Most countries appear to dislike Germany's "better spending" proposal for the 2014-2020 EU budget, EurActiv has learned. The proposal, described by a diplomat as "blood, sweat and tears", was tabled at a recent meeting of European affairs ministers in Nicosia.

The six-page document titled "More growth through better spending: four challenges", provides a series of hurdles for cash-strapped countries to access EU funds.

For example, it plans to eliminate the "bonus financing" for countries under bailout programmes.

Eurozone heads of state and finance ministers now routinely issue statements or take decisions for the 17 countries using the euro, creating a de-facto two-speed Union in the Council.

Some eurozone states have proposed that the European Parliament adapt by allowing a smaller group of MEPs to hold votes on legislation, relating to eurozone countries only - thus so creating a 'eurozone parliament'.

But Hannes Swoboda, chair of the Socialists & Democrats in the European Parliament, dismissed the notion out of hand. "The idea of creating a eurozone parliament is absolute nonsense and would be counter-productive," she said.

"The euro is our currency, there is no need for a parliament at currency level. We have the European Parliament and national parliaments to work on the issues at hand, which they are doing," she added.

Hungary needs an IMF/EU financing agreement and will agree with international lenders but the lenders' initial set of policy proposals are unacceptable, Hungarian Prime Minister Viktor Orban told public radio today (7 September). Before that, he "unfriended" the IMF on Facebook and posted a video slamming its demands.

Orbán, whose government started loan talks with the International Monetary Fund and the EU in July after months of delays (see background), poured cold water on hopes for a fast agreement by saying the IMF had made a raft of demands that he could not agree to.

Fidesz is all about communication, so it's worth to point out that this was preceded by the release of a list of supposed IMF demands by the main pro-Fidesz daily, and the list was partly made up. But, I am beginning to think that there is a strategy behind Orbán's incoherent line: he keeps up talks with the IMF and the European Commission while simultaneously dissing them to keep markets in limbo and thus avoid a concerted market attack.

In the greater scheme of things, the Orbá government's economic policy is still smoke and mirrors and a failure rather than a real departure from consensus. The recession is now official here, too. The freedom fighter pose also masks austerity measures hitting the poor they introduced on their own. And the Orbán government's search for new less than democratic allies to the East hasn't brought real benefits. For example, there was this:

BBC News - Azeri killer Ramil Safarov: Nato chief 'concerned'

Nato's secretary-general has expressed concern over a decision by Azerbaijan to pardon an army officer convicted of the brutal murder of an Armenian.

Ramil Safarov hacked a man to death with an axe in Hungary in 2004 and was imprisoned there until last week, when he was extradited to Azerbaijan.

He was expected to serve out the rest of his life sentence, but was instead promoted, and given a flat to live in.

The Armenian parliament has now formally suspended ties with Hungary.

The hand-over deal was brokered in secret, without even consulting the foreign minister. All of this reportedly in hopes of bonds purchases which didn't come (and oil deals which are illusory with Nabucco practically dead).

_{*Lunatic*, n.
One whose delusions are out of fashion.}

Castilla-La Mancha regional premier María Dolores de Cospedal (above) was applauded by her fellow Popular Party (PP) lawmakers on Friday after they voted in favor of her plan to abolish all salaries for members of the regional parliament, beginning next year. De Cospedal is also the party's general secretary and has been keen to be viewed as hawkish on the need for cutbacks in public spending.

Peter Gauweiler, one of the critics who filed a complaint with the court against the ESM immediately after the parliamentary vote on it, said in a statement on Sunday that the fund should not be ratified until the ECB rowed back on its plans unveiled on Thursday for potentially unlimited purchases of sovereign bonds.

"The ESM - as long as it is constitutional at all - should only be able to enter into power when the ECB has taken back its self authorization to become a hyper rescue fund," Gauweiler said in a statement.

"This possibly calls into question the plans for the announcement of the ruling on the ESM this coming Wednesday."

G7 economies are expected to grow at an annualised rate of just 0.3% in the third quarter of 2012 and 1.1% in the fourth, the Paris-based OECD said yesterday (6 September).

OECD cut its forecast more sharply for eurozone countries: Germany, to 0.8% from 1.2%, saying the bloc's debt crisis was increasingly weighing on core economies. Italy's outlook was even more grim, with its forecast slashed to -2.4 % from -1.7% in May. France's estimate was cut to 0.1% from 0.6%.

German travellers faced major disruptions this Friday after the trade union that represents Lufthansa cabin crew walked off the job at midnight. The latest work stoppage follows two previous strikes in the past week.

Germany's flag-carrier used e-mail and text messages to inform around 55,000 of its passengers that their flights had been cancelled, according to a Lufthansa spokesman.

The airline operates around 1,800 flights on an average day, at least half of which it cancelled even before the strike began.

"However, futher cancellations can be expected," another spokesman for the airline told the DPA news agency, adding that it was still too early to put a precise figure on the number of cancellations.

4) The upper middle class job market has recovered, which is why those folks are no longer panicking and are telling you that the economy isn't so bad as all that.

5) the failure to force the rich to take their losses and to break up the banks means that the same people who caused the 2007/8 financial crisis still control the economy and the government.

...

7) Europe, ex. Germany, is in recession.

8 ) the developed world is in depression, it never left depression.  During depressions there are recoveries (such as they are) and recessions, but the overall economy is in depression.

...

10. Austerity is a means by which the rich can buy up assets which are not normally on the market for cheap.

11. the wealth of the rich and major corporations has recovered and in many countries exceeded its prior highs.  They are doing fine. Austerity is not hurting them. They control your politicians.  The depression will not end until it is in their interest for it to do so, or their wealth and power is broken.

...

17) Wages are being systematically broken in the developed world.  The rich do not believe they need you, except as wage-slave labor.  You will all be company store slaves, paying rental streams to everyone to be allowed to continued to eke out a miserable existence.

...

19) Stirling Newberry says, and I agree, that none of this is stable, but it will last as long as the majority of the baby boom, the silents and a good chunk of the Xers still think they can hang on to their little piece of the pie, and screw everyone else.  It will most likely break down in 2020/24, which is when the demographics turn.  Young people today are completely screwed, they have astronomical student loans, no or shitty jobs, can't afford a house and can't afford to start a family.  Note that the places where revolutions, peaceful or otherwise, are happening, are places where the majority of the population is young.  Latin America, the Middle East.

From the same author: Are Creative Careers Now Reserved Exclusively For The Privileged?.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

During one segment, we discussed the varying theories for why unemployment is so bad, and a clip from Bill Clinton's speech was played, during which he said this:

We do need more new jobs, lots of them, but there are already more than three million jobs open and unfilled in America today, mostly because the applicants don't have the required skills. We have to prepare more Americans for the new jobs that are being created in a world fueled by new technology. That's why investments in our people are more important than ever.
He didn't use the term, but what Clinton was saying was that a large part of the unemployment problem was "structural" (the unemployed don't have the proper skills) rather than cyclical (the result of of a lack of demand).

On this point, Bill Clinton was incorrect. All of the evidence shows that lack of demand is the problem, not the structure of the economy.

There are a few different lines of attack against Clinton's argument.

AP - Human Rights Watch said it has uncovered evidence of a wider use of waterboarding than previously acknowledged by the CIA, in a report Thursday detailing brutal treatment of detainees at U.S.-run lockups abroad after the 9/11 attacks.

The accounts by two former Libyan detainees who said they underwent simulated drowning emerge only days after the Justice Department closed its investigation of the CIA's use of severe interrogation methods. Investigators said they could not prove any agents crossed the lines authorized by the Bush administration in the "war on terror" program of detention and rendition.

Any new instances of waterboarding, however, would go beyond the three that the CIA has said were authorized.

The 154-page report features interviews by the New York-based group with 14 Libyan dissident exiles. They describe systematic abuses while they were held in U.S.-led detention centers in Afghanistan - some as long as two years - or in U.S.-led interrogations in Pakistan, Morocco, Thailand, Sudan and elsewhere before the Americans handed them over to Libya.

A bomb blast struck near a government ministry and a court in Damascus on Friday, shortly after a motorcycle bomb exploded outside a mosque following Friday prayers, killing at least five security officers and injuring several others.

AP - A Pakistani judge granted bail Friday to a young, mentally challenged Christian girl accused of insulting Islam for burning pages of the religion's holy book. Rights activists welcomed the decision after calling for her release since she was arrested three weeks ago.

The case has focused attention on Pakistan's harsh blasphemy laws, which activists claim are used to persecute minorities and settle personal vendettas.

Judge Mohammed Azam Khan set bail at 1 million Pakistani rupees, or about $10,500, a significant sum in a country where many families live on only a few dollars a day. The girl's impoverished family may need outside financial support to free her.

...In an unusual twist, police arrested a Muslim cleric from her neighborhood a week ago after a follower from his mosque accused him of stashing pages of a Quran in her bag to make it seem as if she burned them. He allegedly planted the evidence to push Christians out of the neighborhood and is now being investigated for blasphemy himself. He has denied the allegation.

Colombian President Juan Manuel Santos on Thursday rejected a proposal by FARC rebels to observe a bilateral ceasefire during peace talks due to begin next month. He added that military operations would continue until a final agreement was reached.

Reduced heating demand during a mild winter helped cut greenhouse gas emissions 2.5% in the European Union last year, the European Environment Agency reported today (7 September).

The EEA said preliminary figures show emissions fell even more sharply - 3.5% - in the 15 countries that were among the original EU signatories of the Kyoto Protocol, the 1997 international agreement that committed developed nations to reducing their greenhouse gas emissions from 1990 levels.

Under Kyoto, the EU agreed to cut emissions by 8% and its own mandate calls for reducing emissions 20% from 1990 levels by 2020. The EEA says overall emissions in the EU last year were 17.5% lower than 1990 levels.

Tough new regulations could be slapped on the shale gas industry if the EU acts upon legislative and environmental failings identified in its most comprehensive analysis yet of the sector, due to be released today [7 September].

Shale gas drilling poses a `high risk' to human health and the environment that is worse than that posed by other fossil fuels, according to a 300-page report prepared by the EU's environment directorate. It is also currently unregulated.

The study identifies eight areas of high-risk due to the cumulative effect of multiple shale wells, including the contamination and depletion of ground and surface water, and degradation of biodiversity, land, air quality and seismic conditions.

Water contamination is considered a high risk because of the industry's hydraulic fracturing - or `fracking' - technique. It involves drilling horizontally to shale deposits at depths of up to 3km, and pumping in large amounts of water, sand and chemical lubricants at high pressure to shatter the brittle rocks.

The cogeneration industry praised Obama for issuing an executive order - a non-legislative directive - on 31 August that would see the number of cogeneration plants double by 2020.

Cogeneration (also called combined heat and power, or CHP) is seen as a promising and efficient technology that captures the heat generated in the production of electricity and uses it to produce hot water or other thermal energy. It can achieve energy savings of up to 90% at a manufacturing plant.

...The American Council for an Energy-Efficient Economy (ACEEE) ranks Europe much higher than the US on energy efficiency progress. However, when it comes to cogeneration, Europe is lagging behind. The level of CHP penetration in European markets is 11%.

Russia is planning to destroy plutonium used in thousands of soon to be decommissioned nuclear warheads by using it as fuel in a special new atomic power plant. The reactor is set to begin operating in one year, but time pressures and a vulnerable cooling system make the project a risky one.

...

AFP - At least 50 people were killed and 550 injured when two shallow quakes struck a remote and mountainous area of southwest China on Friday, toppling buildings and sparking chaos in the streets, officials said.

Residents described how people ran out of buildings screaming as the two quakes hit on the border of southwestern Yunnan and Guizhou provinces an hour apart around the middle of the day followed by a string of aftershocks.

Germany is spending loads of money to recruit male child care workers, launching expensive employment campaigns to attract more men into the profession. Many parents want their children to be educated by both men and women, but low wages mean efforts have met with little success so far.

French investigators say the murder of a British man and three others on the edge of a secluded Alpine forest bears the hallmarks of a professional assassination as they revealed they were investigating allegations there had been a money dispute in the family.

The increasing belief among investigators that Saad al-Hilli was targeted means attention will focus on his private and professional life as they search for clues to any motive for the massacre.

French investigators said one line of inquiry was an alleged family dispute, said to have involved a wrangle over property. French officials stressed this was one line of inquiry among others.

With its garish, purple and turquoise lighting and dominant water feature, it looks like a cross between an Italian nightclub and a fantastic facility that could have been dreamt up by Ian Fleming.

In fact, it is the grotto through which Silvio Berlusconi's guests arrive by sea at his flamboyant retreat on Sardinia. The existence of the entrance has been known about since 2004 when opposition politicians objected to a series of changes to his villa and estate on the Costa Smeralda, saying they were initiated without planning permission.

But now, for the first time, photographs have been published. The tunnel enables visitors to reach the billionaire TV magnate's hideaway through gates concealing a grotto beneath his villa.

While not an ideal monetary system, thanks to the euro, states that adopted it renounced the possibility of manipulating its national currency and thus, the ability to pull off in solitary the perfect heist, robbing its own citizens to finance partisan goals, imposing the least overt and less democratic tax that can be levied, that is, inflation. Not surprisingly Ayn Rand referred to it as the paradigm of the perfect crime.

...

However, Austrian School economists like Ludwig von Mises, Friedrich von Hayek or, today, Jesus Huerta de Soto, have taught us that monetary systems that leave money creation at the mercy of the whims of politicians and central bankers, hinder and distort consumption and investment flows, preventing the efficient allocation of resources and generating international financial instability, currency wars, competitive devaluations, artificial credit expansion and inflation.

A better alternative, more solid and stable, and that would end boom and bust cycles, has been proposed by Huerta de Soto. This is supported on three basic reforms: restoration of the bank reserve ratio of 100 percent, abolition of central banks and return to the gold standard. However, it does not seem as if we can see those reforms in place any time soon, so until these reforms can be put into practice, at least we should approach as much as possible the ideal monetary system, avoiding falling again in what Hayek called monetary nationalism.