True situation within Greece

[yolland]

Washington Post, Nov. 18

As the Daily Mirror reported, Irish parliamentarians are livid over the news that German lawmakers got to pore over Ireland’s new budget before they did. But that was all part of the deal to bail out Ireland earlier this year: “Germany now has the right to be fully informed about bailout countries’ progress before new tranches of funds are paid out.” Or, as the Daily Mirror’s headline screams, “GERMANY IS OUR NEW MASTER.”

And yet, Germany doesn’t exactly seem thrilled at the prospect of further bailouts and expanded schoolmarm duties. German Chancellor Angela Merkel is still refusing to allow the European Central Bank to act aggressively to calm the debt crisis in Italy and Spain. That, in turn, has market analysts freaked. Deutsche Bank’s Jim Reid noted today that it’s impossible to tell whether Merkel is bluffing—to induce reforms in Spain and Italy—or not. (Hey, isn’t that the point of a good bluff?) “If you don’t think Merkel’s tone will change,” writes Reid, “then our investment advice is to dig a hole in the ground and hide.”

Newly appointed European Central Bank president Mario Draghi also declared today that he doesn’t want the central bank to do what economists want him to do and unconditionally guarantee the debts of countries like Italy and Spain...“Credibility implies that our monetary policy is successful in anchoring inflation expectations,” Draghi said. “This is the major contribution we can make. ...Gaining credibility is a long and laborious process. ...Losing credibility can happen quickly—and history shows that regaining it has huge economic and social costs.”

Now, there are two possible responses to Draghi’s speech today. First, what good is the ECB’s credibility on inflation expectations if the euro zone gets utterly destroyed? After all, as Deutsche Bank’s Reid says, “It’s difficult to see any other scenario than widescale sovereign defaults without an aggressive ECB.” The other counterpoint to Draghi’s is that the ECB has already been intervening, in dribs and drabs, in the sovereign bond market. Gary Jenkins at Evolution Securities estimates that the bank is already sitting on 100 billion euros of Italian debt alone. These sporadic interventions haven’t been nearly enough to allay investor fears that Italy might not be able to repay its debt (as Reid says, only an unconditional ECB guarantee will quell the bond markets), but those little purchases are adding up to real money.

So if the ECB is worried about violating Article 123 of the EU treaty, well, as Richard Portes told me earlier this week, they’ve long since crossed that bridge.

[Aygo]

What does Mario Monti [new italian Prime-Minister of the new government of national union/salvation, not subjected to elections], Lucas Papademos [new greek Prime-Minister of the new government of national union/salvation, not subjected to elections] and Mario Draghi [new president of the ECB], all vested these last weeks, have in common?

[LJT]

All former Goldmann Sachs employees/advisors. You would think it was a joke if it wasn't incredibly sad. Would you get an arsonist to put out a fire? The Independent has a good article on it, even if I do believe on their map they get some of the Eurozone countries wrong.

http://www.independent.co.uk/news/bu...e-6264091.html

[Aygo]

Interesting article from the Independent.
Today someone posted on a portuguese site the front page of an edition of the Irish Daily Mirror and it said the Irish budget is being sent to Berlin previously for approval before being "approved" in Ireland. Is that true?

I read too a quote from Mendès France said in 1957. He's french and I read a translation for portuguese. I can't find the original in french, so I'm gonna translate it directly from the portuguese translation to english:

The abdication of a democracy can take two forms: either uses an internal dictatorship, submitting all the powers to a providential man, either delegate its powers to an external authority which in the name of the technique will exercise the political power, because in the name of cleaning up the economy, it easily gets to dictate monetary, budgetary, social policies and finally political in a broader sense, national and international.

And just another update to this vision of what's really happening here:
Nigel Farage - «What give you the right to dictate to the Greek and Italian people?
Nigel Farage - "Barroso in the bunker"

[LJT]

My understanding is that it's been passed to every finance minister in the EU, and was only leaked from the Bundestag.

I find the idea of nationality and all that it entails to be a set of ideas outmoded in this modern world. I like being Irish but don't subscribe to the beating the chest rhetoric, so you could kinda say I'd be for a federal Europe, but i'm never sure bigger is better, as it just seems to me that it leads to reduced accountability and a reduction in actual democracy which people can participate in.

[Aygo]

Originally Posted by LJT

My understanding is that it's been passed to every finance minister in the EU, and was only leaked from the Bundestag.

I find the idea of nationality and all that it entails to be a set of ideas outmoded in this modern world. I like being Irish but don't subscribe to the beating the chest rhetoric, so you could kinda say I'd be for a federal Europe, but i'm never sure bigger is better, as it just seems to me that it leads to reduced accountability and a reduction in actual democracy which people can participate in.

I fully follow what you think. If it's for saving Europe and its people, I'm all for real federalism, where no state is more or less than another.

The question is: Are europeans really ready to abdicate of their national identities (which are very strong in Europe rather than any other part of the world for "ages")? We know that every shot of trying to make an "european empire" of some sort of european community have never ended well (these last 60 years were the only exception). I don't know...
Are bulgarians ready to abdicate of their national identity to join the same federation that spanish does?
Sometimes I feel that in terms of civilizational behaviours, southern Europe is way very close to northern Africa, rather than northen Europe. Do you understand why I posed that question after this?

[financeguy]

Originally Posted by LJT

I find the idea of nationality and all that it entails to be a set of ideas outmoded in this modern world. I like being Irish but don't subscribe to the beating the chest rhetoric, so you could kinda say I'd be for a federal Europe, but i'm never sure bigger is better, as it just seems to me that it leads to reduced accountability and a reduction in actual democracy which people can participate in.

Oh wow, you're really putting it out there dude. Talk about telling it to the man, wow, I'm well impressed, fair play. Is there anyone you don't agree with, as a matter of interest?

I advocate abolishing all social welfare in our li'l country, and shooting IMF traitors pour encourager les autres. I approve of forced sterilisation for heroin users and quite frankly, though I did not agree with the Provos on multiple issues, they kept the peace in certain working class areas of Dublin and Belfast better than the current regime.

Furthermore I believe that the current government of the 26 counties is an illegal entity, and should be removed from office, using force if necessary.

So how do ya like dem apples, Mr be-nice-to-everyone?

[LJT]

I would agree with none of that (Though may I ask why do you think the government is an illegal entity? Not up to speed on current politics of the south)

I am not in agreement with the status quo, big business and politicians in bed together.

The western military complex can take a running jump for all I care.

I'm just trying to work out what our choices are, or what the ideal would be, when I say I would be in favour of a federal Europe, it certainly would not be anywhere near the form it is now, and in my head there exists an idealised version of what Europe could be. I am in favour of more direct democracy but even that comes with caveats "the tyranny of the majority". I would also favour the idea of giving more regions within the UK more power to say meet the needs of the North West of England. Practically I have no real idea how that would work overall (whether increasing bureaucracy, mismatched infrastructures etc) and how something similar could be implemented in a more federal Europe.

As I said I am just trying to work out what would be best as a way of running a state. All ideas generally come with a downside just trying to weigh them up, and work out what is practical and what is not.

I think the social contract between the state and the people has been forgotten and lost somewhere many years ago, where current governments believe they have an inherent right to exist, which is not in line with the people's general wishes. They exist for us and because of us, where at the moment they only exist for themselves. The political systems we use now have no right to exist in perpetuity.

[Aygo]

Hungary asks EU and IMF for financial support

Here you got.
Greece, Ireland, Portugal, (in Italy the IMF is already there without the money... in Spain it'll be soon too), now Hungary.

Let's not forget that this is the third time that the IMF and the EU go for bailout for hungarian economy in these last 10 years.
The results have been catastrophic... As predictable. The consequences of each IMF bailout? Ask another bailout.
This is a non-ending spiral. Only Europe did not realize that yet.

[Aygo]

Germany suffers "disaster" at bond auction
Germany only achieved to put 65% of the debt predicted on the market today.
Germany today tasted its own poison.
Yesterday, Netherlands interests over its public debt started to grow up.
Last week, it happened to Austria(!).
Last week as well, Hungary asked for IFM help (and soon for another bailout) because its austerity policies haven't worked at all this decade!
Spain elected a new (right-wing) government this last Sunday and, right after on Monday, the interests over public debt in certain terms reached higher numbers than Italy (that country that asked IFM technicians and now has a new Prime-Minister from Goldman Sachs).

F***KING WAKE UP, EUROPE!!!
We're getting tired of this and certainly powerless to fight against this...

[mama cass]

no one knows what to do...

[LJT]

Who was it that said that parliament is just an entertainment to keep the masses distracted? Some of the stuff they choose to debate is just mind boggling when there are more pertinent issues at hand.

If you enjoy rants, I recommend reading George Monbiot's last few columns on the Guardian. Previously I have found him quite shrill and disingenuous, but he's been hitting the nail on the head in the past few.

[Aygo]

Eurozone debt web: Who owes what to whom?

(US and Japan included in the eurodebt)

Guess what? Portuguese and greek debts are ridiculous compared to german's, french's or italian's!
And, as I suspected for a while, Portugal owes money mostly to Spain... And Portugal and Spain, most of all, depend on each other economically, so the "systemic" and "contagious" effect from portuguese debt is... FAKE!

I just read that the IFM is preparing a 600 000 million euros (I think american say this number as 600 billions, I'm not sure) bailout for Italy very soon!
If this is true, what does it means?

GAME OVER, Europa.

[Aygo]

What were two Irish budget documents doing in Berlin?

Germany and France step up push for EU control of budgets

Is this what is intended by a common economical Government?

Is this the federalism we're supposed to embrace?

If this is federalism... No, thanks. Keep it for yourself.

[Canadiens1131]

Originally Posted by Aygo

What were two Irish budget documents doing in Berlin?

Germany and France step up push for EU control of budgets

Is this what is intended by a common economical Government?

Is this the federalism we're supposed to embrace?

If this is federalism... No, thanks. Keep it for yourself.

The federal budget documents are in Germany because seemingly half of fucking Europe couldn't keep its shit together.

Germans owns a large swath of Europe now. Money is as good as troops on the ground in this day and age. Ironically, this time Germany is the responsible older brother giving the rest of the shitty irresponsible kids loans so they can pay their next month's rent.

[Aygo]

Really?
Is that why Germany has a public debt almost as big as other European countries too? In 2010 was 84% of the GDP (Spain had almost 70%, France 86%, Italy 107%).
Is that why german newspapers have been claiming that Germany has a debt of almost €5 billion (european billion, not american billion)?
Is that why german (french and dutch) banks have been financing for years and years actives and debt from countries like Greece? Is that why France and Germany bank are exposed in more than €100 000 million to greek debt (and I'm only talking about the greek debt, let's no imagine other countries')?
Is that why Germany is the country who most produces and sells weapons to Greece because of both's conflict with Turkey?
Is that why Merkel's coalition partner FDP (economic liberalists) were huge fans of federalization when they had 15% in 2009 and now that surveys give them 3% they became euroskepticals?
Is that why debt was forgiven to Germany in the late XIX century/beggining of the XX century?
Is that why debt was forgiven to Germany after the II World War, in 1953, by the then-called "haircut", that allowed Germany, not only to rebuild itself, but to pay the debt with low interests and taking into account the level of annual GDP growth (the agreement said that Germany should pay the equivalent no more than 5% of the GDP)?
Is that why Germany debt was literally forgiven by a huge default when East and Western Germany reunited, so the reunification and the integration in the EU could be easier?

Don't f****** kidding me!
Germany is in the same boat we do. There were, in fact, some policies to reorganize the welfare state and to promote and open industry. They opted to increse the public debt, like every other european country (told by ECB) to save the bank in 2008/9.
But let's not forget that 66% of what Germany produces is for Europe! Germany depends on the internal european market. Germany is the biggest beneficiary of having a common, yet very strong currency.
Germany has to let the ghost of Weimar's inflation go away! Europe desperately needs the ECB to work as it should, to print money and to do what ECB said it was going to do after the States saved the bank in 2008!

When surveys ask if germans want Merkel for a third mandate, 80% say no, even if CDU/CSU still has 31-35% in opinion polls.
Germany will have elections in 2013. Merkel although still leads with 31-35% in polls, won't be able to make a coalition again. Her present partner, the FDP, only has 3% now. And the other big party, the SPD is not interested in a "central block". The most probable scenario is a new scenario (not for Baden-Wuttenburg) of a coalition between SPD and The Greens.
Every ancient german leader, with no exception, has been harshly critical of Merkel, even ex-leaders of her party like Helmut Kohl said recently that she's ruining Europe. Critics have been claiming they're getting convinced that she and her team have absolutely no idea about how finantial markets work. Merkel it self is struggling to mantain its coalition with FDP that has threatned to break it.
I'm afraid, really afraid, 2013 deadline will be too late...
...For Germany and for Europe.

[yolland]

Telegraph (UK), Dec. 5 (Ambrose Evans-Pritchard)

Be careful of the German term 'Fiskalunion', the next phase of Europe’s misadventure. What Chancellor Angela Merkel means is increased powers to police the budgets of EMU sinner states. She means prior vetting of fiscal plans. She means automatic fines, cuts in EU development funds, and loss of EU voting rights for alleged violators, all justiciable before the European Court. The correct term is 'Stability Union', as the Chancellor calls it at home. It certainly entails unprecedented intrusion into the internal affairs of sovereign states, but in one direction only: discipline, without transforming help.

None of Mrs Merkel’s proposals--whether enshrined in EU treaties or not--offer any meaningful solution to the crisis at hand. They continue to ignore the cancer in the EMU system: the corrosive 30% currency misalignment between North and South, and the German-Dutch trade surplus. Her plan clings to the Wagnerian myth that Club Med fiscal extravagance is the cause of all the trouble, though Spain had a budget surplus of 2% of GDP five years ago and never broke the Stability Pact--unlike Germany--and Italy has long had a primary surplus. But you can bang your head against a wall trying to convince the Puritans that their morality tale is bad science, or that enforced contraction in the South without offsetting expansion in the North can only push Italy, Spain, Portugal, and Greece deeper into suffocating debt deflation and ultimately lead to a 1930s black hole for everybody. The Puritans want pain. Only suffering cleanses.

It is an inescapable truism that monetary union must balance internally over time, either by trade or by capital flows. If the German bloc cuts off capital for the South--the “sudden stop” of 2009-2011--then the same German bloc must accept a lower trade surplus.

Historians can only smile, or weep. Germany is unwittingly doing to Spain exactly what America did to Weimar Germany after flooding the country with cheap capital in the late 1920s. When Wall Street cut off funds and ended the credit boom, Germany collapsed. There was a chorus of self-righteous pedants in Hooverite America who turned this into a question of cultural ethics, reproaching the Germans for lack of discipline and failing to work hard enough. Sound familiar?

Be that as it may, the German plan is not for fiscal union as understood in any other country. Mrs Merkel stands at the edge of the Rubicon: she has not crossed it. She has not agreed to joint debt issuance, eurobonds, fiscal transfers, or shared budgets, and nor can she do so lightly given that Germany’s constitutional court ruled in September that the sovereign powers of the Bundestag may not be alienated to an EU body. "The sovereignty of the German state is inviolate and anchored in perpetuity by the Basic Law. It may not be abandoned by the legislature,” said chief justice Andreas Vosskuhle at the time. "There is little leeway left for giving up core powers to the EU. If one wants to go beyond this limit…then Germany must give itself a new constitution. A referendum would be necessary," he said.

This is why Mrs Merkel can only nibble at the edges of fiscal union, hoping to use the EU “ratchet clause” for limited treaty changes without need for a referendum. As of this weekend, Mrs Merkel was still saying that “joint liability is not possible” and that “eurobonds cannot now be used as a rescue measure in this crisis. Whoever does not understand this, does not understand the nature of the crisis.”

[mama cass]

cheers Yolland, interesting quotes! the Telegraph is an incredibly right-wing-leaning paper in the UK though, so will not be pro-Europe...

it's true, until the past few days, the media has been very ambiguous re. the term fiscal union, and it was only around this weekend that they started clarifying what it actually means, tighter monitoring and punitive measures, as opposed to harmonising tax systems, which i could never get my head around! Sarko and Merkel do seem to be getting very heavy handed now and have certainly done a massive U-turn from "we're all in this together!" just a few months/weeks ago, to now rejecting joint liability and wanting to adopt these punitive measures for "naughty" countries! wonder what will happen when Italy and Spain cannot meet their debts, because France will be truly fucked at that point!

France seems totally obsessive about staying close to Germany, but that does go back to the very origins of the EU, the ECSC of which France and West Germany were founding members - France suffered greatly from invasion during WW2 and after the war vowed to tie itself to Germany economically in order to protect itself... i swear that's still where France is coming from in a way...

also Sarkozy could be voted out next year with the French elections, so what then?

[WalkOn21]

Originally Posted by yolland

Telegraph (UK), Dec. 5 (Ambrose Evans-Pritchard)

Quotes from the Telegraph will hardly give a fair and balanced view of the eurocrisis.

Not only do they present their readership with the most negativistic possible reporting on the eurozone, they don't shy away from printing exaggerations and outright falsehoods either. Such as when they claimed that Slovakia had been "bullied into" agreeing to the EFSF expansion in a second vote after its government fell, when in reality Robert Fico (the opposition leader) had always said he would agree to it and that he was only voting against it the first time because it would bring the right-wing government down, with him being quoted as saying: "We’re saying ‘no’ to a rightist government, but we’re saying ‘yes’ to the rescue fund."

So excuse me for not paying much attention to what the Telegraph prints. It reads like a UKIP pamphlet.

[Aygo]

Originally Posted by WalkOn21

Quotes from the Telegraph will hardly give a fair and balanced view of the eurocrisis.

Not only do they present their readership with the most negativistic possible reporting on the eurozone, they don't shy away from printing exaggerations and outright falsehoods either. Such as when they claimed that Slovakia had been "bullied into" agreeing to the EFSF expansion in a second vote after its government fell, when in reality Robert Fico (the opposition leader) had always said he would agree to it and that he was only voting against it the first time because it would bring the right-wing government down, with him being quoted as saying: "We’re saying ‘no’ to a rightist government, but we’re saying ‘yes’ to the rescue fund."

So excuse me for not paying much attention to what the Telegraph prints. It reads like a UKIP pamphlet.

So, Robert Fico only voted against it in the "first round" only to bring the government down so his party could govern (with new elections?), is that it?
In Portugal, a journalist that comments news said that reunions with the euro-chiefs were so tough that the Prime-Minister left her last the reunions in tears. Is that true?