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by Nomad on Mon Feb 6th, 2012 at 01:19:59 PM EST
Maastricht 20 years on: Eurocrat blues | Presseurop (English)

Over the last year, the Schuman roundabout, at the foot of the community institutions in Brussels, has been transformed into a depressing urban shambles. In a decor worthy of an industrial park in a hard boiled crime thriller, cranes, concrete mixers, and scaffolding have taken possession of the administrative and political epicentre of the European Union.

Delays already announced to the works, scheduled to continue until 2014, are a cruel symbol of the decline in the fortunes of the eurocrats who reign over this part of city where the EU's "founding fathers" - Schuman of course, but also Jean Monnet, Alcide de Gasperi and other less well-known figures such as Emile Noël, general secretary of the Commission from 1967 to 1987 - are venerated. And among such luminaries, one name is repeated more often than all the others: Jacques Delors, the president of the EU executive from 1985 to 1995. On 7 February 1992, with the support of the Kohl-Mitterrand duo, the former French government minister led the eurocracy out of the darkness with the signature of the Maastricht Treaty on monetary union. Obligation for transparency dragged Commission into abyss

Delors, remembered as a leader who stood his ground against heads of state, charmed the press and embodied the union. Twenty years on, he is still with us. On 7 February, he will be back in Brussels to commemorate Maastricht. But the eurocracy no longer has the same fire of those years. Far from it. Developments that followed 1992 - enlargement to include 15 additional countries by 2007, French and Dutch rejection of the ill-fated European Constitution in 2005, the scramble to adopt the Lisbon Treaty and finally the financial crisis - have been more than enough to douse the flame.

by Nomad on Mon Feb 6th, 2012 at 03:20:45 PM EST
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Greece faces ultimatum on new bailout | EurActiv

Greece's coalition parties must tell Brussels today (6 February) whether they accept the painful terms of a new bailout deal, as EU patience wears thin with political dithering in Athens over implementing reforms.

Technocrat Prime Minister Lucas Papademos tried to get leaders of the three parties in his government yesterday (5 February) to sign off on the terms of a €130 billion rescue, which Greece needs soon to avoid a chaotic debt default.

In a statement, Papademos said party chiefs - who may face angry voters in parliamentary polls as soon as April - had agreed measures including wage cuts and other reforms as part of spending cuts worth 1.5% of gross domestic product (GDP).

But a spokesman for the PASOK socialist party said a number of major issues demanded by the "Troika", representing Greece's EU, European Central Bank and IMF lenders, remained unresolved.

Talks on the new bailout, which would be Greece's second since 2010 - and an accompanying deal to ease the country's huge debt burden via its private creditors accepting deep losses on the bonds they hold - have dragged on for weeks, stretching the EU's patience to breaking point.

"Things are very tough and difficult," a Greek government official said, requesting anonymity.

Now the parties - PASOK, the conservative New Democracy and far-right LAOS - must respond to a working group of senior euro zone finance ministry officials who are preparing for a meeting of their ministers later in the week.

by Nomad on Mon Feb 6th, 2012 at 03:21:40 PM EST
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Greece caves to pressure and cuts state jobs - Europe - Al Jazeera English

Greece's coalition government has agreed to demands to cut civil service jobs, announcing 15,000 positions would go this year, amid mounting international pressure to agree on austerity measures needed to secure major new debt agreements.

The announcement on Monday signals a major shift in Greece's policy, as state jobs have so far been protected during the country's acute financial crisis, which started about two years ago.

Dimitris Reppas, Greece's minister for public-sector reform, said the job cuts would be carried out under a new law that allows such firings.

Al Jazeera's John Psaropoulos, reporting from Athens, said the reduction in state workers may be only the beginning of job losses.

"[The cuts] are coming as part of a commitment to fire 150,000 public service workers... This is in addition to 200,000 public service employees who have left through [negotiated] dismissal, early retirement and firing," he said.

Greece is racing to push through painful reforms and clinch a $170bn bailout deal from its European partners and the International Monetary Fund to avoid a March default on its bond payments.

by Nomad on Mon Feb 6th, 2012 at 03:22:05 PM EST
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Poverty without firing a shot. How civilized!

They tried to assimilate me. They failed.
by THE Twank (yatta blah blah @ blah.com) on Tue Feb 7th, 2012 at 04:59:06 AM EST
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BBC: Greece exit would not end euro, says EU commissioner
A similar message was delivered with a more optimistic spin by Jean-Claude Juncker, ...

"The euro will outlivebury us all," he said.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Tue Feb 7th, 2012 at 05:18:44 AM EST
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The Greek Vise - NYTimes.com

How much is the troika demanding from Greece? How tight is the squeeze? Here's a look based on the most recent IMF report (pdf).

The current plan calls for Greece to move into large primary surplus -- that is, surplus not counting interest payments on the debt:

by Nomad on Mon Feb 6th, 2012 at 03:29:01 PM EST
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Well, if they meet that target they could default around this time next year, and there'd be fuck all the ECBuBa could do to stop them.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 7th, 2012 at 07:52:25 AM EST
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Chinese economic growth at risk from European downturn | Business | The Guardian

A sharp downturn in Europe could cut China's economic growth rate nearly in half, the International Monetary Fund said on Monday, adding to warnings about a possible severe global slowdown this year.

The IMF said Beijing should be ready to launch a multibillion-dollar stimulus to ward off a slump in the world's second-largest economy.

The IMF is forecasting 8.2% growth this year for China but said that could be reduced by up to four percentage points if Europe's crisis causes large declines in credit and output.

"The global recovery is threatened by intensifying strains in the euro area and fragilities elsewhere," it said. "In the unfortunate event such a downside scenario becomes reality, China should respond with a significant fiscal package, executed through central and local government budgets."

China rebounded quickly from the 2008 global crisis and its economy expanded by a healthy 9.2% last year but growth has declined as Beijing tightened credit and investment curbs to prevent overheating.

by Nomad on Mon Feb 6th, 2012 at 03:29:05 PM EST
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Why New York Giants' Super Bowl Victory Is Good for the Economy - Real Time Economics - WSJ
New England may be in mourning over the outcome of Sunday's nail-biter of a Super Bowl, but all is not lost: The Giants' victory will provide a much-needed boost to the nation's economy.

Sure, there could be a small boost to consumer spending as gamblers spend their winnings from betting on the inexplicably underdog Giants. But this is bigger than that. Much, much bigger.

On Tuesday, for the first time since the "Occupy" protesters were ousted from Zuccotti Park, thousands of members of the "99%" will descend on Lower Manhattan. But this time, instead of division and conflict, the gathering will foster unity as bankers, construction workers and busboys come together to celebrate a uniquely American story: the triumph of a less-talented younger brother over his more-talented brother's more-talented arch-nemesis. A triumph that took place in a building built for the older brother, who will probably never play there again. A triumph secured when a 250-pound man accidentally scored a touchdown by falling backwards into the end zone. Heck, even Pats fans can take comfort in the fact that the Giants' parade will royally tick off Jets fans.

by Nomad on Mon Feb 6th, 2012 at 03:29:23 PM EST
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The result is that taxpayers subsidise banks implicitly in good times, explicitly in bad times, and suicidally in a sovereign debt crisis.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Tue Feb 7th, 2012 at 04:48:35 AM EST
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Bloomberg: Capitalism Seen in Crisis by Investors Citing Inequalities
As the global financial and business elite gather in Davos for their annual forum, a majority in the Bloomberg Global Poll agree that income inequality hurts the economy and that governments need to do something to address it -- ideas at the heart of "Occupy" protests worldwide. Those surveyed also voice reservations about the financial industry's role in society, with seven in 10 seeing at least some truth in the argument that banks have too much power over governments.

"Capitalism is in crisis because there is a huge and growing disparity in income/wealth distribution in Western economies, and an equally divisive generational disparity," poll participant Michael Derks, chief strategist for FXPro Financial Services broker in London, said in an e-mail.

"It requires government intervention on an enormous scale, because an economy cannot survive if it does not invest in the younger generation," Derks said.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Tue Feb 7th, 2012 at 05:58:39 AM EST
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Businessweek: Raise Taxes on Rich to Reward True Job Creators: Nick Hanauer
I'm a very rich person. As an entrepreneur and venture capitalist, I've started or helped get off the ground dozens of companies in industries including manufacturing, retail, medical services, the Internet and software. I founded the Internet media company aQuantive Inc., which was acquired by Microsoft Corp. in 2007 for $6.4 billion. I was also the first non-family investor in Amazon.com Inc.

Even so, I've never been a "job creator." I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate.

That's why I can say with confidence that rich people don't create jobs, nor do businesses, large or small. What does lead to more employment is the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Tue Feb 7th, 2012 at 07:02:45 AM EST
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The comment thread over there just renewed my faith in humanity.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 7th, 2012 at 07:50:42 AM EST
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"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Tue Feb 7th, 2012 at 08:39:19 AM EST
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Joseph Stiglitz: Capturing the ECB (Project Syndicate)
There are three explanations for the ECB's position, none of which speaks well for the institution and its regulatory and supervisory conduct. The first explanation is that the banks have not, in fact, bought insurance, and some have taken speculative positions. The second is that the ECB knows that the financial system lacks transparency - and knows that investors know that they cannot gauge the impact of an involuntary default, which could cause credit markets to freeze, reprising the aftermath of Lehman Brothers' collapse in September 2008. Finally, the ECB may be trying to protect the few banks that have written the insurance.

None of these explanations is an adequate excuse for the ECB's opposition to deep involuntary restructuring of Greece's debt. The ECB should have insisted on more transparency - indeed, that should have been one of the main lessons of 2008. Regulators should not have allowed the banks to speculate as they did; if anything, they should have required them to buy insurance - and then insisted on restructuring in a way that ensured that the insurance paid off.


The final oddity of the ECB's stance concerns democratic governance. Deciding whether a credit event has occurred is left to a secret committee of the International Swaps and Derivatives Association, an industry group that has a vested interest in the outcome. If news reports are correct, some members of the committee have been using their position to promote more accommodative negotiating positions. But it seems unconscionable that the ECB would delegate to a secret committee of self-interested market participants the right to determine what is an acceptable debt restructuring.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Tue Feb 7th, 2012 at 09:18:26 AM EST
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