Germany "too weak to withstand more stimulus says Angela Merkel

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Germany 'too weak to withstand more stimulus', says Angela Merkel


Germany does not have the economic strength to launch another stimulus
package now without running the risk of losing market confidence, Chancellor
Angela Merkel said.








Angela Merkel said that Basel
III regulations should be applied internationally Photo:
Reuters






By Andrew Trotman, and
agencies

6:35PM BST 15 Apr 2013


55 Comments




In 2009, Germany boosted its crisis-hit economy,
Europe's largest, with large-scale spending. The €50bn package was the biggest of its kind since
World War II and included investment in education and
infrastructure, as well as tax cuts for firms and individuals.


But now, said the Chancellor, "we do not have the strength for a second
economic package without losing international confidence".


In the debate about how to help eurozone countries hit by high deficits, debt
and recession, Ms Merkel has long stressed the need for structural reforms and
cost-cutting to rebalance public finances.


Critics especially in southern Europe and France have charged that the fiscal
discipline approach stifles growth and adds to the economic pain, calling
instead for greater stimulus measures that would revitalise demand.


Last week, the new US Treasury Secretary Jack Lew
during a Berlin visit also urged economies to stimulate consumer
demand. He said that evidence from his side of the Atlantic
suggested increased government spending and looser monetary policy was having a
more positive effect than anything being tried in Brussels.



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"Policies that would help to encourage consumer demand in countries that have
the capacity would be helpful," Mr Lew said at the time.

There have also been growing signals from inside the International Monetary
Foundation in favour of an easing of austerity in the eurozone to boost
economies in the 17-member currency bloc and to help revitalise the global
economy.

Last month, the IMF's head Christine Lagarde suggested the European Central
Bank should cut interest rates and allow higher inflation, adding that would
help ensure a sustained economic recovery.

Speaking on Monday to an audience of bankers, Ms Merkel also took care to
highlight progress in regulating the financial system, but warned that much work
remained to be done. She added that Basel III regulations should be applied
internationally.

"We have promised the public that every financial centre, every actor, every
financial product, is subject to regulation, and we are still far from that,"
she said, while calling for the G20 to pursue efforts in this direction.

She said that banks had not yet fully regained the trust they lost during the
financial crisis and reminded financial institutions that part of their role was
to support the wider economy.

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European Union: Cameron-Merkel, a courting couple

15 April 2013The Times London

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Martirena
As David Cameron’s recent visit shows, a growing band of people in Germany support the British PM’s tough approach to the EU. Ahead of Germany’s September election, Chancellor Angela Merkel looks quite tempted to align herself with Britain’s open market ideas, rather than those of protectionist France.

Thomas KielingerAngela and David — theirs must be one of the most eye-catching romances of recent political history. Seven years ago they were locking horns because the newly elected Tory leader had ordered his MEPs to leave the European People’s Party, where all right-minded conservatives are grouped together, Mrs Merkel’s Christian Democrats included, and join a new centre-right group of Cameron’s own creation.
If you could see them now... Over the weekend they celebrated a spring awakening in each other’s company, with Samantha, Joachim and the Cameron children thrown in for good measure. What a metamorphosis. Never before has the PM taken his entire family on a foreign trip with so much policy content, nor has Mrs Merkel awarded such closeness to any other guest, foreign or German, at the German government’s official residence at Schloss Meseberg [where Cameron and Merkel spent the weekend].
Now, it may be an axiom of political philosophy that nations don’t have friends, they have only interests. But it surely helps in this crisis-fraught age if the protagonists manage to add friendship to networking and by doing so to reinforce common purposes.
Headline-writers tend to overlook what unites people, preferring to go for the drama of enmity and rupture of one kind or another. Thus it was with Mr Cameron’s EU speech in January that called for powers to be returned to the national level. But little notice was taken of what the German Chancellor had been saying that same week at Davos. Mrs Merkel, too, spoke of the need for the EU to commit to reform to improve competitiveness and to reverse the deep alienation Europeans feels towards the “union”, a misnomer if ever there was one.

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Francois Hollande faces austerity revolt from own ministers


French president Francois Hollande is facing an anti-austerity revolt from
his own ministers as he pushes through a fresh round of tax rises and austerity
to meet EU deficit targets.








Francois Hollande will on
Wednesday unveil another round of belt-tightening worth €12bn Photo: AFP






By Ambrose Evans-Pritchard

6:43PM BST 16 Apr 2013

209 Comments




Three cabinet members have launched a joint push for a drastic policy change,
warning that cuts have become self-defeating and are driving the country into a
recessionary spiral.


“Its high time we opened a debate on these policies, which are leading the EU
towards a debacle. If budget measures are killing growth, it is dangerous and
absurd,” said industry minister Arnaud Montebourg.


“What is the point of fiscal consolidation if the economy goes to the dogs.
Budget discipline is one thing, cutting to death is another,” he said.



Mr Hollande will on Wednesday unveil another round of belt-tightening worth
€12bn, even though Paris is already carrying out the harshest fiscal squeeze
since the Second World War and France may already be in a triple-dip recession.



The cuts are hard to reconcile with Mr Hollande’s campaign pledge last year
to end austerity. They have set off furious criticism across the French Left.
“Austerity is no longer tenable in Europe today with millions of unemployed,”
said social economy minister Benoît Hamon.



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Mr Hollande has sought to restore discipline, warning that “no minister is
entitled to call into question the policy we have in place”. Yet he is
struggling to justify why France is passively complying with German doctrines.


He flirted with the idea of "Latin bloc" to confront Berlin last year but
ultimately backed down, cleaving like his predecessors to the Franco-German
alliance. Any deviation from EU Fiscal Compact would lead to a showdown with
Berlin.

Mr Montebourg appears to have broken ranks entirely, accusing Germany of
running the euro into the ground by squeezing German wages to gain competitive
advantage, warning that it is unacceptable for one country to “impose” its own
agenda.

Almost all the austerity measures will come from tax rises, pension fees and
a “green’ levy, rather than spending cuts. The state sector will climb to a
record 56.9pc of GDP this year as the economic contraction eats into the private
sector. Public spending has reached Scandinavian levels, without nordic labour
flexibility.

Pierre Gattaz, head of the industry federation, said the French state is out
of control. “Company bosses are in panic, stressed by falling order booksm, the
tax burden and a loss of competitiveness.”

Critics say the French tax squeeze is not even helping to curb borrowing.
France is at growing risk of a debt trap as the slump itself erodes tax
revenues. Public debt will jump to 94pc of GDP next year, a drastic upward
revision from 90.5pc.

A report prepared for EMU finance ministers over the weekend by the Breugel
forum in Brussels said the eurozone’s crisis strategy is a failure, a nexus of
confused policies that cut against each other.

Fiscal overkill is stopping the banks returning to health, while
foot-dragging on the EU bank union is perpetuating the credit crunch in the Club
Med bloc.

Sky-high unemployment is eroding job skills and “undermining Europe’s
long-term growth potential”. Low growth is making it “much tougher for hard-hit
economies in southern Europe to recover competititveness and regain control of
their public finances”.

Breugel said the apparent success of EMU’s “internal devaluation” strategy -
where crisis states cut unit labour costs to claw back lost competitiveness - is
an illusion caused by distortions to the productivity data. “There have been
very few truly good performers,” it said.

The report called for a radical shift in policy to break out of the vicious
circle and prevent Europe being left behind as the US recovers. Yet as so often
in this long saga EMU finance ministers appeared to have ignored the findings of
their own experts.

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ECB 'can't do everything for everyone', says Mario Draghi


The European Central Bank, in charge of monetary policy for 17 different
countries, "can't do everything for everyone at any time," ECB chief Mario
Draghi has said.








Mario Draghi said that while the
ECB's raft of anti-crisis measures had 'avoided major disasters', the full
positive effects were still not feeding through into the real economy just
yet Photo: Bloomberg
News






By Andrew Trotman, and
agencies

4:52PM BST 16 Apr 2013


17 Comments




Responding to questions at the European Parliament in Strasbourg, Mr Draghi
said that while the ECB's raft of anti-crisis measures had "avoided major
disasters", the full positive effects were still not feeding through into the
real economy just yet.


And even though interest rates were at historic lows and the ECB had pumped
unprecedented amounts of liquidity into banks, credit was still not flowing
freely to small and medium-sized enterprises, the ECB chief said.


There were three reasons why this might be the case: banks might lack
funding, they might lack capital, or - if they had both capital and funding -
"they're fearful of lending because they're afraid they won't be repaid", he
said.


As a central bank, the ECB could tackle the first problem, which it had done
via its emergency liquidity operations. But it was not in its jurisdiction to
solve the other two problems, he said.


"We're not in the business of cleaning up struggling banks," Mr Draghi
insisted.



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Nevertheless, the ECB was fully aware of the difficulties of getting credit
flowing to businesses and "we continue working on this problem and within our
mandate", he said.

"It's not a matter of courage, it's a matter of doing the right thing. The
issue here is do the right thing."

And the participation of other actors was needed, particularly the national
governments, Mr Draghi said.

The comments echo Mr Draghi's remarks made earlier this month after the ECB
held interest rates steady at its last policy meeting

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Denmark: ‘Denmark set to breach EU rules’

17 April 201 Berlingske Tidende


Berlingske Tidende, 17 April 2013
At a time when it is negotiating its 2014 budget with Brussels, the Danish government has been obliged to cut its forecast for growth in 2013, from 1.25 per cent to 0.75 per cent.
In view of this situation, “the country’s public spending deficit may exceed the 3 per cent of GDP authorised by the Fiscal Stability Treaty,” notes the daily, which continues —

As early as 2010, the EU recommended that Denmark reduce its deficit by 1.5 per cent before the end of 2013. […] In view of the decline in growth, it appears that, for the first time, the country is not going to comply with recommendations.

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Greece: ‘Dangerous Dawn’

17 April 20 Neues Deutschland


Neues Deutschland, 17 April 2013
“Greek democracy is in danger,” says the Council of Europe Commissioner for Human Rights, Nils Muiznieks, who has published a report following his visit to Greece earlier this year.
Muiznieks, who travelled to the country at the end of January, “was shocked by the spread of fascist ideas, as well as attacks on migrants, homosexuals and anyone who thinks differently,” writes the daily.
He has called for police and justice measures to ensure respect for the rule of law and human rights, and suggested that the Greek government examine the possibility of banning Golden Dawn, the neo-Nazi political party which has been present in the Greek parliament since May 2012.

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IMF Sees Some Corporate Debt Unsustainable in Parts of EU


By Sandrine Rastello - Apr 17, 2013 5:06 PM GMT+0100

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As much as 20 percent of non-bank corporate debt in the weakest euro-area economies is unsustainable and may force companies to cut dividends and sell assets, dealing further blows to investor confidence, the International Monetary Fund said.
Businesses (SXXP) in Italy, Spain and Portugal have the largest “debt overhang,” according to the IMF’s Global Financial Stability Report released today, which analyzed 1,500 publicly traded non-financial European firms. Strains in the corporate sector may in turn hurt banks’ asset quality, the report showed.





Enlarge image
IMF Sees 20% of Corporate Debt Unsustainable in Parts of Europe



Tomohiro Ohsumi/Bloomberg
With the Bank of Japan’s decision earlier this month to embark on record easing, the world’s four biggest developed-market monetary authorities -- the BOJ, the U.S. Federal Reserve, the European Central Bank and the Bank of England -- are aligned in their commitments to spur growth and return their economies to full strength.
With the Bank of Japan’s decision earlier this month to embark on record easing, the world’s four biggest developed-market monetary authorities -- the BOJ, the U.S. Federal Reserve, the European Central Bank and the Bank of England -- are aligned in their commitments to spur growth and return their economies to full strength. Photographer: Tomohiro Ohsumi/Bloomberg

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“Firms in the euro-area periphery have built a sizable debt overhang during the credit boom, on the back of high profit expectations and easy credit conditions,” the IMF said. Now they “face the challenge of reducing the debt overhang in an environment of lower growth and higher interest rates, in part related to financial fragmentation in the euro area.”
European policy makers are struggling for ways to give companies in the so-called periphery access to affordable credit even after the European Central Bank’s plan to purchase bonds of debt-burdened countries. The IMF report defined the periphery as Cyprus, Greece, Ireland, Italy, Portugal and Spain.
Weaker Expansion

The Washington-based fund lowered its global growth forecast yesterday and called for “aggressive” monetary policy in the region, which is set to contract for a second year and lag behind the rest of the world.
“A key action needed is to fix the euro area, to fix it once and for all,” Jose Vinals, the director of the IMF’s monetary and capital markets department, said at a press conference in Washington today.
European officials need to complete repair of their financial industry and move toward a banking union, Vinals said. If banks in the periphery could get better funding conditions in capital markets, companies would in turn benefit from lower borrowing costs, he said.
The IMF describes a debt overhang as a burden that generates such large interest payments that it prevents companies from investing in profitable projects that would enable them to reduce debt on their own over time.
Reducing Leverage

“While large diversified companies may sell assets -- including foreign units -- to reduce leverage, potential profitable sales are likely to negatively affect their revenues and earnings,” the IMF said. “Furthermore, additional cuts in operating costs, dividends and capital expenditures may also be required, posing additional risks to growth and market confidence.”
While financial risks have abated in the euro region and around the world after the ECB’s commitment to save the monetary union and additional debt relief for Greece (GDBR10), some banks still face high funding costs and deteriorating asset quality, the IMF said.
“Spring has also arrived to global financial markets, where after very rainy days and threatening clouds we are beginning to see some blue sky and more sunny days,” Vinals said. The improvement won’t be sustained “unless policy makers address some key underlying vulnerabilities,” he said.
Contagion from developments in Cyprus was a reminder of how fragile the recovery is, according to the IMF, which has pledged about $1.3 billion toward the country’s international rescue package.

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NOT SURE IF MENTIONED BUT MOST BRITONS BELIEVE THE GOVERNMENT SHOULD HANG ONTO RBS.

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NOT SURE IF MENTIONED BUT MOST BRITONS BELIEVE THE GOVERNMENT SHOULD HANG ONTO RBS.

The sooner the government sells off RBS the better Badboy. it's losing money, the shares are down and more lawsuits ahead for RBS over the Libor scandal ,

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The heart of Europe

18 April 2013El País Madrid




Walenta
The crisis has accentuated the selfishness of EU countries, triggering the abandonment of cooperative European integration. A Spanish philosopher argues that cohesion and interdependence must be regained before an irrational north-south divide tears the EU apart.

Adela CortinaThe European Union’s actions are causing well-deserved dissatisfaction among its citizens. The union is being tagged a "European disunion", in which national leaders scramble for votes without caring about that supranational institution that once made us so proud.
We Europeans, inventors of the nation state, also devised a community of shared sovereignties and laid the groundwork for a cosmopolitan society. Economic union would reinforce political cooperation, founded on the principle of a citizens’ Europe.
However, the current crisis has shown none of these goals have been reached. Countries have conducted themselves in their own self-interest, not in the cooperative spirit essential for the union to follow the political and economic agendas that would best benefit its citizens. There is no genuine European democracy: leaders make agreements bilaterally, changing their loyalties for the sake of short-term convenience, and neglecting European aspirations.
It’s a suicide mission, not just because it goes against the grain of democracy, and not just because it is immoral to make decisions above the heads of those who suffer the consequences, but because it is as foolish as it is irrational. If we assume humanity to have benefited from the rationality advanced in Europe, we have ended up in the most puerile irrationality.
After all, we have known for a long time that what is rational is not to seek the maximum selfish benefit and let others fall by the wayside, but to summon up sufficient intelligence to work together from a starting point of social cohesion. The old anarchists got this right: it is mutual support that benefits the species, not ruthless competition, and it is wiser to make allies than adversaries, friends than enemies.
The cooperative human

Inherent human reason is not egoistic, but cooperative. As Michael Tomasello of the Max Planck Institute for Evolutionary Anthropology has pointed out, “you will never see two chimpanzees carrying a log together.” The ability to cooperate led the human species to leave the jungle behind. Those who work shoulder-to-shoulder not only succeed in moving a log, but also create links that have their own intrinsic value and that help them work together in the future.
That seemed to lie at the heart of the project for a united Europe. It is disheartening to see how the Europe that invented democracy in classical Greece, that coined the notion of human dignity as the core of a shared life, that promoted not only scientific but above all a moral rationality, that discovered the social state and the possibility of a supranational community, has betrayed its own identity with a tenacious drive to self-destruction, without the least affection for the ideals that constitute it.
The events in Cyprus, which are clearly the results of selfish and bumbling improvisation rather than intelligent concern for the good of the population, add to a recent history of grievances among the countries of the south, in which a deep aversion northern states is brewing. This situation benefits the populisms and totalitarianisms of one or another stamp, which in a just society would have no chance of thriving.
How is it possible that the well-off find it so hard to learn that countries and people depend on each other, and that it is not true that “my win is your loss”? Just the opposite is true. If we in the south end up poorer, which is what is happening, not only we come out the losers, but those from the north end up worse off as well.
Even devils prefer rule of law

Kant, the German of Königsberg, said that even a town of devils, beings without moral sensibility, would prefer the rule of law to a state of war every man for himself. But, indeed, he added they must have sufficient intelligence. I would add they must show authentic human intelligence, as is revealed in the ultimatum game.
In this game, one player offers to share a sum of money with another player, who can accept or reject the offer. If the second player accepts, they both come out ahead. If not, neither gets anything. If it were true that human rationality attempts to maximize profit unilaterally, the second player should accept any offer that is greater than nothing, and the player making the offer should offer a share as close as possible to nothing. But those players who are offered the share tend to say no to anything less than 30 per cent of the total, because they want to avoid saying yes to any amount that would humiliate them. For that reason, the players making the offer tend to propose 40 to 50 per cent of the total in order to take away at least something. If the offer is a little short, those who demonstrate a maximising rationality when they enter a game of ultimatum adapted for them are chimpanzees, not people.
The bad thing is that, in itself, the humiliation of the worse-off is also not even intelligent. What is intelligent, in the case of Europe, is to recover one’s own identity and so create a genuine democracy, based on social cohesion and mutual assistance.
Translated from the Spanish by Anton Baer

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I READ IN GUARDIAN THAT A GERMAN MP OG GREEK ORIGIN HAS RESIGNED IN PROTEST AT GOVERNMENT POLICY,SAYING GERMANY IS PURSUING WRONG POLICY ON EU.

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I READ IN GUARDIAN THAT A GERMAN MP OG GREEK ORIGIN HAS RESIGNED IN PROTEST AT GOVERNMENT POLICY,SAYING GERMANY IS PURSUING WRONG POLICY ON EU.

Badboy more and more Germans are saying that they do not want Germany to help in any more bailouts since they now have their own economic problems. it is true, Merkel imposed too high a restriction when the world is in recession and it is looking more likely the Euro will fail.

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ECB should limit amount of liquidity in the eurozone, says Wolfgang
Schaeuble


The European Central Bank should try to limit the amount of the liquidity in
the eurozone, Germany's finance minister has said, as he warned that pumping
money into crisis hit economies would not create growth if they were not matched
by reforms.








Mr Schaeuble also said he
supported a global minimum corporation tax rate and that he remained committed
to tackle evasion and tax havens. Photo:
AFP






By Szu Ping Chan, and
agencies

2:32PM BST 19 Apr 2013

7 Comments




"There is much money in the market, in my view too much money," Schaeuble
said in an interview for the German economic weekly Wirtschaftswoche on Friday.



"If the ECB tries to use what leeway it has to reduce this great liquidity a
little I would welcome that," he said, adding that the ECB had done well to
bring inflation below 2pc.


"We in Germany should not forget that many European countries are still in a
precarious situation with economic growth," he added. But pumping liquidity into
their economies without far-reaching structural reforms would not create the
conditions for sustainable growth. Mr Schaeuble said.


Mr Schaeuble also said he supported a global minimum corporation tax rate and
that he remained committed to tackle evasion and tax havens.


Last November, Mr Schaeuble joined UK Chancellor George Osborne in calling
for the world's leading economies to combat tax avoidance and to force
corporations to pay their fair share of tax or face the consequences.



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Mr Schaeuble also said that Cyprus's move to raise its corporation tax from
10pc to 12.5pc was "too low"

"I would have liked a few more percentage points," he said.

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The IMF is flunking the financial crisis


By turning its fire on Britain, the IMF gives the impression it is out of
ideas and solutions








Criticism of Britain by the
IMF’s chief economist, Olivier Blanchard, makes no sense, unless explained as
traditional French Anglophobia Photo:
Bloomberg





By Jeremy Warner

8:23PM BST 18 Apr 2013

100 Comments




Why did nobody see this coming, the Queen asked of the financial crisis some
years ago. Today, her question would be only slightly different: if all you
economists are so clever, why, more than five years into the crisis and with no
end in sight, are you still debating solutions?


I’m at the spring meeting of the International Monetary Fund in Washington
this week, and it is striking just how little the debate has moved on since the
crisis began. One of Baroness Thatcher’s attributes was the ability to
communicate complex economic problems and ideas in simple, common-sense terms
that connected with ordinary people.


This is not a virtue with which the IMF, with its several thousand
economists, is blessed. Of course, there has to be some forum for worthy
international debate on matters economic, and this is in part what the IMF is
for. It is also true to say that the size and complexity of today’s economic
quagmire has confounded all standard analysis.


Even so, you’d expect more from an organisation that is meant to set the
international agenda on financial stability and economic growth. There is a
glaring disconnect between the grinding reality of economic stagnation and the
vacuous deliberations of the IMF policy elite.


Discussion of the size of “fiscal multipliers”, which countries should be
consolidating and which stimulating, the trajectory of bank deleveraging and so
on – all of it seems to be conducted in a parallel universe of comfortable
irrelevance.

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Britain launches legal challenge to Financial Transaction Tax


Britain has threatened to provoke a fresh row with Brussels by launching
legal proceedings against a €35bn tax on financial transactions agreed by 11
European Union members earlier this year.








Analysis by the City of London
has found that the tax would add almost £4bn to the cost of issuing UK
government debt this year Photo:
Alamy






By Philip Aldrick, in
Washington

6:01PM BST 19 Apr 2013


245 Comments




The UK lodged the challenge at the European Court of Justice in protest at
the spillover effects the private agreement might have on the UK economy.



Although the FTT will only be adopted by the 11 euro area signatories, which
include Germany, France, Italy and Spain, it will hit investors worldwide.



As it stands, any trade in euro-denominated financial instruments and any
transaction with a bank from the 11-nation group, or one of its overseas
branches, would be subject to the tax – regardless of where the deal took place.



Speaking in Washington while attending the International Monetary Fund’s
spring meetings, George Osborne said: “The UK has launched a legal challenge to
the European Commission proposal to a Financial Transaction Tax.


“The British Government [is] not against financial transaction taxes in
principle – we have stamp duty on shares – but we are concerned about the
extra-territorial aspects of the Commission’s proposal. That concern is shared
by some other countries.”



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UK financial institutions, as well as international investors from Japan to
the US, have been in uproar over the plan. Analysis by the City of London has
found that the tax would add almost £4bn to the cost of issuing UK government
debt this year.

Like the UK, US officials are also pressing Europe to curb the
“extra-territorial” effect. Tom Quaadman, vice-president for capital markets at
the US Chamber of Commerce, has said: “There is a potential for regulatory
overreach that could harm the global economy.”

The FTT is being adopted by the 11 countries under the European Union’s
“enhanced co-operation” regime, which allows groups within the 27 members to
press ahead with joint policies without unanimous support.

However, under Article 327 of EU law, other member states have a right to
protect their economies against any impact such agreements might have on their
economic interests.

As the City plays such a vital role to the UK economy – and because a large
share of euro transactions go through the City and many European banks operate
in the capital, Britain could be disproportionately hurt by the new tax.

In principle, the effect would be the same in New York, Tokyo and Singapore –
but the impact would in practice be less severe.

The UK Government hopes amendments can be made to the tax as it stands before
becoming law, and is currently in constructive negotiations with Germany and
France. It has launched the action against the European Commission’s
“authorisation decision” as a form of insurance policy in case the discussions
fail.

A Treasury source said: “We are confident we will find a resolution.”

The legal action is the latest in a long list of recent skirmishes with
Brussels, including a battle over the EU budget, David Cameron’s veto of the EU
treaty in 2011, and his pledge to hold and in/out referendum in 2017.

Under the current proposal, agreed in February, the FTT will be levied at
0.1pc on equity and debt transactions and at 0.01pc on derivate transactions
within the 11 member group.

It is expected to raise as much as €35bn a year. The European Commission has
estimated it could reduce economic growth by a total of 0.5pc over the next 40
yea

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Germany: Heading for ‘à la carte’ pensions?

18 April 2013


Die Tageszeitung, 18 April 2013
Germany could see the emergence of “flexi-pension generation,” headlines Die Tageszeitung in the wake of a government decision to increase pensions in 2014 (by 1 per cent in west German states, and 3 per cent in the east). In an extensive analysis of what future generations can expect from the pension system, the daily remarks —

The era where everyone retired at more or less the same age is over, not because people have suddenly become more liberated or individualistic, but because the labour market, which has become extremely flexible, will need some people and not others. Some will be able to continue working and may even be obliged, others will not.”

This system will generate inequality, argues TAZ, which sees two solutions —

One way would be to open the floodgates of the invalidity pension system, which is a common measure in Europe, but one which requires generous medical certificates. Alternatively, there is another more interesting option, in which each occupation has a specific retirement age. Roofers and scaffolders [...] could therefore benefit from full retirement at age 58, while those who choose to develop their talents in journalism and academia could work until age 72 if they wish.

A system with variable retirement ages would be difficult to implement, acknowledges the newspaper —

but current injustice in the social welfare and pension system is not acceptable either. The reforms of the last 15 years have destroyed the legal protection for pensions. And now is the time for change.

In 2012, the average retirement age in Germany was 63.3 years for women, and 63.8 years for men.

[Panda]

European Union: ‘Europe has become its own worst enemy’

19 April 2013
Presseurop Il Sole-24 Ore


Il Sole-24 Ore, 19 April 2013
“A real attack is underway against the heart of the European Union,” writes Christian Rocca, director of IL, the cultural supplement of Sole 24 Ore:

[It is] an attack launched from the interior of the continent; a home-grown reaction to the economic crisis. Europe has become its own enemy, responsible for all our national headaches, the target of all our corporate grievances. Things have not always been this way. Up to twenty years ago, Europe presented the dream, hope and challenge of a new departure: the peaceful liberation of the countries of the East, the reunification of Germany, the abolition of borders, the free circulation of ideas and people, Erasmus. Today, there is nothing but the Champions League to remind us that we are still a Union. For the rest: welcome to Euroland, the desolate land of the euro, a monetary union where the most ghastly words a European can hear are: ‘Greetings. I come from the EU and I am here to help you.’

To illustrate the “obvious rips” that have appeared in the Union flag in recent years, IL calls on four European intellectuals – the historian Niall Ferguson, former European Commissioner Peter Mandelson, MEP Daniel Cohn-Bendit and the publisher and editor of Die Zeit Josef Joffe – to explain why. According to Rocca,

the most important threat to the European project today is the loss of legitimacy of the European spirit, its shaky credibility [...]. This time, the usual scream of “More Europe – we need more Europe!” won’t be enough to salvage it.

[Panda]

Italy centre-left leader Pier Luigi Bersani announces resignation


Italy’s political stalemate has deepened after the centre-left leader with
the best chances of forming a government announced his resignation late Friday
as his party split into warring factions.








Mr Bersani’s move came after
backers in his party voted down two candidates that he had proposed for the role
of president Photo:
Reuters





Tom Kington in Rome

10:08AM BST 20 Apr 2013

13 Comments




The decision to step down by Pier Luigi Bersani, the leader of the Democratic
Party, is likely to heighten the sense of deadlock after February’s inconclusive
general election which the Democratic Party narrowly won without gaining a
working majority.


Mr Bersani’s move came after backers in his party voted down two candidates
that he had proposed for the role of president. Late on Friday night, he accused
fellow party members of betraying him, adding that there was a “tendency in some
towards permanent destruction.”


The centre-left’s implosion is the latest reminder of how it is made up of a
string of parties, from former communists to Christian democrats who have never
gelled, failing to hold a government together when elected in 2006 and never
mounting a truly convincing opposition to Silvio Berlusconi.


While the centre-left has stumbled since the election, former prime minister
Silvio Berlusconi’s centre-right coalition has taken a lead in the polls. Mr
Bersani’s exit could allow his photogenic young rival in the Democratic Party,
Matteo Renzi - who also appeals to right wing voters -- to take charge.



Yesterday, Giorgio Napolitano, the 87-year-old incumbent president, agreed to
accept a mandate for a second term as a president in order to end the impasse
over who should do the job. He had previously sought to avoid standing again
because of his advanced age.



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Mr Bersani had initially proposed as president the former Senate leader
Franco Marini, a choice shared by Mr Berlusconi, suggesting that Mr Bersani was
testing the waters for a coalition government with Mr Berlusconi to break
Italy’s political deadlock.

That was enough to spark fury in the ranks of the Democratic Party, but Mr
Bersani’s next favoured choice, former prime minister Romano Prodi, also failed
in a fourth round of voting on Friday, after around 100 backers of Mr Bersani
failed to vote for him.

Backers of former comic Beppe Grillo, the surprise package in February’s
election, continue to support left-wing academic Stefano Rodota, who has also
been backed by Nichi Vendola, a left wing ally of the Democratic Party,
suggesting Grillo may yet get his candidate elected.

Luca Zaia, the president of the region of Veneto, and one of the presidential
electors, warned that a rapid decision was essential. “Enough with this game of
names because we are making a horrible spectacle of ourselves internationally,”
he said.

[Panda]

Greece's great fire sale


From pristine beaches to palaces, entire islands and its London embassy, a
nation in crisis is selling its assets, writes Harriet Alexander.








View over Lindos the main beach
and the acropolis, Rhodes, Greece Photo:
ALAMY






By Harriet Alexander,
Rhodes

6:00PM BST 20 Apr 2013


247 Comments




As George Georgas drives his golf buggy along the sea front, the sprightly
80-year-old muses on why this is the best stretch of coast in the world.



The beach is the longest on the Greek island of Rhodes – four miles of
crystal waters, flanked by a gently sloping pebble shore. The 18-hole golf
course that flanks it is lined with olive trees and wild flowers, and there is
scarcely a hotel or high rise in sight.


Mr Georgas has played here for over 30 years. And now he thinks the
government should sell it.


"We are like a bankrupt housewife forced to sell the silver, to save the
family," he said. "Greece has no choice."


The sale of the coast at Afandou is part of the
Greek government's desperate
attempts to raise money by privatising its vast portfolio of state-owned assets
– the largest firesale in history. Some 70,000 lots are for sale, ranging from
pristine stretches of coast through to royal palaces, marinas, thermal baths,
ski resorts and entire islands. Only last Wednesday, bidding closed for a stake
in the state gambling company.



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On Monday Antonis Samaras, the prime minister, scraped through another round
of negotiations with the Troika – the EU, IMF and European Central Bank – and
managed to secure payment of the next EU 8.8 billion instalment of the bailout.
But privatisation is a prerequisite for receiving the bailout funds.

On Rhodes, a mountainous island 50 miles long that was the mythical home of
the sun god Apollo, huge chunks of prime real estate are now up for grabs.
Beside the 1,850-hectare Afandou estate there is the peninsula of Prasonisi, a
paradise for windsurfers, and the Mandraki marina in Rhodes Town, where the
famous Colossus, a 100 foot high statue that was one of the seven wonders of the
ancient world, once stood guard over the port entrance.

Rhodes is unique in having nearly a third of its land owned by the
government, a legacy of being occupied during the Italian invasion in 1912 and
later having ownership of that land passed over to Athens when it became part of
the modern Greek state. Yet that hasn't stopped the inspectors from Athens
fanning out across the country to see what else they could auction off.

The idea of snapping up a Greek island certainly has its appeal. In March the
Emir of Qatar bought six for £7 million, while a Russian oligarch bought
Skorpios – previously owned by the Onassis family – earlier this month for a
reported £65 million, as a present for his 24-year-old daughter Ekaterina
Rybolovlev. While both those sales were private, it showed there was a
potentially lucrative market for chunks of scenic Greece.

To that end, the royal palace on Corfu, where Prince Philip was born, is now
also for sale. So too is a large coastal estate which, the government boasts on
its website, is next door to land owned by the Rothschild banking dynasty.

Officials refuse to discuss prices, saying that it depends on offers and the
development proposals, but the Afandou coastline is looking for an investment of
150-250 million euros. The port of Poros, a pretty cobbled marina in southern
Greece, is on the government books, as is the Athens police headquarters and the
Ministry of Culture – a giant temple-like construction in the centre of the
capital. So too are the buildings housing the ministries of health, education
and justice. Even the Greek embassy in London's Holland Park: yours for £22
million.

However, not everyone supports the idea of so many places going under the
hammer.

"We need to keep state ownership of all our assets – not sell them to the
highest bidder," complained Yiannis Milios, chief economist for the opposition
Syriza party, who would prefer to see more use of public-private partnerships,
rather than sales.

"Experience shows that the privatisation of public goods is a very bad idea.
With water, for instance, the quality falls but the price rises, which is
totally wrong. The government is very good at finding legal formulas to work its
way round supposed guarantees of public interest. It is not a good idea at all."


But others argue that Greece has no choice. Two bailouts from the European
Union have failed to inject life into the economy, which has been in recession
for the past six years. Unemployment is 27 per cent, and the deficit is forecast
to grow to 189pc of GDP this year. Almost 1,000 jobs have been lost every day
over the past three years in the private sector, and as part of Mr Samaras's
deal made on Monday, 15,000 public sector workers are set to be made redundant
as part of a Troika's programme for slimming the bloated public sector.

As well as political resistance, the other problem for privatisation
programme is finding buyers. While the more picturesque islands might seem
attractive busy, the same cannot be said of vast, loss-making behemoths like the
Hellenic Railways Network and the Public Power Corporation. Both have militant
unions that have vowed to fight privatisation tooth and nail, making them highly
risky prospects for investors.

That partly explains why Greece has only raised about EU2 billion from
privatisations since its first bailout loan in May 2010, missing its target of
raising EU3 billion by last year. The country's longer-term aim of raising EU50
billion by 2019 has repeatedly been scaled back, and the best it now hopes for
is to raise around EU 11 billion in privatisation proceeds by the end of 2016.


From his office overlooking the Mandraki marina in central Rhodes Town,
Stathis Kousournas, mayor of Rhodes, sees no alternative.

"We want this investment – we actually fought for it to happen," he said. "We
have to make sure that we are getting a fair price and respecting the
environment, but those who have come to me with concerns are in the minority.


"It is not all being sold permanently – some of it is a long-term lease.
We're all anxious to make the best of this – it is a development for all of
us.".

Unemployment on the island is low compared to the mainland, averaging 17 per
cent over the year thanks to the influx of tourists. But life is still hard.


Maria Karabini, a 40-year-old civil servant, has seen her salary drop by half
over the past three years. Now, after paying her mortgage, she only has EU200 a
month to live on.

"This sale of the land must happen," she said. "We need this now, quickly.
Tell the Russians and the Qataris to hurry up!"

Across the island, almost everyone seems to embrace the proposals, so
desperate are they for relief from austerity measures, although Lucas Georgas, a
Bath University-educated businessman, sounded a note of caution.

"What I don't like is the 'sale' aspect of it," he said. "I would like to see
the government renting it out for 20, 30, 40 years so that the business venture
can make a profit, then return ownership to the state. This land does not belong
to my generation to sell it."

In Athens, though, the man with the task of directing the firesale is
convinced that there is no other way.

Stelios Stavridis, chairman of the Hellenic Republic Asset Development Fund,
has only been in the job for three weeks – his predecessor resigned, reportedly
before he could be sacked, over the slow pace of sales.

"I'm an entrepreneur, not a politician, and I have been screaming my head off
that this is all about growth, job creation, wealth creation," said Mr
Stavridis. "I am the anti-bureaucracy man: we need to bring in this money –
there is no other way."

In Mr Stavridis's office in central Athens, not far from the parliament, a
pair of American businessmen discuss in hushed tones their negotiating position.
A ticker tape flickers above the head of the receptionist, detailing the latest
hot offers: Afandou, Corfu lands, the disused Athens airport.

"We have been acting so stupidly for years, making rules against our own
interest," Mr Stavridis added. "Being state-owned and well run is a
contradiction in terms."

For those who do take the plunge, there are still myriad hurdles to overcome,
despite the efforts of Mr Stavridis's team. Land registry is patchy at best,
while investors must also promise to commit their own equity, but many foreign
banks are wary of lending to Greek projects. Greece would appear to be only
acting now because the Troika has forced its hand.

Back in Afandou, Vassilis Anastasiou, the manager of the golf course for the
last 30 years, looks out every day on concrete proof of the "stupidity" of
previous government programmes.

A grand breeze block clubhouse looms over the golf course; completed in 1973
and, strangled by bureaucracy, empty ever since.

"At least under the military junta it only took three years to build that
site," said Mr Anastasiou. "Governments since would have taken 50 years to do
the same."

His club has around 100 members, paying EU400 a year and with 60 of them
playing regularly. But he is adamant that the land must be privatised – even if
it means increasing the fees.

"Anyone who argues against it is either an idiot, or a state employee who
doesn't think about economic reality and just likes to lounge on the beach," he
said. "We have our heads in the noose."

[Panda]

Angela Merkel: 'Europe has the last word in certain areas'


Countries in the eurozone must accept that Europe “has the last word” and
need to work together more closely if the continent is to avoid going into
decline, German chancellor Angela Merkel has warned.








The German chancellor was
speaking at an event hosted by Deutsche Bank in Berlin alongside the Polish
Prime Minister Photo:
AP





By Jeevan Vasagar, and
agencies

3:10PM BST 22 Apr 2013

147 Comments




In the latest signal that Germany backs stricter Europe-wide controls over
national budgets, the chancellor said that eurozone members had to be prepared
to surrender authority to European institutions.


Speaking at an event hosted by Deutsche Bank in Berlin alongside Polish Prime
Minister Donald Tusk, Mrs Merkel said: “We seem to find common solutions when we
are staring over the abyss.


“But as soon as the pressure eases, people say they want to go their own way.



“We need to be ready to accept that Europe has the last word in certain
areas. Otherwise we won't be able to continue to build Europe.”


European leaders are due to meet in June to discuss moving towards fiscal
union. Germany favours tighter, centralised controls of national budgets and has
proposed that the EU’s economics commissioner should be given more powers to
police countries’ budgets. Berlin insists that deficit reduction is key to
rebuilding the euro zone economy.



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Other European countries, particularly France, disagree with this approach to
solving Europe’s debt crisis and have pressed the case for banking union.

The Polish prime minister said it would be "dangerous" if other countries in
Europe felt Germany was imposing its own economic model across the entire bloc.
A majority of the Polish population now has doubts about adopting the euro
following the crisis, Mr Tusk said.

But Mrs Merkel denied that Germany was imposing its view, saying Europe was
made up of different cultures and economies with different strengths.

She said: "We don't always need to give up national practices but we need to
be compatible. It is chaos right now.

"We need to be prepared to break with the past in order to leap forward. I'm
ready to do this.”

This meant Germany accepting more compatible social security systems so that
Europeans could move between countries without worrying about their pensions.


Mrs Merkel rejected the idea that her country was seeking "hegemony" in the
European Union, and pledged to seek consensus.

She said: "Germany has a ... sometimes complicated role because we are the
largest economy - we are not the richest, but we are the largest. Therefore
Germany will only act together with the others - hegemony is totally foreign to
me."

Mrs Merkel said Europe needed closer cooperation to succeed amid tough global
competition and to avoid decline, pointing to her personal experience growing up
in the former communist East Germany.

"Look, I've experienced the collapse of a country. The economic system failed
under the aegis of the Soviet Union.

"What I really don't want is to look on, eyes open, as Europe as a whole
slips back. I would find that absurd, we have all the skills in our hands."

================
I think if Angela Merkel tries to put her ideas to the EU there would be a mass
exodus from the EU. With 6 Countries having received bail-outs which will take forever to repay
and the population of these Countries protesting at the austerity measures, the last thing they want is to lose
their Sovereignty.

[Panda]

For five years, Ertan Ercantan made a living selling Turkish rugs to Greek
Cypriots coming across the border that splits Cyprus’s capital Nicosia in half.
Overnight, they’re gone, he said.

“If things are bad for them, they are bad for us too,” Ercantan, 70, said as
he smoked a cigarette and sipped traditional Turkish coffee in his empty shop on
March 27. “Look at the street here. Normally these streets are full of people.
Now, they are empty.”





Enlarge image

Cyprus Turks Share Pain as Banking
Crisis Revives Talk of Unity




Simon Dawson/Bloomberg

A man stands silhouetted outside closed restaurants on the
Turkish side of Nicosia, North Cyprus on March 20, 2013.

A man stands silhouetted outside closed restaurants on the
Turkish side of Nicosia, North Cyprus on March 20, 2013. Photographer: Simon
Dawson/Bloomberg




1:43
April 3 (Bloomberg) -- Bloomberg Television's Ryan Chilcote
reports from Nicosia on the impact of the banking crisis on Cyprus's retailers.
(Source: Bloomberg)



Enlarge image

Cyprus Turks Share Pain as Banking
Crisis Revives Talk of Unity




Chris Ratcliffe/Bloomberg

A locked gate sits along the United Nations (UN) buffer
zone, between the Turkish and Greek controlled areas of
Nicosia.

A locked gate sits along the United Nations (UN) buffer zone,
between the Turkish and Greek controlled areas of Nicosia. Photographer: Chris
Ratcliffe/Bloomberg



Enlarge image

Cyprus Turks Share Pain as Banking
Crisis Revives Talk of Unity




Chris Ratcliffe/Bloomberg

The Turkish national flag is seen painted onto the
hillside of the Pentadaktylos Mountains (Kyrenia Zone), in the Turkish
controlled area of Northern Cyprus, as viewed from an area in Nicosia,
Cyprus.

The Turkish national flag is seen painted onto the hillside of
the Pentadaktylos Mountains (Kyrenia Zone), in the Turkish controlled area of
Northern Cyprus, as viewed from an area in Nicosia, Cyprus. Photographer: Chris
Ratcliffe/Bloomberg



Enlarge image

Cyprus Turks Share Pain as Banking
Crisis Revives Talk of Unity




Petros Karadjias/AP Photo

An employee of the bank talks to the people as they wait
outside a branch of Bank of Cyprus before it opened in Nicosia, on March 28,
2013.

An employee of the bank talks to the people as they wait
outside a branch of Bank of Cyprus before it opened in Nicosia, on March 28,
2013. Photographer: Petros Karadjias/AP Photo

Turkish and Greek Cypriots have been arguing over territory for half a
century, yet in the island’s Turkish-controlled north there are no signs of
schadenfreude over the financial crash in the internationally recognized state
to their south. Instead, Turkish Cypriots expect to share the pain because
cross-border business has thrived since 2004, even after the failure of a United
Nations plan to unify the country.

“This isn’t going to be good for the Turkish Cypriots, politically or
economically,” said James Ker-Lindsay, a lecturer at the London School of
Economics and author of “The Cyprus Problem.” “They have forged links with the
Greek Cypriots over the past 10 years, and a lot do cross over for jobs. We’re
talking about a potential massive contraction of the Cyprus economy.”

Cyprus has been divided since
1974, when Turkey invaded after a coup by supporters of union with Greece. Turkey
keeps about 30,000 troops in the north and is the only country to recognize a
Turkish Cypriot state. Greek Cypriots rejected the UN plan in a referendum nine
years ago on the eve of joining the European Union, while the Turks voted in
favor.

Wealth Gap


Greek Cypriots make up more than three-quarters of the island’s population of
1.15 million. They are two-thirds richer than their Turkish neighbors, with
per-capita output of $25,600 last year, according to the International Monetary
Fund. In the north, aid from Turkey is a key prop for an economy largely cut off
from international markets. It received 800 million liras ($440 million) of
Turkish grants and loans last year.

The wealth gap may be about to narrow as Cyprus’s economy heads for recession
after the collapse of its two biggest banks rocked European financial markets.


The Greek Cypriot government last month shut down the entire banking
industry, central to the economy’s growth, for almost two weeks. It also agreed
to an EU bailout that involves budget austerity, seizing cash from bank
depositors, and the euro area’s first capital controls.

Jobs Threatened


Since March 28, a sign at the crossing on Nicosia’s Ledra Street, near where
Ercantan sells carpets, tells Greek Cypriots that they can’t take more than 300
euros across the border.

There may soon be fewer Turks traveling in the opposite direction for work,
too.

As many as 3,000 Turkish Cypriots are employed in the south, mostly in
construction, and doubts about their job prospects has businesses on the
northern side worried, said Kemal Baykalli, deputy general secretary of the
Turkish Cypriot Chamber of Commerce.

Like many Turkish Cypriots, Baykalli said he’s hopeful that something good
may come out of the banking collapse, in the form of new momentum for
reunification.

“Logic tells us that we have to find a way to cooperate on this small island
to overcome the crisis,” he said.

On the Greek side, Caesar Mavratsas, a professor of sociology at the
University of Cyprus, agrees, though that doesn’t mean he thinks it’s going to
happen.

‘Scarce’ Rationality


“The rational or responsible thing to do at this point would be to solve the
Cyprus problem because that would lead to economic development,” he said. “But
in Greek Cypriot politics, rationality and responsibility have been very
scarce.”

Sticking points in 2004, and in subsequent UN-backed talks, include property
rights, status of settlers from Turkey and power-sharing in a remodeled state.


About three-quarters of Greek Cypriots found the UN proposals on those issues
unacceptable, and voted “no.” Among the minority in favor of reunification, and
one of the few leading Greek Cypriot politicians to take that position, was
Nicos Anastasiades, who was elected president in February.

“This is a great opportunity for Anastasiades to become a true statesman,”
Mavratsas said. “I’m not very optimistic because even members of his own party
do not agree with him.”

‘One Cyprus’


On the Turkish side of Nicosia, Melis Eroglu, 26, said she would vote “yes”
to unification, as two-thirds of Turkish Cypriots did last time.

“My vote wouldn’t be about joining the euro zone,” she said during her shift
in a bookstore in the historic city center. “It’s about having one Cyprus rather
than a divided country.”

Greek Cypriots are pinning their hopes on offshore natural gas discoveries to
replace some of the revenue lost from the collapse of the financial-services
industry. Mavratsas cites the chance to develop those reserves as one advantage
to a settlement with Turkey.

“It’s going to be much more expensive for us if we send it through Greece,”
he said.

Turkey has objected to Cyprus’s search for gas on the grounds that Turkish
Cypriots should share in any benefits. After the Greek Cypriot government
authorized the start of drilling in 2011, Turkey announced its own exploration
plans off the north, and sent sent frigates and fighter jets to escort its
seismic ship.

Turkey has shelved projects with
Italy’s Eni SpA (ENI) because it’s
taking part in the exploration in Cyprus, Energy Minister Taner
Yildiz said on March 27. “No energy project in the region is feasible
without Turkey,” Yildiz said this week.

Hotel Ruins


Mehmet Ali Talat, a supporter of unification who negotiated with Greek
Cypriots as head of the Turkish Cypriot state in the five years through 2010,
points to tourism and new construction as another incentive for a reunification
deal.

Varosha, a kind of no-man’s land on the east coast, is the most obvious
example of unused economic potential. Fenced off by barbed wire since 1974, the
resort’s hotels, restaurants and bars, once the island’s smartest, stretch along
a sandy beach where wild cactuses grow. Many of the buildings were gutted by
rockets during the invasion, while others have fallen into ruin since then.

Under Turkish military control, Varosha’s status is another stumbling block
in unity talks. “Investments would skyrocket” if the talks succeed, Talat said
in an April 1 interview in Nicosia.

Gul’s Trip


Turkey is pushing for a quick
resumption of talks. President Abdullah Gul, speaking during a trip to Lithuania
yesterday, said the financial crisis and the change of government in the south
should be seen as an opportunity.

Cypriot Foreign Minister Ioannis Kasoulides suggested that Turkey is trying
to take advantage of a country in crisis.

“Some are calling for an immediate start to negotiations and are trying to
exploit our difficult and weak position,” he said. “We don’t intend to
immediately start negotiations.”

For all the potential economic benefits of reunification, Greek Cypriots are
probably too daunted by their country’s financial collapse to address such a
major challenge now, according to Ker-Lindsay at the LSE.

“Cypriots tend to be quite conservative,” he said. “At the moment, they might
be surveying the economic landscape and saying look, we just can’t risk it, it’s
too big a task.”

In Nicosia, Ercantan, the rug-seller, said he’s seen plenty of hard times
before. For four of the five decades his shop has been open, it was separated
from potential Greek Cypriot customers by armed sentries and barbed wire. Still,
he said he’s fearful of the economic crisis unfolding in the south.

“I think things will be very difficult for a long time,” he said. “This is
not good for any of us.”

[Panda]

Europe throws in the towel’

22 April 2013
Presseurop De Volkskrant


De Volkskrant, 22 April 2013
With economic crisis and the lack of growth in the Eurozone, “Europe is now placed third in a three-speed world economy, far behind emerging economies like China, Brazil, and India, and also significantly outpaced by the United States,” reports the daily, in the wake of the spring meeting of the IMF and the World Bank, which was held in Washington from April 19 to 21.
The objective, formulated by the EU in the year 2000, to become the world’s most competitive knowledge economy by 2010, has not been realised, complains the newspaper. Worse still, Germany’s Minister of Finance, Wolfgang Schaüble, has warned that “in the near future, growth will, at best, be between 1 and 1.5 per cent.”

[Panda]

Italy: Twilight of the parties

22 April 2013La Repubblica Rome

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The stalemate over the election of the President of the Republic, which broke on April 20 with the re-election of Giorgio Napolitano and the resignation of the leadership of the Democratic Party, is the highwater mark of the crisis in the Italian political system. To save that system, we must move ahead immediately with reforms, starting with electoral reform.

Nadia UrbinatiOur republic is at a crossroads as important as it is serious, as indicated by the crisis of parliamentary democracy. The crisis follows and inevitably reflects the crisis of the parties, and it is revealed by the incapability of those parties to bring unity to conflicting opinions, both in their own midst and towards other parties. In Germany in 1933, the Weimar Republic broke apart on this stumbling block, with tragic consequences.
In the Italy of 2013 we are witnessing a new version of the history of the ungovernability of the parliament and the dysfunctionality of its democratic methods – the agreements, the cross-party compromises, the majority decisions. The crisis, which was already brewing when the parties failed to form a government following the February election, was brought to a head with the election of the President of the Republic.
This is because, when it comes to electing a president, the parties have to manage the political game directly themselves. They cannot procrastinate or fall back on an external authority, as they can when they are putting together a government, which under the Italian Constitution is overseen by the president.
The parties were unable to agree, to compromise and take decisions by majority vote. They failed for various reasons. Some are specific to Italy’s recent history, or the 20 years under Berlusconi governments, which fuelled oligarchical and corrupt practices and darkened the public mood against the political parties. The second is modern means of communication, which have created direct relationships between citizens and leaders and institutions. This phenomenon has given rise to the notion that the role of the parties can be reduced and that we can have a direct parliamentary democracy – that is, without having to go through the parties.
Erosion of legitimacy

For all these reasons the parties are weak and getting weaker. What we are witnessing is an erosion of legitimacy, and and an erosion of structures and leadership, credibility and authority as well. That erosion has been confirmed by the inability to form a government and it has been magnified by the ill-chosen pact between the Democratic Party (PD) and the People of Freedom (PdL) to field a joint candidate for the presidency of the Republic.
This inept agreement shows just how far those who came up with it and who backed it have failed to grasp the Italy they are living in, that Italy that just came out of the polling booths. They have failed to grasp the crisis of parliamentary democracy and are carrying on as they did before, back when the party machines made the decisions and the parliamentarians toed the party line. Their failure to grasp this crisis has been a very grave error.
Today they’re placing all their hopes once again in Giorgio Napolitano. The re-election of the outgoing president confirms the inability of the parliament to emerge from this cul-de-sac and to cope with democracy without having to invoke a higher presidential authority. The presidential function, in fact, is now going through a metamorphosis. Perhaps we need to rethink our institutions, since, with the democracy of the web, which is here to stay, the fragmentation of the parties is inexorable.
Crisis in parliamentary democracy

Today, the political game is being played out live, between the parliament and the Internet. Predictably, the result is indiscipline, fits of temper, lack of distrust in commitments that were made, and the inability to sit down together for negotiations. Only parties led by a man with a firm hold on them can demonstrate discipline and unity. Paradoxically, the PdL and the Five Star Movement (M5S) are more disciplined and united than the PD. The latter is, amongst all the political movements, the one whose leaders have the hardest time whipping the members into line and so are the most plagued by instability.
The PD is the mirror of the crisis afflicting parliamentary democracy. How we can cross over through this stage of lack of authority is hard to figure out. That is why it is now more important than ever to grasp the meaning of this critical moment and to act accordingly – that is, to start immediately on electoral reform. This electoral law is the scandal that this parliament has stumbled over and that every future Member of Parliament will stumble over, precisely because it promotes divisions.
Even if an electoral reform is brought in, however, it will be obvious that it will be possible only with the implicit creation of a presidential system. Those who are responsible for our institutions should be aware of the gravity and the exceptional nature of this moment in our history – and be capable of putting together an accurate picture of the extremely delicate situation we are living in.
On the web

• Original article at La Repubblica it
  
• Linkiesta article it
  
• Il Sole-24 Ore article it
  

Reactions The collapse of the Democratic Party, the failure of Grillo

According to Linkiesta, the first re-election of a President in the 67 years of the Republic is the "umpteenth misstep of a political class that is now inadequate, unable to carry out the simplest duties delegated to it by the Constitution". After having failed to cope with the financial emergency in November 2011 and finding itself obliged to hand over the reins to Mario Monti and his government of technocrats,

incapable of reading correctly the calls for renewal coming in from across the country, the Democratic Party and the People of Freedom have reached the edge of collapse – this time because of Beppe Grillo. It is no coincidence that the collapse of the popularity of the political heavy hitters has been accompanied by the incredible ascent of the Five Star Movement, carried aloft by millions of protest votes that transcend traditional divides.

Stefano Folli, writing in Il Sole 24 Ore , does not share this opinion. According to him, "Beppe Grillo has ended up losing a political battle that he had been winning just hours earlier... Grillo had set out a strategic objective, which was to destabilise the Democratic Party first, and then upset the entire party structure". To this end, he relied on the candidature of the jurist Sefano Rodotà to win over part of the left-leaning electorate. Now, stresses Folli, what Grillo fears is that

the re-election of Giorgio Napolitano may give a vital boost to a system in decay [...], that a strong Presidency will be able to bring the parties back to reason, by getting them to finally tackle the reforms they have so far refused.

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Food: Nearly 5% of EU beef is horsemeat


17 avril 2013
Presseurop El Mundo



"Horsemeat with anti-inflammatories," sums up Spanish daily El Mundo referring to the results of tests run last month in the European Union on samples of beef suspected of containing horsemeat. Aimed at reassuring consumers in the wake of the horsemeat scandal, the results of the tests, which were carried out by the health authorities of each member state at the request of the EU Commission, were published on April 16.
Two types of tests were carried out. The first was designed to identify the amount of horsemeat in meat advertised as beef. The second detected traces of phenylbutazone, an anti-inflammatory drug, which is potentially dangerous to humans and is banned from the food chain.
El Mundo explains that –

nearly 5 per cent of the beef analysed during the last month by the EU contained horse DNA and 0.51 per cent of the horse meat contained traces of phenylbutazone.

It quotes the findings of the EU investigation, which found that the issue "is a matter of food fraud and not of food safety".
The countries posting the worst results are France and Greece, where traces of horse DNA were detected in 13 per cent and 12.5 per cent of the beef analysed, respectively. However, the United Kingdom, which found no cases of horsemeat in beef in the current tests, was responsible for the vast majority of cases of phenylbutazone being discovered in horsemeat. Of the 3,115 samples tested, only 16 were found to contain phenylbutazone, however 14 of these were found in UK samples.
To regain consumer confidence, the Commission will, in a few months, propose stricter sanctions in case of fraud on labelling or in marketing. It will also establish a passport for horses to reinforce surveillance within the EU.
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• Article original – El Mundo es
  
• EU press release on the test results en
  
• El Mundo website es
  

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• United Kingdom: ‘Findus beef lasagne up to 100% horse’
  

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