Quote of the day: Five-star resort socialism

It’s about time somebody said it.

From María Sosa Troya of El País:

The conference organized by the Socialist International in Portugal between February 4 and 5 garnered little attention among the world’s media, but one moment went viral on the social networks. Beatriz Talegón, the Spanish-born secretary general of the International Union of Socialist Youth (IUSY), lambasted delegates at a luxury hotel in the chic beach resort of Cascais, who included representatives of the ruling French PS and Spain’s Socialist Party (PSOE), accusing them of being out of touch with the problems facing young people.

“When people are taking to the streets in Madrid, in Brussels, in Cairo, in Beirut, they’re fighting for what we here, as convinced socialists, defend. [...] Unfortunately, it has not been us socialists taking enthusiastically to the streets and mobilizing,” said the 29-year-old, looking around at her increasingly uncomfortable audience, before continuing: “I am surprised that we claim to lead the revolution from our five-star hotels, traveling in luxury cars. When you political leaders tell people that you understand them, that you support them, that we are socialists, do you really feel their pain inside? Can we really understand them from a five-star hotel?”

Read the rest.

Here’s a video of her remarks. We’ve not been able to find a English-subtitled version.

 

Quote of the day: The road not traveled

Rosa Luxemburg, quoted by Paul Le Blanc in Links International Journal of Socialist Renewal:

“Socialist democracy does not come as some sort of Christmas present for the worthy people who, in the interim, have loyally supported a handful of socialist dictators”, Luxemburg argued. Genuine socialism was inseparable from freedom, and “freedom must always be freedom for those who think differently”. She warned: “Without general elections, without unrestricted freedom of press and assembly, without a free struggle of opinion, life dies out in every public institution, becomes a mere semblance of life, in which only the bureaucracy remains as the active element. . .at bottom, then, a clique affair — a dictatorship, to be sure, not the dictatorship of the proletariat but only the dictatorship of a handful of politicians. . .”

Quote of the day: Death of the social contract

From Salvatore Babones, originally published in Australian Options Magazine and reprinted in Truthout:

Over the past forty years, America has become much more politically correct with regard to gender and sexualiy. Men do not openly display calendars featuring topless models on their office walls, and public gay bashing is now considered inappropriate, even in Republican circles. But gender and sexuality are issues that transcend social class. Even rich, powerful men have gay children – or may be gay themselves. Even rich, powerful men have wives.

On every other issue, America – or at least American politics – has swung violently to the right. The more social class is involved, the further to the right America has swung. Poverty was once a social disease to be cured; it is now an individual crime to be punished. Put it down to individualism, conservatism, neoliberalism, or whatever -ism you want, America is now the world’s greatest reactionary force.

Unfortunately, all the evidence is that the rest of the world is following America down the road to perdition. Nowhere are national health insurance schemes, access to free education, and old age pensions being expanded. Nowhere is the world moving forward. Everywhere the social gains of the twentieth century are either being eroded, or destroyed.

EuroWatch: Debt, taxes, Spailout, miseries

It’s the D-word that’s much in vogue in Europe these days, with debt on the tongues of all the right eurocrats and banksters. Harnessing the debt monster is the play, rather than the simple and rational expedient of a jubilee. We’ve got pronouncements from the German and Dutch finance ministers, a harsh word from the man who broke the Bank of England, and a call for a financial autocrat.

Meanwhile, the Swiss military is training for a European collapse.

Major tax hikes and other austerian measures are about to inflict more misery on Portugal, prompting the inevitable protests and a regional election loss for the ruling party. The Spailout’s drawing nearer as austerity bites deeper, Spanish banks get another downgrade, the mass exodus continues, the secession struggle is heating up, and the national dropout rate is soaring — wwhile demand for welfare is rising as funding for programs is cut. And the Italians are saying the cost of a Spailout will drive them deeper into recession.

The British health service faces a corporate takeover, the country gets an IMF rebuke and an auditor’s seal of approval. Iirish unemployed face new bureaucratic obstacles, Cypriots vow an austerity fight, French corporateers declare war on the government, and European car sales continue to fall.

The Iron Chancellor’s kinder, gentler approach

Yep, Angela Merkel’s got a soft heart. [Either that or the threat of common currency exports is causing her some discomfort, given the potential impacts on German industry.]

The “new Merkel,” via euronews:

Schäuble again invokes the D-word

German money minister Wolfgang Schäuble has been resolutely flogging the debt issue, declaring that the only solution to the eurocrisis is the relentless sacrifice of lives and livelihoods to the debt beast.

Only through ruthless, remorseless payments to the private investment sector, he says, will ensure the S word, sustainable development, the perpetuation of an economic system in which finance and consumerism are exalted.

From Agence France-Presse:

Slashing government debt is the only way to put Europe back on a path of sustainable economic growth, German Finance Minister Wolfgang Schaeuble said on Monday.

“If we want to achieve sustainable growth, we have to reduce the sovereign debt in nearly all advanced economies,” Schaeuble said in a speech at the Thai central bank.

“There is no choice (but) to reduce in the medium term the over-indebtedness,” he added.

“The most important thing for growth is confidence — confidence by investors and confidence by consumers… Long term stability is the most efficient precondition for regaining confidence,” Schaeuble said.

Read the rest.

Decades to debt cuts says Dutch central bankster

Here’s another of those “duh” stories.

From Reuters:

It may be decades before debt levels in the euro zone drop below the EU limit of 60 percent of economic output, but states should still aim to beat that target, European Central Bank policymaker Klaas Knot said on Monday.

The currency bloc needed a strong authority to enforce a reduction of debt levels, Knot, who also heads the Dutch central bank, said.

His downbeat assessment of how long it might be before states again met the standards on debt they had to adhere to when they joined the single currency added to a growing debate about whether those at the sharp end of the debt crisis should be allowed to scale back their austerity programmes.

Read the rest.

For the umpteenth time, it’s not debt that’s the problem, it’s a slavish devotion to its service that’s the real killer.

The transformation of citizens from autonomous political actors into passive servants of private finance is lethal, both to the democratic impulse and to the lives of every living thing on earth.

It’s corporate greed that spends billions to manipulate our minds, and not just on election days. It’s no coincidence that the same minds that shaped government propaganda efforts during World War I became pivotal players in advertising [Edward Bernays] and in molding public opinion [Walter Lippmann].

Some Teutonic Soros Tsuris

Yep, the billionaire who broke the Bank of England is coming down hard on Germany’s reluctance to cough up cash and take on it’s new role as “benevolent hegemon.”

Yes, he really said that.

From Capital.gr:

The European Union could be destroyed by the “nightmare” euro crisis, and Germany needs to take the responsibility to save the common currency, billionaire fund manager George Soros said on Monday Soros, who made his mark as an investor on a big bet against the British pound in 1992, said the other alternative is for Germany — the euro zone’s biggest economy — to simply leave the 17-member currency bloc.

The crisis “is pushing the EU into a lasting depression, and it is entirely self-created,” said Soros, chairman of Soros Fund Management. “There is a real danger of the euro destroying the European Union,” he said, according to Reuters.

“The way to escape it is for Germany to accept … greater commitment to helping not only its interests but the interests of the debtor countries, and playing the role of the benevolent hegemon.”

Read the rest.

Nowhere, of course, does he suggest a debt jubilee or even a default, general or selective.

No, he wants his own class ensured of future profits.

And Germany’s money minister calls for a financial Führer

Schäuble wants a single official empowered as the Lord High Chancellor of Money, with sweeping powers over the budgets of not-so-sovereign states.

From Capital.gr:

Germany’s finance minister called on Tuesday for the creation of a ‘currency commissioner’ for the euro zone with wide-ranging powers over national budgets as part of an overhaul of the EU treaty to deepen integration and end the bloc’s debt crisis.

Wolfgang Schaeuble also backed reform of the European Parliament to ensure that only lawmakers from countries affected by a particular issue could vote on it, CNBC reported.

He said he had spoken with Chancellor Angela Merkel about the proposals, adding that she was “somewhat more cautious” about them.

Speaking to reporters on his way back from an Asian tour, Schaeuble said the European Union should start to discuss his proposals for treaty change at a summit in Brussels this week.

Read the rest.

Swiss army trains for European collapse

While popular myth paints Switzerland as a pacifist country, it’s anything but.

In fact, until recently Switzerland may have been the most heavily armed nation in Europe, if you counted in the reserves.

The country is also ready for war, with fallout and blast shelters in place ready to house the entire population, though while all roads, bridges, and tunnels leading into the country were mined and fortified until late in the last century, those defenses have been downsized in recent years.

And now, with the continent in chaos, the Swiss military is preparing for the worst.

From Valentina Pop of EUobserver:

The Swiss army is preparing for possible internal civil unrest as well as waves of refugees from euro-countries as the economic crisis drags on.

Switzerland, a non-EU, non-euro country landlocked between eurozone states, last month launched a military exercise to test its preparedness to deal with refugees and civil unrest.

“It’s not excluded that the consequences of the financial crisis in Switzerland can lead to protests and violence,” a spokesperson of the Swiss defence ministry told CNBC on Monday. “The army must be ready when the police in such cases requests for subsidiary help.”

Some 2,000 officers took part in the “Stabilo Due” military exercise in eight towns around the country, based on a risk map detailing the threat of internal unrest between warring factions and the possibility

If you think Obama’s a socialist, listen to one

Upton Sinclair was a socialist who almost became Governor of California in 1934, defeated only when state Republican Chair and film mogul Louis B. Mayer produced a series of ads shown in theaters across the state arousing that base fear that always accompanies hard economic tears, the fear of an influx of immigrants eager either to seize jobs or benefits.

Sinclair was both a socialist and a prolific writer, and his best known book, The Jungle [1906], an expose of the Chicago meat-packing industry, led directly to the passage of the Pure Food and Drug and Meat Inspection acts.

This extract from Chapter 28 of The Jungle features the speech by a socialist orator that leads protagonist Jurgis Rudkus into the movement:

Part 1

Part 2

And here’s a video about the ads produced by Mayer’s film crews that led to the defeat of Sinclair’s gubernatorial campaign on the ticket of the End Poverty in California movement, posted by veteran journalist Greg Mitchell, author of a history of the 1934 Sinclair gubernatorial run, The Campaign of the Century:

So the next time you hear a Republican proclaim the “Obama’s a socialist” chestnut, send them the link to this post.

H/T to Reality Zone.

GreeceWatch: Angry seniors, Germans, jobs, more

The finance minister made a trip north Tuesday, hustling his German counterpart and coming back empty-handed. But he’s plotting his own surprise, a war reparations for the country that sent Greece an earlier incarnation of the Men in Black. Meanwhile, the French president says he wants to give more time to inflict those immiserating cuts.

A crowd of retirees, angry at coming pension cuts and increasing problems getting medical care and medicines, paid a noisy visit to the health ministry, while reporters from Athens News, who haven’t been paid in ages, are calling a job action.

Parliament’s pondering stripping immunity from a thuggish neo-Nazi, Russian tourists are flooding the country, the war of words between the fake and real lefts is heating up, and half of foreign workers in Greece are working without insurance or health benefits.

Finance Minister’s German trip a washout

Yannis Stournaras made his trek to Berlin Tuesday and didn’t even get a lousy T-shirt.

Instead, he got another lecture from his German counterpart.

First, the setup, from ANSAmed:

As leaders of the three parties in the Greek coalition government continue their efforts to sign off on an 11.5-billion-euro package of austerity measures, Finance Minister Yannis Stournaras is on Tuesday due to present the blueprint, and Greece’s plans for reforms and privatization, to his German counterpart Wolfgang Schaeuble in Berlin. The visit, as Kathimerini notes, comes ahead of the scheduled arrival in Athens on Friday of representatives of Greece’s foreign creditors, the European Commission, European Central Bank and International Monetary Fund (known as the troika), whose subsequent review will determine whether or not Greece receives a vital 31.5-billion-euro tranche of rescue funding.

A day before the crucial meeting, German Chancellor Angela Merkel expressed support for Greece and other debt-ridden EU states while insisting that agreed-to reforms must be implemented. In his talks with Schaeuble, Stournaras is expected to repeat Greece’s argument — that a deep recession has hampered reforms — and to sound him out on a possible two-year extension to Greece’s fiscal adjustment period.

Read the rest.

Andy Dabilis of Greek Reporter has the goods on what happened when the two money ministers met:

As Greece prepares to lower the boom again on workers, pensioners and the poor to keep international aid coming, German Finance Minister Wolfgang Schaeuble has warned again that there can be no let-up in austerity measures and reforms.

The hard-liner told Greek Finance Minister Yiannis Stournaras in a meeting in Berlin that, “Most important is that Greece fully implement its obligations,” referring to pending cuts of another $14.16 billion and other demands, including speeding the pace of privatization. Schaeuble also reminded Stournaras that, “It is central for Greece to implement fully its commitments,” his ministry said.

>snip<

Stournaras asked for Berlin’s help in stabilizing the Greek economy and restoring development as the Gross Domestic Product (GDP) is falling. Stournaras also met with German Foreign Minister Guido Westerwelle. A statement published in the Frankfurt Rundschau, Westerwelle warned German politicians who are constantly carping about Greece that what they say travels outside the country and has serious ramifications.

He added, “The euro is not in crisis but is and will remain a stable currency. In Europe, we face a debt crisis which has developed into a crisis of trust. Our policy, that of financial discipline, of solidarity, and orientation toward development gives the same answers. At the same time though, we have to be careful not to harm our prestige in Europe and the rest of the world with statements that are instigated from political party tactics.”

Read the rest.

But the finance minister has a trick up his sleeve

He’s got his staff calculating just how much Germany owes Greece in the form of reparations from the last time Men in Black called the shots in Greece, the men in the black uniforms of the Schutzstaffel and their gray-clad colleagues in the Sicherheitsdienst:

From A. Papapostolou of Greek Reporter:

Greece’s Finance Ministry will calculate the country’s claim for World War II reparations against Germany, Deputy Finance Minister Christos Staikouras said.

The General Accounting Office will make the calculation for the first time, Staikouras said today in response to a question from a lawmaker from the Independent Greeks party. The ministry has begun collecting archival material to be examined by a group of experts, he said.

“The German reparations are a particularly complex legal issue and subject to study and settlement at an international level in accordance with the rules of international law,” Staikouras said.

“The case is still outstanding, and as a country we reserve the right and the possibility to manage it to a satisfactory conclusion.”

Read the rest.

Hollande favors giving Greece more time

While François Hollande and Angela Merkel have proven the best of friends, the French president’s willing to openly advocate for giving the Greeks more time to implement all those gruesome austerity measures, including yet another round of pay and pensions and the sell-off of islands, power grids, and such.

He came out again Tuesday for a kinder, gentler implementation.

From ANSAmed:

French President Francois Hollande said Tuesday he was in favour of granting Greece’s request for more time to hit its economic targets if the troika overseeing application of its bailout conditions gave a positive appraisal of its progress. Hollande said the plan could be “re-applied” without any need for another bailout.

Rowdy pensioners stage a day of rage

Their target was the health ministry, and their anger was directed at the latest austerity measures and their inability to get treatment and medicines because of job actions by doctors and druggists who’ve not been paid by the state, sometimes for months on end.

From Deutsche Presse-Agentur:

Hundreds of protesting pensioners in central Athens on Tuesday stormed the Greek Health Ministry during a rally to protest health care cuts, demanding a meeting with the minister.

Some 300 pensioners briefly scuffled with riot police as they pushed their way into the building, reaching the office of Health Minister Andreas Lykourentzos.

The minister refused to meet with the demonstrators.

The pensioners are protesting plans by the government to further reduce pensions and benefits and the ongoing action by pharmacists and doctors who are refusing to provide medicine and medical care on credit.

Read the rest.

More from Keep Talking Greece:

Members of security tried to stop them from storming the minister’s office,  however the sprightly pensioners would not step back. They chanted slogans demanding from the government to take back measures that decrease their pensions.

Some Greek media report the minister came out asking them to be quiet, other claim, a pensioners’ delegation had a chat with Lykourentzos for just a couple of minutes inside his office.

Inside or outside the office, the issue is Dimos Koumpouris, chairman of IKA-pensioners Association, told the crowd the minister had called them “liars” and “bullies”.

“The minister called us ‘bullies’, he said he doesn’t believe we have to pay for drugs from our own pockets,” Kumpouris told the angry crowd.

Read the rest.

Here’s a short Newsit video [in Greek] via Keep Talking Greece:

University profs face salary cuts

They’re significant, and will take their pay back to levels of 17 years ago.

From Athens News:

University professors have been told to expect an average 17.5 percent pay cut under the new austerity package.

Finance Minister Yannis Stournaras told lecturers’ representatives on Monday that the precise wage cuts will depending on the wage scale.

According to the lecturers who attended the meeting, the proposed cuts are: five percent on those earning up to 1,000 euros monthly; 15 percent on earnings between 1,001 and 1,500; 25 percent on salaries

EuroWatch: Trucks of cash, alarm bells scream

A cacphonous clanging crecendo of alarm bells sounds across Europe, with worried banks readying trucks to haul cash out of Greece as fears of a eurozone exit — even an end to the euro itself — hit a new peak. Meanwhile, rising foiod prices across the globe are raising anxieties in the G20 and eurozome manufacturing dropping again, with Germany taking a major hit.

From a Cassandran musing about too little, too late, there’s a German pension system in peril, more layoffs for Opel, and more spats in Merkel’s party over bond buying.

Lots of alarms in Spain, where the government’s now acknowledged they’re working out their Spailout proposal, fervent hopes of an eurobank response, and the provinces are sinking, their cash running out, while the much-merged Bankia spirals into bakruptcy and the prime minister postures.

France gives us another bank collapse, more spiking jobless numbers, a furious effort to control the political base, and some presidential junketeering.

Italy offers more junketerring, ten cities on the verge of bankruptcy and the threat of a school shutdown, and the impending collapse of one of Europe’s oldest banks.

From Ireland, we’ve got a threatened recall and a falling beerometer, while the British cabinet faces a shakeup as a battle over taxes brews, and grownups move back in with their parents, while the Portuguese government prepares for the Portout and a Fozzie bear rises to the heights of Danish politics as unemployment rises, and Cyprus may join the PIIGS.

We conclude with three stories on car sales and some Polish good sense.

Banksters get ready for the Grexit

They’re fine-tuning their systems, readying fleets of trucks to carry cash, and doing everything necessary for the return to the drachma.

It’s all in preparation for the Grexit, but the measures they’re taking will be in place in the event Spain and/or Italy get the boot — or in the event of the end of the euro itself.

From Nelson D. Schwartz of the New York Times:

Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable. Ford has configured its computer systems so they will be able to immediately handle a new Greek currency.

>snip<

JPMorgan Chase, though, is taking no chances. It has already created new accounts for a handful of American giants that are reserved for a new drachma in Greece or whatever currency might succeed the euro in other countries.

>snip<

Greece’s abandonment of the euro would most likely create turmoil in global markets, which have experienced periodic sell-offs whenever Europe’s debt problems have flared up over the last two and a half years. It would also increase the pressure on Italy and Spain, much larger economic powers that are struggling with debt problems of their own. “It’s safe to say most companies are preparing,” said Paul Dennis, a program manager with Corporate Executive Board, a private advisory firm.

In a survey this summer, the firm found that 80 percent of clients polled expected Greece to leave the euro zone, and a fifth of those expected more countries to follow.

Read the rest.

G20 prepares for global food summit as prices soar

The combination of drought and heavy speculation of the commodities market has sent food prices soaring across the globe.

August was the second month in a row that profits from commodities beat the bond and stock markets, as investors sought refuge in the safety tangible goods — which is good news for them but bad for the rest of us, who are paying more for life’s necessities.

With the global economy in crisis, the G20 nations are under intense pressure to convene a major conference on food prices.

From Tom Bawden of The Independent:

The G20 is under growing pressure to call an emergency food summit after the price of essentials jumped by ten per cent on average in July.

New research shows prices are at a record high following “an unprecedented summer of droughts and high temperatures”. Cereal prices were particularly hard hit, with maize and wheat rising by a quarter and soybeans by 17 per cent, as poor weather decimated harvests in the US, Russia, Ukraine and Kazakhstan, according to the World Bank. The average global food price in July stood six per cent higher than a year earlier.

“Food prices rose again sharply threatening the health and well-being of millions of people,” said World Bank Group President Jim Yong Kim. “Africa and the Middle East are particularly vulnerable, but so are people in other countries where the prices of grains have gone up abruptly,” he added.

The World Bank report also warned that prices could continue to rise this year. “Negative factors – such as exporters pursuing panic policies, a severe El Nino, disappointing Southern hemisphere crops or strong rises in energy prices – could cause significant further grain price hikes,” the report said.

Read the rest.

Eurozone manufacturing records another decline

While the whole common currency area has been in decline, the latest numbers show a particularly sharp decline in the zone’s industrial giant, Germany.

From the Financial Times via CNN:

Eurozone manufacturing contracted for the 13th consecutive month in August, as exports in Germany, the bloc’s main engine of growth, fell at the steepest rate in three years, according to a purchasing managers’ index.

The Markit manufacturing PMI for the 17-country euro bloc was revised to 45.1 from the initially estimated 45.3. Although above July’s 37-month low of 44.0, it still remained significantly below the 50 mark, which indicates a contraction.

The figures contrasted with more encouraging manufacturing numbers from the UK, also released on Monday, which showed a bounce to 49.5 from 45.2 in July. But Markit, which compiles the data, emphasised a grim underlying picture for the country’s manufacturing sector, while disappointing PMI data from China at the weekend pointed to a more serious downturn than Beijing had been anticipating, economists said.

Analysts said although the eurozone’s PMI rate of decline was easing, eurozone gross domestic product was likely to contract in the third quarter, which would mark the euro region’s second recession in three years. GDP for the single-currency area shrank 0.2 per cent in the second quarter.

Read the rest.

More on the German numbers from Spiegel:

Exports are a major pillar of the German economy, but now the sector is starting to feel the impact of the euro crisis and the global economc slowdown. German export orders fell in August by the highest rate in more than three years, the Markit financial information company announced Monday after conducting a survey of 500 industrial firms.

“Survey respondents commented on a general slowdown in global demand and particular weakness in new business inflows from Southern Europe,” the institute said. The firms hardest hit by declines are manufacturers of machinery and other investment goods as well as producers of intermediate goods such as chemicals.

In the first half of 2012, German exports had still grown thanks to demand from Japan, the United States and Russia. But it was already evident then that exports to crisis-hit countries were falling sharply, and that trend is now continuing.

Markit economist Tim Moore said the German industrial sector is going through its worst quarter — the three months to the end of September — in more than three years.

Read the rest.

And more from Jonathan Cable of Reuters:

In Italy the main index (43.6) has now been below the break-even point for over a year and was worse than economists had predicted while in Spain it has been sub-50 since May last year.

The latter two countries are deep into austerity programs which are aimed at bringing their debt piles under control but also keep their economies stuck in recession.

They are looking for the European Central Bank help them escape this vicious circle by buying debt issued by their governments to bring down borrowing costs.

“The national picture remains one of widespread contraction, only Ireland saw manufacturing output rise. The situation in Italy is also becoming more of a cause for concern, as it falls further down the PMI league table,” [Markit senior economist Rob] Dobson said.

Read the rest.

Merkel and the reign of bean counters

Is the new European regime, pushed by Angela Merkel, doomed to failure?

And, if so, why?

Consider this from New Europe’s pseudonymous Kassandra:

The late interest of Angela Merkel for “more Europe” unveils the German agony after it realised that, in retrospect, things are not developing in the direction it would like.

Germany now asks for a new Treaty that will function as a Constitution with the focus on a common budget centrally controlled from Brussels (write Frankfurt or, better, Berlin). Member states will be offered in return Eurobonds and other ephemeral facilities. Yet the “patent” is unlikely to work as it seems to be late overdue by two or three years. A midsummer night dream as William would have said but the summer is already gone.

For any major or even minor change in the Union, the French agreement is necessary. It is a “sine qua non” prerequisite. Europe without France would only be a complex of barracks and camps with German commanders. Four and a half years ago, October 12, 2008, the then-powerful Nickolas Sarkozy gave to Angela Merkel the great opportunity to reshape Europe, secure the euro and save all economies, now collapsing. Greece, for instance, could have been saved with €20, maximum €30 billion. Now the salvation of Greece (and soon of several others) may well be history. Why it was not done four and a half years ago? Because then (and now), Europe was ruled by accountants.

Read the rest.

Perhaps the writer, whose pseudonym comes from the princess of Troy granted the boon of foretelling the future along with curse that none would believe her, is correct.

We think the real problem is enslavement of debt itself and the concomitant for endless growth contained within it.

So long as the present system endures, cycles of boom and bust, accompanied by the upward transfer of wealth in a globalized financial regime, will continue to inflict misery on billions.

German pension system in peril

Pension systems in both Europe and the U.S. are premised on the accumulation of interest, since companies and government put away insufficient wealth to fund them.

That means times of low interest imperil pensions, dependent as they are on the inflation that comes from debt-based financing.

Now, with interest rates in Germany at or near zero, the government’s pension plan is in crisis, and a political debate over funding is shaping up.

From Michael Gessat of Deutsche Welle:

German Labor Minister Ursula von der Leyen tells today’s workers that they may face poverty upon retiring. But her proposed fix for the

GreeceWatch: The debt madness nears climax?

In its original Greek, klimax meant a ladder, and, by extension, the culmination of a process achieved through a series of steps leading to a defined end.

So it’s an appropriate term to use to describe the process now underway as, step by step, Greece is prepared for what amounts to the final act of, well, a Greek tragedy, is which a people and the wealth they’ve accumulated through a ancient and conflict-ridden history and are sacrificed to appease the paramount god of the age, the financial agora.

With Prime Minister Antonis Samaras busily paying obeisance to the market’s minions this week, the citizens of Greece await word from the North on the next round of miseries awaiting them.

At issue is whether or not the country will receive the next round of Troika bailout cash needed to keep the country in business while it dissects itself, piece by piece, and sells off its body parts to raise the cash to pay off interest on the earlier bailouts and all those bonds, themselves dissected into sundry black instruments of speculation.

There’s a lot to tell today, starting with the latest maneuvers by prime ministers and presidents to iron out the latest austerity package and all those cuts needed to get that next fix of cash. The eurozone’s top financial minister says no money til October, and only then if Greece pays proper obeisance, and there’s worrying evidence that even more cuts are called for, while the top two europols are polishing up their messaging, with some theatrics thrown in for free.

No sooner do we hear softer sounds from the German press that another paper reveals that the world’s giant banks are strategizing for the Grexit.

More pay cuts for civil servants are unveiled, city governments close their doors in protest, while tax collectors angrily denounce layoffs in their own ranks as more evidence of tax evasion surfaces and the government announces a new war on tax cheats. And despite all that, the Democratic Left pledges allegiance.

For out final offerings we have a call to listen to history, a Greek editor’s reminder that the Torika is making real profits from Greece’s misery, and word that Greek junk bonds are all the rage at investment houses.

No bailout money until October at the earliest

The next round of cash is contingent on Greece’s capitulation to the latest demands for budget, jobs, pay, and pension cuts, as well as the sell-off of parts, gas lines, the post office, and so very much more.

Samaras is spending the week ducking in and out of meetings with the powerful pols of the North, trying to sell them on his coalition’s latest round of deadly cuts, whilst simultaneously making a plea to spread the misery out over four years instead of two.

Eurozone finance chief and Luxembourg Prime Minister Jean-Claude Juncker Wednesday told Samaras there’ll be no word on the next round of the bailout until October at the earliest.

He also took pains to warn the Greek public that the country’s now getting its final chance for Troika aide.

From the BBC:

After a meeting with Greek Prime Minister Antonis Samaras, Mr Juncker praised the nation’s “tremendous efforts” so far to cut its deficit.

But he said “priority number one” was further consolidation of the public finances of Greece.

He added that Athens must put in place economic and structural reforms.

These include changes to the labour market, and the relaunching of privatisation programmes which have been promised but not enacted.

Read the rest.

As for Samaras’s plea to give the country two more years to implement the austerity measures, Juncker said “I have to underline this will depend on the findings of the troika mission and we have to discuss the length of the period and other dimensions.”

More from Agence France-Presse:

Juncker, head of the Eurogroup of eurozone finance ministers, said he was “totally opposed” to Greece being forced out of the 17-nation bloc, a move he said would create a “major risk” for the entire euro area.

>snip<

“As far as the immediate future is concerned, the ball is in the Greek court. In fact this is the last chance and Greek citizens need to know this,” Juncker said after a two-hour meeting with Prime Minister Antonis Samaras.

Juncker added that in his opinion, the Greek government’s “priority number one is the consolidation of public finances, (along with) a robust and credible strategy for closing the mid term gap” in its debt-laden accounts.

He called this a “precondition” for the release of further installments from a 130-billion-euro ($161-billion) rescue package that Greece has been drawing from this year to ward off bankruptcy.

Read the rest.

But it gets even worse. . .

Greece may have to make even greater cuts

This is getting ridiculous. Each time the Greek government makes the cuts demanded by the the Troikarchs of the IMF/eurobank/European Commision, they get hit with demands to make even greater cuts.

Andy Dabilis of Greek Reporter writes of that latest ill omen:

[T]he Financial Times reported that Samaras’ uneasy coalition government, consisting of his New Democracy Conservatives, the PASOK Socialists and Democratic Left, may need to make $16.9 billion in cuts, some $2.76 million more than anticipated, although there are fears it could reach $18.7 billion, the amount the government has identified. Much of that would come from yet more pay cuts, tax hikes and a fourth round of slashed pensions that would push many elderly below the poverty line, with some auxiliary pensions to be eliminated while tax evaders owing the country $70 billion continue to escape.

A senior official told the Financial Times that if the cuts are carried out that Greek primary budget expenditures would be the lowest in the Eurozone as a percentage of Gross Domestic Product, a humiliating comedown. Greece is trying to cut its budget deficit to 3 percent of GDP in two years, from 9.3 percent now. Samaras wants a two-year extension because he said the austerity measures have worsened a five-year recession that has seen unemployment hit 23.1 percent – 54.9 percent for those under 25 – and is set to shrink the economy by 7 percent. Greece has lost 25 percent of its GDP in five years.

“The economy will not be able to bear the burden of such huge spending cuts in 2013 and 2014. If there is no extension, economic activity will be depressed and it will be very difficult for any government to survive,” said another government official. The government is also considering laying off 40,000 state workers at reduced pay and firing them within a year.

Read the rest.

This is simply madness, an infliction of even more draconian measures that will ensure that the country is unable to raise the revenues demanded, which in turn will lead to one of two eventualities, either a quick Grexit or the final and complete looting of the nation’s resources and the subjugation of its populace into latter-day serfs.

Merkel and Hollande plot their Grand-Guignol

From Wikipedia

Grand-Guignol was a Parisian theater with a bill of fare that gave its name to a genre, the presentation of graphic, amoral horror productions as exemplified in the poster to the right, .

The woman, bound and blinded, threatened by a shadowy man with knife raised to strike provides the perfect metaphor for the people of Greece today, enchained my misery and privation and deprived of a vision of hope.

Two key players in scripting the drama are German Chancellor Angela Merkel and French President François Hollande, and they’ll soon be meeting to draft the latest act.

From Agence France-Presse:

German Chancellor Angela Merkel and French President Francois Hollande will try to present a united front when they meet Thursday ahead of a fateful few weeks for Greece’s eurozone future.

As leaders of the bloc’s top two economies, the pair carry the weight of expectations that they will drive decisive action to remedy the near three-year crisis, despite their differences.

The timing of the evening summit in the German capital is no coincidence — Merkel will host the Greek prime minister in Berlin less than 24 hours later before he meets Hollande in Paris Saturday.

>snip<

Germany, Europe’s effective paymaster, has insisted Athens must stick to the timeline and reforms agreed in return for its second rescue package, while France is seen as more flexible.

Read the rest.

But is there a rift between the writers?

Hollande is one of that strange, flabby, and subservient species that passes for a socialist in today’s European politics, while Merkel’s a stolid conservative in the traditional German mold, devoted to banks, business, and bürgerlich values.

So their dance is delicate, and fraught with nuance. Holland must appear to at least mouth the values that once went with the S-world, while invariably capitulating to the demands of the market.

Now there seems to be a tiff, worthy of note, but, we presume, ultimately meaningless.

From Deutsche Presse Agentur:

Signs of tensions between France and Germany emerged Wednesday as cash-strapped Greece stepped up a diplomatic offensive to convince Europe that it needs more time to introduce a tough round of economic reforms.

>snip<

Merkel‘s spokesman said Berlin and Paris had agreed that the German and French leaders would just make short statements to reporters before a dinner meeting to discuss Greece crisis and the eurozone debt crisis.

But it emerged Wednesday that Hollande now plans to break ranks with the Chancellor and to hold his own press briefing of the French media in the French Embassy in Berlin after his talks with Merkel.

>snip<

Merkel‘s spokesman Steffen Seibert denied that Germany was upset at this departure from the usual practice in Berlin.

“If a foreign guest wants to also go to his country‘s embassy, that‘s up to him and certainly not open to criticism from us,” he said.

Read the rest.

Ah, there’s another European term for it, appropriately French: Théâtre de l’Absurde.

And while we’re on the subject of Théâtre de l’Absurde

Consider the following from Melissa Eddy and Jack Ewing of the New York Times:

Bild, Germany’s most-read newspaper, has accused Greece of “making our euro kaput” and only a few days ago referred to the country as “a bottomless pit.”

On Wednesday, though, the paper featured a friendly chat with the man in charge of that bottomless pit: Antonis Samaras, the Greek prime minister, who pleaded during an interview for more time to repair his country’s shattered economy. The Bild reporter even inquired how Mr. Samaras was feeling after an eye operation.

Coming from a newspaper known for a keen understanding of what its 2.8 million readers want to hear, the shift in tone could be significant. It coincides with signals from members of Chancellor

Quote of the day: François Hollande, neoliberal

From Philippe Marlière, Professor of French and European politics at London’s University College, on the pseudo-socialism of the French president:

The Socialist president has not opposed the EU-inspired austerity programmes that are strangling the economies of Greece, Ireland, Italy, Portugal and Spain. Worse, he has implicitly endorsed them by sending an unprecedented, thinly veiled warning to Greek voters days before the dramatic rerun of the general elections. He hinted that if Greeks insisted on casting their votes in favour of Syriza, a leftwing “anti-austerity” coalition, it could cost them Greece’s participation in the eurozone.

On 9 August, France’s constitutional council ruled that the adoption of the EU fiscal compact did not require a change to the constitution. This would have necessitated the support of three-fifths of MPs; an unachievable majority. Instead, the treaty will enter into force if the government passes an “organic law” by a simple majority. Hollande said there would be no referendum on the new treaty – he is afraid of losing it.

This denial of democracy has infuriated the left. Many argue that the pact allows Brussels to dictate national policy by allowing it to impose sanctions on countries that fail to respect a structural deficit ceiling of 0.5% of GDP. The diktat will restrict all governments’ room for manoeuvre in the foreseeable future. What is more, it dramatically undermines parliament’s powers to pass laws as it sees fit for the country. When the French return from their summer holidays, they can only hope for further spending cuts (€33bn in 2012-14) and tax rises to meet Hollande’s 3% deficit targets by the end of 2013.

Hollande has chosen to stay the course of the punitive austerity policies that are ruining European countries. Mr Normal has quietly taken to the neoliberal sea – and he makes no waves.

Read the rest.

Gore Vidal on the American national security state

Provocative, outspoken, sometimes eccentric, and invariably interesting, Gore Vidal shuffled off the mortal coil last night in Los Angeles. He was 86.

A member of the American aristocracy and a man who delighted in provoking power, Vidal was, among other things, a brilliant novelist, a scintillating essayist, and a relentless critic of Imperial America, he was, above else, endlessly entertaining.

Here’s his 18 March 1998 appearance at the National Press Club, where his address starts at about the ten minutes mark and ends at the one-hour mark. It’s a devastating and witty critique of the national security state. Note his prescient critique of NATO:

Vidal was regarded by many in the elite as a class traitor, with William F. Buckley Jr. Among his most outspoken critics. Here’s a memorable confrontation between the two from 1968 during the Democratic National Convention:

From his Los Angeles Times obituary:

“Style,” Vidal once said, “is knowing who you are, what you want to say, and not giving a damn.” By that definition, he was an emperor of style, sophisticated and cantankerous in his prophesies of America’s fate and refusal to let others define him.

Business Insider has a collection of quotes. A couple worth noting:

As the age of television progresses the Reagans will be the rule, not the exception. To be perfect for television is all a President has to be these days.

Apparently, a democracy is a place where numerous elections are held at great cost without issues and with interchangeable candidates.

More from a compendium posted by The Guardian:

“The genius of our ruling class is that it has kept a majority of the people from ever questioning the inequity of a system where most people drudge along, paying heavy taxes for which they get nothing in return”

“We should stop going around babbling about how we’re the greatest democracy on earth, when we’re not even a democracy. We are a sort of militarised republic.”

“There is no human problem which could not be solved if people would simply do as I advise.”

UPDATE: Mr. Fish has just posted his own graphic tribute to the writer, via his blog Clowncrack, and titled simply “Gore Vidal”:

 

EuroWatch II: Spain trembles, Greece woes, more

We open with Spain, where the economic numbers are bad and growing worse. We’ve got the first sign of a split between regional governments and Madrid, and a report on the continued flow of cash out of the country [including euros just used to bail Spanish banks],

Lots to report from Greece, including to coalition government’s failure to meet the deadline for its proposed budget cuts, a proposal by the coalition to spread the misery out over four years instead of two, more on the latest list of proposed cuts, the impending emptying of the government’s cash drawer, a report on the growing numbers of impoverished youth, the impending political fight over the proposed closure of dozens of universities, a New Dawn whip attack on the mayor of Corinth, plus a roundup of other Greek stories.

We got an upcoming meeting between the prime ministers of Spain and Italy, a German bank layoff, rising German unemployment numbers, and German Chancellor Angela Merkel’s drive to up her country’s arms sales.

To close, we’ve got another socialist [sic] failure in France.

Spain sinks deeper into the abyss

The next Spailout’s apparently coming fairly soon, and tomorrow couldn’t be soon enough, according to the latest economic numbers released today.

From Al Arabiya:

Spain’s downturn deepened in the second quarter, with the economy shrinking 0.4 percent after contracting 0.3 percent in the first three months of 2012, official data showed Monday.

The figures from the national statistics institute INE confirmed Bank of Spain data issued last week, compounding the problems the government faces in an economy expected not to return to growth until 2014.

INE said the second quarter outcome reflected “weaker domestic demand which was offset in part by a positive contribution from external demand.”

Earlier this month, the government said the economy would continue in recession next year, shrinking 0.5 percent instead of growing 0.2 percent as previously expected.

Read the rest.

Then there are the other numbers to consider, too.

From Deutsche Presse-Agentur:

Spain‘s central government deficit stood at 4.04 per cent of gross domestic product in the first half of 2012, well above the 3.5-per-cent target set for the entire year, the government said Tuesday.

The deficit was, however, largely due to advance cash payments to the country‘s highly indebted regional administrations, officials said. They expressed confidence that Spain would meet the annual deficit target.

The central government deficit is lower than the overall budget deficit, which includes figures from regions and municipalities.

Spain is struggling to trim the overall deficit from 8.9 per cent in 2011 to 6.3 per cent this year, as agreed with the European Union.

Read the rest.

Regions meet in Spain, Catalonia opts out

The battle over money from the central bank is causing dissent in Madrid, where Catalonia has refused to send representatives to a sit-down with the central government.

From ANSAMed:

Catalonia is boycotting this afternoon’s meeting between the autonomous regions and Spanish Finance Minister Cristobal Montoro, Catalan government spokesperson Francesc Homs said at a press conference on Tuesday. Rather, Catalan finance minister Andreu Mas-Colell has written Montoro a letter requesting he ”rectify his policies,” Homs said.

Catalonia has accused the central government of not extending to the autonomous regions the EU deadline extension on deficit reduction it has obtained for itself, thus ”making their financial situation unbearable.” Spain is imposing regional deficit-reduction targets of 1.5% of GDP in 2012, 0.73% in 2013, and 0.1% in 2014. In what is its third cash flow crisis in the past few months, Catalonia today announced it is suspending its July 400 million euro payment for hospitals, schools, and public services, putting 100,000 public employee salaries at risk.

The region requested aid from Spain’s 18 billion euro regional bailout fund a week ago.

Read the rest.

Money flows out of merged Bankia

With the country on the brink of yet another bailout, depositors in Spain’s Bankia — the bailed-out financial giant created out of the merger of its namesake with a half-dozen other stricken — have continued to withdraw cash from it, as well as other Spanish banks at a record clip.

From ANSAMed:

Capital flight from Spain gathered pace in May as the government stepped in to bail out Bankia, the country’s fourth largest credit institution, Bank of Spain data showed on Tuesday.

May outflows rose to 41.294 billion euros, and totaled 163 billion euros – or approximately 16% of economic output – between January and May, with domestic banks sending money abroad, foreign banks pulling out cash and mostly non-resident investors dumping domestic assets.

Resident families and businesses pulled 1.793 billion euros out of domestic banks in May and 4.110 billion euros in the first five months of the year, against a total of 6.372 billion euros in the same period last year. Funds being injected by the European Central Bank are not funneled into the real economy, because they are being deposited in foreign countries with more solid economic outlooks, according to El Mundo newspaper.

Read the rest.

So they bail out a bank, then the mo ney goes right back out of the country. How, one might wonder, is that supposed to help in a country where the jobless rate is soaring?

But, heck, esnl’s just an old and mild-mannered reporter, and not faced with worries about where to stash millions or billions.

And on to Greece. . .

Greek coalition fails to meet budget austerian deadline

Seems the coalition government is being rent by disagreements over just what to slash and sell.

From Andy Dabilis of Greek Reporter:

Greek Prime Minister Antonis Samaras and his coalition partners missed their own deadline on July 30 to reveal the details of a $14.16 billion savings plan demanded by international lenders to keep rescue loans coming as the talks were expected to continue for several more days, leaving anxious Greeks uncertain what is coming next for them after previous waves of pay cuts, tax hikes and slashed pensions.

Democratic Left leader Fotis Kouvelis told reporters that he, Samaras, and PASOK Socialist leader Evangelos Venizelos didn’t even discuss how to close a remaining $2.5 billion hole in a previously outlined plan to make the cuts insisted upon by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) which is holding back a second bailout of $173 billion until the government reaches a consensus. Kouvelis said instead that the leaders talked about the social problems that the austerity measures they support have caused, worsening a five-year-recession, putting nearly 1.1 million people out of work, shrinking the economy by 7 percent and closing 1,000 businesses a week.

Kouvelis denied the talks had broken down and said, “There’s a dead end when someone disagrees,” and said they had reiterated their support for a secret budget-cutting plan they have not yet revealed. Troika officials who were in Athens to meet the leaders and go over the country’s books said they would stay until the Samaras government finalizes the cuts.

Read the rest.

Samaras wants four years instead of two

Given the past remarks of the Troikarchs, we suspect the New Democracy prime minister has next to no chance at all of winning acceptance of his plea to stretch out the layoffs, salary and pension reductions, health care cuts, and sell-offs needed to meet the requirements of that austerity memorandum,

From euronews:

Reports from Greece say allies of the Prime Minister Antonis Samaras want two more years to implement unpopular austerity measures demanded by international creditors.

The coalition’s three parties have agreed on most of the 12 billion euros in cuts to satisfy inspectors from the EU and the IMF bailing out the country.

But left-wing partners want more time.

“The issue is to make sure that the choices we make do not destroy the possiblity of re-negotiation, and above all don’t destroy the possibility of Greece remaining in the eurozone,” said Finance Minister Yannis Stournaras.

Read the rest.

More on the cuts on the table from Capital.gr:

Political leaders in Greece have agreed on most of the austerity measures demanded by its creditors and are now eyeing pension and wage cuts to find the final 1.5 billion euros of savings still needed, a source close to the talks said to Reuters on Sunday.

Greece must find savings worth 11.5 billion euros for 2013 and 2014 to satisfy its increasingly impatient lenders, who are currently visiting Athens to evaluate the country?s progress in complying with the terms of its latest bailout.

A finance ministry source said the lenders, who were due to leave Athens at the end of July, would now stay until the savings plan was nailed down.

“We want to help and we will stay as long as it takes and until the plan is finalized,” IMF mission chief Poul Thomsen has told the Greek finance minister, according to a Greek official.

Read the rest.

And still more from a second Capital.gr story:

Greek ruling coalition leaders pressed on Monday with talks on spending cuts needed to unlock a 31.5-billion-euro loan instalment from the country’s EU-IMF rescue package.

After two hours of talks with Prime Minister Antonis Samaras, his socialist and moderate leftist allies said they were working on a “strategic framework” to pull the country out of a five-year recession.

“The discussion continues, and will continue in the coming days,” said Fotis Kouvelis, head of the small Democratic Left party that supports the government.

“We are in complete agreement on the strategic planning to deal with problems,” he told reporters.

Socialist leader Evangelos Venizelos, head of the coalition’s third member, added: “We are creating a strategic framework to take the country out of recession.

“All three leaders agree on this,” he said.

Read the rest.

And more still from Greek Reporter’s Andy Dabilis:

Democratic Left leader Fotis Kouvelis told reporters that he, Samaras, and PASOK Socialist leader Evangelos Venizelos didn’t even discuss how to close a remaining $2.5 billion hole in a previously outlined plan to make the cuts insisted upon by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) which is holding back a second bailout of $173 billion until the government reaches a consensus. Kouvelis said instead that the leaders talked about the social problems that the austerity measures they support have caused, worsening a five-year-recession, putting nearly 1.1 million people out of work, shrinking the economy by 7 percent and closing 1,000 businesses a week.

Kouvelis denied the talks had broken down and said, “There’s a dead end when someone disagrees,” and said they had reiterated their support for a secret budget-cutting plan they have not yet revealed. Troika officials who were in Athens to meet the leaders and go over the country’s books said they would stay until the Samaras government finalizes the cuts.

Venizelos said Greece needs to more rapidly implement a privatization plan he delayed when he was Finance Minister in a previous government and called for national unity in a nation deeply divided over the pay cuts, tax hikes and slashed pensions the government has imposed to satisfy the Troika that foreign bankers and private investors will be paid back first.

Greek media has reported, however, that the government will go back on its word not to mandate more austerity and plans to cut pensions, slash a lump sum by 22.6 percent that pensioners have had taken out of their salaries for decades for their retirement, and was even considering putting a cap of $1,840 a year on health care, which one patient group said would mean only the rich could afford coverage in Greece and the poor would be left to die.

Read the rest.

The Greek till: Still running on empty

Without another cash infusion from the Troika, more Greek workers will be going without paychecks and hospitals without needed drugs — among other things.

From Capital.gr:

Near-bankrupt Greece is fast running out of cash while it waits for its next installment of aid from international lenders, a deputy finance minister said on Tuesday, sounding the alarm on the country?s precarious financial position.

Greece?s European partners have repeatedly promised the country will be funded through August, when it must repay a 3.2 billion euro ($3.9 billion) bond, but the details of the funding have yet to be disclosed.

In the absence of that money,Greece would run out of funds to pay everyday public expenses ranging from police and other public service wages to pensions and social benefits, Reuters reported.

Read the rest.

Growing numbers of children living in poverty

And the official numbers are likely skewed to the low side.

From Thodoris Skoulis and Charles McPhedran of GlobalPost:

Estimates for the number of children living below the poverty line vary. The EU’s official figure, 439,000, or 23 percent of the population under 18, increased a mere 2 percent since 2009. However, that number is derived from the current Greek median wage.

Child poverty specialist Matsaganis Manos says the number probably jumped “dramatically” between 2009 and 2011 — to 35 percent — if

EuroWatch: Spain, German downgrades, Greece

Each passing day brings reports of the intensification of the eurocrisis.

We open with a “big picture” story, then look at the latest news on numbers. We’ve got a rash of bad news for Germany, including a new Moody’s downgrade for German states and the euro bailout machine, dropping business confidence in Germany, and warnings of a major threat the German pensions.

We’ve got lots from Spain, and even more from Greece, where the prime minister announced he’s abandoning all plans to renegotiate the austerity memorandum, a sick senior has been forced to abandon his much-needed oxygen, reporters are working without paychecks, the pros and cons of another Greek investor haircut, Grexit and eurozone collapse warnings, bank bailout conditions, and the grim struggle for survival.

We also have news from France, and a complaint from the  that the European Commission that austerity shouldn’t apply to them.

The long, hot summer of the ailing euro

There’s no doubt that the crisis is gaining speed, as Spiegel reported Wednesday in an omnibus wrap-up, the best place to start today’s roundup:

Hopes that the euro crisis may take a summer break like scores of European Union leaders, including German Chancellor Angela Merkel, have been dashed. The currency, at two-year lows against the dollar, has been pummelled by a raft of bad news on Spain, Greece and the credit ratings outlook for Germany.

Madrid’s troubles are perhaps most concerning. The country’s borrowing costs have surged amid new fears the euro zone’s fourth-largest economy will need a full sovereign bailout that the currency union’s backstop funds can ill afford. Investors were demanding 7.6 percent interest on 10-year sovereign bonds on Tuesday, a new euro-era high and well above the 7 percent level seen as unsustainable for public finances.

Even worse, the Spanish government said last week it expected the economy to remain in recession well into next year and the autonomous region of Valencia became the first to ask Madrid for aid to pay debt obligations it cannot meet. The northeastern region of Catalonia, responsible for a fifth of the country’s economic output, indicated on Tuesday that it too may apply for central government funds.

The new Spanish woes coincided with an annoucement from Moody’s Investors Service on Tuesday night that it was cutting the outlook on its triple-A long-term rating for the EU’s temporary bailout fund, the European Financial Stability Facility (EFSF) to negative from stable, dealing a blow to one of the EU’s two firefighting funds. Moody’s also said late on Tuesday it would review German states and lowered its outlook from stable to negative for Baden-Württemberg, Bavaria, Brandenburg, North Rhine-Westphalia and Saxony-Anhalt.

Read the rest.

A rater drops the hammer on Germany

Once again, it’s Moody’s taking the lead, this time with a combination package certain to send more tremors through the increasingly shaken economic giant.

They also target the Merkel-pushed mechanism touted as the great hope for saving the euro, the EFSF.

From Deutsche Welle:

The American credit ratings agency Moody’s has lowered the economic outlook for the current eurozone rescue fund and a host of German states. This comes a day after Moody’s took the same step with Germany as a whole.

Moody’s announced overnight that it was lowering the economic outlook for funds within the European Financial Stability Facility (EFSF) from “stable” to “negative,” a day after taking the same step with Germany, Luxembourg and the Netherlands. As with the three eurozone members, Moody’s did not alter the EFSF’s top-notch Aaa credit rating.

The EFSF is the current iteration of the overarching eurozone emergency loans fund, sometimes called a “bailout” fund.

The ratings agency said that the EFSF outlook change was linked to its Monday moves, because the poorer prospects for top eurozone economies “imply an increased likelihood that the EFSF might be downgraded over the next 12 to 18 months.”

>snip<

North Rhine-Westphalia, Berlin, Brandenburg, Saxony-Anhalt and the southern economic engines of Bavaria and Baden-Württemberg were all demoted from a “stable” to a “negative” economic outlook on Tuesday.

Read the rest.

More bad news for Germany

While the German economy remains the strongest of Europe’s major economies, the realization is sinking home that the crisis can’t be confined to the continent’s southern rim, especially given the dependence of German industry on southern buyers.

The latest survey of German business executives shows yet another decline in optimism.

From Deutsche Welle:

The German Business Climate Index (BCI) dropped to 103.3 points in July, from 105.2 points in the previous month, the Ifo economic institute said Wednesday.

The fall in the institute’s closely watched business sentiment barometer was steeper than analysts had expected. They predicted a drop to 104.5 points in a poll made by Dow Jones Newswires.

“The euro crisis is having an increasingly negative impact on the German economy,” said Ifo President Hans-Werner Sinn, as he explained the third consecutive monthly drop of the index.

He noted that the business climate in the manufacturing sector deteriorated significantly because German manufacturers were both dissatisfied with their current business situation as well as downbeat about the future.

Ifo’s subindex measuring the current business climate fell to 111.6 points in July from 113.9 in June. The subindex, which looks at future prospects, dropped to 95.6 points from 97.2 points. For the whole BCI, 100 points is the long-term average.

Carsten Brzeski, an analyst with ING Bank, told the Reuters news agency that German businesses had finally “arrived in reality.”

Read the rest.

Plunging interest rates threatened German pensions

Pension funds depend on maintaining a significant rate of compound interest, given that payouts inevitably require more than the initial capital investment. But with German bonds and bank accounts paying next to nothing in the way of interest, that means troubles ahead for pension funds.

It’s a problem not confined to Germany. Here in California, the largest public employee pension fund is reporting rates of return of one percent, less than a fifth of what’s needed to maintain an adequate funding base.

From Open Europe:

It was just a matter of time: The front page of today’s Bild warns about the effect the crisis will have on millions of Germans’ pensions.

Under the headline “Euro crisis shrinks pensions”, Bild reports that the occupational pensions of 17 million Germans are threatened by a combination of the low interest rates on the government bonds of the remaining creditworthy nations – which pension funds heavily invest in – and by the low rate of interest (0.75%) set by the ECB in an attempt to stimulate the economy, which it is feared will lead to inflation in the longer term.

In turn, the paper claims, this will erode the value of pension payments, citing calculations by Professor Stefan Homburg from the University of Hannover which show that given an inflation rate of 5%, a €1,000 pension payment would only be worth €614 in ten

EuroWatch: Bad numbers, downgrade, Greece

We got the latest bad numbers [steel, cars], another euroministerial meeting on the Spailout, a downbeat IMF forecast with a call for a euroTARP, German doubt and electioneerring, a Spanish TV jobs massacre, a pair of Italiam downgrades, a fascinating collection of stories from Denmark, and lots from Greece, including another austerity suicide, a Troika visit delay, busy cutting sessions, pension cuts for the mentally ill and nursery downsizings, and a tourism book from Merkel-land.

Another warning, from the steel industry

The ongoing economic crisis is making itself felt in Europe’s basic industries, the processors of the basic goods on which other manufacturing depends.

The steel industry fell off as demand dropped, and they’re predicting no major recovery for at least another nine months as consumption continues to decline.

From Deutsche Presse-Agentur:

The European steel industry warned Monday that the current market trough could last longer than previously forecast with steel consumption set to fall 5 per cent this year.

Releasing its latest report on the sector, the EUROFER steel industry association said it was not expecting any improvement in steel demand across the European Union until the second quarter of 2013.

“With global economic growth currently hitting a soft patch, export growth is also cooling down, despite the weaker euro,” said EUROFER director general Gordon Moffat.

“This is bad news for the manufacturing sector and for steel consumption in the EU,” he said.

Read the rest.

A steel dependent industry declines

One major consumer of steel is car manufacturing, and Opel, Peugeot, Ford and other carmakers are continuing to decline.

From Deutsche Welle:

New registrations for cars in the European Union dropped by 2.8 percent to just over 1.2 million vehicles in June, constituting the ninth consecutive month of declining sales in the 27-nation bloc, the European Automobile Manufacturers Association (ACEA) said on Tuesday.

The month-on-month decline added to a sharp 6.8 percent fall in European car sales in the first six months of 2012, resulting in 6.64 million fewer new cars being registered compared with the same half-year period in 2011.

However, the pace of the slump in Europe’s car markets was slowing, ACEA said, as June’s registration figures had been the best in eight months.

According to the ACEA figures, markets shrank most dramatically in debt-hit eurozone countries such as Greece and Ireland. Sales there were down by more than 41 percent – in Portugal, sales dropped by 37 percent, registrations in Italy slumped by one-fifth.

Read the rest.

Crisis meeting downgraded to teleconference

While finance ministers were supposed to meet in person to discuss the latest bailout, the Friday session originally planned as a head-to-head sitdown has been reduced to screen time.

At issue is that document integral to all eurobailouts these days, the memorandum spelling out the austerian mandate to which the latest victim, Spain, must swear fealty.

From Alvise Armellini of Deutsche Presse-Agentur:

The Eurogroup panel of eurozone finance ministers will discuss the upcoming Spanish bank rescue via teleconference and not in person, Eurogroup President Jean-Claude Juncker said in a statement Tuesday.

The Eurogroup was expected to hold talks on July 20, but until Juncker’s announcement it was unclear whether it would actually meet in Brussels and whether it would discuss other crisis matters, such as Italy’s struggle with high bond yields or bailouts for Greece and Cyprus.

Juncker said “the only item on the agenda” for Friday was “the (memorandum of understanding) for financial assistance to the Spanish banking sector.”

Ministers are expected to give their final nod to a eurozone loan of up to 100 billion euros (122.8 billion dollars), in return for strict conditions on the reform of the Spanish financial system.

Read the rest.

IMF blames eurocrisis for global woes

So it’s not just Barack Obama, although, to be fair, the International Monetary Fund is a creation of Washington, along with its companion, the World Bank.

And the solution, the IMF says, is to fire up the printing presses with a euro version of America’s own Troubled Assets Relief Program.

From Valentina Pop of EUobserver:

The euro crisis continues to weigh down the global economy, the International Monetary Fund said Monday (16 July), putting pressure on the European Central Bank to lower its interest rate even further and issue more cheap loans to the banks.

“There is room for monetary policy in the euro area to ease further. In addition, the ECB should ensure that its monetary support is transmitted effectively across the region and should continue to provide ample liquidity support to banks under sufficiently lenient conditions,” the IMF said in its annual World Economic Outlook.

>snip<

The specific reference to the ECB is meant to increase pressure for the Frankfurt-based body to turn on the printing presses via cheap loans, low interest rates and “some form of quantitative easing”, meaning direct or indirect bond purchasing aimed at lowering governments’ borrowing costs.

Read the rest.

More from Capital.gr:

Europe needs to adopt a massive EUR700 billion Troubled Asset Relief Program, or TARP, style policy as seen in the U.S. to shore up the region’s banks, said a senior official at the Organisation for Economic Co-operation and Development on Tuesday, Wall Street Journal reported.

“Taking the banking system problem off the table requires a massive TARP style capital injection using equity warrants which would end up costing the tax payer nothing,” said Adrian Blundell-Wignall, deputy director, financial and enterprise affairs at the Paris based think tank.

Under the U.S. Federal Deposit Insurance Corporation definition of a 5% liquidity ratio, “you need about EUR700 billion to EUR750 billion to be well capitalised. I’m saying that’s the amount that would make the financial sector sit up and take notice,” the OECD official said.

Launched during the depths of the 2008 financial crisis, the US administration set up TARP to capitalise banks which was initially estimated to cost around US$700 billion but only around US$431 billion was disbursed to banks, much of which has since been paid back. The U.S. government still holds stakes in around 350 lenders.

“The way the US handled the banking crisis is going to be the way the history books say you should do it,” said Mr. Blundell-Wignall.

Europe’s leaders have so far struggled to contain the region’s debt crisis. An agreed EUR100 billion bail out of Spain?s banks has done little to win back market confidence and yields continue to remain elevated on Spanish and Italian bonds.

Read the rest.

Merkel plans ahead for next election

And for German voters, she says, next years elections will be all about the fate of the euro and the fate of the European Union.

From Honor Mahony of EUobserver:

Next year’s federal elections in Germany will be about Europe, said Chancellor Angela Merkel, who has spent the past two years shaping the eurozone’s answer to its debt crisis in the face of scepticism at home.

“Next year’s vote will also be about the situation in Europe and what expectations we have for Europe,” the chancellor said in an interview with public broadcaster ZDF.

She said her own personal vision of the EU was of a “stability union” that has a presence on the world stage.

“Without Europe we would no longer be able to represent our values, our ideas, our ideals together.

Read the rest.

Another reason for Mekelian concern

While Germany has been thre economic standout during the latest round of the crisis, selling billions in no-interest bonds to investors desperate to park cash in safe havens, it’s still part of an ailing continent, and that’s beginning to sink home in the minds of the investing class.

From Andrew McCathie of Deutsche Presse-Agentur:

German investor confidence dropped in July as the eurozone debt crisis appeared to dampen the economic mood in Europe’s biggest economy, a key survey released Tuesday showed.

The Mannheim-based ZEW economic research institute said its index, which measures the mood among analysts and institutional investors, fell to minus 19.6 points this month after it posted its biggest drop in 14 years in June when it fell to minus 16.9 points.

The July fall was in line with analyst’s forecasts.

Massive downsizing at Spanish TV

This time it’s a regional network that’s the target of the austerity ax.
From euronews:

Angry workers interrupted the midday news bulletin at Valencia’s regional TV channel on Monday as RTVV became yet another example of Spain’s debt crisis.

The regional government – run by Prime Minister Mariano Rajoy’s PP party – is almost bankrupt and the channel accounts for roughly one billion euros of its debt. Now it has announced plans to save 54 million euros by laying off three quarters of the channel’s workforce – almost 1,300 people.

One worker complained: “It’s not the workers who are guilty. Those responsible are the management that over recent years got the company into this terrible mess and social disgrace.”

Read the rest.

The network’s not universally admired, and it’s been called a self-serving power of Rajoy’s party, but that’s not the fault of workers.

And on to Italy. . .

Another downgrade for Italian institutions

Not only banks, but utilities, the postal services, and more.

And the timing’s interesting, coming just as moves toward another bailout are already underway.

But it gives the investors a rationale for making the inevitable memorandum even more extortionate.

From Deutsche Welle:

Seven of Italy’s banks have been dropped by one notch and six others have been downgraded by two notches, Moody’s Investor Service said on Monday.

Two of the country’s largest banks, Intesa SanPaolo and Unicredit, went from an A3 credit rating to a Baa2 with a negative outlook. Major utilities companies, including the country’s largest postal service Posta Italiane, energy giant Eni and energy and water services provider Acea, as well as a number of local government

Headline of the day II: Proof Fox News is working

And proof too that at least 40 percent of Americans have no idea what socialism really is. From the Christian Science Monitor:

Is America becoming a ‘socialist state’? 40 percent say yes.

 

Important documentary: The Power Principle

An important documentary by Scott Noble. The Power Principle exposes the hidden agenda driving American foreign policy over the last seven decades and its gruesome consequences.

Historian Michael Parenti calls the film “A gripping, deeply informative account of the plunder, hypocrisy, and mass violence of plutocracy and empire; insightful, historically grounded and highly relevant to the events of today.”

In an interview for Soldiers for the Cause, a veterans group supporting the Occupy movement, filmmaker Noble outlines the theses advanced in his documentary:

• The Cold War was not just a struggle between the Soviet Union and the United States; the real struggle was between American corporations and the Third World.
• Top policy planners in the US and other Western nations were acutely aware that the Soviet Union had a conservative foreign policy. You can see this in numerous declassified documents.
• Nevertheless, the American government engaged in what can only be described as a campaign of terrorism against the American people, constantly invoking the “Soviet Menace” to justify military spending and war.
• The United States does not have a free press.
• The Pentagon is a Keynsian Mechanism.
• The American government was responsible for genocide during the Cold War.
• The Empire is similar to the mafia.
• Corporate interests are inextricably wed with military policy.
• American imperialism is not of recent vintage.
• Elites deceive themselves as well as the public.
• The US is not exceptional. It is behaving pretty much as powerful states always have.
• Western elites supported fascism prior to, during and after WWII.
• A WWIII scenario is almost inevitable unless the American public wakes up – and fast.

For more information see the film’s website.

And now, the documentary:

The Power Principle – I: Empire

The program notes:

An Introduction to the Empire; Iran – Oil and Geopolitics; Guatemala – the “merger of state and corporate power”; The Congo – Neocolonialism; Grenada – “The Mafia Doctrine”; Chile – “libertarianism with a small l”; Globalization: Consequences.

1945: Grand Area Strategy; Fascism: a “rational system of the plutocracy”; Case Studies: the Greek Communists; The Italian Communists; the Spanish Anarchists; Fascism’s Western backers; Trading with the Enemy; Fascism as “preservation of civilization”; the Cold War and “A Century of Fear”.

The Power Principle – II: Propaganda

The program notes:

The Soviet Menace?; Case Studies: El Salvador, Nicaragua; Propaganda: Self-Deception and blowback; The “International Communist Conspiracy”; Declassified Documents; NSC 68; The Pentagon as Keynsian Mechanism; The Military Industrial Complex; The War against the Third World; Shifting rationales; What is imperialism?; Case Study: Haiti; “War is a racket”.

Fear-based conditioning – The War of the Worlds, The Triumph of the Will; World view Warfare; The Russians are coming; Television: The “perfect propaganda medium”; Soviet vs. American propaganda; Hollywood and the Pentagon; Psywarriors and the media; Operation Mockingbird; The Pentagon Pundits; Project Revere; The Bomber Gap; “scare the hell out of them”.

The Power Principle – III: Apocalypse

The program notes:

Mutually Assured Destruction; MAD men – Curtis Lemay and the super hawks; MAD men – Hermann Kahn and the Rand Corporation; Over flights as provocation; Cuba: the “danger of a good example”; terrorism against Cuba; “Unconventional warfare”; the Cuban Missile Crisis and the “man who saved the world”.

Why did the Soviet Union collapse?; Gorbachev: a “more violent, less stable world”; the Pentagon’s New Map; Did Ronald Reagan end the Cold War?; The Brink of Apocalypse: Able Archer; The betrayal of Russia; The expansion of NATO; Yugoslavia and Libya; the Yeltsin coup; Living standards in the former Soviet Union; A third way?

François Hollande to Greeks: Pay up — or else

If anyone had any doubts about Hollande’s “socialism,” the 24th president of the French Republic removed all doubt during a Greek television broadcast, warning them that eviction from the eurozone awaits should Syriza win.

From Agence France-Presse:

While acknowledging the Greeks’ right to determine their own future, Hollande told Greek Mega Channel television that if it appears from the vote that they doesn’t want to respect the bailout deal “there will be countries in the eurozone which would prefer to end Greece’s presence in the eurozone.”

>snip<

“I am in favour of Greece remaining in the eurozone, but Greeks should know that this requires there be a relationship of trust,” Hollande said in a transcript of the interview provided by his office.

Hollande said he had lobbied his EU counterparts for bloc funds be speeded up so Greece, now in its fifth year of recession, can return to growth.

He pledged he would continue to push for their release and warned Greeks “the abandoning pure and simple of the (bailout and austerity) memorandum would be seen by many eurozone members as a break up.”

Read the rest.

What “socialism” means for parties like Hollande’s Socialist Party and the Greek Pan-Hellenic Socialist Party [PASOK], is simply a kinder, gentler austerity — taking a little less of the top while burying subject states and their peoples even deeper in the inescapable quagmire of debt.

What Syriza wants: Beyond the hyperbole

With the Greek Left coalition Syriza poised for a strong finish in the 17 June elections, what does the party actually want.

Writing at Countercurrents, Gaither Stewart presents a translation of what he calls “the apparently official platform,” taken from the daily bulletin of Italy’s Communist Refoundation Party.

Here’s the text, which is slated to be released officially on Friday:

• Audit of the public debt and renegotiation of interest due and suspension of payments until the economy has revived and growth and employment return.
• Demand the European Union to change the role of the European Central Bank so that it finances States and programs of public investment.
• Raise income tax to 75% for all incomes over 500,000 euros.
• Change the election laws to a proportional system.
• Increase taxes on big companies to that of the European average.
• Adoption of a tax on financial transactions and a special tax on luxury goods.
• Prohibition of speculative financial derivatives.
• Abolition of financial privileges for the Church and shipbuilding industry.
• Combat the banks’ secret [measures] and the flight of capital abroad.
• Cut drastically military expenditures.
• Raise minimum salary to the pre-cut level, 750 euros per month.
• Use buildings of the government, banks and the Church for the homeless.
• Open dining rooms in public schools to offer free breakfast and lunch to children.
• Free health benefits to the unemployed, homeless and those with low salaries.
• Subvention up to 30% of mortgage payments for poor families who cannot meet payments.
• Increase of subsidies for the unemployed. Increase social protection for one-parent families, the aged, disabled, and families with no income.
• Fiscal reductions for goods of primary necessity.
• Nationalization of banks.
• Nationalization of [formerly] public (service & utilities) companies in strategic sectors for the growth of the country (railroads, airports, mail, water).
• Preference for renewable energy and defence of the environment.
• Equal salaries for men and women.
• Limitation of precarious hiring and support for contracts for indeterminate time.
• Extension of the protection of labor and salaries of part-time workers.
• Recovery of collective (labor) contracts.
• Increase inspections of labor and requirements for companies making bids for public contracts.
• Constitutional reforms to guarantee separation of Church and State and protection of the right to education, health care and the environment.
• Referendums on treaties and other accords with Europe.
• Abolition of privileges for parliamentary deputies. Removal of special juridical protection for ministers and permission for the courts to proceed against members of the government.
• Demilitarization of the Coast Guard and anti-insurrectional special troops. Prohibition for police to wear masks or use fire arms during demonstrations.
• Change training courses for police so as to underline social themes such as immigration, drugs and social factors.
• Guarantee human rights in immigrant detention centers.
• Facilitate the reunion of immigrant families.
• Depenalization of consumption of drugs in favor of battle against drug traffic. Increase funding for drug rehab centers.
• Regulate the right of conscientious objection in draft laws.
• Increase funding for public health up to the average European level.(The European average is 6% of GDP; in Greece 3%.)
• Elimination of payments by citizens for national health services.
• Nationalization of private hospitals. Elimination of private participation in the national health system.
• Withdrawal of Greek troops from Afghanistan and the Balkans. No Greek soldiers beyond our own borders.
• Abolition of military cooperation with Israel.  Support for creation of a Palestinian State within the 1967 borders.
• Negotiation of a stable accord with Turkey.
• Closure of all foreign bases in Greece and withdrawal from NATO.

EuroWatch: Crisis deepens, austerian pope, more

The pace of economic developments in Europe is accelerating exponentially, and the crisis appears to be nearing a tipping point.

Some of today’s highlights:

• The White House pushes eurogrowth
• The Bank of England sounds a warning
• The Italian prime minister meets the pope, decrees austerity
• Moodys downgrades Italian banks
• A tax office is firebombed in Lovorno
• Debate about bank capital requirements heats up; Brits want more
• German investor confidence falls
• Hungary toes the euro line
• Danish paid holiday cuts debated
• Health costs rise across Europe
• The European Commission can’t afford talent
• A mixed picture of euroracism emerges

Hollande shows his true colors

Consider two of his most interesting just announced appointments to the staff of the Elysee presidential palace [the U.S. equivalent would be senior White House staff].

From Reuters:

In another key appointment, Hollande named his long-time collaborator Emmanuel Macron, an investment banker at Rothschild, as deputy secretary general. Macron, who is in his mid-30s, is expected to handle sensitive economic dossiers in the post, which equates to a senior economic advisor.

On defense, Hollande left in place General Benoit Puga, the military advisor to outgoing President Nicolas Sarkozy.

Read the rest.

Oh yeah, Hollande’s a socialist, just like Barack Obama.

The same guy who implemented Sarkozy’s guns-not-butter lethal military policies will be whispering in Hollande’s ear, as well as a Rothschild bankster, who, as BloombergBusinessweek reports, “advised Hollande throughout the campaign”.

Now consider the words of that most famous of French socialists, a man assassinated for opposing militarism.

From Jean Jaurès, written in 1905:

To have responsibility without authority, to be punished without having been consulted, such is the paradoxical fate of the proletariat under the capitalist disorder. And if capital were organised, if by means of vast trusts it were able to regulate production, it would only regulate it for its own profit. It would abuse the power gained by union to impose usurious prices on the community of buyers, and the working class would have escaped from economic disorder only to fall under the yoke of monopoly.

Read the rest.

H/T to Moussequetaire.

Merkel, Hollande preach the growth gospel

Following their first official meeting yesterday, new French President François Hollande and German Chancellor Angela Merkel emerge to decree that growth is the European mandate, and they’ll do anything to get it.

From Spiegel:

Hollande said that the pair had reached an understanding to put all ideas and proposals for growth on the table and to discuss which legal possibilities existed to make them reality. At the same time, he insisted that he was not interested in renegotiating the fiscal pact, as he had threatened to demand during the campaign. He merely wants to add a growth dimension, he said.

Still, Hollande wasn’t completely a model guest. He once again mentioned his support for bundling European debt in so-called euro bonds, a proposal to which Merkel and her coalition partners, the Free Democrats (FDP), are adamantly opposed. He also said that without growth, sovereign debt cannot be paid down — a seemingly banal sentence that could, however, be understood as a critique of Merkel’s obsessive focus on fiscal responsibility.

The two sides will have to work quickly to find agreement on the way forward. Merkel said that Paris and Berlin hope to be able to present joint proposals for growth stimulus at the European Union summit at the end of June. “It will be very important,” she said, “that Germany and France present shared ideas at that time.”

Read the rest.

Obama reads from the same scripture

Barack Obama is weighing in too, undoubtedly aware that a deepening of the European crash is certain to tip the trembling American economy deeper into depression.

And yes, we use the D-word, because for working class Americans it is a depression, with pay frozen or cut, benefits declining, hours lengthening, and the future looking ever grimmer.

From Ewen MacAskill of The Guardian:

Barack Obama is to press German chancellor Angela Merkel to support a growth package to help bail out Europe at the G8 summit this weekend amid fears in the White House that the eurozone crisis could damage the president’s re-election chances.

Obama is scheduled to meet Merkel, the new French president François Hollande, the Italian prime minister Mario Monti and British prime minister David Cameron at Camp David on Friday evening.

But foreign affairs analysts said that Obama’s leverage with the European leaders is minimal on this issue. Although the US has the economic muscle to help Europe out of its mess, the Obama administration took the strategic decision not to become involved directly

Read the rest.

And Tiny Tim follows suit

The treasury secretary tries to add his own bit of confidence-bolstering.

From EUbusiness:

US Treasury Secretary Timothy Geithner on Tuesday welcomed the debate stirring in Europe over the need for economic growth, as the eurozone grapples with a public debt crisis and stagnant economic expansion.

“We should welcome this new debate about growth in Europe,” Geithner said at a conference in Washington.

The Europeans “have a stronger set of tools to manage the crisis now in place,” he said.

“You see them talk about a better balance between growth and austerity, meaning a somehow more gradual, softer path to restoring fiscal sustainability.”

The US Treasury chief underlined that an overly rapid cutback in spending could lead to a “negative spiral of growth.”

Read the rest.

So what’s got them worried?

The European economy is stuck, with only Germany showing any growth at all, due in part to its lack of any minimum wage for the lowest tier of the workforce.

From Reuters:

The 17-nation eurozone grows 0 percent in quarter as Germany remains the only large economy to post expansion. Even the Netherlands’ economy shrinks 0.2 percent, signaling no quick recovery for the euro area

The eurozone just avoided recession in early 2012 but the region’s debt crisis sapped the life out of the French and Italian economies and widened a split with paymaster Germany.

Eurozone gross domestic product (GDP) stagnated in the first quarter, the EU’s statistics office Eurostat said yesterday.

>snip<

Barely out of the 2009 financial crisis, businesses and households in much of Europe are hampered anew as governments cut back on spending to curtail budget deficits and companies freeze plans to invest.

Despite two summits this year and another planned for next week, EU leaders have been unable to find a way back to growth, while many southern Europeans are turning against austerity measures, holding huge street protests in Madrid and backing radical political parties in Greece’s recent elections.

Read the rest.

England’s economic crisis deepens

And the Bank of England is worried.

They’re placing the blame on mainland Europe, and calling for a strict austerian line.

From EUbusiness:

The Bank of England on Wednesday cut its forecast for British growth and warned that the eurozone debt crisis was the biggest threat to

Eurowatch: Can Pasok form a new government?

The Guardian’s been liveblogging the developments as socialist [sic] party leader Evangelos Venizelos attempts to form a new government, and according to the latest developments, it looks like he has a chance.

In one of the latest developments, SYRIZA — the left coalition that tried and failed to form a government Wednesday — has apparently softened its once adamant anti-austerity line, an odd development given the party’s post-election rise in popularity [which we note below].

Lots more from Greece, more woes for Spain, bellowing from Berlin, and the latest chapter in Italy’s longest-running show, the Berlusconi Follies.

But on to Greece.

Venizelos tries to make a government

Most of today’s items on the Greek political scene were written before the latest developments liveblogged by The Guardian, but they indicate the difficulties Paok faces in trying to hammer out a coalition.

Given Pasok’s plummeting popularity, it’s going to be interesting to watch what sort of compromises are made. We suspect any last pretense of socialism will be cast aside.

From Maria Petrakis, Natalie Weeks, and Marcus Bensasson of Bloomberg:

Evangelos Venizelos, the socialist Pasok leader and former finance minister, is trying to form a government after receiving a three-day mandate from President Karolos Papoulias today. Pasok yesterday rejected terms for a government set by Alexis Tsipras of anti-bailout Syriza party, which then gave up its bid to build a coalition.

“There is no time to lose,” Venizelos said in Athens yesterday on state-run NET television. “We can’t take any decisions that worsen the recession, increase unemployment or endanger the real economy. That means no new elections, no instability, no uncertainty: to remain in the euro.”

The standoff has reignited European concerns over Greece’s ability to hold to the terms of its two bailouts negotiated since May 2010. With Parliament split and policy makers in Berlin and Brussels urging Greece to stay the course, the country at the epicenter of the debt crisis is again facing the risk of an exit from the euro.

>snip<

“New elections are the most likely possibility,” Spyros Economides, a senior lecturer at the London School of Economics, said in a telephone interview. “The coalition math from the May 6 vote just doesn’t add up.”

Read the rest.

The BBC adds:

Pasok is now deeply unpopular, says the BBC’s Mark Lowen in Athens – seen as the architects of austerity, and tainted with allegations of corruption.

It dominated Greek politics for most of the past four decades, but saw its support slashed on Sunday – coming third with just 41 seats, a quarter of its pre-bailout support.

Its attempt to form a government also appears likely to fail, our correspondent says, making fresh elections – and weeks of fresh instability across the eurozone – seem inevitable.

Read the rest.

And from Niki Kitsantonis of the New York Times:

Mr. Venizelos is likely to face even greater difficulties as his party, known as Pasok, was the architect of the country’s first bailout in 2010 and is widely blamed for Greece’s economic woes. But although he failed to find any common ground in exploratory talks with political rivals, Mr. Venizelos expressed determination on Wednesday. “It is clear that we currently cannot reach a solution but we must continue the national effort,” he said, noting that his mandate would have “substance and importance.”

Local media were more skeptical, reporting that the Socialist leader may give up what appears to be a losing battle, surrender his mandate and instead ask the president to proceed to the next stage, summoning all the leaders of parties in Parliament to try to broker a coalition. If this fails, Mr. Papoulias must appoint a caretaker government and call new elections within 30 days, with the most probable date believed to be June 17.

Read the rest.

Bailout renegotiation hinted

This story leaves us wondering what sort of backroom deals are being hammered out in Brussels to allow the two formerly dominant Greek political parties, Pasok and New Democracy, to hammer out a deal that will keep the real Left out.

From Agence France-Presse:

Venizelos helped negotiate Greece’s second international bail-out, which was granted on condition the then Pasok-New Democracy coalition government implemented the harsh austerity measures required by the EU and IMF.

But both mainstream parties are now suggesting it will have to be renegotiated.

Venizelos now says Greece needs to “look for the best amendment possible of the terms” of the agreed reforms, and New Democracy leader Samaras said renegotiating the bailout was “certainly realistic”.

Their shift echoed the anti-austerity rhetoric of Syriza’s Tsipras, who argued that Sunday’s overwhelming anti-austerity vote had “clearly nullified the loan agreement and (pledges) sent to Europe and the IMF”.

Read the rest.

Meanwhile, the EU adds bailout strings

If there’s a carrot being offered in secret, Brussels also brought out the stick.

From Valentina Pop of EUobserver:

Eurozone officials on Wednesday night (9 May) agreed to pay only €4.2 billion as first bail-out tranche for Greece, an outstanding 1 billion being blocked until June, amid growing political uncertainty in Athens and another failed attempt to form a government.

“The Board has confirmed the release of the outstanding amount of €5.2bn from the first installment…an amount of €4.2bn will be disbursed on 10 May. The remaining funds of €1.0bn are not needed before June and will be disbursed depending on the financing needs of Greece,” reads a statement from eurozone’s temporary bail-out fund, the European Financial Stability Facility.

Its board of directors comprises of finance ministry officials from each of the 17 eurozone countries.

The statement also noted that the money is put into a “segregated account” and used to pay back Greece’s debt.

Read the rest.

Berlin brings out its own stick

If there’s one person whose name is likely to provoke anger in Greece, it’s that of Germany’s finance minister, the official who has consistently taken the hardest line against any moderation of the Troika-imposed austerity regime.

Wolfgang Schaeuble is back at it again.

From EUbusiness:

Greece must stick to a March deal agreed with its international backers and enact promised reforms to remain within the eurozone, German Finance Minister Wolfgang Schaeuble said on Wednesday.

“If Greece wants to remain in the eurozone, there is no better solution than the path it has already taken,” Schaeuble said, referring to austerity cuts and reforms in return for a 240-billion-euro debt bailout.

“You can’t have one without the other,” he added.

The Greeks need “to form a stable government and strictly respect their commitments, in the same way that we will respect our obligations to Greece,” Schaeuble said, echoing earlier comments by German Chancellor Angela Merkel.

Read the rest.

The latest Greek jobless numbers: Grimmer still

The official Greek unemployment rate nears 22 percent, numbers certain to fuel the growth of discontent as well as more alienation from the two mainstream parties which landed Greek labor in the deepest crisis since the fall of the dictatorship 38 years ago.

From Keep Talking Greece:

900 people were losing their jobs on a daily basis in February 2012, pushing  the unemployment rates to 21.7%. According to Greek Statistics Authority (ELSTAT) the number of unemployed in 1,070,724

EuroWatch: Electile dysjunctions, economics

Voters will turn out in France and Greece Sunday in two very closely watched elections.

The French race will decide the presidency, with incumbent Nicolas Sarkozy trailing in the polls against “socialist” Francois Hollande, while the Greek race will determine the makeup of parliament — which, in turn, will pick the next prime minister, who’ll replace bankster-installed former central bankster Lucas Papademos [who also serves as finance minister].

We got some election updates, including some testy exchanges in Athens and Paris, more financial news from Greece [mixed], the latest news from Spain [bad], some lecturing by Bill Clinton [snicker], a cry of despair from the Bank of England, a failure to regulate, big European losses for GM, and a cultural warning.

Capital Account on the eurocrisis

We open with with the latest segment of Lauren Lyster’s Capital Account:

The program notes:

Nicolas Sarkozy and challenger Francois Hollande face off today in a live French election TV debate. This is reportedly being seen as the climax of the campaign. With elections in France and Greece this weekend, the results have the potential to send shockwaves across theEuropean debt-landscape. We speak with former diplomat and investment banker, and founder of creditwritedowns.com, Edward Harrison about how politics in single countries could impact the global economy. This includes a conversation on the latest PMI numbers that show growth could be slowing across the globe, including in China.

Meanwhile, what did outspoken and famed fund manager Hugh Hendry tell a panel about Europe at the Milken Institute Global Conference yesterday that has people talking? Could asset confiscation be top on the list of concerns for investors and businessmen in Europe? He seems to think so, saying that he believes we are a year away from the french nationalizing their banking system.

And speaking of asset confiscation, foreign financial institutions are reportedly frantically preparing and shelling out serious money in order to comply with US tax regulations. It’s the Foreign Account Tax Compliance Act (FATCA), and as US citizens are shunned by Swiss and German banks facing these rules, more evidence reveals American expats are lining up to give up their passports. We’ll talk about what this means, and why we continue to see this trend of Americans preparing to flee the country.

Franco-electile ejaculations

The latest poll results show Hollande leading Sarkozy by seven percent, which probably accounts for Sarko’s ridicule of his opponent in last night’s three-hour televised debate.

From CNN:

In one testy exchange Wednesday night, Hollande accused Sarkozy of cronyism.

“You appointed your close colleagues everywhere, in all the ministries and regional government. If I understand correctly, you appointed them everywhere,” he said.

In response, Sarkozy, who is trailing in opinion polls, questioned his rival’s grasp on the truth.

“Can I finish my phrase? What you are saying now is a lie. It is slander. You are nothing but a little slanderer,” he said.

Read the rest.

We don’t have a horse in this race. Beneath the bluster, both guys are waging a predictable campaign, just as in presidential races on this side of the pond, reaching out to voters who lost out in that last round of voting [primaries here in the U.S.].

Beneath the bluster, we suspect a Hollande win means about the same as Obama’s win four years ago: The only real difference is the image, while the substance stays the same.

Three-card Monti says he’ll help

With German Chancellor Angela Merkel solidly in the Sarkozy camp, pundits are predicting that a Hollande victory Sunday would add new tensions to the already troubled eurozone.

Well, not to worry. The bankster-installed former eurocrat-turned-Italian Prime Minister promises to pour some [olive] oil on troubled waters.

From EUbusiness:

Italy can help France and Germany find “a new equilibrium” if Socialist frontrunner Francois Hollande wins the French presidential election on Sunday, Prime Minister Mario Monti said Wednesday.

“We have become more pressing and, I hope, more persuasive in a European context,” Monti said at a debate with former World Bank economist Joseph Stiglitz in Rome hosted by a centre-left think tank.

“What could happen in France would be a very important factor,” he said.

“I think Italy has placed itself in a good position to help France and Germany find a new equilibrium if it comes to that,” he added.

Read the rest.

Now isn’t that all better now?

‘The [Greek] centre cannot hold. . .’

There’s a certain irony in quoting that famous poem by William Butler Yeats, in which he so precisely prescribed the arc of the 20th

Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

So of worst of Greek intensity is coming from a name with which Yeats is also identified, Golden Dawn.

Yeats’ Golden Dawn [formally, the Hermetic Order of the Golden Dawn] was something Madonna would’ve joined — a smorgasbord of offerings drawn from various mystical traditions, ranging from Kabbalah to Theosophy. It lasted from 1887 to 1978.

The latter-day incarnation is the extreme Right Greek party whose members give the Nazi salute and wear hoodies adorned with Nazi-esque eagles.

The Greek version bears more in common with the one lasting creation of another early 20th Century mystical order, the Thule-Gesellschaft, a Munich-based smogarsbord that created the shell of what became both the Nazi Party and its newspaper, while contributing several key luminaries to the Party’s ranks, including Hermann Goring, Rudolf Hess, and Alfred Rosenberg.

Which brings us back to Greece, and a center that cannot hold.

From euronews:

Greece is in gloomy mood as it prepares to go to the polls on Sunday, with campaigning taking place against a backdrop of public protest.

Politicians are blamed for painful austerity that has slashed wages and pensions, with the big Socialist and Conservative parties bearing the brunt of public anger.

“The two main Greek parties have signed what Greece’s future will be for many years to come and it’s a one-way street for Greeks to put