Tectonic shifts are underway across the continent. A leading IMF official has resigned, charging that incompetent bureaucrats and hacksrepeatedly ignored warnings about the impending crisis.
We’ve got a major bombshell in the announcement that the eurozone’s central bank is refusing Greek bonds as collateral, a move that sent Spanish share prices down and seems certain to add more intensity to a national tragedy. [The story's after the jump, grouped with out other Greek items.]
We got another harsh eurobankster warning, graphic eviden ce of what’s at stake in the event of euro breakup, the latest on the Spailout, a warning of a Spanish regional collapse, the flight of Iberian young to former colonies, and an airline that won’t be taking them.
From Greece, we’ve got another resignation from government, the return of electricity to a sweltering hospice, a Samaras meeting, another warning from another German, a visit from Bubba. a Prime Ministerial strike-breaking raid, more racist attacks [including a video].
From Italy, we’ve got a prime ministerial coup against provincial governments, a Sicilian mayor’s warning of civil war, a rating agency’s back-pat, and more legal worries for a seemingly resurgent Baron of Bunga Bunga.
There’s a Cyprus bank upgrade, a German business upbraid, suspicions of deep French agendas, and a very untransparent European Parliament.
We begin with a trio of videos.
BBC: Wildfires sweep across Southern Europe
Just as austerity cuts are demolishing firefighting services, an epidemic of fires has erupted in Greece and other countries along the southern edge of the continent.
From BBC News:
Associated Press: ‘The Dark Knight’ Paris Premiere Cancelled
The Colorado theater midnight Batman massacre carried out by a armor-clad gunman who told police “I am the Joker” has a European echo:
From Deutsche Welle: Greece – Crisis in sports
A stark report on the sad plight of competitive sport in the country that gave us the Olympics:
IMF economist resigns in anger
The International Monetary Fund, the critical third member of the Troika now engaged in the deconstruction of Europe for the benefit of investors, is riddled with incompetence and hacks, declares one of its leading economist in a tempestuous resignation letter.
What’s even worse, senior officials ignored clear warnings of the approaching economic crisis.
From Ian Talley of the Wall Street Journal:
A senior International Monetary Fund economist is resigning from the Fund, writing a scathing letter to the board blaming management for suppressing staff warnings about the financial crisis and a pro-European bias that he says has exacerbated the euro-zone debt crisis.
“The failure of the fund to issue [warnings] is a failing of the first order, even if such warnings may not have been heeded,” Peter Doyle said in a letter dated June 18 and copied to senior management.
Doyle is formerly a division chief in the IMF’s European Department responsible for non-crisis countries. He currently acts as an adviser to the Fund but is expected to officially leave in the fall.
“The consequences include suffering [and risk of worse to come] for many including Greece, that the second global reserve currency is on the brink, and that the Fund for the past two years has been playing catch-up and reactive roles in the last-ditch efforts to save it,” he said in the letter.
“After twenty years of service, I am ashamed to have had any association with the Fund at all,” he said in the letter. Mr. Doyle wasn’t immediately available for further comment.
More from the BBC:
He writes of “incompetence”, “failings” and “disastrous” appointments for the IMF’s managing director, stretching back 10 years.
In the letter, dated 18 June and obtained by the US broadcaster CNN, Mr Doyle said the failings of IMF surveillance of the financial crisis “are, if anything, becoming more deeply entrenched”.
He writes: “This fact is most clear in regard to appointments for managing director which, over the past decade, have all-too-evidently been disastrous.
“Even the current incumbent [Christine Lagarde] is tainted, as neither her gender, integrity, or elan can make up for the fundamental illegitimacy of the selection process.”
CNN has posted the full text of the letter [PDF].
Such are the minions of money now dissecting the prone corpse of material and human capital across the globe, selling off the parts and stilling any last, faint cadaveric spasms.
Another harsh eurobankster warning
They’re coming so regularly now you could almost set your watch by them.
But then the euro’s an increasingly hard sell this days, going these days for under $1.22, while the Canadian dollar is within a hair’s breadth of the U.S. dollar [98.70 cents, as we write].
The euro zone political commitment to the euro should not be underestimated, European Central Bank Executive Board member Benoit Coeure said on Friday in a warning to those doubting the single currency’s survival.
In a speech in Mexico City, Coeure said there was a lack of understanding about the euro zone’s approach to tackling the debt crisis and that he disagreed with those who said the bloc did not have the right tools to fix the situation.
“I would caution those who have doubts about the euro, that they underestimate the political commitment to it at their own risk,” Coeure said.
“The ambition to provide long-term foundations for EMU in less than a decade is a historical step of great significance,” he added.
So what’s a stake? A graphic answer
David Keohane of FT Alphaville reports on a new JP Morgan Chase report speculating on the costs to Finland of a eurozone exit [insignificant, according to the banksters].
But what caught our eye was this chart from the bank report, showing the net international investment positions [NIIPs] of eurozone countries.
Here’s how Wikipedia defines the term:
The difference between a country’s external financial assets and liabilities is its net international investment position (NIIP). A country’s external debt includes both its government debt and private debt, and similarly its public and privately held (by its legal residents) external assets are also taken into account when calculating its NIIP.
A country’s international investment position (IIP) is a financial statement setting out the value and composition of that country’s external financial assets and liabilities.
Basically, the more a country appears on the right hand side of the chart, the greater its potential losses in the event of a eurozone exit or collapse. [For where the U.S. Stands, see this graphic nightmare.]
And look at Germany’s position, the best single illustration of why Angela Merkel is so desperate to destroy national budgetary autonomy.
And on to Spain. . .
Word of final Spailout total coming in September
We presume this means Spain will go through the same kind of vetting now underway in Greece.
The eurocrats are playing with fire in holding off on their announcement, given the high tensions inside the country, where growing numbers are taking to the streets in outrage over the austerian demands.
The exact amount that Spain will borrow from the euro zone to recapitalize its banks will only be determined in September, euro zone finance ministers said on Friday, after approving the terms of a loan of up to 100 billion euros ($123 billion).
In return for the loan, Spain will have to restructure its banking sector and its assets, and improve governance and regulation, the Eurogroup of euro zone ministers said in a statement.
But Madrid will also have to honor its government deficit reduction targets and commitments on structural reforms and rebalancing of its economy, undertaken under separate procedures of the European Union.
Spanish region on brink of collapse
Following up on today’s earlier post about Spain, now comes word that one of the countries major regions is about to default.
The announcement sent Spanish stocks on the biggest plunge in the last two years and dropped stock markets across the continent.
From the London Telegraph’s Emma Rowley and Martin Roberts:
Spanish shares suffered their biggest one-day drop in two years, leading European markets’ plunge downwards, after a major Spanish region said it needed rescuing by its cash-strapped government and the country braced for more recession.
The IBEX share index in Spain fell 5.8pc, while Italy’s own FTSE MIB lost 4.4pc, after Valencia became the first region to seek a bail-out from a new fund setup by the Spanish central government, which is itself under heavy financial strain.
As fears rose, the sell-off was seen across Europe, with Germany’s DAX dropping 1.8pc and the UK’s benchmark FTSE 100 losing 1.1pc to close at 5,655.04.
“Like other regions, Valencia is suffering the consequences of liquidity restrictions in markets as a result of the economic crisis,” the regional administration said, as it announced it was preparing to tap the Spain’s new €18bn (£14bn) emergency-loan fund for its regions for an undisclosed amount.
More from ANSAmed:
Valencia is the first Spanish region to seek assistance from the country’s Liquidity Fund, set up by the Spanish government to help financially troubled regions face payment deadlines. Ciscar did not clarify how much aid Valencia is seeking from the finance ministry, but sources close to the government council said the region sought roughly three billion euros. Spain’s finance minister, Cristobal Montoro, after initially denying the loan request, then admitted that it had been approved by Valencia’s government council, and that it “will oblige the imposition of new conditions” on the region in order to respect the deficit ceiling established for the year.
Spain’s council of ministers created the Liquidity Fund on July 13, with a financing of 18 billion euros, to guarantee liquidity for regions that are unable to face essential payments, such as for pharmaceuticals and to avoid debt default.
Meanwhile, Iberians flee to former colonies
No surprise, given that they share common languages and many traditions.
Many young Spanish and Portuguese citizens are leaving their homeland in search of better opportunities abroad, with former colonies being among the more popular destinations, reports say.
In the first half of 2012, 40,000 Spaniards left home – almost twice as many as in the same period last year, figures from the National Statistics Institute show.
The numbers are even higher for foreign nationals in Spain, of which 229,000 left during the last six months.
As such, Spain has seen its overall population drop by 33,162 people this year to 46,163,116, newspaper El Pais reported Wednesday (18 July).
The latest report by the Organisation for Economic Cooperation and Development (OECD) said labour migration to Spain from outside the EU also declined by 90,000 over the last year, adding to fears that the country could suffer a ‘brain drain’.
But they won’t be fleeing on Ryanair
That’s because the airline is cutting service to both countries as a result of higher airport fees imposed as part of the austerity memoranda.
From Meadhbh McHugh of the Irish Times:
Ryanair is to cancel 11 routes from Madrid and four from Barcelona, as well as making deep cuts in flights and frequencies from both airports.
It said the cuts were in response to the Spanish government’s doubling of airport departure taxes at both Madrid and Barcelona El Prat on July 1st.
Ryanair say it objected to the “extortionate” tax increases, claiming they were particularly damaging to Spanish tourism, jobs and the economy at a time when Spanish youth unemployment stands at 50 per cent.
In Madrid, Ryanair chief executive Michael O’Leary claimed the cuts alone would cause a “combined loss of 2.3 million passengers and over 2,000 jobs at Madrid and Barcelona El Prat airports to other lower cost airports elsewhere in Europe, where Ryanair continues to grow”.
The reductions will take place from November.
Bombshell: Eurobank blocks Greek bonds as collateral
Back during the Vietnam war, the U.S. military launched a propaganda program called “Hearts and Minds,” capitalizing on a term frequently invoked by President Lyndon Johnson.
The idea was to turn captured enemy soldiers into apostles of the American-backed Saigon regime.
Other soldiers laughed at it, joking “Grab ‘em by the balls, and their hearts and minds will follow” [a sentiment also echoed in Washington at the time].
Well, now the eurozone bank is grabbing Greece by the balls.
From Agence France-Presse:
The European Central Bank said Friday it will stop accepting Greek sovereign bonds as collateral but will review the situation once a team of international auditors has completed its visit to Athens.
In the interim, Greek banks could continue to get funding from the Greek central bank, the ECB said in a statement.
The decision to suspend Greek sovereign bonds and other assets backed by the Greek government came with the expiry next week of a bond swap launched earlier this year, the ECB explained.
Greek sovereign bonds “will become for the time being ineligible for use as collateral in eurosystem monetary policy operations,” the ECB said.
However, the ECB said its policy-setting governing council would re-assess the eligibility of the bonds once the so-called ‘troika’ of experts from the ECB, the European Commission and the International Monetary Fund had completed their review of the progress made by Greece in meeting the conditions of its bailout programme.
More from Reuters:
Greek banks had tapped a total of €62 billion in ELA funds from the Greek central bank at end-June, in addition to €74 billion in regular ECB liquidity operations.
Greek banks would almost certainly go bust if their central bank funding was withdrawn.
Banks in other euro zone countries also own large chunks of Greek debt, though they are more likely have other assets to use as collateral and are thus not hit as hard.
The ECB requires guarantees in the form of eligible collateral from all banks that seek central bank funds in its lending operations.
Without the country’s cash drawer empty and unemployment at staggering levels, the ECB is dropping the hammer.
Grabbed by the balls indeed!
Another resignation, this time in Greece
The latest to quit is the country’s chief privatization officer.
He’s not quitting because he’s heartbroken about the selloff of the public’s property, however.
No, he’s resigning because the country’s not doing enough to sell off their assets quickly enough.
That should get him a cushy job at a bank or brokerage.
From Athens News:
The chief executive of the country’s privatisation agency, Costas Mitropoulos, resigned on July 19.
In an open letter to Finance Minister Yannis Stournaras, Mitropoulos clarifies that his resignation will take effect on August 10, in an effort to maintain continuity and also to have time to brief the new CEO.
Explaining the reason for his resignation Mitropoulos states, “In order to accelerate privatization and to carry out the projected result, the government must provide full support for the administration of the Hellenic Republic Asset Development Fund (HRADF), facilitate all actions, and promote privatization as planned. This will give a message of reliability, professionalism and commitment to those looking to invest in Greece. The newly elected government has not given the support needed… Instead, they have indirectly yet systematically reduced the prestige and credibility in the eyes of potential investors. Furthermore, no set date has been given to the Chairman of the Board to resume meetings and indeed accelerate the privatization program. In these conditions I can no longer work professionally and effectively in my role as CEO entrusted by the state in July 2011.”
One reason for his resignation might be this incident reported by Keep Talking Greece.
While we deplore the whole notion of sacrificing national assets to line the pockets of speculators, if you are going to do it, the Greek example should be your model. On the other hand, if folks we conspiring to hold on to assets on the assumption that default was both inevitable and imminent, we’d sympathize with a little bit of creative obstructionism.
Power restored to Athens hospice
All it took was a little bad press to prompt a Prime Ministerial scramble.
We noted in our last EuroWatch that power had been cut to a hospice because of an unpaid bill — a bill the hospice couldn’t pay because the government was months behind on its allocation for the hospice.
That left hundreds of sick people without air conditioning during a fierce summer heat wave — and left Antonis Samaras red-faced.
So calls were made and power was restored.
Electricity was restored at the Aniaton Hospice in Kypseli, central Athens, on Friday, following the intervention of Prime Minister Antonis Samaras.
Power had been cut off at the charity care home for pensioners with disabilities on Thursday, as the center had been unable to pay a 600-euro property tax that was levied through its electricity bill.
According to reports, the premier’s office contacted Public Power Corporation (PPC) CEO Arthouros Zervos on Friday and was informed that the power cut had been the result of a misunderstanding, as the electricity bill had been issued in the name of an individual.
On Thursday, the president of the foundation that runs the Kypseli charity, Ioanna Iliadi, told journalists that the charity was unable to pay the tax because it is owed 3 million euros by Greece’s main healthcare fund, EOPYY, leading to the home being unable to pay its 170 employees since March as well as to shortages in the food supplies destined to the 235 Aniaton Asylum residents.
Samaras to meet with dynamic duo
The pair in question? The bosses of the IMF and the eurobank.
Just what’s on the agenda isn’t explained.
From Harry Papachristou of Reuters:
Greek Prime Minister Antonis Samaras spoke on the phone to European Central Bank President Mario Draghi and IMF chief Christine Lagarde earlier on Friday and has agreed to meet them in the coming weeks, his office said.
“(Samaras and Draghi) had an initial discussion on economic developments in Greece and Europe and they agreed to meet immediately after August,” Samaras’s office said in a statement sent by a text message.
Another German issues another ultimatum
They just keep on coming.
German newspaper reports. . .quoted a member of a political party in the German coalition government as saying euro zone countries should comply with agreed reforms or leave the bloc.
Asked if Greece could stay in the euro, Gerda Hasselfeldt, a senior member of the Bavarian Christian Social Union (CSU), sister party to Chancellor Angela Merkel’s Christian Democratic Union (CDU) said it was up to Greece to implement measures that had been agreed.
“If a country is unwilling or unable to comply with its obligations, it must leave the euro zone,” she added in an interview to the Rheinische Post.
Relax, Greece! Bubba’s on his way!
And just as he “reformed” the U.S. by singing NAFTA and abolishing FDR’s banking regulations, he’s out to sell the Greeks on the virtues of “structural reforms.”
From Athens News:
Thirteen years after his last visit and eleven years after leaving the White House, former US president Bill Clinton returns to Athens on Sunday 22 July.
The former president is coming to promote a new initiative that seeks to redefine the country’s image abroad by disassociating Greece from its negative perceptions.
The Greek Americans behind the Hellenic Initiative Programme also want to support the work of various charity organisations, back the implementation of structural reforms and encourage direct foreign investment.
Given that he’s a former President married to the current Secretary of State, Clinton’s sell job carries clout.
Samaras breaks a strike
It’s not that we expected anything different from the austerian New Democracy hack. But what is staggering is the vicious little semantic twist he uses to justify strike-breaking and union-busting.
It comes right out of the American Republican Party playbook.
Scuffles broke out between riot police and protesters Friday when a prosecutor was dispatched to reopen the Halyvourgia steel plant in Aspropyrgos, western Attica, following a nine-month strike by workers that had effectively closed down the facility.
Police had been on standby when the gates of the facility opened at 5.30 a.m. and clashed with striking workers and members of the Communist-affiliated PAME labor union.
The senior plant manager sustained head injuries during the fracas while some protesters clashed with employees who wanted to return to work. Six people were arrested, charged with committing violence, and later released pending trial.
Friday’s intervention followed a court order issued a month and a half ago which deemed the strike by Halyvourgia workers illegal.
More from Greek Reporter’s A. Papapostolou:
State-run NET television said conservative Prime Minister Antonis Samaras had intervened personally to reopen the plant after a ruling last month by an Athens court declaring the strike illegal.
“The law will be upheld and people’s sacred right to work will be guaranteed,” NET quoted Samaras as saying.
The strikers are protesting layoffs at the private Elliniki Halyvourgia plant, which last year employed about 400 staff, and plans by the factory’s operators to introduce more part-time work.
“The decision (to strike) was taken by a majority of the workers at a general assembly. That is a democratic right,” Giorgos Sifonios, head of the strikers’ organizing committee, said. “We are not giving up our struggle.”
So a strike is a violation of the “people’s sacred right to work?” [emphasis added].
Ah, the twisted semantics of austerity.
Racist attacks surge in Greece
We’re written a lot about the rise of racism, fueled by resentment of immigrants, as one of the inevitable concomitants of economic crises, and we’ve written myuch about the role played in Greek assaults by members of Golden Dawn — those latter-day Nazis, complete with the Hitler salute.
Now comes another report warning of the dangers of racial violence in the country.
From Greek Reporter’s Andy Dabilis:
A rise in anti-immigrant sentiment in Greece – including within a new coalition government – has led to an avalanche of assaults, at least 300 of which have been catalogued by human rights groups who called on the police to offer better protection. Nearly half of police officers, however, reportedly voted for the anti-immigrant neo-Nazi group Golden Dawn which won 18 seats in Parliament in the June 17 election, but has denied it participated in the violent attacks.
Greece is a gateway to the European Union and attracts immigrants, particularly from Africa, the Middle East, Afghanistan and Iraq, many of whom want to use the country for a jumping-off point. Prior to the elections, a coalition government rounded up scores of thousands of illegal immigrants and set up detention centers to hold them. New Prime Minister Antonis Samaras, overseeing another coalition government, also said he wants to force illegal immigrants out of the country, and Greece is asking for European Union help to handle the overflow on its shores and land borders.
The anti-racism campaigners said five Indian and Pakistani immigrants were injured on July 16 when they were attacked by some 20 masked men in their homes in Menidi, six miles north of Athens. One alleged victim, Indian immigrant Vije Kumar, had extensive cuts and bruises and said he was beaten with clubs and metal bars. “It was 10 o’clock at night and I was sitting outside eating because it was really hot … suddenly about 20 men appeared, maybe more. They were all wearing hoods. They started hitting us,” Kumar, a 40-year-old frame maker who has lived in Greece for 12 years, told the AP. “We didn’t realize what was happening in the beginning. They really beat us badly. It was like they were trying to kill us.”
And here’s an Athens News video featuring the victims of the Menidi assaults:
Off we go to Italy. . .
Italy to dissolve most provincial governments
Amazingly, the latest move to strip local governments of autonomy has received little coverage, and there’s a lot more we’d like to know.
The only report we have is from ANSAmed, which provides only a single paragraph:
The government is set to dissolve 64 of Italy’s 107 provincial governments, assigning their functions to regional authorities as part of efforts by Premier Mario Monti’s administration to save public money. The Cabinet on Friday decided to ‘save’ 43 provincial authorities, including 10 in the areas surrounding big Italian cities, government sources said.
It’s an astounding move, and in the prevailing direction. One of the major goals of “structural reform” is the destruction of local sovereignty.
Sicilian mayor warns of civil war over austerity
Civil war is something Sicily’s seen numerous times, and while we presume there’s some hyperbole involved, it’s still an ominous phrase to be head from the mayor of the island’s largest city and the fifth largest in Italy.
From the London Telegraph:
The misery caused by Italy’s financial crisis could spark a “civil war” in the southern island of Sicily, the mayor of regional capital Palermo said on Friday.
“Because of an explosive mix of despair felt by many families and the stranglehold of organised crime, a civil war could even break out,” mayor Leoluca Orlando told the economic daily Wirtschaftsblatt.
“Sicily is the Greece of Italy,” said Orlando, a member of the anti-corruption Italy of Values party and a staunch anti-Mafia champion.
“We’ve managed to stay afloat only because we’re a part of Italy,” he added.
“Many businesses are shutting, families on low incomes can no longer pay their electricity bills,” said Orlando, who has been mayor since May.
Fitch gives Italy a pat on the back
Not an upgrade, but a firm attaboy.
Fitch Ratings on Thursday affirmed Italy’s credit rating at ‘A-‘ with a ‘negative’ outlook, citing recent and prospective structural reforms that would enhance the growth potential of the economy.
The short-term foreign currency rating is affirmed at ‘F2′ and the country ceiling at ‘AAA’.
“Fitch recognises recent reform to the labour market and measures to render the economy more flexible,” the agency said in a report.
According to the report, the affirmation also reflected the demonstrated commitment of the government to reducing the budget deficit and public debt, as well as Parliament’s adoption of a balanced budget amendment to the Constitution and ratification of the Fiscal Compact.
Fitch said that the government’s four fiscal packages, the most recent announced in early July, over the last year and equivalent to 5 percent of GDP should be sufficient to reduce the budget deficit below 3 percent of GDP this year to place public debt on a downward path from 2013.
Il Cavaliere dodges prosecutorial summons
Known as Il Cavaliere [the knight], Slivio Belusconi, the baron of Bunga Bunga, did ducked out on a summons to appear for questioning about bribes and favors allegedly extorted from him by wiseguys.
The timing couldn’t be worse, given that he’s recently announced his intention to run for another term as prime minister — a post that would immediately confer legal immunity as long as his term in office lasts.
From Corriere della Sera in Milan:
The Palermo public prosecutor’s office summoned Silvio Berlusconi for questioning on 16 July but the former prime minister declined on the grounds that he had to attend a meeting with a group of economists. The aim of the summons was to question the former People of Freedom (PDL) leader as a material witness in the investigation into State-Mafia negotiations in the early 1990s to put an end to Cosa Nostra-organised violence.
According to well-informed sources, the Palermo prosecutors want further details about several interest-free loans made by Mr Berlusconi to Marcello Dell’Utri. Mr Dell’Utri is under investigation on suspicion of being the channel of communication for the 1994 Mafia threats directed at Mr Berlusconi, who at the time was serving his first term as prime minister. Mr Berlusconi is understood to have refused to travel to Palermo, claiming as “legitimate impediment” a meeting of economists and politicians to discuss the euro, the crisis and Europe. The eight-hour meeting, sponsored by former minister Antonio Martino, was held behind closed doors at Villa Gernetto, an 18th-century stately home at Lesmo in Brianza.
Magistrates investigating the negotiations between central government and the Mafia are working on the premise that, starting with the 1992 murder of Christian Democrat politician Salvo Lima, Cosa Nostra sought to put pressure on the upper echelons of government to obtain concessions of various kinds. Prosecutors maintain that the advances did not encounter very much resistance.
More details from a second Corriere della Sera story:
The payments that Silvio Berlusconi has made to Marcello Dell’Utri over the past ten years come to a tidy €40 million. According to public prosecutors, it is hush money paid by the former prime minister to one of his closest – and most Mafia-implicated – collaborators. Marcello Dell’Utri is alleged to have induced Silvio Berlusconi to make handsome payments, some of them recent, for his silence over uncomfortable details and other matters pertaining to the senator’s dangerous relationships with Mafia bosses. Payments are thought to have continued until just before the Court of Cassation ruling that could have sent the senator to prison or forced him into a spectacular flight from justice. However, Marcello Dell’Utri avoided a stretch behind bars when Italy’s supreme court quashed his sentence, although the ruling confirms his relations with Cosa Nostra during the Seventies and Eighties. Palermo prosecutors, however, maintain that the extortion continued.
Only half of the money that poured into Senator Dell’Utri’s account is formally justified by the purchase of Villa Comalcione at Torno on Lake Como, which he sold to the former PM for €21 million on 8 March (the day before the supreme court’s ruling), despite a 2004 valuation which set the price of the luxury residence at just €9.3 million. There is no official reason for the other transfers from the former prime minister’s bank account into that of the senator and his wife, all of which are described as “interest-free loans”. The story is the same for gifts of bank securities.
For more on the alleged extortionate and its suspected beneficiary, see this September story from the same paper.
A bank upgrade — in Cyprus
While Italy got a pass, one bank actually got an upgrade, albeit in another Mediterranean country.
Fitch Ratings has upgraded Cyprus Popular Bank’s (CPB) Viability Rating (VR) to ‘cc’ from ‘f’ following the completion of the government recapitalisation. CPB’s support-driven Issuer Default Ratings are unaffected.
Fitch has upgraded CPB?s VR as a result of the partial restoration of its capital base through a EUR1.8bn capital injection by the Cypriot government, which has now become the major shareholder with 84% stake.
François Hollande’s long, hot summer cure?
Is the French President’s plan to hire lots of jobless folk for state-paid jobs a ploy to prevent further violence on French streets this summer?
That’s the implication of this Reuters report from Nicholas Vinocur of Reuters:
President Francois Hollande’s plan for tens of thousands of state subsidized jobs will not fix France’s stagnant economy but it may be enough to keep angry unions and jobless youths off the streets as layoffs mount after the summer.
Two months into his presidency, Hollande faces a gathering storm as unemployment climbs past 10 percent and threatens to jump even higher this autumn.
Worsening prospects for many jobless youths have fed frustration in the poor suburbs that ring major French cities, which saw riots in 2005. France’s militant unions, alarmed by mounting factory closures, are bristling for a fight.
“My hypothesis is that after holidays there will be social upheaval because people will no longer be able to express their frustration by voting,” said Dominique Reynie, head of political think tank Fondapol.
“Everything Francois Hollande has done until now has been to prepare the French for a shock in the autumn.”
Yep, get ‘em well fed before the chop.
An upbraiding for the Germans from a eurocrat
Translation: You got rich off the euro, now help out.
From Agence France Presse:
Germany’s top companies and executives must do more to support the euro, the EU’s justice commissioner Viviane Reding said in a magazine interview.
“I would expect Germany’s major companies and their top executives to come out more in support of the European cause. After all, they’ve benefitted enormously from the single market and from currency union,” Reding told the weekly Manager Magazin’s latest edition to be published on Friday.
Germany, Europe’s biggest and strongest economy and effectively its paymaster, should not forget that it, too, had profited greatly “from the great confidence placed in it by its neighbours,” Reding said, pointing to European countries’ support for German reunification.
The current debt crisis cannot be resolved without mutual trust.
“We won’t get any further if we think in categories of incentives and sanctions,” Reding argued, referring to Berlin’s rejection of pooling debt in the single currency area.
Transparency? We don’t need no stinkin’ transparency
Such is the response of many members of Europe’s parliament to requests for for financial information required by a law that they passed.
What’s most surprising is their evident contempt for the law.
Valentina Pop of EUobserver:
From frivolous responses, illegible scrawls, to no answers at all, several members of the European Parliament are not serious when it comes to declaring their financial interests, a survey carried out by an NGO has shown.
The lack of clear rules prohibiting MEPs to keep side jobs as consultants made headlines last year when the Sunday Times uncovered three deputies willing to take money from lobbyists in return for placing amendments.
Following the so-called cash-for-amendments scandal, the Parliament adopted an ethics code and, while not banning side jobs, made it mandatory to declare any other occupations in a “declaration of financial interests” posted on the Parliament’s website.
But six months after they were introduced, Friends of the Earth Europe, a Brussels-based NGO focusing on transparency issues, has discovered that many of the declarations are empty or contain bogus information.
Read the story for specific examples, including one bloke who listed his previous employment as “master of the universe.”