Ein Paradox – starker Franken und starke Exporte
Warum sich die teure Schweizer Währung nicht in den Ausfuhrstatistiken niederschlägt
NZZ ONLINE: Der Franken wird immer stärker. Schweizer Exportfirmen warnen vor dramatischen Folgen. Allen Horrorszenarien zum Trotz wächst die Schweizer Wirtschaft in einem erstaunlichen Tempo. Selbst die Exportbranchen legen zu – ein bemerkenswertes Paradox.

Der Schweizer Franken kennt offenbar keine Grenze nach oben. Seit Anfang 2010 hat der Euro gegenüber der Schweizer Währung über 18 Prozent verloren, seit Ende 2007 sogar rund 30 Prozent. Inzwischen ist der Euro für einen Preis von etwa 1.20 Franken zu haben. Selbst die leichte Entspannung der Lage in Griechenland ändert nur wenig an den Tiefstkursen der Gemeinschaftswährung.

Ein starker Franken verteuert die Exporte der Schweizer Firmen ins Ausland. Sie werden durch die hohen Preise gegenüber der ausländischen Konkurrenz benachteiligt. Historisch hatte das meist erhebliche Folgen für den Werkplatz. Beispielsweise hatte eine ähnliche Aufwertung des Frankens gegenüber der damaligen D-Mark von über 25 Prozent zwischen April 1977 und September 1978 die Wachstumsdynamik empfindlich belastet. Aufgrund solcher Erfahrungen wäre eigentlich zu erwarten, dass die Schweizer Exporte jetzt um rund 15 Prozent schrumpfen sollten.

Doch in der Realität ist es umgekehrt. Die Schweizer Wirtschaft wächst weiter in hohem Tempo und auch die Exporte halten sich erstaunlich robust. Dies überrascht offenbar selbst die Ökonomen des Bundes, hat doch das Seco Mitte Juni die Schätzung für das Exportwachstum im laufenden Jahr nochmals nach oben angepasst. Erwartet wird nun eine Zunahme der Exporte im laufenden Jahr um 4,6 Prozent. » | tsf | Donnerstag 30. Juni 2011

BIS Report: The West Must Stop Living On The Never-never

THE DAILY TELEGRAPH: There comes a point where attempts to stave off disaster do more harm than good, writes Jeremy Warner.

Are we reliving the 1930s or the 1970s? Looking at the catastrophe which has befallen Greece, it’s beginning to seem more like the former. The economic upheaval of the 1970s was pretty awful at the time, but ultimately, Western economies worked their way through the decade’s inflationary challenges to enter an unprecedented period of prosperity and economic advancement.

It’s much less easy to be optimistic about the outcome of today’s uniquely complex mix of economic conditions. Admittedly, there is as yet no comparison with the social deprivations of the 1930s, but even so, the inability of many countries to raise themselves out of their post-bubble slump makes comparisons with the pre-war era hard to avoid.

Everything up to and including the kitchen sink has been chucked at the problem, but still we are struggling to achieve escape velocity. Both in terms of fiscal and monetary measures, policymakers are all out of ammo.

The point has not been lost on the Bank for International Settlements (BIS) – often referred to as the central bankers’ bank. In its annual report this week, it draws the opposite conclusion to the one you might expect. If this were a 1930s-style slump, you might expect the BIS to support the present policy mix of ultra-loose monetary and fiscal measures. Instead, it sees this more as part of the problem than the solution. “The sooner advanced economies abandon the leverage-led growth that precipitated the great recession, the sooner they will shed the destabilising debt accumulated during the last decade and return to sustainable growth,” it says. “The time for public and private consolidation is now.”

Much the same strictures are aimed at the Bank of England, whose tolerance of relatively high inflation in pursuit of increasingly elusive growth is regarded by the BIS as dangerous and, if sustained, likely to trigger the kind of super-inflation seen in the 1970s. Continue reading and comment » | Jeremy Warner | Wednesday, June 29, 2011

Austerity Engulfs the High Street
THE GUARDIAN: Thorntons joins growing list of casualties in a week of retail misery that could cost 10,000 jobs

More than 10,000 retail jobs face the axe as the British high street faces one of its most painful bouts of contraction since the second world war amid the biggest squeeze on household budgets for decades.

As the government's austerity measures take hold, experts warned that the number of retailers going bust would continue to rise this year with a number of household names facing insolvency.

The confectioner Thorntons emerged as the latest high street casualty when it said on Tuesday it would close up to 180 stores, putting more than 1,000 jobs at risk. The flooring chain Carpetright followed suit, saying 50 stores could close as consumers shun purchases amid fuel and food price inflation and rising job insecurity, especially in the public sector.

Over the last week, a clutch of high street names announced they were in trouble. Habitat was among several to call in the administrators, putting 750 jobs on the line. The electronics retailer Comet is also shutting stores.

The department store chain TJ Hughes said it was planning to appoint an administrator after a slump in sales, raising a question mark over the future of 4,000 employees who work at its 58 stores in England and Wales.

The retail carnage will intensify the debate around the coalition's spending cuts and, on Thursday, 750,000 teachers and civil servants hold a one-day strike to protest at reforms to pay and pensions which they claim will leave them worse off despite having to pay more to into their retirement plans. In parliament, Labour is lobbying for a cut in VAT payments to bring relief to consumers and cushion shops from spiralling rent bills. » | Richard Wachman | Tuesday, June 28, 2011

THE GUARDIAN: High street slump: The 'dismal science' of a rebalancing economy: Even prosperous towns are tightening their belts – and that means disaster for retailers » | Michael White in Crawley | Tuesday, June 28, 2011

Debt-laden Greece Finds No Buyers in 'Fire Sale' of National Assets

THE GUARDIAN: Greece puts €50bn of national assets on sale in hotel ballroom but private equity firms are not interested

While Greece erupted in protest again, representatives of the country's government were at Claridge's hotel trying to drum up international investors' interest in a "fire sale" of its national assets.

Up for sale are 39 airports, 850 ports, railways, motorways, sewage works, a couple of energy companies, banks, defence groups, thousands of acres of land for development, casinos and Greece's national lottery. George Christodoulakis, Greece's special secretary for asset restructuring and privatisations, said the sell-off would raise €50bn (£44bn) to help pay back the country's €110bn bailout debt.

The private equity bosses gathered in the hotel's ballroom for the parade of Greece's national treasures showed little interest in buying anything.

Nikos Stathopoulous, managing partner of BC Partners, which has invested more than €3.5bn in Greece, said investors are put off by bureaucracy, strong unions, corruption and a lack of transparency. "Even in the good times Greece is not a country that attracts investment. Foreign investors don't want to invest in a country where there is no flexibility in hiring and firing people," he said. "You don't want to invest in a country in which you wake up and a new law has been passed which totally undermines and destroys the value of the investment you've just made." » | Rupert Neate | Tuesday, June 28, 2011

Greek Police Fire Tear Gas on Protesters
THE DAILY TELEGRAPH: Greek police fired tear gas at demonstrators in central Athens at the start of a 48-hour strike to protest austerity measures demanded by international lenders as the price for more financial aid.


As Greece teeters on the edge of bankruptcy, parliament is due to vote this week on a package of spending cuts, tax increases and privatisations agreed as part of a massive bail-out aimed at averting the euro zone's first default.

Following weeks of protests and rolling strikes, ADEDY, the public sector union representing half a million civil servants, and GSEE, which represents 2 million private sector workers, are stepping up pressure on deputies before the votes.

As thousands rallied in Syntagma square near the parliament, hundreds of hooded youths threw stones and bottles at police who responded with tear gas as the initially peaceful mood turned violent. A street umbrella was set fire outside a record-and-book store sending black smoke spiralling into the air above Syntagma Square near the parliament.

The protesters had marched through the capital chanting slogans, banging drums and carrying banners attacking the bail-out deal which many Greeks feel imposes harsh and unjust penalties on ordinary pensioners and workers while sparing the wealthy.

Transport and public services were hit, schools were shut and many shops and businesses were closed, while the streets of central Athens were virtually deserted. » | Tuesday, June 28, 2011

Verbunden »

Heart Advice for High-flyers
Risking It, Cholesterol - Julian's Story

US Spends £12.5 Billion a Year on Air Con in Iraq and Afghanistan
THE DAILY TELEGRAPH: The US military spends about $20 billion (£12.5 billion) a year just to air-condition its bases in Iraq and Afghanistan, a retired senior officer has claimed.

Brigadier General Steve Anderson, who served as chief logistician to General David Petraeus in Iraq, said that the American department of defence (DOD) was shockingly inefficient in its energy use.

"In essence what we're doing is we're air conditioning the desert over there in Afghanistan, Iraq and other places," Brig. Gen. Anderson said.

Taking into account raw fuel, transport and security, "DOD will spend about $20 billion annually to air-condition tents and temporary structures," he told National Public Radio. » | Jon Swaine, New York | Tuesday, June 28, 2011

Greece Seeks Bailout as 48-hour Strike Begins
The Greek finance minister says he wants to finish negotiations about a second bailout by the end of the northern summer. From Athens, Mike Hanna reports.

Australian Woman Predicted to Become World's Richest Person

THE DAILY TELEGRAPH: Gina Rinehart, an Australian woman who inherited a debt-ridden mining company from her father 20 years ago is set to become the world's richest person.

Gina Rinehart, 57, is the richest person in Australia and predicted to become the wealthiest in the world.

Her fortune has more than doubled to A$10.3 billion (£6.8 billion) in the past year because of a commodities boom.

She is on course to overtake Carlos Slim, the Mexican magnate worth £46 billion, and the Microsoft chairman Bill Gates, who is worth £35 billion, Citigroup has estimated.

The financial group calculates that three coal and iron ore projects she is developing will lead her to overtake the men mainly because she owns her companies outright and has no shareholders. » | Telegraph’s Foreign Staff | Monday, June 27, 2011

A Little-noticed Milestone: This Week, House Prices Will Have Fallen Over 30 Per Cent in Real Terms
TELEGRAPH – BLOGS – ANDREW LILICO: Unless something odd happens, this week is likely to see an interesting but under-announced milestone: falls in house prices, in real terms, from their 2007 peak, exceeding 30 per cent (on the well-known Halifax measure). In cash terms, house prices peaked in August 2007, and fell 22 per cent to March 2009. After picking up a little in the second half of 2009 and early 2010, they went back to falling from mid-2010, and have been broadly flat during 2011.

But because inflation is high, that flat performance in cash terms for housing in 2011 means that, after adjusting for inflation, house prices have been falling apace. In real terms, since January 2010, house prices have fallen a further 12 per cent. » | Andrew Lilico | Monday, June 27, 2011

Is the US In Denial over Its $14tn Debt?
BBC: Is America in denial about the extent of its financial problems, and therefore incapable of dealing with the gravest crisis the country has ever faced?

This is a story of debt, delusion and - potentially - disaster. For America and, if you happen to think that American influence is broadly a good thing, for the world.

The debt and the delusion are both all-American: $14 trillion (£8.75tn) of debt has been amassed and there is no cogent plan to reduce it.

The figure is impossible to comprehend: easier to focus on the fact that it grows at $40,000 (£25,000) a second. Getting out of Afghanistan will help but actually only at the margins. The problem is much bigger than any one area of expenditure.

The economist Jeffrey Sachs, director of Columbia University's Earth Institute, is no rabid fiscal conservative but on the debt he is a hawk:

"I'm worried. The debt is large. It should be brought under control. The longer we wait, the longer we suffer this kind of paralysis; the more America boxes itself into a corner and the more America's constructive leadership in the world diminishes."

The author and economist Diane Coyle agrees. And she makes the rather alarming point that the acknowledged deficit is not the whole story.

The current $14tn debt is bad enough, she argues, but the future commitments to the baby boomers, commitments for health care and for pensions, suggest that the debt burden is part of the fabric of society:

"You have promises implicit in the structure of welfare states and aging populations that mean there is an unacknowledged debt that will have to be paid for by future taxpayers, and that could double the published figures."

Richard Haass of the Council on Foreign Relations acknowledges that this structural commitment to future debt is not unique to the United States. All advanced democracies have more or less the same problem, he says, "but in the case of the States the figures are absolutely enormous". » | Justin Webb, BBC News | Monday, June 27, 2011

Interest Rates Need to Rise Globally
REUTERS: Global interest rates must rise to avoid high inflation becoming entrenched, the Bank for International Settlements said on Sunday.

It also warned that delaying deficit cuts could risk intensifying the sovereign debt crisis and have grave consequences were investors to lose confidence in a major economy such as the United States.

"With the arrival of sharper price increases for food, energy and other commodities, inflation has become a global concern," the BIS said in its annual report.

"Tighter global monetary policy is needed in order to contain inflation pressures and ward off financial stability risks."

Of the four major central banks, the European Central Bank is the only one which has raised rates since the intensification of the financial crisis in late 2008. » | Sakari Suoninen | BASEL, Switzerland | Sunday, June 26, 2011

Greek Debt Crisis Prompts Fears of EU Disintegration

THE GUARDIAN: As a Brussels correspondent in the 1990s, Toby Helm reported on the EU at its zenith. Now, as Observer political editor, he returns to a city of uncertainty – over the Greek debt crisis, the future of the euro and the whole political project

Norbert Schwaiger is a true veteran of EU summits. Now in his early 70s, the amiable German recalls with relish the triumphs and disasters from 34 years of service in Brussels as if they all happened yesterday. He chats about Delors, Kohl, Mitterrand, Chirac, Thatcher and the great rows with the British over money. The epic moments of European construction, from the Single European Act in 1986 to the Maastricht treaty in 1992 and the birth of the euro in 1999, are all fresh in his mind.

To catch up with Europe's progress, Schwaiger, a former press officer who retired in 2003, returned to a Brussels summit last week to take the temperature. Much had changed. "The historical idea has faded," he said wistfully. "When we started it was about Germany and France and the Benelux countries building a new Europe to stop the endless wars. Germany, and that generation of Germans, was ashamed of Hitler. It was about creating security, a secure Europe and a secure economy. Then they wanted to have Europe as their new home country."

As EU officials from 27 countries milled around the giant Justus Lipsius building, the venue of a summit dominated by the dire economic plight of Greece and the resulting existential threat to the euro and the EU itself, the contrast in mood could not have been starker from the heyday of integration that Schwaiger had known.

The talk was no longer of high ideals and "more Europe", but of mere survival for the European project. Where they used to talk of "ever closer union" in the commission press conferences, the phrase is now rarely, if ever, heard except when referring to history. José Manuel Barroso, the pragmatic European commission president, set his sights at this summit on "stability" for the foreseeable future, meaning the EU will do well to steady the ship in the face of Greece's financial implosion and possible exit from the single currency. Never mind any new European dreams.

From Schwaiger's perspective, one of the reasons why Europe has run out of idealism is the passage of time. He argues that Germany's postwar guilt, which did so much to power the European project, no longer drives young Germans to think about the EU as their parents and grandparents did. "In Germany the new generation, just out of school, has no memory of this," he says. Instead the young see a Germany united from its former east and west, communism fallen and a continent no longer haunted by its past or racked by the fear that it could plunge back into war. Much of Europe's original raison d'être has disappeared and Germany is now less willing to be its unquestioning, selfless paymaster. » | Toby Helm | Saturday, June 25, 2011

Rettung Griechenlands geht in die zweite Runde

REUTERS DEUTSCHLAND: Brüssel (Reuters) - Trotz der fast aussichtslosen Finanzlage Griechenlands startet die Europäische Union einen zweiten Rettungsversuch des Euro-Landes.

Die EU-Staats- und Regierungschefs stellten bei ihrem Gipfel am Freitag in Brüssel dem angeschlagenen Mittelmeerland ein neues Hilfspaket in Aussicht. "Wir haben verabredet, dass es ein neues Programm für Griechenland geben wird", sagte Bundeskanzlerin Angela Merkel. Zugleich erhöhten sie den Druck auf Regierung und Opposition in Athen, einen strikten Sparkurs einzuschlagen. Die Verhandlungen mit den Banken über eine Beteiligung am Kreditpaket für Griechenland laufen derweil auf Hochtouren. Die EU will dem Wachstum des Landes mit der schnelleren Auszahlung von Mitteln aus den EU-Fördertöpfen auf die Sprünge helfen. » | Reuters Deutschland | Freitag 24. Juni 2011

Christine Lagarde défend sa candidature devant le FMI

REUTERS FRANCE: WASHINGTON - Christine Lagarde a défendu pendant trois heures jeudi sa candidature à la direction générale du Fonds monétaire international (FMI).

La ministre française de l'Economie, favorite pour le poste face au Mexicain Agustin Carstens, est sortie souriante de sa réunion avec les membres du conseil d'administration de l'institution.

A sa sortie, devant la presse, elle a expliqué, en anglais, avoir plaidé "pour un Fonds plus réactif, certainement plus efficace et plus légitime". » | Reuters | Vendredi 24 Juin 2011

Eurozone Debt Crisis Poses Biggest Threat to UK Stability
THE DAILY TELEGRAPH: The eurozone debt crisis poses the "most material and immediate threat" to the UK's financial stability, according to a report by Sir Mervyn King's Financial Policy Committee.


"Sovereign and banking strains are the most material and immediate threat," the committee, chaired by the Bank of England governor, said in its inaugural report.

The committee called for banks to improve their disclosure of sovereign and bank sector exposure and also warned that authorities needed to keep a closer eye on the explosion of "opaque" products such as exchange traded funds (ETFs), which banks increasingly use to raise funds.

It follows an overnight victory for David Cameron in preventing British taxpayers' money being used to bail out Greece.

At a European Union summit in Brussels, the Prime Minister won a fight with Angela Merkel, the German Chancellor, to keep Britain out of any new rescue package.

Germany had wanted to use money from the European Financial Stability Mechanism to bail out Greece. Britain is a contributor and has no veto on how its €11.85billion (£10.5billion) funds are used. » | Szu Ping Chan | Friday, June 24, 2011

Greek Islands Feel Pinch of Debt Crisis
The Greek debt crisis has far reaching consequences and it's not just the cities and the commercial centres, but far off islands are also feeling the pinch.

Greek Island of Aegina, famous for its pistachio farming, is struggling as production continues to dwindle.

Members of co-operatives have come down from 600 to 230, and this year sales are down so payouts are much lower.

Amid the hardship, a German suggestion to sell off Greek islands to pay off the debts has angered the residents and farmers in this picturesque island.

Al Jazeera's Tim Friend reports from Aegina.

People & Power: The Indignant
Demonstrations, marches, rallies. For months now hundreds of thousands of Europeans have been expressing their anger at government imposed austerity measures. So what is driving them? And what do they hope to achieve?

World's Richest Show Growing Appetite for Life's Luxuries

THE GUARDIAN: 'Investments of passion' are all the rage among the wealthy

As the world's richest people got even richer, so did their appetite for the playthings needed to satisfy their lifestyles. Growing wealth from the emerging economies, largely in Asia Pacific, helped spur the demand for these so-called "investments of passion".

Sales of luxury cars jumped, with Mercedes-Benz reporting a rise in sales in China and Hong Kong of 112%, outpacing the total rise in its sales of 5%. Ferrari had its best ever year in China.

Chinese buyers are also pushing up the price of art. Last year, Bright Road, by contemporary Chinese artist Liu Ye, sold for three times the estimated price at auction. Chinese collectors are also passionate about European art. Two world records were set last year: $104.3m for a Giacometti sculpture was later surpassed by a Picasso painting which fetched $106.5m. » | Jill Treanor | Thursday, June 23, 2011

Briton Who Won $1 Billion Divorce Case Files for Bankruptcy

THE DAILY TELEGRAPH: A British woman who won a reported $1 billion in one of the biggest divorce settlements in history has filed for bankruptcy in the US.

Patricia Kluge, a 62-year-old socialite, winemaker and one-time adult film actress, reported debts with her third husband of about £30 million, despite selling her 300-acre estate in Virginia.

She admitted defeat after a £10 million fire-sale last year of paintings, Roman statues, Qing dynasty antiques, a Chippendale commode, a four-poster bed from Hedingham Castle and a George III crystal chandelier.

Liquidating jewellery including 64 carats worth of diamonds, platinum and diamond earrings, and a sapphire-and-diamond Cartier watch, also failed to keep her afloat.

Asked last night where all her money had gone, Miss Kluge would only say: "That's a very long story". Her husband, Bill Moses, has said: "We spent too much, too fast."

"It's not the moment to talk about 'what ifs'," Miss Kluge told The Daily Telegraph, "or for what we coulda, shoulda, woulda".

"It needn't have come to this, and we had settlement talks on the table, but the banks decided this was the route to take. We're focused on the future and moving forward." » | Jon Swaine, New York | Wednesday, June 22, 2011

My comment:

If one has to declare bankruptcy after being in possession of a billion, then there's really no hope for the person! If a billion won't see someone through the rest of his/her life in comfort, then I don't know what will. The old saying, 'easy come, easy go' is as true today as it ever was. – © Mark

This comment also appears here

Give Voters Shares in Bailed-out Banks, Says Nick Clegg

THE DAILY TELEGRAPH: Every adult in Britain would receive free shares in the nationalised banks under plans to reward the public for helping bail out the City during the financial crisis.

More than 46 million people would be handed the shares in Royal Bank of Scotland and Lloyds Banking Group under the “people’s bank” plan devised by Nick Clegg, the Deputy Prime Minister.

The plans propose that ordinary voters would be able to profit from any increase in the value of their shares once the Treasury has recouped taxpayers’ money used for the bail-out – an offer that could eventually be worth up to £1,000 to householders.

Mr Clegg said that it was “psychologically immensely important” for people to be given a stake in the banks in the wake of the financial crisis. “Their money has been used to the tune of billions and billions and billions to keep the British banking system on a life-support system,” he said.

He added that Britons were now “condemned to take an interest in what happens in our banking system” because of its size relative to the economy. He said that giving them shares represented fair compensation for the financial crisis.

Mr Clegg admitted that the Liberal Democrats had been frustrated by the Conservatives in their attempts to rein in the banks and said that he hoped to give the public shareholders a veto over boardroom pay and other issues. » | Christopher Hope, Rio de Janeiro | Thursday, June 23, 2011


My comment:

This is an excellent idea. The people should get far more out of it than a measly £1,000 though. What Nick Clegg says is absolutely correct. They are the people's banks in all but name. But for the people's (forced) generosity, they'd be out of business by now.

This is Nick Clegg's best idea to date. And how Thatcheresque! The banking fiasco has disenfranchised many, many people. This measure would go a little way to restoring the voters' trust in the system. It is also refreshing to hear a politician suggest that the people be given something back in the form of a stake in the economy. God only knows they've had to fork out enough over the years. They are also having to forfeit a decent return on their savings ever since the collapse of the banking system.

Mr Clegg admitted that the Liberal Democrats had been frustrated by the Conservatives in their attempts to rein in the banks...

This doesn't surprise me one little bit. The Conservatives' raison d'être is to serve the wealthiest in society. The bankers count among the wealthiest in society.

Nick Clegg has just gone up in my estimation. Keep the great ideas coming, Nick! We need plenty more of them to mend this broken system. – © Mark

This comment also appears here

Inside Story: Rising Food Prices
Inside Story with Abdolreza Abbassian, an economist at the Food and Agriculture Organization of the United Nations; Marie Brill, a senior policy analyst at Action Aid; and Michael Hewson, a market analyst at CMC Markets

Krise in Europa: Schmidt fordert Wohlstandsprogramm für Griechen

WELT ONLINE: Altkanzler Helmut Schmidt hält sogar eine völlige Pleite Griechenlands für politisch beherrschbar. Die EU fordert er zu nachhaltiger Hilfe auf – in Form konkreter Projekte.

Alt-Bundeskanzler Helmut Schmidt hat vor Panikmache im Zusammenhang mit Griechenland gewarnt. "Wir haben eine Schuldenkrise einzelner kleiner Euro-Länder, keine Krise der Euro-Währung", sagte Schmid der "Zeit".

Demnach hätte selbst "der Bankrott eines einzelnen, kleineren Mitgliedstaates nur eine vorübergehende psychologische Wirkung".

Schmidt forderte die EU dazu auf, Griechenland "durchgreifend" zu helfen. „Das gilt auch für den Extremfall, dass die griechische Regierung gegenüber ihren ausländischen Gläubigern die Zahlungsunfähigkeit erklärt. Selbst dann – und dann erst recht! – wird es entscheidend, dass Europa die griechische Wirtschaft wieder in Gang bringt.“

Ein derartiges Leitprogramm "muss orientiert sein an Leitideen wie Beschäftigung, Produktivität und Volkseinkommen.“ » | WON/pku | Mittwoch 22. Juni 2011

Time for Plan B: How the Euro Became Europe's Greatest Threat

SPIEGEL ONLINE INTERNATIONAL: The euro is becoming an ever greater threat to Europe's common future. The currency union chains together economies that are simply incompatible. Politicians approve one bailout package after the other and, in doing so, have set down a dangerous path that could burden Europeans for generations to come and set the EU back by decades. By SPIEGEL Staff

In the past 14 months, politicians in the euro-zone nations have adopted one bailout package after the next, convening for hectic summit meetings, wrangling over lazy compromises and building up risks of gigantic dimensions.

For just as long, they have been avoiding an important conclusion, namely that things cannot continue this way. The old euro no longer exists in its intended form, and the European Monetary Union isn't working. We need a Plan B.

Instead, those in responsible positions are getting bogged down in crisis management, as they seek to placate the public and sugarcoat the problems. They say that there is only a government debt crisis in a few euro countries but no euro crisis, citing as evidence the fact that the value of the European common currency has remained relatively stable against other currencies like the dollar.

But if it wasn't for the euro, Greece's debt crisis would be an isolated problem -- one that was tough for the country, but easy for Europe to bear. It is only because Greece is part of the euro zone that Athens' debts are a problem for all of its partners -- and pose a threat to the common currency.

If the rest of Europe abandons Greece, the crisis could spin out of control, spreading from one weak euro-zone country to the next. Investors would have no guarantees that Europe would not withdraw its support from Portugal or Ireland, if push came to shove, and they would sell their government bonds. The prices of these bonds would fall and risk premiums would go up. Then these countries would only be able to drum up fresh capital by paying high interest rates, which would only augment their existing budget problems. It's possible that they would no longer be able to raise any money at all, in which case they would become insolvent.

But if the current situation continues, the monetary union will invariably turn into a transfer union, a path the inventors of the euro were determined to prevent. » | Spiegel Staff | Monday, June 20, 2011

Why Won't the EU's Leaders Accept the Euro Is Fatally Flawed - and Allow Greece to Go Bust?

MAIL ONLINE: Yesterday afternoon, Jack Straw became the first senior Labour politician to declare that Greece would leave the euro.

Even BBC correspondents, who often content themselves with parroting European Commission press releases, have grasped that something is wrong.

Little wonder, when Greece’s debt is now growing faster than its economy; making it a mathematical certainty that it will not pay its creditors. The international markets know it: long-term Greek government debt is trading at around two-thirds of its nominal value.

Indeed, the only people who still believe (or pretend to believe) that Greece can remain solvent are the eurozone finance ministers, who have just agreed another bailout.

In a statement of stunning complacency, they praised Athens for a ‘significant and necessary adjustment effort’ which would contribute to ‘avoiding a default’.

They took the same line a year ago, when they offered Greece €110 billion to get through what they insisted was simply a short-term cash crisis.

Now, despite those assurances, they are set to release another €80 billion.
Such bailouts are not useless, but actively harmful: the last thing an over-indebted country needs is more loans.

Why, then, are the eurozone governments doing it?

They know that the bailouts are unpopular with their own constituents.

Every week, German newspapers bulge with stories about wealthy Greeks avoiding tax.

Why, Germans ask, should we have to pay more tax so that Greeks can pay less? Why should we have to work until 67 so that they can retire at 63?

For many Greek professionals, paying your dues to the taxman has become a lifestyle option. Read on and comment » | Daniel Hannan, Conservative MEP for South East England | Tuesday, June 21, 2011

Greek Crisis: EU Leaders Must Act Decisively or Face Disaster, Says IMF

THE GUARDIAN: IMF chief tells eurozone leaders to agree Greece's bailout or trigger further global crisis as EU ministers delay €12bn lifeline

The International Monetary Fund has warned European leaders that their hesitant response to Greece's debt crisis risks triggering the world's second global financial meltdown in three years.

As EU finance ministers scrambled to build a second bailout of Greece in the space of a year, but delayed throwing Athens a €12bn lifeline until next month, the IMF delivered its bluntest public criticism to date of the way EU leaders have handled the crisis.

"Policymakers are yet again facing uncomfortable dilemmas, raising uncertainty about the final outcome," the fund said in its annual assessment of the eurozone. "With deeply intertwined fiscal and financial problems, failure to undertake decisive action could rapidly spread the tensions to the core of the euro area and result in large global spillovers … a disorderly outcome cannot be excluded."

The warning came as the Greek prime minister, George Papandreou, was trying to secure agreement from MPs for a package of measures to cut the country's huge debts that would mean deep wage cuts and sweeping privatisation. Tonight, he faces a crucial parliamentary vote of confidence that could yet derail the delivery of the rescue funds.

After meeting the ministers in Luxembourg, John Lipsky, the IMF's acting head, warned that the Greek crisis would "be felt much more strongly around the world" if it was allowed to draw in core eurozone banks. He indirectly signalled that Europe's attempts to get to grips with the crisis over the past 18 months had been disjointed, indecisive, and unproductive. » | Ian Traynor in Brussels, Larry Elliot | Tuesday, June 21, 2011

Liliane Bettencourt ne sera pas placée sous tutelle
LE POINT: Saisie pour avis par un juge des tutelles des Hauts-de-Seine, la plus haute juridiction française a repoussé la mise sous contrôle.

La Cour de cassation a repoussé la perspective d'un éventuel placement sous tutelle ou curatelle de l'héritière de L'Oréal Liliane Bettencourt, qui a été jugée nécessaire par des experts médicaux. Saisie pour avis par un juge des tutelles des Hauts-de-Seine, la plus haute juridiction française lui a répondu qu'elle n'était plus saisie de la demande de mise sous tutelle déposée l'année dernière par sa fille Françoise Meyers, car cette dernière l'a entre-temps retirée. "Dans une procédure aux fins d'ouverture d'une mesure de protection en cours d'instruction devant le juge des tutelles (...), le désistement d'instance émanant du requérant met fin à l'instance", dit l'arrêt rendu public par la Cour. » | Source Reuters | Lundi 20 Juin 2011

Eurokrise – Griechenland: Einschätzungen vom Schweizer Fernsehen Korrespondenten Jonas Projer
Europa setzt mitten in der gefährlichen Schuldenkrise ein Zeichen der Stärke. Die EU stockt – wie schon länger geplant – ihren Krisenfonds EFSF für Wackelkandidaten auf. Die Garantien der Eurostaaten steigen dazu von derzeit 440 Milliarden auf 780 Milliarden Euro.

Greek PM Addresses Parliament as Protest Continues
Greek prime minister George Papandreou has called on members of parliament to forge a "national accord" to deal with the country's debt crisis.

Papandreou was speaking just hours before EU finance ministers gathered in Luxembourg to discuss a second bailout package for Greece.

Outside parliament protests continued for the 29th day against the government's proposed austerity measures.

Al Jazeera's Tim Friend reports from Athens.

Edmund Conway’s View: Why Germany Must Exit the Euro

THE SUNDAY TELEGRAPH: Germany - not Greece - has 'destabilised the euro area and is one of the biggest road-blocks to its ultimate recovery.

Imagine you’re in charge of Europe. Not, I grant you, the opportunity of a lifetime, but let’s narrow down the job description to one specific question. The only way you can save the single currency is to eject one country from the eurozone. So, who is it to be?

You might be tempted this weekend to say Greece, for understandable reasons. Not only is it facing almost certain default, it has been a constant thorn in the side of the euro – spending too much, saving too little, and displaying the kind of corporate and statistical honesty you could only hope to match by placing Bernie Madoff in charge of FIFA.

But Greece is not the word. Stricken though it is, lancing that particular boil won’t help. Greece’s issues have always been a manifestation of a far deeper problem with the currency, one that policymakers still seem unable to confront. The eurozone has been pulling itself apart for years; removing Greece will not change that.

However there is another eurozone member that sticks out like a sore thumb. It has run its economy just as, if not even more, recklessly than the Mediterranean brothers, has single-handedly destabilised the euro area for the best part of a decade and is one of the biggest road-blocks to its ultimate recovery. That country is Germany.

This might sound counter-intuitive. Germany, after all, has an enormous current account surplus; it honed its productivity and competitiveness over the past decade; where Greece borrowed it saved, where Spain splurged it cut, where Ireland inflated it deflated. But that is precisely the problem. Were Keynes around today he would have identified the issue instantly: in any monetary system, nursing a mammoth current account surplus can be just as destabilising as a deficit. » | Edmund Conway | Saturday, June 18, 2011

Uncertainty Looms for Families in Greece
Looks like an idyllic picture of family life, but despite the sunshine and clear blue skies in the Athens suburbs, there is real hardship here. Yiannis Pantzos and his wife Nadia have both lost their jobs. They are young enough to still have big commitments - a house and small children. Al Jazeera's Tim Friend reports from the Greek capital.

Analysis: The Euro Has Not Brought Europe Closer – It Has Ripped It Apart
THE INDEPENDENT: The scale of Greece's problem is simply stated: her national debt will approach 160 per cent of GDP on current trends. Here in the UK we are supposed to be in crisis because that ratio is heading for about 75 per cent.

Unless the Greek economy grows at an astonishing rate, the interest on that debt simply cannot be paid out of any conceivable tax take, while the spending cuts and austerity packages are conspiring to push the economy into depression (though official figures, viewed with some suspicion, suggest the Greek economy is managing to grow, despite everything).

In terms of timing, the end could come very rapidly. The IMF's acting managing director, John Lipsky, has threatened the eurozone (in reality that means Germany) with no further instalment of the soft existing agreed loan to Greece unless Germany guarantees it and the Greeks start to behave. Read on and comment » | Sean O'Grady, Economics Editor | Saturday, June 18, 2011

Riches to Rags as Guardian Bleeds £33m in a Year
THE GUARDIAN: The Guardian, propped up by a car magazine, faces going out of print after warning of a cash crisis and the threat of more redundancies.

When The Guardian celebrated its centenary in 1921, its most revered editor, Charles Prestwich Scott, summed up his newspaper's values in an essay that is still quoted on its website every day.

"Comment is free," he wrote, "but facts are sacred." Scott, who devoted his entire working life to The Guardian, including 57 years as editor, was a Liberal MP who believed newspapers fulfilled a "higher function" than simply striving for "profit or power".

But Scott, who also owned The Guardian for 22 years, was a pragmatist, too, and stressed in the same essay that a newspaper "is a business, like any other, and has to pay in the material sense in order to live".

What he would have made of the financial mess his successors have allowed his beloved publication to get into is anyone's guess. » | Gordon Raynor, Chief Reporter | Saturday, June 18, 2011

Sarkozy et Merkel unis sur la question grecque
LE POINT: Le président français et la chancelière allemande ont appelé l'ensemble des pays membres à "soutenir l'euro".

La chancelière allemande Angela Merkel et le président français Nicolas Sarkozy sont convenus vendredi de chercher une solution rapide pour aider la Grèce à faire face à sa dette, avec une participation volontaire des créanciers privés. "Il nous faut une solution au plus vite", a déclaré Angela Merkel, tout en se refusant à donner une date précise, alors que Nicolas Sarkozy laissait entendre que la solution devait être trouvée avant le mois d'août, lors d'une conférence de presse commune à Berlin.

"Nous voulons que le secteur privé participe sur une base volontaire (au plan de sauvetage de la Grèce). Je veux insister là-dessus, il n'y a aucune base légale pour une participation obligatoire", a poursuivi Angela Merkel. "Ceci doit être fait en harmonie avec la Banque centrale européenne", a-t-elle ajouté. » | Source AFP | Vendredi 17 Juin 2011

Greece on the Brink?
Will nation's economy default?

Greece Is Fast Approaching the Point of No Return

THE GUARDIAN: An uncontrolled debt default by Athens is suddenly starting to seem a horrible possibility

Greeks rioted, the country's prime minister offered to resign and the yield on Greek two-year sovereign bonds hit 28%. Meanwhile, the Dow Jones industrial average fell 190 points at one stage. Markets are carrying a simple message: we fear politicians and policymakers are losing control of the plot. The long-feared "Lehman moment" – an uncontrolled debt default by Greece, with the impact being felt across the eurozone banking system – suddenly seems a horrible possibility.

Investors' worries are understandable. The past month has seen the European Central Bank and eurozone politicians squabble over the design of the next bailout package for Athens. Private sector investors must share some pain, says German finance minister Wolfgang Schäuble, if German taxpayers' money is to be dispatched. Unacceptable, says the ECB, we cannot allow anything that looks like a debt default, it would be too dangerous. Read on and comment » | Nils Pratley | Wednesday, June 15, 2011

Retail Sales Figures Reveals [sic] Depth of Consumer Slump
THE GUARDIAN: The slump in retail sales in May does not bode well for GDP growth in the second quarter

Retail sales dived by twice the expected rate in May as consumers cut their spending on clothes and other non-food items to pay for higher petrol prices.

Retailers said the difficult economic outlook had depressed consumer confidence and encouraged shoppers to stay away from the high street.

Sales volumes dropped 1.4%, more than reversing the 1.1% increase in April that was mainly attributed to the royal wedding and unseasonally warm weather.

Vicky Redwood, senior UK economist at Capital Economics said the figures showed that April was a temporary blip to a long-term downward trend.

"The underlying trend in sales over the past several months still looks broadly flat at best. What's more, we expect this trend to worsen as households respond to the intensifying squeeze on their real pay. We continue to think that overall household spending will drop by about 1% this year," she said. » | Phillip Inman | Thursday, June 16, 2011

Inside Story: Greece Protests at Austerity Measures
Inside Story with presenter Teymoor Nabili discusses with guests: Vagelis Agapitos, independent economist; Yanis Varoufakis, professor of economics at the University of Athens; and Fotis Boblas, an activist and protester.

Public Sector Workers Back Mass Strike Over Pensions
BBC: Up to 750,000 public sector workers will hold a co-ordinated strike later this month after members of a third major union backed industrial action.

The PCS said its 290,000 members had to defend themselves against "attacks" on their pensions by the government.

But ministers called it "irresponsible" and said the 32.4% turnout showed the strike had "extremely limited support".

The civil servants will walk out on 30 June - the same days as hundreds of thousands of teachers and lecturers.

The National Union of Teachers and the Association of Teachers and Lecturers have announced a nationwide walkout, affecting thousands of schools in England and Wales.

Alongside action from PCS members - who include court staff, immigration officers and air traffic controllers - it will be the biggest outbreak of industrial unrest in the public sector for many years.

Labour leader Ed Miliband wrote on Twitter: "Strikes are a sign of failure on both sides. Government needs to get round table not ramp up rhetoric." (+video) » | Wednesday, June 15, 2011

“Admittance of Greece and Italy into Eurozone Was Huge Mistake” – Economist (June 2, 2011)

Greeks Protest against Rescue, Call for Jobs

Bailouts Could Have Disintegration Effect on Europe - German MP

Klaus-Peter Willsch »

Grève générale: manifestants et policiers s'affrontent à Athènes

TRIBUNE DE GENÈVE: La manifestation à Athènes contre les nouvelles mesures d'austérité dégénère. La police a utilisé des gaz lacrymogènes, tandis que les protestataires lançaient des yogourts et des pierres.

La police grecque a fait usage de gaz lacrymogènes mercredi contre les manifestants rassemblés devant le parlement à Athènes pour protester contre les nouvelles mesures d’austérité en Grèce.

Les protestataires ont lancé des pierres et des yogourts sur les forces de police protégeant le parlement où les députés doivent débattre d’un plan d’austérité de cinq ans destiné à réduire le déficit budgétaire du pays. Selon la police, plus de 20.000 personnes s’étaient rassemblées dans les rues d’Athènes en milieu de journée. Les manifestants voulaient former une chaîne humaine autour du parlement.

Ce mercredi commence l’examen du projet de loi budgétaire comprenant un nouveau volet d’austérité d’ici à 2015, alors, qu’à Bruxelles, les créanciers du pays peinent à s’entendre sur la façon d’aider le pays, menacé de défaut de paiement selon les agences de notation financière. Les créanciers se déchirent sur l’effort à demander aux banques privées créanciers du pays, certains craignant qu’une trop forte implication des banques dans le plan de sauvetage ne déclenche de facto un défaut de paiement de la Grèce, qui par capillarité pourrait entraîner l’effondrement de l’ensemble de la zone euro. » | AFP | Mercredi 15 Juin 2011

Verbunden »

Generalstreik: Griechen protestieren gegen Sparprogramm

FRANKFURTER ALLGEMEINE: Gegen das Sparprogramm der Regierung protestieren heute tausende Griechen vor dem Parlament. Züge und Fähren fallen aus. Ministerien, staatliche Unternehmen sowie viele Banken bleiben geschlossen.

Tausende Griechen sind an diesem Mittwoch vor dem Parlament in Athen zusammengekommen, um gegen das neue Sparpaket der Regierung zu protestieren. Im Parlament ist für den Nachmittag eine Debatte über das Milliarden-Sparprogramm angesetzt.

Schon am frühen Morgen versammelten sich dort zahlreiche Menschen. Während des Tages wollen die sogenannten „Empörten Bürger“ alle Zufahrtsstraßen zum Parlament blockieren. Rund 1500 Polizisten sperrten einen Teil der Innenstadt ab und errichteten zwei Meter hohe Barrikaden vor dem Parlament.

Wegen der Streiks fallen Züge, Fähren und die Athener Vorstadtbahn aus. Ministerien und staatliche Unternehmen sowie viele Banken bleiben geschlossen. Dem griechischen Journalistenverband zufolge wurde der Streik der Journalisten im Fernsehen und Radio, der zunächst 24 Stunden dauern sollte, abgebrochen, um die Berichterstattung wieder aufzunehmen. Auch die Fluglotsen nehmen nicht am Streik teil. Sie zogen ihren Aufruf zum 24-Stunden-Streik mit Verweis auf die touristische Hauptsaison wieder zurück. » | FAZ.NET mit dpa, Reuters, AFP | Mittwoch 15. Juni 2011

Austria Forced to Suspend Sale of Two Mountains

THE DAILY TELEGRAPH: The Austrian government has abruptly pulled two sky-high pieces of real estate – majestic peaks offering stunning alpine views – off the open market after an outpouring of national outrage over the perceived sell-out of the nation's heritage.

BIG, the agency that purchases state property and manages it in the public interest, announced the decision after discussions between Economics Minister Reinhold Mitterlehner and top officials in charge of the agency.

"We have suspended the sale to evaluate alternative possibilities," agency spokesman Ernst Eichinger said. He said the transaction would likely go ahead but buyers would be restricted to "Austrian institutions" instead of the highest free-market bidders.

The peaks are in the easternmost part of Tyrol province, home to some of Europe's highest mountain ranges.

The "Rosskopf" is more than 8,500 feet high, the "Grosse Kinigat" nearly 8,800 feet. They are on offer together for £107,000.

Austria is fiercely proud of its alpine ranges. Its national hymn begins with the worlds "Land of Mountains," its history is replete with the heroic exploits of rugged mountain men – and news over the weekend that the two summits were up for sale next month quickly went viral. » | Tuesday, June 14, 2011

Geroge [sic] Soros Blames Officials as Greek Crisis Escalates

THE DAILY TELEGRAPH: Billionaire investor George Soros has criticised international authorities for "not providing a solution" for the European debt crisis as Greek sovereign bond yields were pushed to record levels again.

Mr Soros, who spoke out as European finance ministers met today to discuss the crisis, said the officials were "basically buying time" rather than tackling the problems. He added: "This is the normal thing for authorities to do. In this case, I'm afraid they are making a mistake."

Credit markets were thrown into fresh turmoil as Greek debt became the lowest rated in the world following a savage downgrade by Standard & Poor's on Monday.

The yield on 10-year Greek government bonds spiked to a record high of more than 17pc as investors demanded a higher return to cover the risks of holding the debt.

Greek debt is now the lowest rated in the world – below Ecuador and Grenada – with many investors now expecting an uncontrolled default.

The emergency meeting of eurozone finance ministers was called by Jean-Claude Juncker, chairman of the group, and comes ahead of a summit in Brussels next week. The group has set a deadline of June 20 to agree a new aid package for Greece, the country's second in 14 months. Read on and comment » | Louise Armitstead | Tuesday, June 14, 2011

Heiress to Buy 57,000-Sq Foot Spelling Home
Candy Spelling's 57,000-square foot Los Angeles home, which had a $150 million asking price, is in contract to be sold to 22-year-old heiress Petra Ecclestone, daughter of billionaire Formula One racing boss Bernard Ecclestone. WSJ's Juliet Chung and Candace Jackson report

No Light Ahead for U.S. Job Seekers
Lakshman Achuthan, co-founder and managing director of the Economic Cycle Research Institute, sees a long, drawn-out slowdown ahead for the U.S. economy, including more sluggish jobs growth that could be around for months to come. He talks with Simon Constable

Greece Given World's Lowest Credit Rating
Standard & Poor's has cut Greece's credit rating by three notches to CCC, the lowest rating of any sovereign nation in the world, as European finance ministers prepare to discuss a new aid package for the country.

The agency said it believed that Greece's recession "could well persist into 2012 and thus may further erode internal political support for the revised EU/IMF programme".

Greece responded by accusing Standard & Poor's of ignoring reform efforts in Athens and European Union talks on debt aid.

Al Jazeera's Paul Brennan and Alan Fisher report from Athens.

House Prices Drop as Lenders Restrict Lending, Say Estate Agents
THE DAILY TELEGRAPH: House prices dropped during the past three months and will continue to do so, surveyors said.

The latest housing survey from the Royal Institution of Chartered Surveyors found that 28 per cent more estate agents reported house prices falling to the lowest level since the beginning of the year.

Ian Perry, a RICS spokesman, said: “Buyer interest in purchasing property remains flat across much of the country and there is little sign of this changing any time soon. “Uncertainty over the economic outlook remains as important as the availability of mortgage finance in depressing demand. On the other hand, the appetite to rent is continuing to grow. And, with little new supply coming onto the lettings market, the cost of renting is increasing and will continue to do so.” » | Tuesday, June 14, 2011

Obamas Ex-Berater Summers fordert weitergehende Steuersenkungen
REUTERS DEUTSCHLAND: Washington - Zur Ankurbelung der US-Konjunktur plädiert Präsident Barack Obamas ehemaliger Wirtschaftsberater Larry Summers für zusätzliche Steuererleichterungen.

Es sei voreilig, die Maßnahmen Ende 2011 auslaufen zu lassen, argumentierte Summers am Sonntag in einem Gastkommentar für die Nachrichtenagentur Reuters. Ohne weitere Unterstützung drohe der amerikanischen Wirtschaft eine jahrelange Stagnation, wie sie Japan erlebt hat. Der Harvard-Professor forderte Steuer-entlastungen sowohl für Arbeitgeber als auch für Angestellte. Derzeit erwägen Summers ehemalige Kollegen in Obamas Regierung lediglich Nachlässe bei der Einkommensteuer. » | Montag 13. Juni 2011

Schuldenkrise: Griechische Tragödie
FRANKFURTER ALLGEMEINE: Nirgends in der Eurozone zogen die Preise nach Einführung des Euro schneller an als in Griechenland. Warnungen hat es viele gegeben. Das Land aber schritt wohlgemut seinem Untergang entgegen.

Es ist verblüffend, wie vorhersehbar Griechenlands Finanzdesaster war – im Nachhinein betrachtet. Dass die verantwortungslose Schuldenmacherei der Athener Regierungen nicht ewig so weitergehen könne, davor warnten viele. Dass die Weigerung griechischer Politiker, ihren Wählern die Wahrheit zuzumuten, eines Tages zu einem bösen Ende führen werde, war ebenfalls seit Jahren zu hören. Doch wie exakt einige Kassandras das Unheil schon vor einem Jahrzehnt kommen sahen, das ist bemerkenswert.

Früh warnten sie vor dem starken Anstieg der Lebenshaltungskosten, der mit dem Euro in Griechenland Einzug hielt und die ohnehin angeschlagene Wettbewerbsfähigkeit des Landes weiter beeinträchtigte. Im Januar 2002, als die neue Währung als Bargeld eingeführt wurde, betrug der Umrechnungskurs 340 Drachmen für einen Euro. Wer damals 3400 Drachmen bei sich trug, hatte viel Geld. Davon ließ sich zum Beispiel ohne Schwierigkeiten ein Mittagessen in einer üblichen Taverne bezahlen, das Glas Wein inklusive. Doch für zehn Euro, das zeigte sich bald, bekamen die Griechen von 2002 an schlagartig weniger als zuvor noch für 3400 Drachmen. In Geschäften und Restaurants wurde großzügig aufgerundet, und viele Griechen hatten Schwierigkeiten, sich an die Tatsache zu gewöhnen, dass nun selbst Münzen etwas wert waren – im Gegensatz zu den Lepta, den griechischen Pfennigen. » | Von Michael Martens | F.A.Z. | Sonntag 12. Juni 2011