EUOBSERVER / BRUSSELS - UK pharmaceutical firms have been defeated in their attempt to put an end to British government incentives to doctors to supply patients with cheaper but equivalent medicines.

The European Court of Justice rejected a complaint by the Association of the British Pharmaceutical Industry (ABPI) that such National Health Service (NHS) schemes were not an illegal inducement under EU law.

EUOBSERVER / BRUSSELS - Many of Europe's biggest corporations are avoiding registering their lobbying activities in Brussels even as they admit to the scale of their operations in Washington where registration of lobbyists is required by law, according to a new study.

As a result of the different registry frameworks between the two legislative capitals - in Brussels, the European Commission's lobby registry is a voluntary affair - European big business on the whole is able to make it appear that it is engaged in much more lobbying in Washington than in Brussels. This is the conclusion of a new study by lobbying watchdogs that analyses what the EU's 50 biggest corporations say they are spending on influencing policy.

EUOBSERVER / BRUSSELS - The growing nationalist sentiment expressed by Chinese internet users is making the country more protectionist, according to Joerg Wuttke, president of the European Union Chamber of Commerce in China.

"When we meet [Chinese] officials they are very worried about the netizens. They really feel they have to be responsive to these interest groups," said Mr Wuttke earlier this week (20 April).

Greek finance minister George Papaconstantinou said after the first day of crucial meetings with EU, IMF and European Central Bank officials on Wednesday (21 April) that an agreement on a contingency rescue plan could be reached by 15 May.

Ryanair boss Michael O'Leary has said he is to fight EU laws that require airlines pay for customers' hotel bills after cancelled flights in the wake of the volcano ash troubles. "There's no legislation designed that says any airline getting a fare of €30 should be reimbursing passengers," he said.

After the first battle in a three part televised debate between Britain's major party leaders led to a massive boost for the "third man", Liberal Democrat leader Nick Clegg has been catapulted into the spotlight, lavished over and picked apart by both the electorate and the press. Welcome to the UK, where "Cleggmania" is contagious... but for how long?

US President Barack Obama on Thursday will warn that the United States is doomed to a repeat of its economic crisis if it fails to embrace his proposed financial regulatory reforms.
   
In advance excerpts of a major speech he is due to give later in New York, Obama calls on Wall Street finance chiefs to join his effort to pass what he has billed as the most sweeping reforms since the 1930s.
   
The president notes that he visited Cooper Union, a prestigious college where he will give Thursday's speech, to warn of the dangers of Wall Street excess during his 2008 election campaign.
   
"I take no satisfaction in noting that my comments have largely been borne out by the events that followed," Obama says.

On his recent piece "Taxes For Revenue Are Obsolete " that appeared on the Huffington Post he notes:

   April 15th has come and gone, but the issue of taxation remains the course de jour. I was recently forwarded an article entitled Taxes For Revenue Are Obsolete, written in 1946 by Beardsley Ruml, the former Chairman of the Federal Reserve Bank of New York and published in a periodical named American Affairs. While Ruml was writing about the merits of corporate taxes, it is his discussion about how the function of taxes changed after the nation exited the gold standard that make this a must read. As Ruml's stated, with an "...inconvertible currency, a sovereign national government is finally free of money worries and need no longer levy taxes for the purpose of providing itself with revenue... It follows that our Federal Government has final freedom from the money market in meeting its financial requirements... All federal taxes must meet the test of public policy and practical effect. The public purpose which is served should never be obscured in a tax program under the mask of raising revenue." He goes on to explain how, with Federal spending not revenue constrained, the first function of taxation is to regulate the value of the dollar, which we know as regulating inflation. The notion of the Federal government 'running out of money' and 'dependence on foreign borrowing' as well as 'sustainability' is categorically inapplicable. The operative CBO 'scoring' is the inflationary effect, rather than simply a revenue forecast. And while Social Security and Medicare may turn out to be inflationary, they are not 'bankrupting the nation' as most believe, including a Democratic Congress that cut Medicare spending with the recent health care bill and has all entitlements 'on the table.'

Derivatives can serve many useful purposes, but they also contain hidden dangers. For instance, they can pile up hidden imbalances in supply or demand which may suddenly be revealed when a threshold is breached. This is true of so-called knockout options, used in currency hedging. It was also true of the portfolio insurance programs that caused the New York Stock Exchange's Black Monday in October 1987. The subsequent introduction of circuit breakers tacitly acknowledged that derivatives can cause discontinuities, but the proper conclusions were not drawn.

Credit default swaps are particularly suspect. They are supposed to provide insurance against default to bondholders. But because they are freely tradable, they can be used to mount bear raids; in addition to insurance they also provide a licence to kill. Their use ought to be confined to those who have an insurable interest in the bonds of a country or company.

It will be the task of regulators to understand derivatives and synthetic securities and refuse to allow their creation if they cannot fully evaluate their systemic risks. That task cannot be left to investors, contrary to the diktats of the market fundamentalist dogma that prevailed until recently.