EU economy commissioner Joaquin Almunia will this week name the first group of states to receive disciplinary action by Brussels for breaching the rules underpinning the euro. Ahead of Wednesday's (18 January) move, the commissioner insisted that member states adhere to the Stability and Growth Pact, which requires that countries keep their budget deficits below three percent of GDP. The headquarters of the European Commission - the guardian of the EU rulebook "The rules were established for everybody and must be respected," he said before a debate in the European Parliament on Monday. "What they say as far as budget discipline is concerned is clear: In the case where countries have recorded or plan deficits above the three percent barrier, we must launch procedures established in the [EU] treaty," he added. Of the countries up for review on Wednesday, France, Spain and Greece are expected to attract excessive deficit action from the commission, according to draft documents seen by Reuters.
EU economy commissioner Joaquin Almunia will this week name the first group of states to receive disciplinary action by Brussels for breaching the rules underpinning the euro.
Ahead of Wednesday's (18 January) move, the commissioner insisted that member states adhere to the Stability and Growth Pact, which requires that countries keep their budget deficits below three percent of GDP.
The headquarters of the European Commission - the guardian of the EU rulebook
"The rules were established for everybody and must be respected," he said before a debate in the European Parliament on Monday.
"What they say as far as budget discipline is concerned is clear: In the case where countries have recorded or plan deficits above the three percent barrier, we must launch procedures established in the [EU] treaty," he added.
Of the countries up for review on Wednesday, France, Spain and Greece are expected to attract excessive deficit action from the commission, according to draft documents seen by Reuters.
The German government is considering taking a stake in General Motors subsidiary Opel to prevent mass layoffs expected to be part of the American automobile giant's looming restructuring. Trade unions are calling for a spin-off, but the issue has sparked a political row. The production line at Opel's modern plant in Eisenach, eastern Germany. Germany's political parties are embroiled in a row about whether the government should take a stake in carmaker Opel, which faces possible mass redundancies and plant closures under a global restructuring by its parent company General Motors due to be presented later on Tuesday. The labor leaders of GM's European subsidiaries -- Opel, Vauxhall in Britain and Saab in Sweden -- on Monday demanded a spin-off of their brands rather than face what they called potentially fatal cost-cutting in Europe by GM. "The spin-off of Opel/Vauxhall ... and the spin-off of Saab is the only reasonable and feasible option for General Motors which would not destroy the European operations and its European assets and could avoid lawsuits," said a statement on the labor force's Web site.
The German government is considering taking a stake in General Motors subsidiary Opel to prevent mass layoffs expected to be part of the American automobile giant's looming restructuring. Trade unions are calling for a spin-off, but the issue has sparked a political row.
The production line at Opel's modern plant in Eisenach, eastern Germany. Germany's political parties are embroiled in a row about whether the government should take a stake in carmaker Opel, which faces possible mass redundancies and plant closures under a global restructuring by its parent company General Motors due to be presented later on Tuesday.
The labor leaders of GM's European subsidiaries -- Opel, Vauxhall in Britain and Saab in Sweden -- on Monday demanded a spin-off of their brands rather than face what they called potentially fatal cost-cutting in Europe by GM.
"The spin-off of Opel/Vauxhall ... and the spin-off of Saab is the only reasonable and feasible option for General Motors which would not destroy the European operations and its European assets and could avoid lawsuits," said a statement on the labor force's Web site.
Politicians and analysts have warned that Britain is on the verge of deflation after economic data released this morning showed that living costs are rising at their lowest rate in almost 50 years.Figures from the Office for National Statistics showed that the retail prices index, which includes mortgage costs, fell to just 0.1% in January following the recent falls in interest rates and cheaper fuel. This is the lowest RPI level since March 1960, and it is expected to enter negative territory soon.Liberal Democrat Treasury spokesman Vince Cable said inflation was now "virtually disappearing" as a threat to families, although this might not be obvious to those facing higher council tax bills."It is becoming clear that for the foreseeable future there is a higher risk of deflation than inflation, which is why it is inevitable and sensible that the Bank of England should be moving towards expansion of credit and the money supply directly," said Cable.
Politicians and analysts have warned that Britain is on the verge of deflation after economic data released this morning showed that living costs are rising at their lowest rate in almost 50 years.
Figures from the Office for National Statistics showed that the retail prices index, which includes mortgage costs, fell to just 0.1% in January following the recent falls in interest rates and cheaper fuel. This is the lowest RPI level since March 1960, and it is expected to enter negative territory soon.
Liberal Democrat Treasury spokesman Vince Cable said inflation was now "virtually disappearing" as a threat to families, although this might not be obvious to those facing higher council tax bills.
"It is becoming clear that for the foreseeable future there is a higher risk of deflation than inflation, which is why it is inevitable and sensible that the Bank of England should be moving towards expansion of credit and the money supply directly," said Cable.
...this might not be obvious to those facing higher council tax bills.
And energy costs, which are up by an impressive percentage on last year.
Petrol prices are creeping up again too.
Russia has cut its budget for hosting the 2014 Winter Olympics in the Black Sea resort of Sochi by 15%, Deputy Prime Minister Dmitry Kozak has said. Mr Kozak said an assessment of construction projects found it would be possible to save about $8.3bn (£5.8bn), according to the Interfax news agency. Russia has been hit hard by the global financial and economic crises after years of soaring economic growth. The 2009 budget is expected to show its first deficit in about a decade.
Russia has cut its budget for hosting the 2014 Winter Olympics in the Black Sea resort of Sochi by 15%, Deputy Prime Minister Dmitry Kozak has said.
Mr Kozak said an assessment of construction projects found it would be possible to save about $8.3bn (£5.8bn), according to the Interfax news agency.
Russia has been hit hard by the global financial and economic crises after years of soaring economic growth.
The 2009 budget is expected to show its first deficit in about a decade.
From the paper:
The government deregulated and privatized the banking system in the late 1990s and 3arly 2000s. The banks passed into the hand of individuals with little experience in modern banking, with then porceeded to take advantage of ample capitalin international markets to fuel a high degree of leverage and exponential growth. In effect, the country decided to stake its economic future on international banking, without have the necessary safeguards in place, eventually developing a banking system mucy beyond the ability of the state to come to its help with liquidity or solvency support.
In effect, the country decided to stake its economic future on international banking, without have the necessary safeguards in place, eventually developing a banking system mucy beyond the ability of the state to come to its help with liquidity or solvency support.
Apparently Anglo-Disease is virulent.
Responding to questions after the speech, Greenspan blamed insufficient regulatory oversight in part for failing to recognize the degree of risk that was accumulating in the banking system."The regulatory structures, especially internationally, were way behind the curve," he said.
"The regulatory structures, especially internationally, were way behind the curve," he said.
There was, for example, [Greenspan's] work on behalf of Lincoln Savings and Loan seeking permission for thrifts to branch out from boring old home loans to invest directly in commercial real estate ventures. Greenspan told Congress such powers were "essential for the financial stability and survival of the savings and loan industry." Congress agreed, but this first bit of financial deregulation spawned a crisis that nearly wiped out the industry, cost taxpayers more than $100 billion and landed Lincoln's top executive in prison.Once installed at the Fed, Greenspan immediately began pushing Congress to repeal the Depression-era law that prevented banks from competing with investment banks in underwriting stocks and bonds. When Congress dallied, he used the Fed's supervisory authority to allow banks to circumvent the law and usher in the era of the megabank. In subsequent actions as bank regulator, Greenspan never met a merger he didn't like, a "firewall" he didn't trust or a consumer protection initiative he didn't find misguided.
There was, for example, [Greenspan's] work on behalf of Lincoln Savings and Loan seeking permission for thrifts to branch out from boring old home loans to invest directly in commercial real estate ventures. Greenspan told Congress such powers were "essential for the financial stability and survival of the savings and loan industry." Congress agreed, but this first bit of financial deregulation spawned a crisis that nearly wiped out the industry, cost taxpayers more than $100 billion and landed Lincoln's top executive in prison.
Once installed at the Fed, Greenspan immediately began pushing Congress to repeal the Depression-era law that prevented banks from competing with investment banks in underwriting stocks and bonds. When Congress dallied, he used the Fed's supervisory authority to allow banks to circumvent the law and usher in the era of the megabank. In subsequent actions as bank regulator, Greenspan never met a merger he didn't like, a "firewall" he didn't trust or a consumer protection initiative he didn't find misguided.
Wanker.
Germany has acknowledged for the first time that it may have to rescue eurozone states in acute difficulties, marking a radical shift in policy by the anchor nation of Europe's monetary union. Finance minister Peer Steinbruck said it would be intolerable to let fellow EMU members fall victim to the global financial crisis. "We have a number of countries in the eurozone that are clearly getting into trouble on their payments," he said. "Ireland is in a very difficult situation. "The euro-region treaties don't foresee any help for insolvent states, but in reality the others would have to rescue those running into difficulty."
Finance minister Peer Steinbruck said it would be intolerable to let fellow EMU members fall victim to the global financial crisis. "We have a number of countries in the eurozone that are clearly getting into trouble on their payments," he said. "Ireland is in a very difficult situation.
"The euro-region treaties don't foresee any help for insolvent states, but in reality the others would have to rescue those running into difficulty."
Germany and France may be forced to contemplate the bailout of entire nations rather than just individual banks as European government budgets buckle under the weight of recession. German Finance Minister Peer Steinbrueck became the first senior policy maker to broach the topic this week, saying some of the 16 euro nations are "getting into difficulties" and may need help. French officials are also concerned about market tensions as the cost of insuring Irish, Greek and Spanish debt against default rises to records and bond spreads widen. The nightmare for Angela Merkel and Nicolas Sarkozy is that widening deficits will prompt investors to shun the debt of some countries, sparking a region-wide crisis. While few investors are yet forecasting any defaults, the mere risk of it may prompt the bloc's two richest economies to ignore the European Central Bank and announce their willingness to come to the rescue.
Germany and France may be forced to contemplate the bailout of entire nations rather than just individual banks as European government budgets buckle under the weight of recession.
German Finance Minister Peer Steinbrueck became the first senior policy maker to broach the topic this week, saying some of the 16 euro nations are "getting into difficulties" and may need help. French officials are also concerned about market tensions as the cost of insuring Irish, Greek and Spanish debt against default rises to records and bond spreads widen.
The nightmare for Angela Merkel and Nicolas Sarkozy is that widening deficits will prompt investors to shun the debt of some countries, sparking a region-wide crisis. While few investors are yet forecasting any defaults, the mere risk of it may prompt the bloc's two richest economies to ignore the European Central Bank and announce their willingness to come to the rescue.
Eventually even Germany will run out of funds to help fiscal stimulus in weaker Eurozone economies and the ECB will have to whip out of its monetarist slumber. Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
Frank Delaney ~ Ireland
is still the preserve on of EU member states
[Europe.Is.Doomed™ Alert] Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
No, wait, don't help us. That would be bad.
WaPo: Late Change in Course Hobbled Rollout of Geithner's Bank Plan (February 17, 2009)
They needed an alternative and found it in a previously considered initiative to pair private investments and public loans to try to buy the risky assets and take them off the books of banks. There was one problem: They didn't have enough time to work out many details or consult with others before the plan was supposed to be unveiled.
Moreover, the department made a strategic decision to limit input from the financial industry and other outsiders, aiming to prevent leaks and avoid a perception they were designing the plan for the benefit of big banks. But that also meant they were unable to vet their plan with the companies involved or set realistic expectations of what would be announced.
The team concluded that the financial rescue effort would have to include several components. None would be more vital than an initiative for either removing or neutralizing the distressed assets on the banks of books -- many related to troubled mortgages -- so the banks would be freed to resume lending.
How the economy went so bad, so fast and what Bernanke and Paulson didn't see, couldn't stop and weren't able to fix.
Watch it. Putz cameos epitomize the ambivalence of analyses of "insider" knowledge and arbitrages. The directors portray Bernanke, Paulson and Geithner as tragic hereos, defenders of free market entrepreneurial spirit, foes of financial industry regulation intervention nationalization. Many solemn B/W stills disrupt streams of trading mania and testimony by journalists, the avuncular Greenberg, the hubris of Fuld. Diversity is the key to economic and political evolution.
If only to start with a bit of anti-metropolitanism, let's begin in Hereford: a very average English settlement (population: 50,000), with a centre long since colonised by the usual high-street names. When I moved nearby five years ago, I might have moaned about a typical Clone Town, but I was amazed by the crowds that descended on the place every Saturday. Now the throng is thinning by the week. At the last count, 51 shops had either closed or were about to. This is not unique to Hereford. It's happening just about everywhere. January's retail figures might have shown an upswing driven by crazed discounting, but the underlying picture remains grim: recent research by Experian, the credit information firm, predicted town-centre vacancy rates of 15% by the end of the year, with some places set to come close to 40%. Quite apart from a simple drop in demand, the current high street crisis says a lot about the economics of the good years, and the risks of letting retail titans gobble up towns with no thought of what might happen when the music stops. One thinks, for example, of quintessentially boom-time commercial leases which mean that rents can only ever go up; and, most crucially, local economies now so dominated by huge firms that large parts of the high street can be imperilled at a stroke - as happened two weeks ago, with the final fall of the UK wing of the Icelandic investment company, Baugur. There's also a story here about the fate of the few independent shops that our towns and cities managed to sustain. Thanks to the buying up of the high street and the great onslaught of your Tescos and Asdas (now joined, of course, by the recession-boosted likes of Lidl and Aldi), a lot of stand-alone businesses had their takings so blitzed that any bad economic news would quickly push them into the red, and so it proved. Now many wonder whether they will ever come back. Trawl the local press and the imbalance is obvious. The Skegness Standard mourns the loss of a beautifully named local menswear institution called Smalls of Spilsby; the South Devon Herald Express tells of the closure of Rossiters, a 150-year-old family-run department store in Paignton. And the good news? Across the country, there are promises of new jobs at Asda, KFC and the international sandwich empire, Subway.
Quite apart from a simple drop in demand, the current high street crisis says a lot about the economics of the good years, and the risks of letting retail titans gobble up towns with no thought of what might happen when the music stops. One thinks, for example, of quintessentially boom-time commercial leases which mean that rents can only ever go up; and, most crucially, local economies now so dominated by huge firms that large parts of the high street can be imperilled at a stroke - as happened two weeks ago, with the final fall of the UK wing of the Icelandic investment company, Baugur.
There's also a story here about the fate of the few independent shops that our towns and cities managed to sustain. Thanks to the buying up of the high street and the great onslaught of your Tescos and Asdas (now joined, of course, by the recession-boosted likes of Lidl and Aldi), a lot of stand-alone businesses had their takings so blitzed that any bad economic news would quickly push them into the red, and so it proved. Now many wonder whether they will ever come back. Trawl the local press and the imbalance is obvious. The Skegness Standard mourns the loss of a beautifully named local menswear institution called Smalls of Spilsby; the South Devon Herald Express tells of the closure of Rossiters, a 150-year-old family-run department store in Paignton. And the good news? Across the country, there are promises of new jobs at Asda, KFC and the international sandwich empire, Subway.
