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German and French banks call the shots - European, Business - Independent.ie - 0 views

www.independent.ie/...ks-call-the-shots-2607577.html german french banks ireland debt
shared by Gene Ellis on 11 Jul 12 - No Cached
  • German and French banks call the shots Print Email  NormalLargeExtra Large ShareNew  0  0   Also in European Debt crisis: European shares edge lower and growth worries persist Bank of England's Tucker 'wasn't encouraged to lean on Barclays' Draghi keeps door open to further interest rate cuts Marks and Spencers sales hit by summer deluge Spain's debt tops 7pc danger level as Madrid gets more time European Home "Shocking" 2012 HoroscopeWhat Does 2012 Have In Store For You? Shockingly Accurate. See Free!www.PremiumAstrology.comExpat Health InsuranceQuick, Compare, Trusted Website Expatriate Health Insurance Quoteswww.ExpatFinder.com/Instant-Quoteshttp://www.googleadservices.com/pagead/aclk?sa=L&ai=BMEejVeb8T8fDKoSG_QaAhrTCB-q_1OYBmoqphxvAjbcB0NkREAMYAyDgw6kIKAU4AFD4gumFAmCpsL6AzAGgAairsfEDsgESd3d3LmluZGVwZW5kZW50LmllyAEB2gFfaHR0cDovL3d3dy5pbmRlcGVuZGVudC5pZS9idXNpbmVzcy9ldXJvcGVhbi9nZX
  • d, for reasons best
  • known to itself, the ECB -- in clear contravention of both previous market precedent and financial logic -- has insisted that the senior bondholders be repaid in full and has lent the Irish banks, institutions which it must have known were hopelessly insolvent, €70bn to do so.
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  • Top of the list are German banks, to whom we owe €92bn with a further €38bn of other exposures. Does the fact that Irish banks potentially owe their counterparts up to €146bn explain the German government's implacable opposition to any write-down of the Irish banks' debts? After the British and the Germans, it is the French banks -- with total Irish bank loans of almost €32bn and a further €23bn of other exposures -- who have the biggest exposure to Ireland. Does this provide at least a partial explanation for French president Nicolas Sarkozy's truculence when faced with Irish requests that senior bondholders be forced to accept a haircut?
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ECB Resisting Calls to Cheapen Euro as Currency War Rages - SPIEGEL ONLINE - 0 views

www.spiegel.de/...rrency-war-rages-a-882462.html
shared by Gene Ellis on 21 Feb 13 - No Cached
  • The central bank chief is coming under increasing pressure because he can't quite bring himself to embrace the concept of quantitative easing, the latest fashion in the world of finance. It involves central bankers engaging in the large-scale purchase of bonds issued by their governments and other securities, thereby injecting huge sums of money into the financial system. In this way, they hope to stimulate the domestic economy and keep their own currencies cheap, thereby strengthening exports.
  • The country is in the process of "boldly rebuilding" monetary policy, Prime Minister Shinzo Abe declared. Indeed, the Japanese yen has lost 12 percent of its value against the dollar in the last two months.
  • The US central bank, the Federal Reserve Bank, has also been printing money to a previously unimaginable extent since the financial crisis. Calling its efforts QE 1 and QE 2, the Fed has pumped more than a trillion dollars into the US economy.
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  • For years, China has defended its currency by pegging the exchange rate to the dollar, and the Swiss National Bank now only permits appreciation of the franc up to a certain limit, because investors have viewed the Swiss currency as one of the last safe currencies since the outbreak of the sovereign debt crisis in Europe.
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Euro crisis based on 'design flaws' in monetary union, conference told - 0 views

www.thescore.ie/r-banking-union-634618-Oct2012 euro crisis based design union conference
shared by Gene Ellis on 14 Oct 12 - No Cached
  • Euro crisis based on ‘design flaws’ in monetary union, conference told
  • The European Central Bank’s current status, where it does not act as a ‘lender of last resort’ in a similar method to other central banks, was particularly criticised.
  • He said the current version of the treaty establishing the ESM, the new permanent bailout fund for the eurozone, would also not function as such a lender – and said it was “incapable of ending the crisis”.
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  • “What I am proposing is a guaranteed yet conditional [lender of last resort] which can reconcile moral hazard concerns with the need to protect sovereign borrowers from the kind of solvency issues we have witnessed since the onset of the economic crisis,” he said
  • McDonnell also called for a full banking union within the eurozone, saying a deposit insurance corporation should be established to fill this gap.
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George Soros: how to save the EU from the euro crisis - the speech in full | Business |... - 0 views

www.guardian.co.uk/...ave-eu-from-euro-crisis-speech
shared by Gene Ellis on 09 Apr 13 - No Cached
  • The crisis has also transformed the European Union into something radically different from what was originally intended. The EU was meant to be a voluntary association of equal states but the crisis has turned it into a hierarchy with Germany and other creditors in charge and the heavily indebted countries relegated to second-class status. While in theory Germany cannot dictate policy, in practice no policy can be proposed without obtaining Germany's permission first.
  • Italy now has a majority opposed to the euro and the trend is likely to grow. There is now a real danger that the euro crisis may end up destroying the European Union.
  • The answer to the first question is extremely complicated because the euro crisis is extremely complex. It has both a political and a financial dimension. And the financial dimension can be divided into at least three components: a sovereign debt crisis and a banking crisis, as well as divergences in competitiveness
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  • The crisis is almost entirely self-inflicted. It has the quality of a nightmare.
  • My interpretation of the euro crisis is very different from the views prevailing in Germany. I hope that by offering you a different perspective I may get you to reconsider your position before more damage is done. That is my goal in coming here.
  • I regarded the European Union as the embodiment of an open society – a voluntary association of equal states who surrendered part of their sovereignty for the common good.
  • The process of integration was spearheaded by a small group of far sighted statesmen who recognised that perfection was unattainable and practiced what Karl Popper called piecemeal social engineering. They set themselves limited objectives and firm timelines and then mobilised the political will for a small step forward, knowing full well that when they achieved it, its inadequacy would become apparent and require a further step.
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Excellent point!
  • Unfortunately, the Maastricht treaty was fundamentally flawed. The architects of the euro recognised that it was an incomplete construct: a currency union without a political union. The architects had reason to believe, however, that when the need arose, the political will to take the next step forward could be mobilized. After all, that was how the process of integration had worked until then.
  • For instance, the Maastricht Treaty took it for granted that only the public sector could produce chronic deficits because the private sector would always correct its own excesses. The financial crisis of 2007-8 proved that wrong.
  • When the Soviet empire started to disintegrate, Germany's leaders realized that reunification was possible only in the context of a more united Europe and they were prepared to make considerable sacrifices to achieve it. When it came to bargaining, they were willing to contribute a little more and take a little less than the others, thereby facilitating agreement.
  • The financial crisis also revealed a near fatal defect in the construction of the euro: by creating an independent central bank, member countries became indebted in a currency they did not control. This exposed them to the risk of default.
  • Developed countries have no reason to default; they can always print money. Their currency may depreciate in value, but the risk of default is practically nonexistent. By contrast, less developed countries that have to borrow in a foreign currency run the risk of default. To make matters worse, financial markets can actually drive such countries into default through bear raids. The risk of default relegated some member countries to the status of a third world country that became over-indebted in a foreign currency. 
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Again, another excellent point!
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Not quite... Maggie Thatcher, a Conservative; and Gordon Brown, of Labour, both recognized this possible loss of sovereignty (and economic policy weapons they might use to keep the UK afloat), and refused to join the euro.
  • The emphasis placed on sovereign credit revealed the hitherto ignored feature of the euro, namely that by creating an independent central bank the euro member countries signed away part of their sovereign status.
  • Only at the end of 2009, when the extent of the Greek deficit was revealed, did the financial markets realize that a member country could actually default. But then the markets raised the risk premiums on the weaker countries with a vengeance.
  • Then the IMF and the international banking authorities saved the international banking system by lending just enough money to the heavily indebted countries to enable them to avoid default but at the cost of pushing them into a lasting depression. Latin America suffered a lost decade.
  • In effect, however, the euro had turned their government bonds into bonds of third world countries that carry the risk of default.
  • In retrospect, that was the root cause of the euro crisis.
  • The burden of responsibility falls mainly on Germany. The Bundesbank helped design the blueprint for the euro whose defects put Germany into the driver's seat.
  • he fact that Greece blatantly broke the rules has helped to support this attitude. But other countries like Spain and Ireland had played by the rules;
  • the misfortunes of the heavily indebted countries are largely caused by the rules that govern the euro.
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Well, yes, but this is an extremely big point.  If, instead of convergence, we continue to see growth patterns growing apart, what then?
  • Germany did not seek the dominant position into which it has been thrust and it is unwilling to accept the obligations and liabilities that go with it.
  • Austerity doesn't work.
  • As soon as the pressure from the financial markets abated, Germany started to whittle down the promises it had made at the height of the crisis.
  • What happened in Cyprus undermined the business model of European banks, which relies heavily on deposits. Until now the authorities went out of their way to protect depositors
  • Banks will have to pay risk premiums that will fall more heavily on weaker banks and the banks of weaker countries. The insidious link between the cost of sovereign debt and bank debt will be reinforced.
  • In this context the German word "Schuld" plays a key role. As you know it means both debt and responsibility or guilt.
  • If countries that abide by the fiscal compact were allowed to convert their entire existing stock of government debt into eurobonds, the positive impact would be little short of the miraculous.
  • Only the divergences in competitiveness would remain unresolved.
  • Germany is opposed to eurobonds on the grounds that once they are introduced there can be no assurance that the so-called periphery countries would not break the rules once again. I believe these fears are misplaced.
  • Losing the privilege of issuing eurobonds and having to pay stiff risk premiums would be a powerful inducement to stay in compliance.
  • There are also widespread fears that eurobonds would ruin Germany's credit rating. eurobonds are often compared with the Marshall Plan.
  • It is up to Germany to decide whether it is willing to authorise eurobonds or not. But it has no right to prevent the heavily indebted countries from escaping their misery by banding together and issuing eurobonds. In other words, if Germany is opposed to eurobonds it should consider leaving the euro and letting the others introduce them.
  • Individual countries would still need to undertake structural reforms. Those that fail to do so would turn into permanent pockets of poverty and dependency similar to the ones that persist in many rich countries.
  • They would survive on limited support from European Structural Funds and remittances
  • Second, the European Union also needs a banking union and eventually a political union.
  • If Germany left, the euro would depreciate. The debtor countries would regain their competitiveness. Their debt would diminish in real terms and, if they issued eurobonds, the threat of default would disappear. 
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Golden Rice - Lifesaver? - NYTimes.com - 0 views

www.nytimes.com/...golden-rice-lifesaver.html GM rice
shared by Gene Ellis on 09 Jan 14 - No Cached
  • making it the only variety in existence to produce beta carotene, the source of vitamin A. Its developers call it “Golden Rice.”
  • And they have motivated similar attacks on trials of other genetically modified crops in recent years: grapes designed to fight off a deadly virus in France, wheat designed to have a lower glycemic index in Australia, sugar beets in Oregon designed to tolerate a herbicide, to name a few.
  • Not owned by any company, Golden Rice is being developed by a nonprofit group called the International Rice Research Institute with the aim of providing a new source of vitamin A to people both in the Philippines, where most households get most of their calories from rice,
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  • “The genes they inserted to make the vitamin are not some weird manufactured material,” he wrote, “but are also found in squash, carrots and melons.” 
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The Man Who'll Perform Triage on Europe's Banks - NYTimes.com - 0 views

www.nytimes.com/...m-triage-on-europes-banks.html
shared by Gene Ellis on 29 Oct 13 - No Cached
  • “What makes it difficult is that it is very fragmented,” he continued. “It is diversified in different countries and they are not used to working together, so it’s a huge organizational effort, and it’s also a huge political effort in the sense of convincing everybody to converge to common styles of supervision.”
  • three parts.
  • a broad assessment of a bank’s risk profile
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  • The second is the so-called “asset quality review,”
  • The third is what is known as a “stress test,”
  • For the supervisory process to be truly useful, experts say it must also be accompanied by a so-called single resolution mechanism — a system for winding down failing banks in an orderly way, to avoid market upheavals.
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Gaps in Graduates' Skills Confound Morocco - NYTimes.com - 0 views

www.nytimes.com/...s-skills-confound-morocco.html
shared by Gene Ellis on 29 Oct 13 - No Cached
  • “It’s sad to note that the state of education is worse now than it was 20 years ago,
  • “How is it that a segment of our youth cannot realize their legitimate aspirations at professional, physical and social levels?”
  • They say that their education has left them ill-equipped for the workplace.
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  • but she is worried that the education she is getting, in a public system that she faults on quality, will not be enough to win her a place in a job market that she says is often skewed by bribery and favoritism.
  • “Students do not have an equal chance to succeed,” she said, adding that many parents had gone into debt trying to ensure that their children have some chance for a future by paying for them to study in private schools. “The quality of education all depends on the parents’ income.”
  • about one-third of the country’s civil servants work in the sector.
  • In his speech he called for mandatory foreign language training in university degree courses and a new emphasis on vocational and technical training.
  • In the 1980s, a political decision to reclaim the Moroccan identity resulted in a change in the language of instruction, with elementary and high school classes shifting to Arabic. Most higher education programs, however, remained in French.
  • Many critics attribute high dropout rates to this language switch. University students, they say, are struggling to learn in a language they barely understand.
  • Mr. Mrabet said other problems included an excessive focus in graduate training on quantity over quality; a failure to adapt courses to workplace opportunities; overcrowded lecture halls; student strikes; and school financing issues.
  • Instead of hiring graduates of the Moroccan public education system, recruiters tend to look for graduates educated abroad or the products of Moroccan private schools,
  • “Call centers are the biggest employers in Morocco with about 50,000 jobs that generally require good skills in French,” he said. “In some fields, like I.T., it is difficult to find people with the adequate training.”
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Ukraine raises fears of gas price war with Russia - FT.com - 0 views

www.ft.com/...b3-11e3-80f4-00144feabdc0.html
shared by Gene Ellis on 25 Apr 14 - No Cached
  • He called upon the EU to pressure Slovakia’s gas transit pipeline operator into sanctioning so-called reverse gas transit flow schemes, allowing Ukraine, which relies heavily on Russian fuel imports, to diversify by importing European market gas.
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RealTime Economic Issues Watch | Transatlantic Economic Sanctions Against Russia - 0 views

blogs.piie.com/realtime
shared by Gene Ellis on 25 Apr 14 - No Cached
  • Transatlantic Economic Sanctions Against Russia
  • First, I have recommended to government officials that US and EU negotiators give priority to energy cooperation and promotion of US exports of liquefied natural gas to Europe during the fourth round of talks on the Transatlantic Trade and Investment Partnership (TTIP) that start on March 10 in Brussels. Efforts should be made to conclude this part of the agreement quickly and immediately implement the obligations on a provisional basis
  • Second, the United States and the European Union should call for special consultations in the International Energy Agency (IEA) to review current oil and gas supply arrangements and reserves in Europe. The IEA should also be called on to assess the implications of the crisis in Ukraine for member and nonmember countries and their options for dealing with potential supply disruptions. Ukraine participates in consultations with IEA members on a regular basis anyway and clearly should be doing so now.
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  • they would help inoculate European economies against the adverse effects of energy disruptions in the medium term.
  • Consideration should be given to invoking GATT Article XXI, which provides exceptions for national security reasons from rights and obligations under the World Trade Organization (WTO), for example. Invoking this WTO exception would allow across-the-board actions against Russia without prior notification or even justification. The national security exception of Article XXI is that broad. In brief, the United States and the European Union could remove in one step all the WTO benefits they accorded Russia when it acceded to the WTO in August 2012. Doing so would disrupt bilateral trade and investment, possibly kicking tariffs back up to Smoot-Hawley levels of the 1930s.
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Companies Quietly Apply Biofuel Tools to Household Products - NYTimes.com - 0 views

www.nytimes.com/...pplied-to-household-soaps.html
shared by Gene Ellis on 01 Jun 14 - No Cached
  • Companies Quietly Apply Biofuel Tools to Household Products
  • A liquid laundry detergent made by Ecover, a Belgian company that makes “green” household products including the Method line, contains an oil produced by algae whose genetic code was altered using synthetic biology. The algae’s DNA sequence was changed in a lab, according to Tom Domen, the company’s manager for long-term innovation.
  • Unilever recently announced that it was using algae oil made by a company called Solazyme in Lux, a popular soap
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  • An ingredient crucial to malaria drugs, artemisinin, is already being produced from a yeast altered through synthetic biology. Specific brands have not been disclosed.
  • Solazyme points to substances like rennet, a key processing aid in cheese-making that requires an enzyme called chymosin to promote clotting. Traditionally, calves’ stomachs were used to provide that enzyme to curdle milk for cheese. But since the late 1990s, rennet has been generated by a microbe whose genetic code was altered with the insertion of a single bovine gene, and that process is the one most widely in use now in the United States.
  • Solazyme describes the organism that produces the oil as “an optimized strain” of single-cell algae “that have been in existence longer than we have.”
  • Ecover buys the ingredient, algal oil from Solazyme, which used to describe itself as a synthetic biology company but has taken the term off its website.
  • Solazyme pointed to the environmental benefits of its processes and noted that the World Wildlife Fund, Rainforest Alliance and other environmental groups support its work. “We use molecular biology and standard industrial fermentation to produce renewable, sustainable algal oils that help alleviate pressures on the fragile ecosystems around the Equator that are frequently subject to deforestation and habitat destruction,”
  • The groups acknowledge that the Solazyme oil itself — in the Ecover detergent — does not contain genetically engineered ingredients in the conventional meaning of the term. Rather, the organism producing the oil has been genetically altered.
  • Some of the same companies are now busily churning out vanillin, resveratrol and citrus flavorings from yeast and other microorganisms that are a product of synthetic biology for use in foods.
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Russia Steps Up Economic Pressure on Kiev - NYTimes.com - 0 views

www.nytimes.com/...economic-pressure-on-kiev.html
shared by Gene Ellis on 24 Mar 14 - No Cached
  • Russia Steps Up Economic Pressure on Kiev
  • Russia is now asking close to $500 for 1,000 cubic meters of gas, the standard unit for gas trade in Europe, which is a price about a third higher than what Russia’s gas company, Gazprom, charges clients elsewhere. Russia says the increase is justified because it seized control of the Crimean Peninsula, where its Black Sea naval fleet is stationed, ending the need to pay rent for the Sevastopol base. The base rent had been paid in the form of a $100 per 1,000 cubic meter discount on natural gas for Ukraine’s national energy company, Naftogaz.
  • Mr. Yatsenyuk raised the pressing need to build an interconnector pipe allowing for a so-called reverse flow from the European Union into the Ukrainian gas system. “We need reverse flows of gas from the European Union to support Ukraine’s energy security,” Mr. Yatsenyuk said.
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  • For years, Gazprom offered successive Ukrainian governments what it called discounts on the fuel, only to continue charging Naftogaz more than other European utilities.
  • Even with the rent for the Sevastopol naval base deducted from the price of gas, Gazprom had charged Naftogaz $395 to $410 for every 1,000 cubic meters of natural gas, for most of 2013. By comparison, Gazprom’s average price in Western Europe for the first nine months of last year was $380 for the same volume.
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Ukraine crisis: Russian retaliation could hit Western mulitinationals - 0 views

www.cnbc.com/101614522
shared by Gene Ellis on 05 Feb 15 - No Cached
  • "There no doubt would be Russian retaliation," said Justin Logan, director of foreign policy studies at the Cato Institute. "Companies with money tied up in Russia would have a tough time getting it back out."
  • The White House said Friday that President Barack Obama and the leaders of Germany, the United Kingdom, France and Italy agreed after a conference call that they're ready to inflict targeted sanctions against Russia if Moscow es
  • The lion's share of foreign money in Russia is from major energy sector players like Shell, Exxon, and BP, said Fadel Gheit, senior energy analyst at Oppenheimer
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  • Shell is working with Gazprom on natural gas extraction in Russia; Exxon has a multibillion dollar exploration partnership with Rosneft, a major oil producer controlled by the Russian government, and BP owns nearly 20 percent of Rosneft.
  • "Shell and Exxon have physical assets in Russia," said Gheit. "But pound-for-pound, BP has the biggest exposure in Russia." Although BP may have the most to lose from an economic tug-of-war between Moscow and the West, tough lessons that BP learned in Russia—through a defunct partnership with Rosneft called TNK-BP—also make BP best equipped for any future fallout, said Nicholas Spiro, managing director of Spiro Sovereign Strategy.
  • Spiro said that several German firms have also steeled themselves for possible fallout from friction between the Russia and the West. "German companies are huge here," said Spiro, naming BASF, energy firm RWE, and Siemens as companies with operations in Russia. BASF is working to finalize a deal with Gazprom that would give it a stake in Siberian oil fields; RWE has reached a preliminary deal to sell its natural gas subsidiary to Russian billionaires Mikhail Fridman and German Khan, and Siemens has a partnership with state-run railroad monopoly Russian Railways. Late last month, Siemens CEO Joe Kaeser made a trip to Moscow to meet with Russian President Vladimir Putin at his residence and voice support for a "trusting relationship" with Russian companies.
  • We know that if the West's resolve starts to crumble, it will almost certainly start in Germany,
  • "That's the canary in the coal mine."
  • "It starts with Germany and works its way down," said Hogan. "They have the most trade back-and-forth, and Germany gets the highest percentage of its energy from Russia."
  • Alcoa owns aluminum fabrication facilities in Russia, and Boeing has a design center in Moscow, as well as a joint venture with VSMPO-Avisma, the world's largest titanium producer.
  • Members of the Russian parliament have also proposed charging international payments companies like Visa and Mastercard with pre-emptive "security fees," with the stated aim of preparing for future financial disruptions.
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Daniel Gros calls for a broad array of EU measures to revive output growth and strength... - 0 views

www.project-syndicate.org/...d-strengthen-regional-cohesion
shared by Gene Ellis on 25 Apr 14 - No Cached
  • Restarting Ukraine’s Economy
  • the price of gas must be increased substantially to reflect its cost,
  • governance of the country’s pipelines, which still earn huge royalties for carrying Russian gas to Western Europe, must be overhauled.
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  • subsidies for domestic coal production must be stopped
  • Ever since these pipelines were effectively handed over to nominally private companies in murky deals, earnings from transit fees have gone missing, along with vast amounts of gas, while little maintenance has been carried out.
  • An energy ministry that decides who can obtain gas at one-fifth of its cost and who cannot is obviously subject to irresistible pressures to distribute its favors to whomever offers the largest bribes or kickbacks. The same applies to coal subsidies, except that the subsidies go to the most inefficient producers.
  • these steps also risk hitting eastern Ukraine, which contains a substantial Russophone minority, particularly hard. Some there might be tempted by the allure of a better life in “Mother Russia,” with its vast resources of cheap energy.
  • And it should open its markets, not only by abolishing its import tariffs on Ukrainian products, which has already been decided, but also by granting a temporary exemption from the need to meet all of the EU’s complicated technical standards and regulations.
  • At the same time, the EU should help to address the cause of extraordinary heating costs: the woeful energy inefficiency of most of the existing housing stock.
  • Experience in Eastern Europe, where energy prices had to be increased substantially in the 1990’s, demonstrated that simple measures – such as better insulation, together with maintenance and repair of the region’s many long-neglected central heating systems – yield a quick and substantial payoff in reducing energy intensity.
  • Even a slight improvement in Ukraine’s energy efficiency would contribute more to reducing greenhouse-gas emissions than the vast sums currently being spent to develop renewable energy sources.
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Deutsche Post - Wikipedia, the free encyclopedia - 0 views

en.wikipedia.org/...Deutsche_Post deutsche post wikipedia free encyclopedia
shared by Gene Ellis on 08 Mar 13 - No Cached
  • The Mail division inherits most of the traditional mail services formerly offered by the state-owned monopoly, for which it uses the Deutsche Post brand. Its exclusive right to deliver letters under 50 grams in Germany expired on 1 January 2008, following the implementation of European legislation. A number of companies are vying to challenge Deutsche Post's near monopolistic hold on letter deliveries, including Luxembourg-based PIN Group and Dutch-owned TNT Post.[2] In 2002, Deutsche Post was granted a license to deliver mail in the United Kingdom, breaking Royal Mail's long-standing monopoly.
  • Beginning in the early 1990s, Deutsche Post started an e-mail service called ePost. Today, a verified e-mail hosting service is run under this brand which allows customers to send and receive messages with digital signatures according to the De-Mail law.
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Some thoughts on German politics and the saver's tax in Cyprus | Credit Writedowns - 0 views

www.creditwritedowns.com/...-the-savers-tax-in-cyprus.html
shared by Gene Ellis on 18 Mar 13 - No Cached
  • Now, the large 82.8% German government debt to GDP ratio is a source of shame for many because Germany was a driving force in enshrining the 60% government debt to GDP hurdle into the Maastricht Treaty that set out terms for the euro zone.
  • Moreover, the interest rate policy of the ECB, geared as it was to the slow growth core, produced negative real interest rates and credit bubbles in Spain and Ireland during the last decade. German banks piled in to those countries as prospects domestically stagnated.
  • “The average German worker feels like a cash cow being sucked dry by a quick succession of reforms and bailouts that take money out of her pocket. First it was for reunification, then for European integration, then to right the economy, then to bail out German banks, and finally to bail out the European periphery. Fatigue has set in.”
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  • The bottom line is that none of the major political parties in Germany are going to vote for bailouts for other euro zone countries unless massive strings are attached, since these bailouts are political losers.
  • The anti-bailout part of the FDP platform is the one part of their rhetoric which could successfully take them over the 5% hurdle. The FDP’s complicity in using German taxpayer money to bail out the so-called profligate periphery is a one-way ticket out of Parliament.
  • “First, the Greek reports come via statements made by Michael Fuchs, CDU deputy Bundestag head and a senior member of German Chancellor Angela Merkel’s party. Fuchs warned earlier today that Germany would veto further aid to Greece if the country has not met the conditions of its previous bailouts.
  • “Second, all along Germany has indicated that it is resistant to increasing funding of the ESM and EFSF bailout facilities. This presents a problem in the case of Spain and Italy because of the size of those economies.
  • Willem Buiter, Chief Economist at Citigroup, has been most vocal in predicting that these facilities will be inadequate when Spain and Italy hit the wall and that more extreme measures will have to be taken.
  • The basic dilemma here is that almost all of the eurozone governments including Germany carry high debt burdens in excess of the Maastricht Treaty. For example, Germany has been in breach of Maastricht Treaty in 8 of 10 years since 2002, has been over the Maastricht 60% hurdle in each of those ten years, and now carries a debt to GDP burden above 80%.
  • The long and short of it was that the Germans had reached the end of their ability to support bailouts.
  • All evidence is that this levy has created panic in Cyprus. After all, what is the use of having a deposit guarantee if government can arbitrarily circumvent it to impose losses on your deposits anyway?
  • One can't just blame Cyprus for this fiasco. The ECB, EC and European Union finance ministers signed off on the insured deposit grab too]
  • My view? It was inevitable that we would be in crisis again. The austerity world view of crisis resolution is completely at odds with the capacity of the euro zone’s institutional architecture to handle a crisis.
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Kerry promotes U.S.-European trade deal - The Washington Post - 0 views

www.washingtonpost.com/...2-814b-063623d80a60_story.html
shared by Gene Ellis on 27 Mar 13 - No Cached
  • France wants to slow down consideration of the proposed transatlantic free-trade zone encompassing about 40 percent of the world’s trade. Germany and Britain are in favor of the plan and want to move fast.
  • The Obama administration says a comprehensive deal would further open European markets and expand exports to the euro zone of U.S. goods and services, currently worth $459 billion a year. Backers say the deal would add more than 13 million jobs in the United States and Europe.
  • But supporters also fear that trade talks will bog down or collapse over parochial concerns, and must be streamlined to succeed.
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  • one of the objections that France is expected to raise over what it calls cultural exceptions to free trade on products with a specific geographic or national significance, such as Champagne wine.
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Cyprus adds to Europe's confusion - FT.com - 0 views

www.ft.com/...4a-11e2-a4fa-00144feabdc0.html
shared by Gene Ellis on 29 Mar 13 - No Cached
  • First, the eurozone does indeed have the capacity to do the right thing in the end, though not before first exhausting all the alternatives.
  • It protects the small deposits and imposes a rational resolution process.
  • Second, a euro is indeed not a euro everywhere.
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  • A consensus on the principle that creditors, not taxpayers, should pay if a bank becomes insolvent does not yet exist across the eurozone. Does anybody imagine the German government would not rescue Deutsche Bank if it were in trouble? Of course it would.
  • Yet, as Guntram Wolff of Bruegel notes, a currency union with internal exchange controls is a contradiction in terms. Only the willingness of the European Central Bank to finance Cypriot banks without limit could end these controls in the near future. Will it be willing to act soon?
  • The outcome in Cyprus underlines the fact that the value of a euro of bank liabilities depends on the solvency of the bank itself and the solvency of the government standing behind the bank. If both bank and state are insolvent, lenders are likely not only to lose a big proportion of their money outright, but to find that the rest is frozen behind controls,
  • The ideal conclusion from the Cypriot imbroglio would be that all eurozone banks should have more capital.
  • A final lesson of this crisis is that what I have called the “bad marriage” that binds the eurozone members together has become worse.
  • Thus the eurozone limps on through crisis after crisis. Can – or will – this continue indefinitely? I do not know.
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The Morality of Amorality in Foreign Policy by Robert Cooper - Project Syndicate - 0 views

www.project-syndicate.org/...of-amorality-in-foreign-policy morality foreign policy policy robert cooper project syndicate
shared by Gene Ellis on 19 Dec 12 - No Cached
  • Foreign policy is about war and peace. If wars are fought on moral or religious grounds, no basis for restraint exists. After all, to call something evil is to invoke a moral duty to destroy it.
  • The Thirty Years War, fought over religion, laid waste to the Continent, killing one-third of Germany's population.
  • As the Romanian philosopher E. M. Cioran says: "Once man loses his faculty of indifference he becomes a potential murderer; once he transforms his idea into a God the consequences are incalculable."
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  • The objective of amoral foreign policy is to sustain order in an anarchic international system by ensuring tolerance and pluralism among a number of independent actors.
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