In a rare show of cross-party unity, MEPs issued a joint statement urging EU leaders to embrace the need for "incentives and sanctions" in implementing the new economic strategy, dubbed 'Europe 2020'. The move came as diplomats met in Brussels yesterday (11 March) to prepare for a crucial summit of EU leaders scheduled for the end of the month. Governments will have to agree national targets for boosting growth and jobs but some are reluctant to give Brussels the power to punish failure. The Europe 2020 plan is the successor to the so-called Lisbon Agenda which is widely seen as having fallen short of its goals due to loose monitoring and enforcement of targets. Joseph Daul, leader of the European People's Party, Martin Schulz, leader of the social democrats, and liberal leader Guy Verhofstadt want EU leadersto abandon the open method of coordination, which uses peer pressure to ensure governments hit their targets, "in favour of stronger instruments".
In a rare show of cross-party unity, MEPs issued a joint statement urging EU leaders to embrace the need for "incentives and sanctions" in implementing the new economic strategy, dubbed 'Europe 2020'.
The move came as diplomats met in Brussels yesterday (11 March) to prepare for a crucial summit of EU leaders scheduled for the end of the month. Governments will have to agree national targets for boosting growth and jobs but some are reluctant to give Brussels the power to punish failure.
The Europe 2020 plan is the successor to the so-called Lisbon Agenda which is widely seen as having fallen short of its goals due to loose monitoring and enforcement of targets.
Joseph Daul, leader of the European People's Party, Martin Schulz, leader of the social democrats, and liberal leader Guy Verhofstadt want EU leadersto abandon the open method of coordination, which uses peer pressure to ensure governments hit their targets, "in favour of stronger instruments".
The official in charge of Europe's new ten-year economic strategy has said the European Commission will rely on scoreboards and public warnings to embarrass national governments into hitting targets on reform and research investment.The Commission will be more candid in its assessment of progress than in the past and will be willing to issue policy warnings, albeit as a last resort, according to Gerard de Graaf, a key player in drafting the 'Europe 2020' strategy at the EU executive's secretariat-general. Speaking at a briefing hosted by Eurochambres, an umbrella group of EU chambers of commerce, De Graaf said the reputational damage that comes with a policy warning and the "embarrassment factor" will help keep member states on track.
The Commission will be more candid in its assessment of progress than in the past and will be willing to issue policy warnings, albeit as a last resort, according to Gerard de Graaf, a key player in drafting the 'Europe 2020' strategy at the EU executive's secretariat-general.
Speaking at a briefing hosted by Eurochambres, an umbrella group of EU chambers of commerce, De Graaf said the reputational damage that comes with a policy warning and the "embarrassment factor" will help keep member states on track.
"We've had good talks on this and I'm pretty confident that we can get a very satisfactory outcome in our discussions over the next few days," said Mr Brown in a joint press conference with the French leader after their meeting in London. At the heart of the current debate are so-called 'third country' measures: If the latest Spanish text is agreed by qualified majority on Tuesday, non-EU domiciled funds will need individual member-state permission before they can market their products to investors in that country. ...London is home to roughly 70 percent of the EU's hedge fund and 80 percent of private equity industry. However, a majority of the UK firms are actually domiciled overseas, in particular in the Cayman Islands. "But what happens if a Cayman fund fails," said one French diplomat on Friday, indicating his country's objections to the passport idea. "Its Cayman rules that apply, and Cayman judges." Spanish diplomats say the UK has failed to muster a blocking majority for Tuesday's finance minister discussion, and while their "objective is to find the largest consensus possible," they would not rule out the possibility of a sealing a deal against UK wishes.
"We've had good talks on this and I'm pretty confident that we can get a very satisfactory outcome in our discussions over the next few days," said Mr Brown in a joint press conference with the French leader after their meeting in London.
At the heart of the current debate are so-called 'third country' measures: If the latest Spanish text is agreed by qualified majority on Tuesday, non-EU domiciled funds will need individual member-state permission before they can market their products to investors in that country.
...London is home to roughly 70 percent of the EU's hedge fund and 80 percent of private equity industry. However, a majority of the UK firms are actually domiciled overseas, in particular in the Cayman Islands.
"But what happens if a Cayman fund fails," said one French diplomat on Friday, indicating his country's objections to the passport idea. "Its Cayman rules that apply, and Cayman judges."
Spanish diplomats say the UK has failed to muster a blocking majority for Tuesday's finance minister discussion, and while their "objective is to find the largest consensus possible," they would not rule out the possibility of a sealing a deal against UK wishes.
Michel Barnier, EU Commissioner for the internal market, received a letter from US Treasury Secretary Timothy Geithner on 1 March warning that a draft EU law, the Alternative Investment Fund Managers Directive (AIFMD), not only discriminated against US funds but would lead to an Anglo-American drift from the EU. "The letter expressed some concerns about something that does not exist," a spokesperson for Barnier said on Thursday (11 March), rejecting Geithner's claims that the AIFMD discriminate against US funds. Barnier is reportedly preparing a reply to Geithner's letter, according to sources at the Commission who did not want to disclose the contents of the letter or when it would be sent. Barnier is expected to tell Geithner that plans to regulate alternative investment funds are in line with the goals of increasing market transparency as set out at the G20 talks of world leaders in Pittsburgh, the EU spokesperson told the Brussels media yesterday (11 March).
Michel Barnier, EU Commissioner for the internal market, received a letter from US Treasury Secretary Timothy Geithner on 1 March warning that a draft EU law, the Alternative Investment Fund Managers Directive (AIFMD), not only discriminated against US funds but would lead to an Anglo-American drift from the EU.
"The letter expressed some concerns about something that does not exist," a spokesperson for Barnier said on Thursday (11 March), rejecting Geithner's claims that the AIFMD discriminate against US funds.
Barnier is reportedly preparing a reply to Geithner's letter, according to sources at the Commission who did not want to disclose the contents of the letter or when it would be sent.
Barnier is expected to tell Geithner that plans to regulate alternative investment funds are in line with the goals of increasing market transparency as set out at the G20 talks of world leaders in Pittsburgh, the EU spokesperson told the Brussels media yesterday (11 March).
The trans-Atlantic dispute over a 50-billion US Air Force refuelling tanker contract reached new heights Friday, as French President Nicolas Sarkozy and Britain's Prime Minister Gordon Brown accused Washington of protectionism -- a policy that the USA usually warns other countries against. If the US "wants to be taken seriously in the fight against protectionism, they should be setting a better example," said Sarkozy at the joint press conference with his British counterpart in London.
The trans-Atlantic dispute over a 50-billion US Air Force refuelling tanker contract reached new heights Friday, as French President Nicolas Sarkozy and Britain's Prime Minister Gordon Brown accused Washington of protectionism -- a policy that the USA usually warns other countries against.
If the US "wants to be taken seriously in the fight against protectionism, they should be setting a better example," said Sarkozy at the joint press conference with his British counterpart in London.
Boeing paid for a study which found that an aerial tanker built by the plane maker would create 10 times more new American jobs than a plan from a consortium between Northrop Grumman and the European Aeronautic Defence and Space Company (EADS). ..."The US government, I say, obliged EADS to leave the competition for the US tanker jets," Fillon said. "I think that the attitude of the US government is a serious incompliance to the rules of loyal competition established between our countries," the French prime minister added. French State Secretary for European Affairs Pierre Lellouche was even more critical. The word "scandal" was too weak to describe the offence, he said. "There is no reason why a technology, which by the way is superior to the American one, should be ousted from the market," Lellouche stated. Airbus President and Chief Executive Officer Thomas Enders also criticised the US government's "bias" in awarding the tender.
Boeing paid for a study which found that an aerial tanker built by the plane maker would create 10 times more new American jobs than a plan from a consortium between Northrop Grumman and the European Aeronautic Defence and Space Company (EADS).
..."The US government, I say, obliged EADS to leave the competition for the US tanker jets," Fillon said. "I think that the attitude of the US government is a serious incompliance to the rules of loyal competition established between our countries," the French prime minister added.
French State Secretary for European Affairs Pierre Lellouche was even more critical. The word "scandal" was too weak to describe the offence, he said. "There is no reason why a technology, which by the way is superior to the American one, should be ousted from the market," Lellouche stated.
Airbus President and Chief Executive Officer Thomas Enders also criticised the US government's "bias" in awarding the tender.
Huge. Mendacious.
State-owned Swedish energy group Vattenfall announced on Friday that it would sell its high-voltage power grid to Belgian firm Elia and Australia's Industry Funds Management. The sale was priced at 810 million euros ($1.1 billion), with 60 percent going to Elia, a power network management company, and the rest going to infrastructure specialist IFM. "The sale reinforces our position in the perspective of participating in the constitution of a true European energy market," Elia chief Daniel Dobbeni said. Vattenfall's head of European activities, Tuomo Hatakka, said at a news conference that the grid was strategic because "it links vast offshore wind farms in the Baltic and North Seas with consumer industries in northern Germany."...Utilities across Europe have sold off lucrative but state-regulated power grids in favor of more profitable energy markets, where limited competition often leads to a market oligopoly. Last month, German's largest power company E.ON sold its grid to Dutch group TenneT for 1.1 billion euros.
State-owned Swedish energy group Vattenfall announced on Friday that it would sell its high-voltage power grid to Belgian firm Elia and Australia's Industry Funds Management.
The sale was priced at 810 million euros ($1.1 billion), with 60 percent going to Elia, a power network management company, and the rest going to infrastructure specialist IFM.
"The sale reinforces our position in the perspective of participating in the constitution of a true European energy market," Elia chief Daniel Dobbeni said.
Vattenfall's head of European activities, Tuomo Hatakka, said at a news conference that the grid was strategic because "it links vast offshore wind farms in the Baltic and North Seas with consumer industries in northern Germany."
...Utilities across Europe have sold off lucrative but state-regulated power grids in favor of more profitable energy markets, where limited competition often leads to a market oligopoly. Last month, German's largest power company E.ON sold its grid to Dutch group TenneT for 1.1 billion euros.
The core argument for unbundling was that networks were used by incumbents to limit access to others, protect their position and restrict competition. The reason why the companies are now selling, after successfully fighting off unbundling, is that networks have been re/de/regulated to a situation where they effectively can no longer be used by networks to restrict competition, and they are not that profitable either. So they no longer have strategic value, and they use up capital at a time when these companies are going to need billions to invest in new generation capacity ,starting ith offshore wind.
So they are selling. Which means that unbundling won in the end. If we end up with one pan-European coordinated grid, it may turn out to be an okay result (because a continent-wide grid is a lot more valuable - to ensure safety of supply, to accomodate renewables, and to bring electricity prices down - than disparate national grids); if not, then we'll have the worst of both worlds - various competition islands (ie not very effective ones) with little ability to plan infrastructure strategically (ie dangerous for the long term). Wind power
"The taxpayer doesn't understand how critical the financial services industry is to them," Anstee, 51, said in an interview at his 252-year-old Mansion House residence opposite the Bank of England. "This absolutely overwhelming tide of negative attitudes has been brought about in taxpayers' minds." [...] "The bailout made the invisibles visible in a really disturbing way," said Glasman, 49, walking in front of the City's six century-old Guildhall a few streets away from Mansion House. "This is the invisible heart of an invisible City that protects invisible earnings." [...] "That's what I'm promoting and that's what I'm defending," Anstee said in his Georgian palace, which is decorated with paintings by Dutch masters and plasterwork of cornucopias spilling coins and fruit. [...] Guests at the City banquet in Mansion House on Sept. 22 dined on smoked fish and filet of beef and Madeira syrup. They drank Chablis and Chateau Moulin a Vent wines and toasted Britain's financial services industry as well as the queen. [...] As head of the City of London Corporation, the area around St. Paul's Cathedral whose boundary is marked by dragon motifs and statues, lord mayors lead a local police force and travel 90 days a year to promote financial services. Anstee has visited the U.S., Dubai and Saudi Arabia and will travel to South Africa, India, China, Russia and other countries. [...] The City's focus on money has led to its local population dwindling to 9,000, while about 320,000 workers arrive each weekday. Uniquely in the U.K., companies as well as individuals vote for City representatives.
[...]
"The bailout made the invisibles visible in a really disturbing way," said Glasman, 49, walking in front of the City's six century-old Guildhall a few streets away from Mansion House. "This is the invisible heart of an invisible City that protects invisible earnings."
"That's what I'm promoting and that's what I'm defending," Anstee said in his Georgian palace, which is decorated with paintings by Dutch masters and plasterwork of cornucopias spilling coins and fruit.
Guests at the City banquet in Mansion House on Sept. 22 dined on smoked fish and filet of beef and Madeira syrup. They drank Chablis and Chateau Moulin a Vent wines and toasted Britain's financial services industry as well as the queen.
As head of the City of London Corporation, the area around St. Paul's Cathedral whose boundary is marked by dragon motifs and statues, lord mayors lead a local police force and travel 90 days a year to promote financial services. Anstee has visited the U.S., Dubai and Saudi Arabia and will travel to South Africa, India, China, Russia and other countries.
The City's focus on money has led to its local population dwindling to 9,000, while about 320,000 workers arrive each weekday. Uniquely in the U.K., companies as well as individuals vote for City representatives.
.... He is tough, towards the end of his piece, on countries that "intentionally breached European economic and monetary law." But what about banks that aid and abet countries that are trying to break the rules? Of course, governments can always massage their statistics unassisted. But when international banks help countries to disguise their true debt levels, through off-balance sheet transactions, what is the difference between that and what Merrill Lynch did for Enron regarding "Nigerian oil barges" (and more)? Technically, Greece's (and potentially other country's) debt deals may not have broken any laws - because the international space for these transactions is so anarchic. But Mr Schauble would be well within his rights to call for rogue investment banks - i.e., those that help break European rules in any fashion - to be banned from the highly lucrative market for European government new issues. Of course, if he is afraid to do this because the banks in question have great market power and a fearsome reputation for sharp elbows and exacting revenge, perhaps Mr. Schauble should consider referring the broader investment banking market (including over-the-counter derivatives) to the relevant anti-monopoly authorities within the European Commission.
He is tough, towards the end of his piece, on countries that "intentionally breached European economic and monetary law." But what about banks that aid and abet countries that are trying to break the rules?
Of course, governments can always massage their statistics unassisted. But when international banks help countries to disguise their true debt levels, through off-balance sheet transactions, what is the difference between that and what Merrill Lynch did for Enron regarding "Nigerian oil barges" (and more)?
Technically, Greece's (and potentially other country's) debt deals may not have broken any laws - because the international space for these transactions is so anarchic.
But Mr Schauble would be well within his rights to call for rogue investment banks - i.e., those that help break European rules in any fashion - to be banned from the highly lucrative market for European government new issues.
Of course, if he is afraid to do this because the banks in question have great market power and a fearsome reputation for sharp elbows and exacting revenge, perhaps Mr. Schauble should consider referring the broader investment banking market (including over-the-counter derivatives) to the relevant anti-monopoly authorities within the European Commission.
To my mind the most shocking thing about the Greek situation is the massive failure of governance - presumably fostered by an enormous civil-society deficit (which might count as the subject of another rant entirely).
Which of course in no way contradicts your point about the urgent need for regulating speculative instruments.
ARGeezer:
I was not of the impression that the banks had accomplished governmental capture on the continent.
I think that (at least in Germany) the norm for a long time was a symbiotic relationship that focused on long-term earnings and stability ("Rheinischer Kapitalismus"). Of course this was not (at least in Germany) entirely without its seamier sides (I would link to a bio of Hermann Josef Abs here, but a google yields nothing adequate in English; (suffice it to say that he was a banker who made his bones during the pre-war Nazi era, rose to the head of Deutsche Bank, managed to hold onto that role after the war and was a major figure of the Wirtschaftswunder.) The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
Still, it has occurred to me in light of Greece that we haven't discussed good governance and civil society much here as such, particularly under the aspect of their complementarity (though I think they are often implicit in comments). The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
ROFL - my comment above is already the no. 4 google hit for 'maxim tremendous but trite'. All hail ET's almighty page rank! En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Germany expects every nation to do its duty.
I have to go along with Schäuble to the extent that the bar is higher for nations
As for doing something about Deutsche Bank, how will it and other German banks fare if Greece is forced to default? I have gathered that many German banks have less capital reserves than do US banks. The approach by government authorities in both the US and Europe is similar: "Hide the debt!"; "Deny the debt"; and pray that time will cure all insolvencies. Hope that works out better for Europe than seems likely for the USA. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
In addition, the USA sent $20+ billion in bailout money for German banks last year, which included a couple billion for state-owned KfW.
Schäuble must be aware of these deals.
Not that it specifically concerns investment banks.
I am not sure Schaeuble can confront the American investment banks without also taking on Deutsche Bank. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Industrial production in the eurozone grew at its fastest rate for more than 20 years in January, amid signs of a far more sustained recovery than had been seen previously.Factory output rose 1.7 per cent from December, the largest leap since the European Union's statistical arm started compiling the data in January 1990. The monthly survey also sharply revised the industrial production figure for December, estimating a 0.6 per cent growth instead of a 1.7 per cent fall predicted earlier. The revision means that industrial output in the 16-country currency bloc is higher than the year-earlier figure for the first time since April 2008, though it remains about 15 percentage points lower than the peak before tje global financial crisis, and even below long-term trends. Part of the upswing can be put down to rising energy production amid unusually cold winter weather. Economists had factored in some industrial growth after a trickle of figures from national authorities earlier this week, but were taken aback by the scale of the upswing.
Industrial production in the eurozone grew at its fastest rate for more than 20 years in January, amid signs of a far more sustained recovery than had been seen previously.
Factory output rose 1.7 per cent from December, the largest leap since the European Union's statistical arm started compiling the data in January 1990.
The monthly survey also sharply revised the industrial production figure for December, estimating a 0.6 per cent growth instead of a 1.7 per cent fall predicted earlier.
The revision means that industrial output in the 16-country currency bloc is higher than the year-earlier figure for the first time since April 2008, though it remains about 15 percentage points lower than the peak before tje global financial crisis, and even below long-term trends.
Part of the upswing can be put down to rising energy production amid unusually cold winter weather.
Economists had factored in some industrial growth after a trickle of figures from national authorities earlier this week, but were taken aback by the scale of the upswing.
A landmark move to protect the world's poorest countries from debt sharks was blocked yesterday by a single Conservative MP during extraordinary scenes in the House of Commons. "Vulture fund" investment companies buy up defaulted third world debt and sue for immediate repayment. The Debt Relief (Developing Countries) Bill was designed to curb their activities, ensuring that creditors cannot pursue debt repayment beyond the level assessed as fair and sustainable by the World Bank. Liberia lost a £20m lawsuit against two vulture funds in a London court late last year. Because of the lack of time before the general election, the Bill's only chance of making it on to the statute book was if there were no protests in the Commons. But to the fury of Labour MPs, one lone voice piped up: "Object!" Three Conservatives were in the chamber - Christopher Chope, Andrew Robathan and Simon Burns - but it was not clear at the time who had intervened.
A landmark move to protect the world's poorest countries from debt sharks was blocked yesterday by a single Conservative MP during extraordinary scenes in the House of Commons.
"Vulture fund" investment companies buy up defaulted third world debt and sue for immediate repayment. The Debt Relief (Developing Countries) Bill was designed to curb their activities, ensuring that creditors cannot pursue debt repayment beyond the level assessed as fair and sustainable by the World Bank. Liberia lost a £20m lawsuit against two vulture funds in a London court late last year.
Because of the lack of time before the general election, the Bill's only chance of making it on to the statute book was if there were no protests in the Commons. But to the fury of Labour MPs, one lone voice piped up: "Object!" Three Conservatives were in the chamber - Christopher Chope, Andrew Robathan and Simon Burns - but it was not clear at the time who had intervened.
