus was badly hit by the Greek financial crisis because of its close links to the country.
Its two largest banks saw combined losses of 4.5bn (£4bn) euros - equal to a quarter of the island's gross domestic product.
The rescue package was agreed after 10 hours of talks in Brussels and was significantly less than the 17bn euros (£14.7bn) asked for.
As part of the deal, the government will also have to hike corporate tax to 12.5% from 10% and sell off state assets to help balance the public finances.
Dutch finance minister Jeroen Dijsselbloem said: "As it is a contribution to the financial stability of Cyprus, it seems 'just' to ask a contribution of all deposit-holders."
He added: "The challenges we were facing in Cyprus were of an exceptional nature."
French Finance Minister Pierre Moscovici said: "We did what we had to."
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Re: New EC Thread
Panda Sat 16 Mar - 20:46
European Union: ‘The poisoned gift’
15 March 2013
Handelsblatt
Handelsblatt, 15 March 2013Presenting Mario Draghi as the 19th Century monarch Charles XIV John of Sweden, the business daily says that the European Central Bank President is “the saviour of the euro and the ruination of savers.”
In a feature devoted to the actions of the ECB, the newspaper notes that
15 March 2013
Handelsblatt
Handelsblatt, 15 March 2013Presenting Mario Draghi as the 19th Century monarch Charles XIV John of Sweden, the business daily says that the European Central Bank President is “the saviour of the euro and the ruination of savers.”In a feature devoted to the actions of the ECB, the newspaper notes that
… since the onset of the financial crisis, the ECB and other central banks have swamped the world with cheap money. Initially, this calmed the markets, but there are risks: the emergence of new [financial] bubbles, at a time when insurers are having trouble finding investments and savers are threatened with the loss of their savings.
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Re: New EC Thread
Panda Sat 16 Mar - 20:53
Debate: We, the lost European people
6 mars 2013The New York Times New York
Outils
Partagé 498 fois en 10 langues
Ruben L. Oppenheimer
More Europe could help our continent out of the crisis, but we would still have to create the Europeans. We must encourage education, cultural exchanges and political initiatives to recover the sense of common destiny that we lost last century, argues a French journalist.
Olivier GuezSo Greece didn’t collapse, and Europe began breathing easier. But not for long. Italy’s rebellious voters, who opted for a flamboyant billionaire and a clown, reminded us how deeply in crisis the continent is. Meanwhile, France is going it virtually alone in Mali, and Britain talks openly of jumping the European ship altogether. This is a crisis not just of Europe’s currency, but of its soul.
If there ever was an emerging vision of a united Europe, it is falling apart for lack of support from its various peoples. Each has its own resentments or suspicions of its partners. But all suffer the same lack: very few of their citizens think of themselves first as Europeans.
How could this be? The history of Europe’s past half-century is usually depicted as step after step toward a common future. But maybe, to understand where we are now, the story should start earlier — not with the coalescing of France and Germany in the 1960s but with the model of Europe in the decade before the calamity of 1914.
In important ways, the Europe of 1913 was more cosmopolitan and European than the Europe of today. Ideas and nationalities mingled and converged in a hotbed of creativity. That year saw the height of Futurism, the beginnings of abstraction in Picasso and Braque, the debut of Stravinsky’s Rite of Spring, the publication of Swann’s Way by Proust. Collaborations to uncover science’s deepest secrets jumped borders easily. The architecture of imperial Austria and republican France found imitators in smaller gems of cities throughout central and southern Europe; they were called Little Vienna or Little Paris.
6 mars 2013The New York Times New York
Outils
Partagé 498 fois en 10 langues
- Text larger
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- Imprimer
- Envoyer
Ruben L. OppenheimerMore Europe could help our continent out of the crisis, but we would still have to create the Europeans. We must encourage education, cultural exchanges and political initiatives to recover the sense of common destiny that we lost last century, argues a French journalist.
Olivier GuezSo Greece didn’t collapse, and Europe began breathing easier. But not for long. Italy’s rebellious voters, who opted for a flamboyant billionaire and a clown, reminded us how deeply in crisis the continent is. Meanwhile, France is going it virtually alone in Mali, and Britain talks openly of jumping the European ship altogether. This is a crisis not just of Europe’s currency, but of its soul.
If there ever was an emerging vision of a united Europe, it is falling apart for lack of support from its various peoples. Each has its own resentments or suspicions of its partners. But all suffer the same lack: very few of their citizens think of themselves first as Europeans.
How could this be? The history of Europe’s past half-century is usually depicted as step after step toward a common future. But maybe, to understand where we are now, the story should start earlier — not with the coalescing of France and Germany in the 1960s but with the model of Europe in the decade before the calamity of 1914.
In important ways, the Europe of 1913 was more cosmopolitan and European than the Europe of today. Ideas and nationalities mingled and converged in a hotbed of creativity. That year saw the height of Futurism, the beginnings of abstraction in Picasso and Braque, the debut of Stravinsky’s Rite of Spring, the publication of Swann’s Way by Proust. Collaborations to uncover science’s deepest secrets jumped borders easily. The architecture of imperial Austria and republican France found imitators in smaller gems of cities throughout central and southern Europe; they were called Little Vienna or Little Paris.
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Re: New EC Thread
Panda Sun 17 Mar - 15:27
I.M.F. Says Euro Zone Remains Vulnerable
By JACK EWING
Published: March 15, 2013
FRANKFURT — The euro zone remains vulnerable to shocks because of weak banks and incomplete regulatory safeguards, the International Monetary Fund said Friday, in a warning to European leaders not to slacken their efforts to build a more resilient financial system. ('http://www.n]
[/url]Aidan Crawley/European Pressphoto Agency
Christine Lagarde, managing director of the International Monetary Fund, which issued a report urging more work on banks.
Interactive FeatureTracking Europe's Debt Crisis
In its first official assessment of the European Union financial system, the I.M.F. urged political leaders to show resolve in addressing the remaining weaknesses in the structure of the euro zone. Unfinished tasks include creation of a mechanism for winding down failed banks, and a system to guarantee customer deposits in order to prevent runs on banks, the I.M.F. said.
The fund praised the decision by euro zone leaders last year to concentrate bank supervision in the hands of the European Central Bank, rather than solely with national regulators who have sometimes been reluctant to impose tough measures on their home banks. But, in a 60-page report, the fund also said that a lot of work remained to be done.
“More forceful action is warranted to cement recent gains in market confidence and end the crisis,” the I.M.F. said.
The fund was once known primarily for dealing with financial and debt crises in poor nations, but in recent years has focused more of its resources on Europe and the crisis in the euro zone. As the report Friday illustrated, the I.M.F. and its president, Christine Lagarde, have been increasingly willing to lecture European leaders on how they should combat the crisis.
Many of the weaknesses pointed out by the I.M.F. in the report were familiar. Among them was a dependence by banks on wholesale funding from money markets, which experience has shown can dry up quickly in a crisis.
The I.M.F. also expressed concern that some banks may not have fully disclosed possible losses from bad loans or risky investments. The organization urged banks to continue raising capital, so that they are better able to absorb losses.
“Legacy assets remain a problem in many E.U. countries,” the report said. The I.M.F. did not specify which kinds of assets it meant, but some of the well-known categories include real estate mortgages in countries like Spain or loans to the depressed shipping industry by German, British and Scandinavian banks.
To be an effective bank regulator, the fund said, the E.C.B. needs to have a means to shut down banks in an orderly way, without creating a burden for taxpayers. But European leaders are still discussing how this so-called resolution authority would work. As long as there is no such body, the E.C.B. would be limited in its ability to deal with sick banks, the fund said.
The I.M.F. also highlighted dangers to the insurance industry, which constitutes a large part of the European financial system but has received far less attention than banks. Years of slow growth and low interest rates have become a threat to life insurance policies or pension plans that promised fixed returns.
“A weak economic environment, if it persists, can threaten the financial health of the life insurance and the pensions industries,” the I.M.F. said.
A version of this article appeared in print on March 16, 2013, on page B7 of the New York edition with the headline: Euro Zone Is Called Still Susceptible to Shoc
;
By JACK EWING
Published: March 15, 2013
FRANKFURT — The euro zone remains vulnerable to shocks because of weak banks and incomplete regulatory safeguards, the International Monetary Fund said Friday, in a warning to European leaders not to slacken their efforts to build a more resilient financial system. ('http://www.n]
[/url]Aidan Crawley/European Pressphoto AgencyChristine Lagarde, managing director of the International Monetary Fund, which issued a report urging more work on banks.
Interactive FeatureTracking Europe's Debt CrisisIn its first official assessment of the European Union financial system, the I.M.F. urged political leaders to show resolve in addressing the remaining weaknesses in the structure of the euro zone. Unfinished tasks include creation of a mechanism for winding down failed banks, and a system to guarantee customer deposits in order to prevent runs on banks, the I.M.F. said.
The fund praised the decision by euro zone leaders last year to concentrate bank supervision in the hands of the European Central Bank, rather than solely with national regulators who have sometimes been reluctant to impose tough measures on their home banks. But, in a 60-page report, the fund also said that a lot of work remained to be done.
“More forceful action is warranted to cement recent gains in market confidence and end the crisis,” the I.M.F. said.
The fund was once known primarily for dealing with financial and debt crises in poor nations, but in recent years has focused more of its resources on Europe and the crisis in the euro zone. As the report Friday illustrated, the I.M.F. and its president, Christine Lagarde, have been increasingly willing to lecture European leaders on how they should combat the crisis.
Many of the weaknesses pointed out by the I.M.F. in the report were familiar. Among them was a dependence by banks on wholesale funding from money markets, which experience has shown can dry up quickly in a crisis.
The I.M.F. also expressed concern that some banks may not have fully disclosed possible losses from bad loans or risky investments. The organization urged banks to continue raising capital, so that they are better able to absorb losses.
“Legacy assets remain a problem in many E.U. countries,” the report said. The I.M.F. did not specify which kinds of assets it meant, but some of the well-known categories include real estate mortgages in countries like Spain or loans to the depressed shipping industry by German, British and Scandinavian banks.
To be an effective bank regulator, the fund said, the E.C.B. needs to have a means to shut down banks in an orderly way, without creating a burden for taxpayers. But European leaders are still discussing how this so-called resolution authority would work. As long as there is no such body, the E.C.B. would be limited in its ability to deal with sick banks, the fund said.
The I.M.F. also highlighted dangers to the insurance industry, which constitutes a large part of the European financial system but has received far less attention than banks. Years of slow growth and low interest rates have become a threat to life insurance policies or pension plans that promised fixed returns.
“A weak economic environment, if it persists, can threaten the financial health of the life insurance and the pensions industries,” the I.M.F. said.
A version of this article appeared in print on March 16, 2013, on page B7 of the New York edition with the headline: Euro Zone Is Called Still Susceptible to Shoc
| |
;
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Re: New EC Thread
Panda Sun 17 Mar - 16:24
Cyprus bailout: Parliament postpones debate
Savers express anger at empty cash points in the capital,
Nicosia
Continue
reading the main story
Eurozone
crisis
Cyprus's parliament has postponed an
emergency session on a controversial bailout deal for the country's banks.
The debate and a presidential address were to happen on Sunday but will now
take place on Monday, state media said.
The deal reached with the EU and IMF on Friday has provoked public anger
because it would impose a levy on bank deposits of up to 10%.
The president has said that refusing the bailout would lead to the collapse
of the country's banks.
Worried investors have been queuing outside banks to withdraw their savings
from cash machines.
The 10bn-euro ($13bn; £8.6bn) deal agreed by the EU and IMF marks a radical
departure from previous international aid packages.
Under its terms, people in Cyprus with less than 100,000 euros in their
accounts would have to pay a one-time tax of 6.75%.
Those with sums over that threshold would pay 9.9% in tax.
Continue reading the main story
Bailout levy
Depositors will be compensated with the equivalent
amount in shares in their banks.
'Betrayal'
On Saturday President Nicos Anastasiades admitted the deal was "painful" but
said it was necessary to avoid a "disorderly bankruptcy".
But opposition leaders and savers - including many non-Cypriots - have
expressed shock and anger at the proposal.
The deal requires the approval of parliament.
President Anastasiades's Democratic Rally party - which has 20 seats in the
56-member assembly - needs support from other factions to ratify the bailout.
Continue reading the main story
“Start Quote
Gavin
Hewitt Europe editor
The president has been meeting with members of the
parliament's finance committee, his office said.
On Saturday the head of the committee, Nicholas Papadopoulos, expressed shock
at the deal, saying it was "much worse than expected".
Opposition leader George Lillikas said the president - who was elected last
month - had "betrayed the people's vote".
Stelios Kiliaris - an adviser to the leader of the Democratic Party, which is
part of the governing coalition - said it was seeking clarification before
deciding whether to back the measure.
"I share the view of the people in the street that our partners in the euro
group have treated us extremely unfairly," Mr Kiliaris told the BBC.
"What happens to Italy now? What happens to Spain? What happens to other
countries?"
"If this experiment fails there will be grave consequences for the whole of
Europe," he added.
The deal has also caused anger within the European Parliament.
Sharon Bowles, who chairs its Economic and Monetary Affairs Committee, said:
"This grabbing of ordinary depositors' money is billed as a tax so as to try and
circumvent the EU's deposit guarantee laws. It robs smaller investors of the
protection they were promised. "
Russian money
targeted
If it goes ahead, the levy will affect many non-Cypriots with bank accounts,
including UK expatriates.
However, depositors in the overseas arms of Cypriot banks will not be hit.
Bank of Cyprus UK and Laiki Bank UK both confirmed on their websites that there
would be no impact.
Chancellor George Osborne said the UK would compensate any government
employees and military personnel whose bank accounts were affected.
According to Reuters news agency, almost half of the depositors in Cyprus are
believed to be non-resident Russians.
The EU decision to impose a levy on bank deposits may have been motivated by
a belief that a lot of the money in Cypriot banks belongs to Russian
money-launderers, BBC business editor Robert Peston says.
The levy itself would not take effect until Tuesday, following a public
holiday, but action is being taken to control electronic money transfers over
the weekend.
Co-operative banks, the only ones which were open in Cyprus on Saturday,
closed after people started queuing to withdraw their money
=======================================
It is well known that Russia has been offloading money into Cyprus Banks and buying up Properties, Casinos , small unfunished developments so I think this is the reason the IMF has come down so heavy 0n Cyprus, plus the IMF and EU wanted the North and South to rejoin .
However, this latest ploy of taxing savers will send a huge ripple around Europe and probably make matters worse.
Savers express anger at empty cash points in the capital,
Nicosia
Continue
reading the main story
Eurozone
crisis
- Troubling year ahead
- A
central banker's view on the eurozone - What really caused the euro crisis?
- Are all summits a waste of time?
Cyprus's parliament has postponed an
emergency session on a controversial bailout deal for the country's banks.
The debate and a presidential address were to happen on Sunday but will now
take place on Monday, state media said.
The deal reached with the EU and IMF on Friday has provoked public anger
because it would impose a levy on bank deposits of up to 10%.
The president has said that refusing the bailout would lead to the collapse
of the country's banks.
Worried investors have been queuing outside banks to withdraw their savings
from cash machines.
The 10bn-euro ($13bn; £8.6bn) deal agreed by the EU and IMF marks a radical
departure from previous international aid packages.
Under its terms, people in Cyprus with less than 100,000 euros in their
accounts would have to pay a one-time tax of 6.75%.
Those with sums over that threshold would pay 9.9% in tax.
Continue reading the main story
Bailout levy
- Depositors with under 100,000 euros deposited must pay 6.75%
- Those with more than 100,000 in their accounts must pay 9.9%
- Depositors will be compensated with the equivalent amount in shares in their
banks - The levy is a one-off measure
Depositors will be compensated with the equivalent
amount in shares in their banks.
'Betrayal'
On Saturday President Nicos Anastasiades admitted the deal was "painful" but
said it was necessary to avoid a "disorderly bankruptcy".
But opposition leaders and savers - including many non-Cypriots - have
expressed shock and anger at the proposal.
The deal requires the approval of parliament.
President Anastasiades's Democratic Rally party - which has 20 seats in the
56-member assembly - needs support from other factions to ratify the bailout.
Continue reading the main story
“Start Quote
End Quote
The EU has a poor record in predicting the consequences of
its bailouts. Time and again it has under-estimated the impact of austerity.
Even though the Cypriot economy is tiny - what will be the impact of this on its
GDP? How will the bailout loan be re-paid, or will Cyprus - like Greece, Spain
and Portugal - end up facing years of hardship? ”
Gavin
Hewitt Europe editor
The president has been meeting with members of the
parliament's finance committee, his office said.
On Saturday the head of the committee, Nicholas Papadopoulos, expressed shock
at the deal, saying it was "much worse than expected".
Opposition leader George Lillikas said the president - who was elected last
month - had "betrayed the people's vote".
Stelios Kiliaris - an adviser to the leader of the Democratic Party, which is
part of the governing coalition - said it was seeking clarification before
deciding whether to back the measure.
"I share the view of the people in the street that our partners in the euro
group have treated us extremely unfairly," Mr Kiliaris told the BBC.
"What happens to Italy now? What happens to Spain? What happens to other
countries?"
"If this experiment fails there will be grave consequences for the whole of
Europe," he added.
The deal has also caused anger within the European Parliament.
Sharon Bowles, who chairs its Economic and Monetary Affairs Committee, said:
"This grabbing of ordinary depositors' money is billed as a tax so as to try and
circumvent the EU's deposit guarantee laws. It robs smaller investors of the
protection they were promised. "
Russian money
targeted
If it goes ahead, the levy will affect many non-Cypriots with bank accounts,
including UK expatriates.
However, depositors in the overseas arms of Cypriot banks will not be hit.
Bank of Cyprus UK and Laiki Bank UK both confirmed on their websites that there
would be no impact.
Chancellor George Osborne said the UK would compensate any government
employees and military personnel whose bank accounts were affected.
According to Reuters news agency, almost half of the depositors in Cyprus are
believed to be non-resident Russians.
The EU decision to impose a levy on bank deposits may have been motivated by
a belief that a lot of the money in Cypriot banks belongs to Russian
money-launderers, BBC business editor Robert Peston says.
The levy itself would not take effect until Tuesday, following a public
holiday, but action is being taken to control electronic money transfers over
the weekend.
Co-operative banks, the only ones which were open in Cyprus on Saturday,
closed after people started queuing to withdraw their money
=======================================
It is well known that Russia has been offloading money into Cyprus Banks and buying up Properties, Casinos , small unfunished developments so I think this is the reason the IMF has come down so heavy 0n Cyprus, plus the IMF and EU wanted the North and South to rejoin .
However, this latest ploy of taxing savers will send a huge ripple around Europe and probably make matters worse.
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Re: New EC Thread
kitti Mon 18 Mar - 7:11
They recon that Spain and Italy will be next to have their savings 'stolen'.
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Re: New EC Thread
Panda Mon 18 Mar - 8:15
kitti wrote:They recon that Spain and Italy will be next to have their savings 'stolen'.
Morning kitti, what a stupid bl***y solution the IMF and EU came up with before Cyprus could get a bailout. There is a run on the Euro around the World.
Bond yields have increased and there is a vote today in the Cyprus Government to try to reduce the "tax on deposits".
Cyprus has been accused of allowing their Banks to money launder for the Russians (probably true) and it is Germany who thought up the idea of taxing income thinking all this Russian money in Cyprus Banks would be taxed.
Stocks around Europe and London have opened lower , Italian Bank share prices suffering the most.
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Re: New EC Thread
Panda Mon 18 Mar - 18:44
Cyprus banks euro tax bail-out is a small-scale smash-and-grab compared to Britain’s slow-motion bank robbery
By Ian CowieYour MoneyLast updated: March 18th, 2013
334 CommentsComment on this article
The Bank of England has frozen interest rates at 0.5pc since early 2009
Outrage about the Cyprus banks euro tax bail-out should not be allowed to obscure the fact that millions of savers in British banks have already lost much more of the real value or purchasing power of their money to prop up financial institutions closer to home.
Savers in British banks and building societies have been stealthily robbed of more than £43bn of the real value of their savings since the Bank of England froze interest rates at 0.5pc four years ago. That's the total shrinkage of bank and building society depositors' purchasing power caused by inflation exceeding frozen interest rates, according to calculations by the pressure group Save Our Savers, following similar calculations by Yorkshire Building Society that the average saver has lost £2,500 in real terms since the credit crisis began.
Both figures have got much bigger than they were a couple of years ago, as inflation has continued to run ahead of interest paid on deposits. Pensioners have suffered even more because higher than average proportions of their fixed incomes are spent on food and fuel. They are the largely silent victims of the Bank of England's policy of running negative real interest rates.
But this slow-motion bank robbery is more difficult to describe than the short, sharp, smash-and-grab in Cyprus. So, despite the best efforts of this column to blow the whistle, more attention will be given to smaller losses for fewer people in Cyprus than millions of savers and pensioners who have lost much more in British banks and retirement funds.
Suggested levies of 6.75 per cent of all deposits up to €100,000 (£86,500) and 9.9 per cent for larger deposits caused many savers in Cyprus to withdraw their money from banks over the weekend. More than 50,000 Britons are thought to have bank accounts in Cyprus, including about 3,000 members of the Armed Forces serving in the country. George Osborne, the Chancellor, has offered to compensate them if they are hit. Cypriot banks operating in this country are not affected.
With commendable understatement, Mr Osborne told the BBC’s Andrew Marr Show: "It’s a difficult situation for people who live in Cyprus. For people serving in our military and our government out in Cyprus, we are going to compensate anyone affected by this bank tax – people who are doing their duty for our country in Cyprus will be protected from this Cypriot bank tax."
Elsewhere, Government sources stressed that deposits held in the London branches of Bank of Cyprus UK and Laiki Bank would not be subject to the new levy. Treasury sources said that “deposits in UK subsidiaries and branches [of Cypriot banks] aren’t affected” by the crisis.
If only small savers with Britain’s high street banks and building societies could say the same. Nor are they the only victims to pay a high price for quantitative easing and QE’s aim of protecting over-stretched banks and borrowers at the expense of savers.
Unfortunately, in a vicious seesaw effect, extra demand for gilts created by QE has pushed up the price of bonds, pushing down their yield or the income pensioners can obtain with their savings. Laith Khalaf of wealth managers Hargreaves Lansdown reckons annuity yields have fallen by about a fifth during the last four years.
So savers of all descriptions are paying a high price for the Bank of England’s strategy of maintaining negative real interest rates. Sadly for the millions of victims of this slow-motion bank robbery in Britain, it remains too complex to explain on the front page or in TV bulletins and so much more coverage will be given to a relatively small scale smash and grab with fewer victims in Cyprus.
By Ian CowieYour MoneyLast updated: March 18th, 2013
334 CommentsComment on this article
The Bank of England has frozen interest rates at 0.5pc since early 2009Outrage about the Cyprus banks euro tax bail-out should not be allowed to obscure the fact that millions of savers in British banks have already lost much more of the real value or purchasing power of their money to prop up financial institutions closer to home.
Savers in British banks and building societies have been stealthily robbed of more than £43bn of the real value of their savings since the Bank of England froze interest rates at 0.5pc four years ago. That's the total shrinkage of bank and building society depositors' purchasing power caused by inflation exceeding frozen interest rates, according to calculations by the pressure group Save Our Savers, following similar calculations by Yorkshire Building Society that the average saver has lost £2,500 in real terms since the credit crisis began.
Both figures have got much bigger than they were a couple of years ago, as inflation has continued to run ahead of interest paid on deposits. Pensioners have suffered even more because higher than average proportions of their fixed incomes are spent on food and fuel. They are the largely silent victims of the Bank of England's policy of running negative real interest rates.
But this slow-motion bank robbery is more difficult to describe than the short, sharp, smash-and-grab in Cyprus. So, despite the best efforts of this column to blow the whistle, more attention will be given to smaller losses for fewer people in Cyprus than millions of savers and pensioners who have lost much more in British banks and retirement funds.
Suggested levies of 6.75 per cent of all deposits up to €100,000 (£86,500) and 9.9 per cent for larger deposits caused many savers in Cyprus to withdraw their money from banks over the weekend. More than 50,000 Britons are thought to have bank accounts in Cyprus, including about 3,000 members of the Armed Forces serving in the country. George Osborne, the Chancellor, has offered to compensate them if they are hit. Cypriot banks operating in this country are not affected.
With commendable understatement, Mr Osborne told the BBC’s Andrew Marr Show: "It’s a difficult situation for people who live in Cyprus. For people serving in our military and our government out in Cyprus, we are going to compensate anyone affected by this bank tax – people who are doing their duty for our country in Cyprus will be protected from this Cypriot bank tax."
Elsewhere, Government sources stressed that deposits held in the London branches of Bank of Cyprus UK and Laiki Bank would not be subject to the new levy. Treasury sources said that “deposits in UK subsidiaries and branches [of Cypriot banks] aren’t affected” by the crisis.
If only small savers with Britain’s high street banks and building societies could say the same. Nor are they the only victims to pay a high price for quantitative easing and QE’s aim of protecting over-stretched banks and borrowers at the expense of savers.
Unfortunately, in a vicious seesaw effect, extra demand for gilts created by QE has pushed up the price of bonds, pushing down their yield or the income pensioners can obtain with their savings. Laith Khalaf of wealth managers Hargreaves Lansdown reckons annuity yields have fallen by about a fifth during the last four years.
So savers of all descriptions are paying a high price for the Bank of England’s strategy of maintaining negative real interest rates. Sadly for the millions of victims of this slow-motion bank robbery in Britain, it remains too complex to explain on the front page or in TV bulletins and so much more coverage will be given to a relatively small scale smash and grab with fewer victims in Cyprus.
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Re: New EC Thread
Panda Tue 19 Mar - 3:51
Cyprus bailout: Q&A
Cyprus is to receive a €10bn bailout from the eurozone to recapitalise its
ailing banking system in return for a series of drastic measures which will hit
the country’s savers. But why has Cyprus had to be bailed out, and why are
savers having to help foot the bill?
A Cypriot parliamentary vote on
the proposed bailout is expected to be held on Monday. Photo: AP
By Rachel Cooper
11:24PM GMT 17 Mar 2013
Read the latest on Cyprus bailout
Wasn't Cyprus doing fairly well before the financial crisis?
It was. Prior to 2008, the International Monetary Fund described Cyprus'
economic performance as a "long period of high growth, low unemployment, and
sound public finances". Although there was a recession in 2009, it was mild
compared to the rest of the eurozone. However, Cyprus has been hurt by its
ailing banks and worsening government finances.
So why has Cyprus had to be bailed out?
The bailout is mainly needed to recapitalise the Mediterranean island's banks
that had grown rapidly and were hit by a sovereign debt restructuring in
Greece.
By 2011, the IMF reported that the assets of Cypriot banks were equivalent to
835pc of annual national income. Some of that was down to investment by
foreign-owned banks, but most was Cypriot.
Related Articles
This imbalance might have been sustainable had the country’s two largest
banks not made loans to the Greek government worth 160pc of Cypriot GDP.
When the value of the debts owed by the Greek state was cut by 75pc, the
Cypriot banks were hit hard. Cyprus became stuck in a familiar negative cycle:
already weak government finances were further ravaged by slow economic growth
and the turmoil in the eurozone.
What are the terms of the bailout?
Eurozone finance ministers and the International Monetary Fund on Friday agreed to a €10bn (£8.7bn) bailout for
Cyprus. It is the fifth eurozone member to be saved from
bankruptcy. Under the deal, bank deposits of more than €100,000 will be hit with
a 9.9pc one-off levy. Under that threshold the levy drops to 6.75pc. At the same
time, a "withholding tax" will be imposed on interest on bank deposits while
corporate tax will be raised from 10pc to 12.5pc.
Further measures include bank restructuring, a “bail-in” of junior
bondholders (where some of their debt will be turned into less valuable equity)
and the increase of the taxes on capital income.
Why does the bailout impose a levy on bank deposits?
As part of a bailout, countries are often called upon to raise funds
themselves. This can be through raising taxes or selling state-owned assets. Or,
in Cyprus' case, it can be through a levy on bank deposits. This is intended to
reduce the size of the bailout and the amount of new debt the country has to
take on.
However, there is a political dimension in Cyprus too. There were concerns
that the island is regarded as a tax haven and there was a desire to punish
those who benefit from this status, even if meant hurting ordinary citizens too.
There were worries too about suspected money laundering in Cyprus. Therefore,
Europe drove a very hard bargain in its negotiations with Cyprus. In return for
a €10bn eurozone rescue package, Cyprus was told to make suspected money
launderers and tax avoiders chip in as well.
What happens now?
A Cypriot parliamentary vote on the proposed bailout is expected to be held
on Monday.
The move to take a percentage of deposits must be ratified by parliament,
where no party has a majority. If it fails to do so, Cyprus' president has
warned that the country's two largest banks will collapse.
One bank, the Cyprus Popular Bank, could have its emergency liquidity
assistance funding from the European Central Bank cut by March 21.
A default in Cyprus could unravel investor confidence in the eurozone,
undoing the improvements fostered by the European Central Bank's promise last
year to do whatever it takes to shore up the currency bloc.
Are the UK arms of Cypriot banks affected?
No. Government sources have stressed that
deposits held in the London branches of Bank of Cyprus UK and Laiki Bank would
not be subject to the new levy. That was backed up
by a statement from Bank of Cyprus UK which stressed it is “a separately
capitalised UK incorporated bank, is subject to UK financial regulation, and
eligible depositors are protected by the UK’s Financial Services Compensation
Scheme." Laiki Bank placed a similar statement on its website.
What about Britons who have savings in Cyprus?
Approximately €2bn of British deposits held in Cyprus will be subject to a
levy of up to 10pc. British-born Cypriots and their families, some of the UK’s
3,500 service personnel on the island and holiday home owners with savings
locally are likely to be affected. George Osborne said on Sunday that British troops and government staff
serving in Cyprus, whose savings are threatened by the bailout, will be
compensated. Details of the compensation will be worked out over
the next few days.
Cyprus is to receive a €10bn bailout from the eurozone to recapitalise its
ailing banking system in return for a series of drastic measures which will hit
the country’s savers. But why has Cyprus had to be bailed out, and why are
savers having to help foot the bill?
A Cypriot parliamentary vote on
the proposed bailout is expected to be held on Monday. Photo: AP
By Rachel Cooper
11:24PM GMT 17 Mar 2013
Read the latest on Cyprus bailout
Wasn't Cyprus doing fairly well before the financial crisis?
It was. Prior to 2008, the International Monetary Fund described Cyprus'
economic performance as a "long period of high growth, low unemployment, and
sound public finances". Although there was a recession in 2009, it was mild
compared to the rest of the eurozone. However, Cyprus has been hurt by its
ailing banks and worsening government finances.
So why has Cyprus had to be bailed out?
The bailout is mainly needed to recapitalise the Mediterranean island's banks
that had grown rapidly and were hit by a sovereign debt restructuring in
Greece.
By 2011, the IMF reported that the assets of Cypriot banks were equivalent to
835pc of annual national income. Some of that was down to investment by
foreign-owned banks, but most was Cypriot.
Related Articles
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suspended
18 Mar 2013
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18 Mar 2013
Expats: Cyprus bank raid is 'legalised theft'
18 Mar 2013
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18 Mar 2013
Gold price jumps on Cyprus worries
18 Mar 2013
Cypriots rush to cash machines after bailout
deal
16 Mar 2013
This imbalance might have been sustainable had the country’s two largest
banks not made loans to the Greek government worth 160pc of Cypriot GDP.
When the value of the debts owed by the Greek state was cut by 75pc, the
Cypriot banks were hit hard. Cyprus became stuck in a familiar negative cycle:
already weak government finances were further ravaged by slow economic growth
and the turmoil in the eurozone.
What are the terms of the bailout?
Eurozone finance ministers and the International Monetary Fund on Friday agreed to a €10bn (£8.7bn) bailout for
Cyprus. It is the fifth eurozone member to be saved from
bankruptcy. Under the deal, bank deposits of more than €100,000 will be hit with
a 9.9pc one-off levy. Under that threshold the levy drops to 6.75pc. At the same
time, a "withholding tax" will be imposed on interest on bank deposits while
corporate tax will be raised from 10pc to 12.5pc.
Further measures include bank restructuring, a “bail-in” of junior
bondholders (where some of their debt will be turned into less valuable equity)
and the increase of the taxes on capital income.
Why does the bailout impose a levy on bank deposits?
As part of a bailout, countries are often called upon to raise funds
themselves. This can be through raising taxes or selling state-owned assets. Or,
in Cyprus' case, it can be through a levy on bank deposits. This is intended to
reduce the size of the bailout and the amount of new debt the country has to
take on.
However, there is a political dimension in Cyprus too. There were concerns
that the island is regarded as a tax haven and there was a desire to punish
those who benefit from this status, even if meant hurting ordinary citizens too.
There were worries too about suspected money laundering in Cyprus. Therefore,
Europe drove a very hard bargain in its negotiations with Cyprus. In return for
a €10bn eurozone rescue package, Cyprus was told to make suspected money
launderers and tax avoiders chip in as well.
What happens now?
A Cypriot parliamentary vote on the proposed bailout is expected to be held
on Monday.
The move to take a percentage of deposits must be ratified by parliament,
where no party has a majority. If it fails to do so, Cyprus' president has
warned that the country's two largest banks will collapse.
One bank, the Cyprus Popular Bank, could have its emergency liquidity
assistance funding from the European Central Bank cut by March 21.
A default in Cyprus could unravel investor confidence in the eurozone,
undoing the improvements fostered by the European Central Bank's promise last
year to do whatever it takes to shore up the currency bloc.
Are the UK arms of Cypriot banks affected?
No. Government sources have stressed that
deposits held in the London branches of Bank of Cyprus UK and Laiki Bank would
not be subject to the new levy. That was backed up
by a statement from Bank of Cyprus UK which stressed it is “a separately
capitalised UK incorporated bank, is subject to UK financial regulation, and
eligible depositors are protected by the UK’s Financial Services Compensation
Scheme." Laiki Bank placed a similar statement on its website.
What about Britons who have savings in Cyprus?
Approximately €2bn of British deposits held in Cyprus will be subject to a
levy of up to 10pc. British-born Cypriots and their families, some of the UK’s
3,500 service personnel on the island and holiday home owners with savings
locally are likely to be affected. George Osborne said on Sunday that British troops and government staff
serving in Cyprus, whose savings are threatened by the bailout, will be
compensated. Details of the compensation will be worked out over
the next few days.
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Re: New EC Thread
Panda Tue 19 Mar - 16:48
European Union: The problem with Germany
15 March 2013
Presseurop New Statesman, The Daily Mail
New Statesman, 15 March 2013“A spectre is once again haunting Europe – the spectre of German power,” writes historian Brendan Simms in The New Statesman’s cover story, dedicated to “The German problem”. The weekly outlines how the last five years have witnessed a “remarkable increase” in German influence, while Berlin has simultaneously fared well during the economic crisis and stopped the European Central Bank (ECB) from embarking –
15 March 2013
Presseurop New Statesman, The Daily Mail
New Statesman, 15 March 2013“A spectre is once again haunting Europe – the spectre of German power,” writes historian Brendan Simms in The New Statesman’s cover story, dedicated to “The German problem”. The weekly outlines how the last five years have witnessed a “remarkable increase” in German influence, while Berlin has simultaneously fared well during the economic crisis and stopped the European Central Bank (ECB) from embarking –on the bond-buying spree that the countries of the bankrupt European periphery so crave, prescribing for them a diet of unpalatable fiscal ‘rules’ instead. […] It is not surprising, therefore, that this period has also witnessed a surge of political and popular Germanophobia across the continent.Simms believes that throughout most of the last 500 years, Germany has vacillated between being diplomatically too strong or too weak.
Today, Germany is both too strong and too weak, or at least too disengaged. It sits uneasily at the heart of an EU that was conceived largely to constrain German power but which has served instead to increase it, and whose design flaws have unintentionally deprived many other Europeans of sovereignty without giving them a democratic stake in the new order.Meanwhile, historian and columnist Dominic Sandbrook, writes in the Daily Mail that an increasing number of Europeans are arguing that “for the third time in less than 100 years Germany is trying to take control of Europe.” He refers to the comments of former Eurogroup President Jean Claude Juncker, who drew parallels between 2013 and the year before the start of WW1 and warned that the threat of European war still exists. Speaking of the Germans, Sandbrook continues –
The question we face now is this: how can the Federal Republic, which is prosperous and secure as never before, be persuaded to take the political initiative and make the necessary economic sacrifices to complete the work of European unity? One way or the other, the German question persists and will always be with us. This is because, whenever Europe and the world think they have solved it, events and the Germans change the question.”
If they continue to impose brutal economic strictures on Europe’s peoples, the consequences in terms of social alienation, international disputes and the rise of political extremism could be dramatic. Already we have seen bloody protests against the German economic yoke in Athens, Rome and Madrid. [...] Thanks to this seemingly endless political crisis, Germany is increasingly being seen not as Europe’s economic saviour but its oppressor. [...] Yet the truth is that lashing together the economies of nations as disparate as Portugal, Greece, France, Italy and Germany has served only to inflame old enmities.
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Re: New EC Thread
Panda Tue 19 Mar - 17:57
Byzantine lessons for Europe
18 March 2013The Guardian London
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Shared 442 times in 10 languages
Justinian I, Byzantine Emperor from 527 to 565. Basilica of San Vitale, Ravenna (Italy)
From managing a single currency, to ending a recession and negotiating political and fiscal unions among a multi-lingual, multi-ethnic commonwealth, Byzantium’s leaders handled the lot. The EU’s politicians could learn much from their ancient forebears, argues a UK historian.
Peter FrankopanSometimes it is easy to forget why we study history. Of course, we use the past to understand the present; but also, ideally, we learn from it too. What a shame, then, that there is no space in the new national curriculum for the history of Byzantium. The eastern half of the Roman empire that flourished long after Rome itself spiralled into decline in late antiquity.
Unfortunately, because generations have never learned about the mighty eastern Mediterranean that once ruled from Venice to Palestine, from north Africa to the Caucasus, the lesson that could be learned in the modern world is lost in the mists of time – a lesson that Europe could do with now more than ever.
Like the EU, the Byzantine empire was a multilingual, multi-ethnic commonwealth that spread across different climates and varied local economies, ranging from bustling cities to market towns, from thriving ports to small rural settlements. Not only that, but it also had a single currency – one, furthermore, that did not fluctuate in value for centuries.
Contrary to popular opinion expressed on an almost daily basis in the House of Commons, where MPs queue up to describe over-regulation or over-complex legislation as "Byzantine", the Byzantine empire was in fact a model of sophistication – particularly when it came to the sorts of areas where the EU has been found wanting. Unlike the European Union, Byzantium was not riddled with inefficiency and disparity when it came to tax: profits could not be parked in a more attractive region, thereby undermining the empire's structure. Government in Byzantium was lean, simple and efficient.
Freedom from taxes
There was no question that different parts of the empire could have different rules or different taxation policies: for the state to function with a single currency, there had to be fiscal, economic and political union; taxes had to be paid out from the periphery to the centre; and it was understood that resources had to be diverted from rich regions to those that were less well blessed – even if not everyone was happy about it. Freedom, grumbled one author in the 11th Century, meant freedom from taxes.
If Eurocrats could learn from the structure of the empire, then so too could they benefit from looking at how it dealt with a chronic recession, brought on by the same deadly combination that has crippled western economies today. In the 1070s, government revenues collapsed, while expenditure continued to rise on essential services (such as the military); these were made worse by a chronic liquidity crisis. So bad did the situation become that the doors of the treasury were flung open: there was no point locking them, wrote one contemporary, because there was nothing there to steal.
Those responsible for the crisis were shown no mercy. The Herman Van Rompuy of the time, a eunuch named Nikephoritzes, was lambasted by an angry population faced with price rises and a fall in the standard of living, and was eventually tortured to death. Widespread dissatisfaction led to others being unceremoniously removed from position, often forced to become monks, presumably so they could pray for forgiveness for their sins.
The crisis even gave rise to a Nigel Farage figure, whose arguments about why things had gone wrong sounded "so persuasive", according to one contemporary, that people "united in giving him precedence" and welcomed him everywhere with applause. He was a breath of fresh air at a time when the old guard were paralysed by inaction and by a dire shortage of good ideas. His message, that the current crop of leaders was useless, was hard to argue with.
Byzantine quantitative easing
The limp policies that were being tried were a disaster, having no effect whatsoever on fixing the problems. This included debasing the currency by pumping out more and more coins while reducing its precious metal content; a form of quantitative easing, in other words. It was like putting a plaster on a gunshot wound.
As the situation got worse, it was time for a clean sweep of the old guard. New blood was brought in, and with them came radical new ideas. A German bailout was one suggestion, although it failed to materialise, despite looking promising for a while. But as food ran short and talk turned to apocalypse, there was no choice but to take decisive action.
The solution was threefold. First, the currency was taken out of circulation and replaced by new denominations that were a fair reflection of real value; second, the tax system was overhauled, with a compilation of who owned what assets across the empire serving as a primer to raise revenue in the future; finally, commercial barriers were lowered to encourage those with outside capital to invest more cheaply and easily than in the past – not in asset acquisition, but specifically for trade. Such was the empire's plight that these barriers were dropped to the point that outside investors could even undercut the locals, at least in the short term, in order to stimulate the economy. The process worked: it was not as painful as had been feared, and resuscitated a patient that had been suffering from economic cardiac arrest.
The Nigel Farage of the 11th century never made it, by the way, though he did pave the way for a really good candidate to rise to the top. Alexios Komnenos was the name of the man who rebuilt Byzantium, though he had to pay the price for his reforms: despised in his lifetime for making difficult decisions, he was ignored by history for centuries afterwards. Perhaps we should be looking for someone with broad enough shoulders today.
18 March 2013The Guardian London
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Justinian I, Byzantine Emperor from 527 to 565. Basilica of San Vitale, Ravenna (Italy)From managing a single currency, to ending a recession and negotiating political and fiscal unions among a multi-lingual, multi-ethnic commonwealth, Byzantium’s leaders handled the lot. The EU’s politicians could learn much from their ancient forebears, argues a UK historian.
Peter FrankopanSometimes it is easy to forget why we study history. Of course, we use the past to understand the present; but also, ideally, we learn from it too. What a shame, then, that there is no space in the new national curriculum for the history of Byzantium. The eastern half of the Roman empire that flourished long after Rome itself spiralled into decline in late antiquity.
Unfortunately, because generations have never learned about the mighty eastern Mediterranean that once ruled from Venice to Palestine, from north Africa to the Caucasus, the lesson that could be learned in the modern world is lost in the mists of time – a lesson that Europe could do with now more than ever.
Like the EU, the Byzantine empire was a multilingual, multi-ethnic commonwealth that spread across different climates and varied local economies, ranging from bustling cities to market towns, from thriving ports to small rural settlements. Not only that, but it also had a single currency – one, furthermore, that did not fluctuate in value for centuries.
Contrary to popular opinion expressed on an almost daily basis in the House of Commons, where MPs queue up to describe over-regulation or over-complex legislation as "Byzantine", the Byzantine empire was in fact a model of sophistication – particularly when it came to the sorts of areas where the EU has been found wanting. Unlike the European Union, Byzantium was not riddled with inefficiency and disparity when it came to tax: profits could not be parked in a more attractive region, thereby undermining the empire's structure. Government in Byzantium was lean, simple and efficient.
Freedom from taxes
There was no question that different parts of the empire could have different rules or different taxation policies: for the state to function with a single currency, there had to be fiscal, economic and political union; taxes had to be paid out from the periphery to the centre; and it was understood that resources had to be diverted from rich regions to those that were less well blessed – even if not everyone was happy about it. Freedom, grumbled one author in the 11th Century, meant freedom from taxes.
If Eurocrats could learn from the structure of the empire, then so too could they benefit from looking at how it dealt with a chronic recession, brought on by the same deadly combination that has crippled western economies today. In the 1070s, government revenues collapsed, while expenditure continued to rise on essential services (such as the military); these were made worse by a chronic liquidity crisis. So bad did the situation become that the doors of the treasury were flung open: there was no point locking them, wrote one contemporary, because there was nothing there to steal.
Those responsible for the crisis were shown no mercy. The Herman Van Rompuy of the time, a eunuch named Nikephoritzes, was lambasted by an angry population faced with price rises and a fall in the standard of living, and was eventually tortured to death. Widespread dissatisfaction led to others being unceremoniously removed from position, often forced to become monks, presumably so they could pray for forgiveness for their sins.
The crisis even gave rise to a Nigel Farage figure, whose arguments about why things had gone wrong sounded "so persuasive", according to one contemporary, that people "united in giving him precedence" and welcomed him everywhere with applause. He was a breath of fresh air at a time when the old guard were paralysed by inaction and by a dire shortage of good ideas. His message, that the current crop of leaders was useless, was hard to argue with.
Byzantine quantitative easing
The limp policies that were being tried were a disaster, having no effect whatsoever on fixing the problems. This included debasing the currency by pumping out more and more coins while reducing its precious metal content; a form of quantitative easing, in other words. It was like putting a plaster on a gunshot wound.
As the situation got worse, it was time for a clean sweep of the old guard. New blood was brought in, and with them came radical new ideas. A German bailout was one suggestion, although it failed to materialise, despite looking promising for a while. But as food ran short and talk turned to apocalypse, there was no choice but to take decisive action.
The solution was threefold. First, the currency was taken out of circulation and replaced by new denominations that were a fair reflection of real value; second, the tax system was overhauled, with a compilation of who owned what assets across the empire serving as a primer to raise revenue in the future; finally, commercial barriers were lowered to encourage those with outside capital to invest more cheaply and easily than in the past – not in asset acquisition, but specifically for trade. Such was the empire's plight that these barriers were dropped to the point that outside investors could even undercut the locals, at least in the short term, in order to stimulate the economy. The process worked: it was not as painful as had been feared, and resuscitated a patient that had been suffering from economic cardiac arrest.
The Nigel Farage of the 11th century never made it, by the way, though he did pave the way for a really good candidate to rise to the top. Alexios Komnenos was the name of the man who rebuilt Byzantium, though he had to pay the price for his reforms: despised in his lifetime for making difficult decisions, he was ignored by history for centuries afterwards. Perhaps we should be looking for someone with broad enough shoulders today.
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