Wednesday, 30 November 2011

Preparing for the Worst: The High Price of Abandoning the Euro

SPIEGEL ONLINE INTERNATIONAL: There is mounting speculation that the euro zone will break apart, or even that the single currency will be abandoned altogether. It often sounds as if such scenarios wouldn't be so bad for Germany. In fact the consequences would be catastrophic for Europe and for its largest economy.

The warning signs are mounting, and fresh news is adding to the gloom every day. Britain's financial watchdog has instructed banks to brace for a possible break-up of the euro zone. British currency trader CLS Bank is reportedly conducting stress tests to prepare for this worst-case scenario.

Polish Foreign Minister Radoslaw Sikorski made a dramatic appeal to Germany on Monday to prevent a collapse of the currency union, saying: "We are standing on the edge of a precipice."

German investors are jettisoning derivatives on a large scale because they have lost confidence in the instruments. For the first time, it appears, people across Europe regard the downfall of the euro as a real possibility. » | David Böcking | Tuesday, November 29, 2011
Pink Diamonds Find New Best Friend: China's Rich

Asia Today: Wealthy Chinese are moving their investments from stocks and bonds to one of the world's rarest gemstones: pink diamonds. Plus, dissident artist Ai Weiwei collects $1 million in donations to help him pay a tax bill.

«Jetzt beginnen zehn kritische Tage»

TAGES ANZEIGER: EU-Währungskommissar Olli Rehn sieht die Bemühungen zur Lösung der Euro-Schuldenkrise in einer entscheidenden Phase. In den nächsten Tagen müsse eine Antwort auf die Schuldenkrise gefunden werden.

Vor Beginn des heutigen EU-Finanzministertreffens in Brüssel warnte EU-Währungskommissar Olli Rehn: «Jetzt beginnen zehn kritische Tage.» In dieser Zeitspanne müsse die Antwort auf die Schuldenkrise in der EU zum Abschluss gebracht «und beschlossen werden», sagte Rehn. Am 8. und 9. Dezember treffen sich die EU-Staats- und Regierungschefs für einen Gipfel in Brüssel. » | jak/sda | Mittwoch 30. November 2011
Strikes Hit Services as Millions Heed Unions' Call to Fight Pension Cuts

THE GUARDIAN: • Disruption across UK as many services come to virtual halt • Osborne: 'I'm not picking a fight with anyone' • Airports, schools, rail services and hospitals affected

The UK is expected to experience the worst disruption to services in decades as more than 2 million public sector workers stage a nationwide strike, closing schools and bringing councils and hospitals to a virtual standstill.

The strike by more than 30 unions over cuts to public sector pensions started at midnight, leading to the closure of most state schools; cancellation of refuse collections; the postponement of thousands of non-emergency hospital operations; and the prospect of delays at airports and ferry terminals.

The TUC said it was the biggest stoppage in more than 30 years and was comparable to the last mass strike by 1.5 million workers in 1979. Hundreds of marches and rallies are due to take place in cities and towns across the country.

The day of action takes place the day after the chancellor, George Osborne, fuelled anger by announcing a fresh wave of pay restraint for public sector workers to help fund economic growth plans and signalling plans to end national pay bargaining within two years.

Osborne denied he was picking a fight with public sector workers. » | Severin Carrell, Dan Milmo, Alan Travis and Nick Hopkins and Hélène Mulholland | Wednesday, November 30, 2011
George Osborne's Series of Bitter Pills

THE GUARDIAN: Message that 'we're all in it together' seems hollow as chancellor takes aim at public sector workers and those reliant on credits

This was the day George Osborne did his best not to be buried by bad news. He came to the chamber of the House of Commons to deliver an autumn statement that prophesied a long, bleak winter for the British economy, a downturn unmatched in the postwar era, one that would stretch for seven lean years.

His task was to release a mudslide of gloomy numbers, forecasts and projections – and somehow remain standing, looking like a man who not only bore no blame for this dire state of affairs but who would pull the country out of the mess. There can't have been many tougher assignments in recent British political history. Just one of the announcements Osborne had to make would, in normal times, have represented a day of despair for a chancellor. But these are not normal times.

So he had to declare that the coalition's signature political promise would be broken: they would not, after all, pay off the deficit by the end of this parliament. That goal had now receded to the distant horizon of 2016-17.

All the pain, the tax rises and spending cuts, that were meant to turn red ink black, would be, if not quite in vain, in pursuit of a goal now revealed as vanishingly remote. » | Jonathan Freedland | Tuesday, November 29, 2011

Tuesday, 29 November 2011

Connecticut Wealth Managers Win $250m Jackpot

BBC: Three wealth managers who live in one of the richest cities in the US have won a lottery jackpot of $254m (£163m).

Greg Skidmore, Brandon Lacoff and Tim Davidson, from Greenwich, Connecticut, won the 2 November Powerball draw after buying a $1 ticket.

They formed a trust after the draw and went public once plans for the cash were finalised, a lawyer said.

The jackpot was the largest ever won in Connecticut and the 12th biggest in Powerball history.

After tax, the winnings will be greatly reduced but still extremely large, totalling $103,586,824.51, the Associated Press reported.

After realising they had won, the men formed a trust fund to help manage the money before going public.

A lawyer for the three men said a portion of that after-tax sum would be donated to charity.

"Obviously, everybody is extremely excited," said Jason Kurland, the lawyer. "These numbers are huge. This is going to benefit many people." » | Tuesday, November 29, 2011
Egypt’s Economy in Crisis

Saturday, 26 November 2011

Prepare for Riots in Euro Collapse, Foreign Office Warns

THE DAILY TELEGRAPH: British embassies in the eurozone have been told to draw up plans to help British expats through the collapse of the single currency, amid new fears for Italy and Spain.

As the Italian government struggled to borrow and Spain considered seeking an international bail-out, British ministers privately warned that the break-up of the euro, once almost unthinkable, is now increasingly plausible.

Diplomats are preparing to help Britons abroad through a banking collapse and even riots arising from the debt crisis.

The Treasury confirmed earlier this month that contingency planning for a collapse is now under way.

A senior minister has now revealed the extent of the Government’s concern, saying that Britain is now planning on the basis that a euro collapse is now just a matter of time.

“It’s in our interests that they keep playing for time because that gives us more time to prepare,” the minister told the Daily Telegraph.

Recent Foreign and Commonwealth Office instructions to embassies and consulates request contingency planning for extreme scenarios including rioting and social unrest. » | James Kirkup, Deputy Political Editor | Friday, November 25, 2011

THE GUARDIAN: Eurozone looks to International Monetary Fund as contagion spreads: • Italian and Spanish bond yields reach new highs • Belgium downgraded by S&P credit-rating agency » | David Gow in Brussels and Giles Tremlett in Madrid | Friday, November 25, 2011

Friday, 25 November 2011

Belgique: S&P abaisse la note à AA

LE FIGARO: L'agence de notation Standard & Poor's (S&P) a abaissé d'un cran la note souveraine de la Belgique à AA, contre AA+, avec perspective négative. La note "AA"appartient à la catégorie des émetteurs de "haute qualité".

Cette dégradation est "liée à la diminution de confiance des investisseurs sur le plan mondial", a réagi le ministre belge des Finances, Didier Reynders, jugeant toujours solide la note du royaume. La décision de S&P renforce la nécessité de "finaliser à très brève échéance le budget 2012", a-t-il ajouté, cité par l'agence Belga.

Dans la foulée, le premier ministre belge en affaires courantes Yves Leterme a lancé un appel aux six partis négociant la formation d'un nouveau gouvernement, après la dégradation de la note du pays, pour qu'ils trouvent un accord avant lundi sur le budget 2012. » | Avec l'AFP et Reuters | vendredi 25 novembre 2011
Is This Really the End?

THE ECONOMIST: Unless Germany and the ECB move quickly, the single currency’s collapse is looming

EVEN as the euro zone hurtles towards a crash, most people are assuming that, in the end, European leaders will do whatever it takes to save the single currency. That is because the consequences of the euro’s destruction are so catastrophic that no sensible policymaker could stand by and let it happen.

A euro break-up would cause a global bust worse even than the one in 2008-09. The world’s most financially integrated region would be ripped apart by defaults, bank failures and the imposition of capital controls (see article). The euro zone could shatter into different pieces, or a large block in the north and a fragmented south. Amid the recriminations and broken treaties after the failure of the European Union’s biggest economic project, wild currency swings between those in the core and those in the periphery would almost certainly bring the single market to a shuddering halt. The survival of the EU itself would be in doubt.

Yet the threat of a disaster does not always stop it from happening. The chances of the euro zone being smashed apart have risen alarmingly, thanks to financial panic, a rapidly weakening economic outlook and pigheaded brinkmanship. The odds of a safe landing are dwindling fast. » | From print edition | Saturday, November 26, 2011
Black Friday: Most Important Day of the Year for the US Economy

THE DAILY TELEGRAPH: Black Friday is being billed more than ever as the most important day of the year for the US economy, a carnival of consumerism in which Americans are expected to shop their way out of the country's financial woe.

Some 152 million people – almost half the population – are due to pass through checkouts carrying heavily discounted products, spending upwards of $50 billion (£31 billion), according a survey by the National Retail Federation (NRF).

Black Friday, the day after Thanksgiving, traditionally marked the moment retailers moved into profit, or "the black". Latterly it has been when consumers queued for hours in the cold to dash around shops, fighting over the latest half-price LCD widescreen televisions.

But amid the highest poverty rate for 28 years, sluggish economic growth and a headline unemployment rate of nine per cent that still grossly under-represents the painful extent of joblessness around the country, some Americans say they have had enough.

A backlash has struck leading retailers such as Best Buy, Macy's and Target which, in a parallel annual ritual, decided that they could not wait and must open their doors at 10pm on Thursday night. Toys R Us is going one better, welcoming customers at 9pm.

"Many holiday shoppers would rather stay up all night to take advantage of retailers' Black Friday deals than set their alarm to wake up the next morning," said the NRF president, Matthew Shay, in a statement critics dismissed as mindless. » | Jon Swaine, Washington | Thursday, November 24, 2011

Related »

THE GUARDIAN: What is Black Friday? : The discount shopping day follows Thanksgiving and is expected to lure millions of US shoppers ¶ Black Friday is the traditional start to the Christmas shopping season in the US. It falls the day after the country's Thanksgiving celebration and has become a discount shopping day when millions of US shoppers are lured by massive savings. This year it falls on Friday 25 November and some stores in the US are even opening at 4am to tempt bargain hunters. » | Mark King | Friday, November 25, 2011
Christmas Sales Frenzy Starts Early

THE DAILY TELEGRAPH: High street shops have started slashing prices early in a bid to entice shoppers to spend money after a renewed slump in consumer confidence.

An unseasonably warm November has also left many stockrooms stuffed with unsold winter clothes with just a month to go until Christmas.

Retailers such as Debenhams, New Look and Currys are among the chains cutting prices heavily this weekend as they try to drum up business in the run-up to Christmas.

Debenhams, for example, has reduced the price of all hats, coats, scarves and gloves by 30 per cent. It is also selling many of its cosmetic ranges at “duty free prices”, with discounts of up to 15 per cent.

It is unusual for so many retailers to be offering money-off discounts before December has even started. High street experts say that there is far more discounting than there was last year.

Matthew McEachran, a retail analyst at Singer Capital Markets, the stockbroker, said: “There is absolutely no doubt that the money-off promotions are coming thicker and deeper than last year.” Read on and comment » | James Hall, Consumer Affairs Editor | Thursday, November 24, 2011

Thursday, 24 November 2011

Shock as €6bn German Bond Sale Ends in Failure

THE GUARDIAN: European commission president says Brussels must be able to impose tax and spending controls on member states

Global financial markets prepared for the euro's endgame after the sovereign debt crisis spread to Germany, the "stability anchor" of the single currency, and investors shunned its government bonds.

Europe's biggest economy suffered what analysts called a "complete and utter disaster" as it managed to sell only two-thirds of its 10-year bonds at auction. "It's a vote of no confidence in the entire eurozone," one said.

Stock markets slumped, the euro fell to a recent low and France came under renewed pressure after it emerged it could be forced by Belgium to pump more emergency aid into rescued lender Dexia. Both countries were forced to deny reports that a €90bn restructuring plan for Dexia was being renegotiated.

Fears of a new credit crunch were heightened by reported problems at Belgian lender KBC and a €10bn (£8.6bn) requirement for fresh capital at Germany's bigger banks.

Paris was again warned – by the Fitch agency – that the country could soon lose its triple A credit rating if the debt crisis and economic downturn deepened. Yields on key eurozone sovereign bonds, including Germany's, rose in tandem, with Italy's back above 7% in late afternoon trading.

Amid widespread investor anxiety about the future, the European commission president, José Manuel Barroso, admitted that it would be impossible to save the euro unless eurozone countries agreed to strict controls from Brussels and the European Central Bank in their tax-and-spend policies. » | David Gow | Wednesday, November 23, 2011

WELT ONLINE: Barroso fühlt sich von der Bundeskanzlerin verraten: Der EU-Kommissionspräsident und die Bundeskanzlerin sind tief zerstritten. Während Merkel für langfristige Lösungen plädiert, ist Barroso für schnelle Hilfen. ¶ Ein friedlicher Tag in Brüssel. Seit Tagen wartet Europa auf diese Pressekonferenz, auf die Kommissionschef José Manuel Barroso sich gerade vorbereitet. Dann kommt ein Bote in sein Büro, er hat schlechte Nachrichten. Die deutsche Kanzlerin habe Barrosos Vorschläge zur Einführung von Gemeinschaftsanleihen, den sogenannten Euro-Bonds, im Bundestag als „unpassend“ und „bekümmerlich“ bezeichnet. Kurz bevor Barroso seine Pläne offiziell vorstellen würde. ¶ Das war am Mittwoch, und dieser Vorfall markiert den endgültigen Bruch in einer Beziehung, die in den vergangenen Jahren viele Höhen und einige Tiefen erfahren hat, aber niemals zerrüttet war. „Chère Angela“, „lieber José Manuel“ – das ist jetzt vorbei. » | J. Dams, C. B. Schiltz und K. Seibel | Donnerstag 24. November 2011
Ratingriese Fitch setzt Portugal auf Ramschniveau

WELT ONLINE: Nach der Herabstufung ist Portugal kein Land mehr, in dem es sich zu Investieren lohnt. Die Portugiesen antworten mit einem Generalstreik.

Die Ratingagentur Fitch hat die Kreditwürdigkeit Portugals herabgestuft. Die Agentur bewertet das Land nun mit der Note „BB+“ nach bislang „BBB-“, wie die Experten von Fitch mitteilten. Damit rutscht das Land in den Bewertungskategorien auf "Spekulations- oder Ramschniveau".


Der Ausblick sei negativ, Portugal habe keinen Status als Investment-Land mehr. Die Ratingagentur begründete ihren Schritt mit den großen Ungleichgewichten im Haushalt, der hohen Verschuldung über alle Sektoren hinweg sowie einem ungünstigen konjunkturellen Ausblick. Fitch rechnet damit, dass die portugiesische Wirtschaft nächstes Jahr um drei Prozent schrumpft. » | Reuters/dapd/woz | Donnerstag 24. November 2011
M&S Brings Comfy Knickers and Curry Back to Paris

REUTERS: The French may scoff at British cooking and fashion, but retailer Marks & Spencer (MKS.L) reckons France is yearning for its ready-made chicken tikka masala, gourmet chutney and sensible knickers.

The veteran British store opened a flagship store on Paris's Champs-Elysees on Thursday after a decade's absence from French soil, bringing the taste and feel of the British Isles to a city that sees itself as a world capital of food and fashion.

Britain's biggest clothing retailer, known too for its home goods and upmarket food, sparked howls of protest in 2001 when it shut up shop in France to stem losses in mainland Western Europe and focus on its home turf, leaving British expatriates and anglophile Parisians bereft.

The return to France is part of a new international strategy to open stores and websites in a handful of countries, rather than the scattergun approach of the past. Goods at the Paris store will be priced around 10 percent higher than in Britain, but M&S said they would be competitive for the French market.

"I am impatiently waiting for the reopening," said Karine, a French TV producer and blogger who preferred not to give her last name. "For me, it's a little like Proust and his madeleine."

While underwear is at the top of the list for many a female M&S shopper -- "They're the only ones to do super comfy underwear," said Karine -- food is also a major draw.

Karine's list of remembered favorite foods from the 127-year-old retailer included "crumpets, scones, pies, chutney, Indian food" -- foodstuffs rarely seen elsewhere in France. » | Alexandria Sage and Vicky Buffery | PARIS | Thursday, November 24, 2011

M&S Paris »

THE GUARDIAN: Marks & Spencer opens Paris store 10 years after 'tragic' exit: But expat brigade expecting Earl Grey tea and streaky bacon disappointed as chief executive Marc Bolland concentrates on selling lingerie and cashmere sweaters » | Kim Willsher in Paris | Thursday, November 24, 2011

THE DAILY TELEGRAPH: Marks & Spencer celebrates their return to France: Marks & Spencer has opened their first store in France for a decade. Henry Samuel went to the shop on the Champs-Elysées to find out more. ¶ The queue that snaked 150 yards up the Champs-Elysées towards the Arc de Triomphe was curiously orderly by French standards. ¶ But then at least half of its 500-odd occupants were British, mostly women, stoically waiting to get a foot into the door of the first Marks and Spencer outlet on French soil since the group shut up shop 10 years ago. ¶ No sooner were the doors of M&S's three-floor Gallic flagship flung open, however, calm gave way to an unseemly stampede for scotch eggs as expats and French anglophiles succumbed to their pent-up cravings for a string of British "delicacies". » | Henry Samuel, Paris | Thursday, November 24, 2011
Happy Thanksgiving!

I should like to take this opportunity to wish our American visitors, followers, and Twitter followers VERY HAPPY THANKSGIVING.

Image courtesy of Google Images

Wednesday, 23 November 2011

Eurobond Plan Sets Barroso on Collision Course with Merkel

THE GUARDIAN: The German chancellor has already made clear she does not see eurobonds as a long-term solution to the eurozone crisis

The European commission faces stiff opposition from Germany on Wednesday when it unveils plans to tackle the spiralling sovereign debt crisis with bonds jointly issued by eurozone nations.

Commission president José Manuel Barroso is expected to argue strongly for stability bonds, also known as eurobonds, against a backdrop of soaring borrowing costs and shattered confidence around Europe.

He must then take his plan to French president Nicolas Sarkozy and German chancellor Angela Merkel, who has already made clear she does not see eurobonds as a solution worth considering at this stage in the crisis.

"If at all, this discussion belongs at the end so I don't find it particularly fitting that we are now once again conducting it in the middle of the crisis, as if it were the answer," Merkel said. "In the long term, it isn't." » | Katie Allen and Graeme Wearden | Tuesday, November 22, 2011

Tuesday, 22 November 2011

Islamic Banking and Finance

PAKISTAN TODAY: Many people think that Islamic banking and finance is a cure to all the financial woes. In fact that is not the case. Islamic banking and finance is as man-made as the conventional banking. The only difference is that Islamic banking and finance seeks basic guidance from Islamic sources like the Quran, Sunnah, Ijma and Qiyas. Only because of this Islamic banking and finance is free from some of the weaknesses and problems besetting conventional banking. There is very strong theoretical evidence that the principles of Islamic banking and finance are superior to the principles of conventional banking. This is why one would be inclined to assert that had Islamic banking and financial principles been implemented in the financial markets the problems we are facing today in financial industry would have been avoided to a great extent. » | Durdana Najam | Monday, November 21, 2011
Is Richard Branson All He's Cracked Up to Be?

THE GUARDIAN: The billionaire Virgin boss is no radical, he's no entrepreneur, he's just a plain old-fashioned carpetbagger

Last week, you, me and every other taxpayer in Britain each handed £13 to the billionaire Richard Branson. Not that we were told about this national whip-round. Instead, George Osborne claimed the heavily discounted sale of Northern Rock to the Virgin boss and a few of his chums represented "value for money". That's a funny way to describe a deal where taxpayers come out at least £400m poorer, but at least we now have an answer to that perennial pre-Christmas question of what to give the man who has everything.

And what do Team Branson plan to do with the Rock? Listen to Virgin Money chairman David Clementi's talk of creating "a significant banking competitor" and you'd have come away with wholesome impressions of commitment and investment. If you'd leafed through the FT this weekend, though, you'd have read about how the Virgin consortium will raid the business of its own cash to pay for the purchase – and then, as the chief investor, American financier Wilbur Ross, puts it: "We would hope to sell out a few years down the road." In other words, the business plan is to buy it cheap, strip it of assets – then flog it dear.

Hang on, you're probably thinking. Is this the same Branson who had those record shops? Who always pops up in the papers dressed as a woman or riding in a hot air balloon? Sir Richard of the Beard and the Overbite?

And the answer is: yes. Sure, Branson would like you to believe that he's the greatest iconoclast since John Calvin, leading a Reformation of established business. And if you won't buy that, he'll settle for being cast as a public-school Don Quixote for ever tilting at insiders and interest groups. Yes, the entrepreneur screws up – as with cars, cola, cosmetics and all those other discarded Virgins – but he takes risks.

The more prosaic truth is that the Virgin boss keeps himself in homes in Holland Park and Necker Island by taking taxpayer subsidies and operating heavily protected businesses. After all, you don't get much safer than a small mortgage lender that's had all its rubbish assets taken off it by the Treasury, in a market where the big banks are keeping their eyes down and their fingers crossed. Continue reading and comment » | Aditya Chakrabortty | Monday, November 21, 2011
This Tax Battle Is for the Soul of America

THE GUARDIAN: The supercommittee failed, so the people will decide in 2012: do they want a European welfare state or a return to true America?

There is a fight going on in the United States. Will the federal government raise taxes on the American people to pay for the increase in federal spending from 20% of GDP to 25% of GDP in Obama's first three years? Or will the American people wrestle federal spending back down towards the 20% of GDP range that has been the norm for 30 years. Will taxes go up to pay for Obama's supersized government? Or will the size and cost of government come down? Does America become a European welfare state or return to be America?

This year, 2011, followed the decisive midterm elections of 2010 in which voters defeated the Democrats to elect a majority of congressmen (238) who have signed a commitment to the American people that they would oppose and vote against any and all taxes. That was round one in the fight. It was also the end of Obama's two-year spending splurge known as "Stimulus One". The Democrats wanted to continue stimulus spending and to increase taxes permanently to pay for what they hoped would be the "new normal" higher tax and spending burden.

The Republican-led House of Representatives said no. The House passed the Paul Ryan budget that would reduce government spending by $6tn over the next decade – even this is only a start, as Obama's budget has the federal government racking up more than $10tn in debt over the next ten years. Obama and the Republicans agreed in early August to cut about $1tn and to establish a "supercommittee" to recommend $1.2tn in additional spending reductions. Continue reading and comment » | Grover Norquist | Tuesday, November 22, 2011
Austerity Is Not the Solution to the Great Recession

THE INDEPENDENT – BLOGS – GLEN O’HARA: What do about the Great Recession? The answer of the Chancellor of the Exchequer, George Osborne, has thus far been to cut, cut and cut again. And when he presents his Autumn Statement to the House of Commons next week, the Chancellor is expected to stick to the austerity script. But the intellectual rationale for this prescription is tenuous at best.

In fact, most governments – and especially that of the United Kingdom – are running hard in the wrong direction. … Read on and comment » | Glen O’Hara | Eagle Eye | Tuesday, November 22, 2011

Dr Glen O’Hara is Reader in the History of Public Policy at Oxford Brookes University. His new book, ‘Governing Post-War Britain: The Paradoxes of Progress’, will be published early in 2012 by Palgrave Macmillan. He blogs, in a personal capacity, at http://publicpolicypast.blogspot.com/.
From Tottenham to Tennessee, Capitalism Is Destroying Politics

THE DAILY TELEGRAPH: Democracy is at stake unless the huge and growing pay gulf between the very rich and ordinary workers can be narrowed.

Tottenham Jobcentre Plus is shut. Boards mask its charred frontage, and a notice screwed to the door announces that the building “has closed due to fire damage and will remain closed until further notice”. Clients are directed to a government website or to a “Temporary Service Arrangements fact sheet”. There is no guidance on how that document might be procured.

In a country with more than a million unemployed 16- to 24-year-olds, this centre, just down the road from where the riots of 2011 began, stands as a monument to dole-queue Britain. A young man with a toddler in his arms hovers outside. He has just arrived from Ghana with an HND in marketing, he says, and he needs a National Insurance number in order to find a job. Someone told him he should start here. They were wrong.

In the borough of Haringey, which includes Tottenham, the percentage of citizens claiming Jobseekers’ Allowance is 6.7, against a national average of 3.8. A contrasting portrait of a Britain whose Midas touch eludes sinking communities is revealed today as the independent High Pay Commission publishes the results of a year-long inquiry into corporate excess.

It reports that, in the past three decades, top executives have awarded themselves increases of more than 4,000 per cent, with the chief executive of Barclays earning £4,365,636, or 169 times more than the average worker. The chief executive of Lloyds, one of the banks bailed out by the taxpayer, gets £2,572,000, which represents a 3,141 per cent hike over the same period.

The top 0.1 per cent of British earners are not only as rich as Croesus, the Lydian king synonymous with great wealth. Most are, by virtue of that fortune, citizens of another country. This realm, dubbed “Richistan” by the American writer Robert Frank, is home to a global elite whose US branch earned more by 2004 than the entire take-home pay of Canada. » | Mary Riddell | Monday, November 21, 2011

My comment:

This is all going to end in communism if nothing serious and meaningful is done about it. Ordinary folk will NOT tolerate this forever more. History shows this to be so. The riots in London which shocked us all will look like a picnic in the park if things go on as they are. This is NOT capitalism! This is a malignant deviation from it. Capitalism isn't working; and nor is democracy. The end of all this will not be a pretty sight. It's five to midnight. The end is nigh. – © Mark

This comment also appears here.
High Pay Commission: Most People Believe Executive Pay 'Out of Control'

THE DAILY TELEGRAPH: Most people believe pay and bonuses for top executives are ''out of control'', according to a new study to coincide with a report which describes excessive high pay as ''corrosive'' to the economy.

A year-long inquiry by the High Pay Commission finds the pay of some top executives has soared by more than 4,000 per cent in the last 30 years, undermining productivity and ''damaging'' trust in British business.

The report criticised ''stratospheric'' pay increases which have seen wealth flow upwards to the top 0.1 per cent of people in the UK.

Average wages in the UK today are a ''modest'' £25,900 - up from £6,474 in 1980 - a three-fold increase.

The commission called for a number of reforms, including a ''radical simplification'' of executive pay, putting employees on remuneration committees, publishing the top 10 executive pay packages more widely, forcing companies to publish a pay ratio between the highest paid executive and the company median, and making firms reveal the total pay figure earned by executives.

The commission also said a new national body to monitor high pay should be established.

The report, Cheques With Balances: Why Tackling High Pay Is In The National Interest, showed that decisions to award huge pay packages are set by a ''closed shop'', shrouded in highly complex detail, effectively hidden from shareholders, staff and the public.

''Stratospheric increases in pay are damaging the UK economy - distorting markets, draining talent from key sectors and rewarding failure. Read on and comment » | Tuesday, November 22, 2011

My comment:

This is NOT capitalism! Capitalism rewards risk-takers. What risks do these executives take? They are in secure positions, and are rewarded with monopoly-figure salaries and bonuses even if they achieve little or nothing. This is unfair, corrosive, and a disincentive for others to take any risks or make any effort to better themselves. Faced with this scenario, why should anyone bother to make the effort to pull himself up by the bootstraps? This is a total disincentive to effort. And that's a very destructive situation for a capitalist economy to be in.

Further, it cannot be overemphasised that societies with such inequalities of wealth are a breeding ground for socialism, and even for communism. If you think that socialist/communist revolutions cannot happen in this day and age, and in this country, think again! Now do we really want to continue with this breeding ground for such a scenario? I think not. It is therefore high time to turn the screws on these obscene, vulgar fat cats. Tax them, until the pips squeak if necessary. The alternative scenario might well not be a pretty sight.
– © Mark


This comment also appears here.

Monday, 21 November 2011

Bettencourt dissimulait des millions dans cinq banques suisses

TRIBUNE DE GENÈVE: Liliane Bettencourt dissimulait près de 100 millions d’euros sur une douzaine de comptes en Suisse et à Singapour en 2010. Les comptes étaient abrités par six établissements bancaires, donc cinq helvétiques.

Le fisc français a découvert douze comptes bancaires cachés de Liliane Bettencourt en Suisse et à Singapour, selon le site d’informations Mediapart. Ils auraient totalisé près de 100 millions d’euros fin 2010. On ne parlait jusqu’ici que de deux comptes en Suisse.

La milliardaire de 89 ans, troisième fortune de France avec environ 17 milliards d’euros, selon des classements de «Challenges» et «Forbes», est depuis 2007 au centre d’une enquête judiciaire qui porte notamment sur des soupçons de financement politique illégal.

Les douze comptes bancaires mentionnés par le fisc dans un rapport de synthèse daté de fin août dernier auquel Mediapart dit avoir eu accès ont été abrités par six établissements bancaires distincts, dont cinq en Suisse. Une source proche du dossier a confirmé l’information de Mediapart. » | ATS | lundi 21 novembre 2011
Taxpayer to Carry the Risk for Private Mortgages

THE INDEPENDENT: The taxpayer is to become the ultimate guarantor for hundreds of millions of pounds of mortgages as part of a radical strategy to boost Britain's ailing housing industry.

Under plans to be unveiled by David Cameron and Nick Clegg today, the Government will underwrite a proportion of mortgages for newly built homes – the first time any such scheme has been attempted in the UK.

By taking on some of the risk of lending, the Government hopes to bring down deposits of up to 20 per cent for first-time buyers to as little as 5 per cent, and to kick-start demand for homes. But, if the housing market were to suffer significant falls in the future, the taxpayer could become liable for losses on repossessed homes. » | Oliver Wright | Monday, November 21, 2011

My comment:

This is NOT capitalism! Since when should the taxpayer pick up the tab for private mortgages? This is a ludicrous scheme thought out by half-wits and dim-wits. – © Mark

This comment also appears here
Germany Backs Down on Tax Demand for Compensation Payments

THE DAILY TELEGRAPH: Germany has backed down on a controversial demand that former slave labourers for the Nazis should pay tax on pensions paid to them as compensation after protests from Belgium and Holland.

Belgium first contacted Germany a month ago to express its fury after "morally indefensible" tax bills were sent to victims of the Nazi forced labour programme during the Second World War.

After initially failing to respond, Berlin was forced to abandon the policy after Belgium threatened to raise the issue during emergency eurozone talks on Nov 30.

A spokesman from Germany's finance ministry on Monday announced that emergency legislation would be passed on Friday to make sure that the pensions would remain tax-free.

"This problem no longer exists, or at least will no longer exist very soon," he said. » | Bruno Waterfield, Brussels | Monday, November 21, 2011

Related »
Philip Morris Sues Australian Government Over Tobacco Laws

THE GUARDIAN: Tobacco company takes legal action against legislation forcing cigarettes to be sold in drab plain packaging

Tobacco company Philip Morris has launched legal action against Australian laws forcing tobacco products to be sold in drab, plain packaging from late next year.

Australia's parliament has passed laws compelling cigarettes, pipe tobacco and cigars to be sold in plain olive packs from December 2012.

While tobacco exporting countries including Nicaragua, Dominican Republic and Ukraine have warned they may challenge the law under world trade rules, tobacco companies including British American Tobacco and Imperial Tobacco have said they may take action in Australia's high court.

Philip Morris said it's lawsuit could trigger compensation claims worth billions of dollars.

"The government has passed this legislation despite being unable to demonstrate that it will be effective at reducing smoking and has ignored the widespread concerns raised in Australia and internationally regarding the serious legal issues associated with plain packaging," Philip Morris spokeswoman Anne Edwards said in a statement.

The action is being brought by Philip Morris Asiaof Hong Kong, the owner of the Australian affiliate, through a notice of arbitration under Australia's bilateral investment treaty with Hong Kong. » | Reuters in Canberra | Monday, November 21, 2011
Germany Tax Levy on Belgian Nazi Slave Labourers Provokes Fury

THE DAILY TELEGRAPH: A decision by Germany to levy a tax on pensions received by Belgians who were slave labourers for the Nazi regime during the Second World War has provoked fury among survivors.

Last week demands for hundreds of euros from tax authorities in the German state of Brandenburg began to land on the doormats of surviving "dwangarbeiders" or their widows.

"It hits me not only financially but emotionally," Simone De Vos, 84, the widow of a forced labourer told the Gazet Van Antwerpen.

"My late husband had anxiety attacks for decades after his time in Germany. It is outrageous that the Germans now want money back."

According to media reports in Belgium, the German authorities last year passed a law stating that pensions for former slave labourers would be taxed at the rate of 17 per cent.

The tax has been applied retroactively from 2005 meaning those Belgian survivors of Nazism or their widows awarded pensions by Germany as a form compensation now face large bills. » | Bruno Waterfield, Brussels | Monday, November 21, 2011

Sunday, 20 November 2011

Britain Will Have to Join the Euro, Says Tory Grandee Lord Heseltine

THE SUNDAY TELEGRAPH: Britain will soon have no choice but to join the euro, Tory grandee Lord Heseltine has claimed, as tensions grow over the eurozone's slow-moving efforts to get a grip on the spreading debt crisis.

The former deputy prime minister, a long-time supporter of the single currency, said the public had "no idea" about the potential impact its collapse would have on the UK.

But he believes Franco-German determination will secure the euro's future and pave the way for Britain to sign up.

Both the Coalition and the Labour Party have ruled out adopting the euro in the foreseeable future.

Last month Prime Minister David Cameron suffered the biggest ever Conservative revolt over Europe as more than 80 Conservative MPs defied his orders and backed a referendum on Britain’s membership of the European Union.

Lord Heseltine, the peer in charge of the Government's £1.4 billion regional growth fund, acknowledged that the Eurozone was in crisis, but said he was confident they would pull through to create a stronger economy.

He told BBC1's Politics Show: "I think we will join the euro. » | Josie Ensor | Sunday, November 20, 2011

BBC: UK will ultimately join euro says Lord Heseltine: Former deputy prime minister Lord Heseltine has said he still expects the UK to eventually join the euro. » | Sunday, November 20, 2011
Eurozone Crisis: European Union Prepares for the 'Great Leap Forward'

THE OBSERVER: As EU politicians desperately try to save euro, plans emerge to deepen the union, widening Brussels regulatory powers

As the skies over euroland darken, at least the jokes in Brussels are getting better. At a recent gathering to discuss the crisis that threatens to unravel the euro, one former member of the European parliament observed acidly: "They ought to give this year's Charlemagne prize [for services to European unity] to the bond markets. Who has done more for the cause?"

The black humour was a way of stating a bald truth: in the de facto capital of the European Union, the ongoing near-death experience of the European single currency is concentrating minds in unprecedented fashion. As governments across southern Europe buckle under the pressure of paying back their debts at ever-higher rates of interest, and even formerly "respectable" economies such as France and the Netherlands feel the chill wind of market scrutiny, the custodians of Europe's future have belatedly found their voice.

Last week the normally dour and pragmatic German chancellor, Angela Merkel, announced that the EU faces "perhaps the toughest hour since the second world war. If the euro fails, then Europe fails, and we want to prevent and we will prevent this. This is what we are working for, because it is such a huge historic project."

As the stakes rise higher than anyone thought they could, the British are increasingly seen as an irritation and even an irrelevance. On Friday David Cameron rushed between overseas meetings with three key players in this monetary psychodrama: Angela Merkel, leader of the only country with the economic heft to sort the mess out; José Manuel Barroso, the Portuguese president of the European commission which is charged with giving Brussels a plan for salvation; and Herman Van Rompuy, the hitherto invisible president of the European council of ministers, the inter-governmental body that will adopt that plan.

Cameron hoped to extract a promise that the City will not be targeted by a future financial transactions tax and a pledge that countries such as Britain that are outside the eurozone will retain their influence in the turbulent times ahead. The prime minister will have discovered that, as the European dream of integration via monetary union teeters on the brink of catastrophe, the concerns of the semi-detached are at the top of no one's agenda. The UK's decision not to directly assist bailout funds for Greece and Portugal went down badly; the subsequent exhortations from Downing Street to sort the euro mess out were greeted with exasperation. » | Julian Coman | Sunday, November 20, 2011

Saturday, 19 November 2011

Occupy Protesters Take Over UBS Building

THE INDEPENDENT: Economic justice campaigners who have been camped outside St Paul's Cathedral for weeks announced today that they have occupied an abandoned office block owned by investment bank UBS.

The occupation of the block in Hackney, east London, is the third stunt pulled by the Occupy London group - and the first time they have occupied a building.

They have previously targeted the land around St Paul's near the London Stock Exchange and Finsbury Square in Islington, north London, for their protests.

The building they have taken over at Crown Place belongs to, but is not occupied by, UBS and no business transactions take place there.

The activists plan to set up a "bank of ideas" there tomorrow and open the disused offices and meeting rooms to "those who have lost their nurseries, community centres and youth clubs due to savage Government spending cuts". » | Rosa Silverman, Jessica Winch | Friday, November 18, 2011
What Price the New Democracy? Goldman Sachs Conquers Europe

THE INDEPENDENT: While ordinary people fret about austerity and jobs, the eurozone's corridors of power have been undergoing a remarkable transformation

The ascension of Mario Monti to the Italian prime ministership is remarkable for more reasons than it is possible to count. By replacing the scandal-surfing Silvio Berlusconi, Italy has dislodged the undislodgeable. By imposing rule by unelected technocrats, it has suspended the normal rules of democracy, and maybe democracy itself. And by putting a senior adviser at Goldman Sachs in charge of a Western nation, it has taken to new heights the political power of an investment bank that you might have thought was prohibitively politically toxic.

This is the most remarkable thing of all: a giant leap forward for, or perhaps even the successful culmination of, the Goldman Sachs Project.

It is not just Mr Monti. The European Central Bank, another crucial player in the sovereign debt drama, is under ex-Goldman management, and the investment bank's alumni hold sway in the corridors of power in almost every European nation, as they have done in the US throughout the financial crisis. Until Wednesday, the International Monetary Fund's European division was also run by a Goldman man, Antonio Borges, who just resigned for personal reasons.

Even before the upheaval in Italy, there was no sign of Goldman Sachs living down its nickname as "the Vampire Squid", and now that its tentacles reach to the top of the eurozone, sceptical voices are raising questions over its influence. The political decisions taken in the coming weeks will determine if the eurozone can and will pay its debts – and Goldman's interests are intricately tied up with the answer to that question.

Simon Johnson, the former International Monetary Fund economist, in his book 13 Bankers, argued that Goldman Sachs and the other large banks had become so close to government in the run-up to the financial crisis that the US was effectively an oligarchy. At least European politicians aren't "bought and paid for" by corporations, as in the US, he says. "Instead what you have in Europe is a shared world-view among the policy elite and the bankers, a shared set of goals and mutual reinforcement of illusions." » | Stephen Foley | Friday, November 18, 2011

Friday, 18 November 2011

Liliane Bettencourt reste sous tutelle

LE FIGARO: La cour d'appel de Versailles a décidé vendredi de ne pas suspendre l'application du placement sous tutelle de Liliane Bettencourt, qui reste ainsi sous la protection judiciaire de sa fille Françoise et de ses deux petits-fils, ont affirmé les avocats des deux parties.

La cour d'appel a fixé au 14 décembre l'examen au fond de l'appel formé par la milliardaire Liliane Bettencourt de son placement sous tutelle, prononcé mi-octobre par la juge des tutelles de Courbevoie (Hauts-de-Seine), a appris l'AFP de sources concordantes.

Les avocats de la femme la plus riche de France ont donc été déboutés de leur demande de suspension de l'application provisoire de ce jugement qui confiait la tutelle sur son patrimoine à sa fille Françoise Bettencourt-Meyers et à ses deux petits-fils, et la tutelle sur sa personne à son seul petit-fils aîné, Jean-Victor Meyers, 25 ans. » | AFP | vendredi 18 novembre 2011

Liens en relation avec l’article »
Why Doesn't Britain Make Things Any More [sic]?

THE GUARDIAN: In the past 30 years, the UK's manufacturing sector has shrunk by two-thirds, the greatest de-industrialisation of any major nation. It was done in the name of economic modernisation – but what has replaced it?

Before moving to Yale and becoming a bestselling historian, Paul Kennedy grew up on Tyneside in the 50s and 60s. "A world of great noise and much dirt," is how he remembers it, where the chief industry was building ships and his father and uncles were boilermakers in Wallsend. Last year the academic gave a lecture that reminisced a little about those days.

"There was a deep satisfaction about making things," he said. "A deep satisfaction among all of those that had supplied the services, whether it was the local bankers with credit; whether it was the local design firms. When a ship was launched at [Newcastle firm] Swan Hunter all the kids at the local school went to see the thing our fathers had put together and when we looked down from the cross-wired fence, tried to find Uncle Mick, Uncle Jim or your dad, this notion of an integrated, productive community was quite astonishing."

Wandering around Wallsend a couple of weeks ago, I didn't spot any ships being launched, or even built. The giant yard Kennedy mentioned, Swan Hunter, shut a few years back, leaving acres of muddy wasteland that still haven't lured a buyer.

You still find industrial estates, of course, and they look the part: overalled men milling about, passing lorries. Only up close does it become clear that there's not much actual industry going on. Read on and comment » | Aditya Chakrabortty | Wednesday, November 16, 2011
Vor Cameron-Besuch: Schäuble prophezeit Ende des britischen Pfunds

FOCUS ONLINE: Der Deutschland-Besuch des britischen Premiers Cameron steht unter schlechten Vorzeichen. Im Streit um die Einführung einer europaweiten Finanztransaktionssteuer liegen vor allem auf der Insel die Nerven blank. Nun gießt Finanzminister Schäuble auch noch Öl ins Feuer.

Vor dem Deutschland-Besuch des britischen Premierministers David Cameron gibt es zwischen Berlin und London nicht nur wegen der geplanten Einführung einer europaweiten Finanztransaktionssteuer zum Teil erhebliche Differenzen. Großbritannien hatte die 17 Euro-Länder mehrfach gedrängt, die Schuldenkrise in den Griff zu bekommen. Das EU-Land gehört nicht zur Euro-Gruppe. Es wachsen Befürchtungen über eine Spaltung Europas in eine EU der 27 und die Eurozone.

Das Recht Großbritanniens, vorläufig nicht der Euro-Zone anzugehören, steht für Bundesfinanzminister Wolfgang Schäuble (CDU) nicht zur Diskussion. Die 17 Euro-Länder benötigten aber Regelungen, damit der Euro stabil sei. Dies fordere übrigens auch Cameron, weil es Ansteckungsgefahren aus der Euro-Krise auch für das britische Pfund geben könnte. Je besser dies gelinge, umso schneller werden sich in den Augen Schäubles andere, die heute noch nicht zur Euro-Zone gehören, von den Vorteilen dieser gemeinsamen Währung überzeugen. Es werde zwar noch ein bisschen dauern. Aber eines Tages werde ganz Europa eine Währung haben. „Aber es geht vielleicht schneller, als mancher heute auf der britischen Insel glaubt“, fügte Schäuble hinzu. » | jba/dpa/dapd | Freitag 18. November 2011

WELT ONLINE: Schäuble sagt das Ende des britischen Pfunds voraus: Greift die Euro-Krise auf die britische Währung über, hätte das gravierende Folgen. Finanzminister Schäuble schließt den Untergang des Pfunds nicht aus. » | dpa/Reuters/tat | Freitag 18. November 2011

FUNDWEB: German finance minister predicts end for sterling: Wolfgang Schäuble, the German finance minister, has predicted the end of the British pound in an interview with newspaper ‘Die Welt’. ¶ In the interview, the finance minister says the day where the whole of Europe was united under a common currency would arrive “faster than many people believe today in the British Isles”. » | Rob Langston | Friday, November 18, 2011

Thursday, 17 November 2011

Ed Miliband Calls for 'More Responsible' Capitalism in Attack on Bankers' Pay

THE DAILY TELEGRAPH: The Labour leader, Ed Miliband, has called for a “more responsible” capitalism in a fresh attack on the “vested interests” in financial services that he claims have undermined the moral fabric of society.

Mr Miliband condemned “unjustified” pay rises for city executives and suggested new laws may be necessary to stop “predatory” businesses operating for “short term” profit.

He called on the government to “change course” by spending more on public services to foster growth and joining a cross party movement to reform the way capitalist markets operate.

Mr Miliband's speech, to a think-tank in London, follows results showing the number of unemployed young people reached one million for the first time.

On Wednesday, the Bank of England warned of an increased threat of a double-dip recession and cut its official growth forecasts to 1% for both 2011 and 2012.

Speaking to the Social Market Foundation, Mr Miliband said the figures marked a “black day for Britain” and accused David Cameron and George Osborne of “hiding away” from the news. » | Tim Ross, Political correspondent | Thursday, November 17, 2011
F.A.Z.-Interview – Irland zweifelt an der Eurozone

FRANKFURTER ALLGEMEINE: 17.11.2011 ·
Der irische Ministerpräsident Kenny glaubt nicht, dass die Länder der Eurozone allein die Schuldenkrise bewältigen können. Es stelle sich die Frage, ob nicht alle 27 Staaten (der EU) aktiv werden müssen, sagte er der F.A.Z.


Der Ministerpräsident von Irland, Enda Kenny, bezweifelt, dass die Länder der Eurozone allein die Schuldenkrise bewältigen können. Kenny sagte der „Frankfurter Allgemeinen Zeitung“ (FAZ): „Trotz des vielen Geldes, das wir in die Rettung des Euros schon gepumpt haben“, sei es nicht gelungen, die Eurozone zu stabilisieren. Deshalb stelle sich die Frage, „ob die Eurozone das alleine schafft oder ob alle 27 Staaten (der Europäischen Union) aktiv werden müssen“. » | Quelle: FAZ.NET | Donnerstag 17. November 2011

Das Interview mit Enda Kenny lesen Sie am Freitag in der Frankfurter Allgemeinen Zeitung.
'Thousands More' City Banking Jobs Could Go

THE DAILY TELEGRAPH: The wave of City redundancies has prompted finance professionals to warn that several thousand investment banking industry jobs could be lost in the coming months.

BNP Paribas, Merrill Lynch and Nomura became the latest major banks to announce job cuts on Wednesday as falling revenues forced them to follow several rivals and shed staff.

"This is the beginning of a major structural shift and I think you will see a lot more cuts in the New Year," said Stéphane Rambosson, a former City banker and managing partner of executive search firm Veni Partners.

BNP Paribas said it would cut about 1,400 jobs in its investment banking division, which employs several thousand staff in London, while Bank of America Merrill Lynch (BoAML) has begun cutting broking employees, with about 15pc of roles at risk, according to two sources. » | Harry Wilson, and Anna White | Thursday, November 17, 2011
Sir Mervyn King: Britain on the Brink of Second Credit Crunch, Bank of England Governor Warns

THE DAILY TELEGRAPH: Britain is on the brink of a second credit crunch, the Bank of England warned as it slashed its growth forecasts for the economy and raised the prospect of a double-dip recession.

The eurozone crisis has left UK banks unable to raise the funding they need to make loans to businesses, evoking the spectre of the crunch that followed the collapse of Lehman Brothers.

And on one critical measure — the cost of insuring banks against going bust — lenders are already facing tougher conditions than at the height of the crunch, the Bank said.

Sir Mervyn King, the Bank’s Governor, said that because of the eurozone crisis, households, companies and banks face a period of extraordinary uncertainty, including a possible slide back into recession. “There is weakness over the next few quarters. No one can know what precisely the outcome will be,” he said.

“In the last three years, we have seen extraordinary events. Who knows what’s going to happen tomorrow, let alone next month?”

The banks can only issue loans to companies and home owners if they can find sufficient funding on the markets. According to the Bank of England’s inflation report, banks’ funding in the three months to September fell to levels not seen since Lehman Brothers, the US investment bank, crashed in September 2008. Read on and comment » | Philip Aldrick, Economics Editor and James Kirkup | Wednesday, November 16, 2011

Wednesday, 16 November 2011

Brasiliens Konsumrausch stützt den Boom

WIRTSCHAFTSWOCHE: Der starke Real bremst Brasiliens Konjunktur. Doch bisher erweist sich der lokale Konsum der neuen Mittelschichten als erstaunlich krisenstabil und gleicht das Minus aus. Deutsche Konzerne profitieren überdurchschnittlich als Zulieferer des Booms.

Restaurants, Shopping-Center, Flughäfen, Hotels – schwierig, wer dieser Tage in Brasilien essen gehen, einkaufen oder verreisen will. Es ist nicht einfach einen freien Tisch zu bekommen oder ein Flugticket zu einem halbwegs vernünftigen Preis. Die Shopping-Center sind auch vor dem Weihnachtsgeschäft meist schon rappelvoll, und wer in Rio de Janeiro ein Hotelzimmer buchen will, muss lange suchen oder direkt tief in die Tasche greifen. Die Tourneen ausländischer Stars von Eric Clapton bis Justin Bieber sind ausgebucht – obwohl die Eintrittskarten deutlich mehr kosten als in Europa oder den USA. Es ist eindeutig: Von der weltweiten Wirtschafkrise ist in Brasilien wenig zu spüren. Die 190 Millionen Brasilianer konsumieren frohgemut als gäbe es kein Morgen – und sie stabilisieren damit die Konjunktur in Brasilien. » | Alexander Busch | Mittwoch 16. November 2011
Anleger flüchten aus Euroanleihen

DIE PRESSE: Zinsen für Staatsanleihen steigen überall in Europa stark an - außer in Deutschland. Österreich und Frankreich haben ihren "Triple A"-Status auf den Anleihemärkten in den vergangenen Tagen praktisch verloren.

Wien/Ju.
Bei den Ratingagenturen wird Österreich seine Bonitätsnote „AAA“ – die höchstmögliche – nach der laufenden Überprüfung durch die Ratingagenturen Moody's und Standard & Poor's wohl behalten. Auf den internationalen Anleihemärkten hat die Republik gemeinsam mit dem ebenso noch mit „AAA“ ausgezeichneten Frankreich ihr „Triple A“ aber de facto verloren: Die Zinsen für österreichische und französische Anleihen, die am Dienstag auf über drei Prozent hochgeschossen waren, verharrten am Mittwoch bei hohen 3,7 Prozent. » | Die Presse | Mittwoch 16. November 2011
Merkel Says Germany Is Ready to Cede Some Sovereignty to Save the Euro

BLOOMBERG: Chancellor Angela Merkel said that Germany is ready to cede some sovereignty to strengthen the euro area and restore confidence in the common currency.

European Union treaty changes to strengthen EU institutions and patrol tighter budget rules are needed “to make the euro zone more crisis-proof,” Merkel told reporters in Berlin today at a joint briefing with Irish Prime Minister Enda Kenny.

“Germany sees the need in this context to show the markets and the world public that the euro will remain together, that the euro must be defended, but also that we are prepared to give up a little bit of national sovereignty,” Merkel said. Germany wants a strong EU and a euro “of 17 member states that is just as strong and inspires confidence on international markets.” » | Patrick Donahue | Wednesday, November 16, 2011
’Europe Speaks German’: Britain Told to Stop Being Selfish and Follow Berlin’s Lead

DAILY EXPRESS: BRITAIN was told to toe the Berlin line concerning the eurozone crisis and that all of Europe was 'speaking German' yesterday.

One of Angela Merkel's closest allies demanded that Britain be 'less selfish' towards the EU, despite being outside the single currency and consider levying a Europe-wide financial tax to help the ailing eurozone.

Volker Kauder claimed the whole of Europe was now speaking German by following Angela Merkel's leadership and so should Britain.

He launched into the stinging attack on the UK's financial policies, cranking up tensions ahead of David Cameron's visit to Berlin on Friday.

The German government believes Britain should start taxing financial transactions to help prop up the battered single currency, which could cost the City billions.

Both the Prime Minister and George Osborne have blocked the proposed "Robin Hood tax," with the Chancellor claiming it is a "bullet aimed at the heart of London".

Brussels believes it could raise up to £35billion but it has been called "economic suicide."

Yesterday Mr Kauder, the parliamentary leader of the Christian Democratic Union, said it was unacceptable for Britain to be "only defending its own interests". » | Emily Fox for express.co.uk | Wednesday, November 16, 2011

THE DAILY TELEGRAPH: European Union debt crisis: Britain must help rescue eurozone, say Germans – Britain must give more to the European Union and cannot “get away” with not contributing to the eurozone rescue package, a senior German government figure has said. » | Robert Winnett, Political Editor | Tuesday, November 15, 2011

WELT ONLINE: "Auf einmal wird in Europa Deutsch gesprochen": Schuldenbremse, Haushaltsdisziplin, stärkere Kontrolle: Unions-Fraktionschef Kauder fordert eine einheitliche Politik in Europa – und teilt gegen Erdogan aus. » | Reuters/dpa/pku/mcz | Dienstag 15. November 2011
Eurozone Crisis: Countries May Be 'Pushed Out' of Single Currency

THE GUARDIAN: Debt crisis intensifies as the Netherlands and France come under pressure from rising cost of borrowing

The prospect of a eurozone breakup intensified on Tuesday night as borrowing costs around the region soared and the Dutch prime minister said it should be possible to expel some members from the currency union.

Investors are rapidly losing hope that a solution to the sovereign debt crisis will be found, and their fear was demonstrated by rising bond yields – the rate of interest governments have to pay to borrow – across almost all single-currency countries. The Dutch premier, Mark Rutte, stoked fears that a collapse could become a reality as he aired the prospect of countries being ejected, albeit as a last resort.

"We would like countries to be able to be pushed out of the eurozone," Rutte said on a visit to London, adding member countries must "put out the fire" of the debt crisis. As analysts warned of "terror taking hold", even some of those countries until now regarded as safe havens, such as the Netherlands, came under pressure as fears about countries' creditworthiness spread from peripheral countries such as Greece into Europe's core.

One bond expert described this as the most worrying day yet in the crisis. Mike Riddell, manager of M&G's international sovereign bond fund, said France was now suffering a "full-blown run" on its debt, with investors dumping French bonds to move their money to safer havens. Riddell added that the credit default swap (CDS) market – where investors in effect bet on the prospects of countries going bust – now indicates that the chance of France losing its coveted top AAA rating is a near certainty.

"Even the Netherlands, which the market perceives to be the second strongest eurozone sovereign, is coming under a bit of pressure," he said. » | Katie Allen | Tuesday, November 15, 2011

Tuesday, 15 November 2011

Stronger than Expected Growth: German Economy Defies Crisis

SPIEGEL ONLINE INTERNATIONAL: Despite the European debt crisis, the German economy chalked up impressive growth during the third quarter. With economies stagnating or contracting elsewhere in the euro zone, however, economists are warning output will likely cool down this winter, with the possibility of a mild recession.

The debt crisis has been a burden for almost all of Europe, but Germany continues to dodge the worst economic side-effects. Gross domestic product jumped considerably in the country between July and September, growing by 0.5 percent over the previous quarter. On Tuesday, the German Federal Statistical Office released its first estimate showing that GDP grew by 2.6 percent compared with the same period the previous year.

The Statistical Office has also revised its figures for spring, indicating that growth was stronger than previously assumed. During the period, GDP grew by 0.3 percent instead of the 0.1 percent previously assumed. » | dsl -- with wires | Tuesday, November 15, 2011

Monday, 14 November 2011

Cameron: ‘What Kind of Europe Do We Want?’

BBC: The current turmoil in Europe is an opportunity for the UK to "refashion" its relationship with Brussels, David Cameron has said.

Although the EU is "out of touch" on many issues, he said it is not in the UK's national interest to exit.

The PM is under pressure from many of his MPs to renegotiate UK membership.

Some Conservatives want to go further and leave the EU altogether. Watch BBC video » | Monday, November 14, 2011
Eurozone Crisis Gives Britain a Chance to Redraw, Says David Cameron

THE GUARDIAN: As Angela Merkel looks for treaty change to strengthen ties, prime minister is keen to move towards a looser union

The crisis in the eurozone gives Britain the chance to refashion the EU as a looser union, David Cameron said on Monday, after Angela Merkel, the German chancellor, said that she wanted substantial treaty change to strengthen it and give the European commission the chance to impose fiscal discipline on excessively indebted states in the single currency area.

Speaking at the lord mayor's banquet in London, Cameron, describing himself as a sceptic, hailed the collapse of the old assumption that power within the EU could only flow from the nation states to Brussels and EU membership could only lead to ever closer union.

Merkel had earlier described the crisis as probably Europe's toughest hour since the second world war, but again spurned UK proposals for a Eurobond or for the European central bank to become lender of last resort to prop up the euro.

Cameron is due to travel to Berlin at the end of this week both to urge Merkel to make the ECB more interventionist and to set out what the UK will seek to safeguard and change in the event of treaty change being sought by Germany. » | Patrick Wintour, political editor | Monday, November 14, 2011
Denmark's Thorning-Schmidt Heads to Downing Street to Meet David Cameron

THE GUARDIAN: Social Democratic prime minister talks about the Kinnocks, the eurozone crisis and plans to bolster the Danish economy

She is the woman who will soon face an impossible challenge: how to get Europe out of its present mess. She is also something of a rarity on Europe's carousel-like political scene – a centre-left leader who has actually managed to win an election.

Denmark's prime minister, Helle Thorning-Schmidt, is holding talks with David Cameron in Downing Street on her first official trip to the UK.

Top of the agenda is the crisis convulsing the eurozone. Britain and Denmark are outside it, but clearly affected by it. Thorning-Schmidt says she wants to canvass the views of Britain before Denmark assumes the EU's rotating presidency in January. In a telephone interview with the Guardian on the eve of her London trip, Thorning-Schmdit conceded the European situation was extremely grave. "We do have a crisis," she said, adding that it is one that affects all 27 EU member states, including its 10 non-Euro economies, and not just the 17 led by Germany and France inside the faltering eurozone. She implicitly rejected the idea that Europe should break up into different groups.

Asked whether she was encouraged by the resignation on Saturday of the scandal-plagued Silvio Berlusconi as Italy's prime minister, she remained diplomatic. "I think … the changes in Greece and Italy have helped our crisis management. All those decisions will be useful in order to move Europe forward, and away from the crisis," she said.

The EU needs to ensure that its members impose "strong discipline" and "follow the rules" so the current economic meltdown is never repeated, she added. She has met Cameron in Brussels and finds him "easy to talk to". What about his internal battle with Tory Eurosceptics? "I know too much about British politics to comment on British politics," she replied. » | Luke Harding | Monday, November 14, 2011