Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
by Fran (fran at eurotrib dot com) on Tue Jan 27th, 2009 at 04:11:47 PM EST
Germany Cabinet Approves Rescue Package to Lift Economy | Germany | Deutsche Welle | 27.01.2009
Chancellor Angela Merkel's government agreed to implement a second economic stimulus package on Tuesday, Jan. 27. The program calls 50 billion euros ($66 billion) worth of investments, aid to businesses and tax breaks.  

The stimulus program, agreed to by Merkel's Christian conservatives and Social Democratic Party earlier this month, calls for tax cuts and investment in roads and railways as well as schools. The package is intended to lift Germany out of its most severe postwar recession.


The program now goes to parliament where it is expected to pass with little resistance. An earlier set of measures that the government valued at 31 billion euros and approved in November was widely criticized as insufficient to revive Europe's biggest economy.


Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift:  Fewer emission could mean less in taxes in the future

The plan calls for altering Germany's automobile tax in favor of more environmentally friendly cars while having little effect on larger cars, which tend to emit more greenhouse gasses. As of July 1, emissions will play a larger part in determining how much tax car owners pay for their vehicles

by Fran (fran at eurotrib dot com) on Tue Jan 27th, 2009 at 04:18:36 PM EST
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World Economic Forum: Davos During the Downturn - SPIEGEL ONLINE - News - International

The financial crisis has spread and deepened since the last World Economic Forum. Now's the time to find a way forward during these times of economic downturn.

This will be my eighth World Economic Forum meeting in Davos, and I fully expect it to be a special few days. Last year's meeting took place against the backdrop of the first waves of global meltdown, with markets crashing around the world in the days before the great and the good met in the snowy Swiss village.

 The annual meeting of the World Economic Forum is taking place in Davos, Switzerland this week. Questions about how far the ripples of the crisis would reach and how many sectors would be affected dominated the meeting. There was much talk of global "policing" mingled with debates on whether the rates of growth in emerging markets could create a decoupled model and how deep the various forms of economic bailout would need to be.

Such discussions now seem like a far-off dream. The waves of bad news have only grown over the past year, with the breadth, depth, and severity of the shocks to the global economy increasing every month. The responses by governments, corporations, and other global agencies have reached ever-greater levels of urgency, scale, and, in some cases, desperation. Solutions that would have seemed left-field a year ago are now commonplace, and we all have a clearer sense of how the combination of massive interdependence and pervasive local difficulties can combine to create a perfect storm.

by Fran (fran at eurotrib dot com) on Tue Jan 27th, 2009 at 04:21:11 PM EST
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The poor dears. Meeting around a cheery log fire in the snowy Alpine village, discussing with philanthropy the higher interests of mankind, little did they imagine that wave upon wave of bad news would shake their confidence in the very foundations of etc etc

How could they have known?

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Jan 27th, 2009 at 04:45:45 PM EST
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Is Europe's welfare system a model for the 21st century? - International Herald Tribune

DAVOS, Switzerland: Along with skiing and partying into the night, Europe-bashing has long been a favorite sport, whenever the world's business and political elite gather here for their once-a-year winter schmoozefest.

But this year many of the critics have fallen conspicuously silent. As top executives, government leaders and a wide range of experts gathered Tuesday for the weeklong World Economic Forum to talk about the challenges facing the battered global economy, the question many were asking was this: Could Europe's much-reviled social welfare system actually end up being the model for the 21st century world?

In the United States, the global stock market rout has wiped out trillions of dollars in retirement savings and rising unemployment is leaving more people without health insurance. In response, officials of the new administration of President Barack Obama have been busy studying the Swedish bank bailout of the 1990s and the Swiss and Dutch health care systems and have been quietly contemplating whether Europe's high fuel taxes and carbon trading system are the right way to limit the burning of fossil fuels that contributes to global warming.

In China, where the demise of the American consumer has exposed the perils of excessive savings at home, the government has not only recently proffered a big Keynesian-style stimulus program but has also just announced a three-year plan to provide universal health care. Though modest by comparison, China's health care plan goes in the direction of what has long been considered a fundamental right in Europe.

by Fran (fran at eurotrib dot com) on Tue Jan 27th, 2009 at 04:21:31 PM EST
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Europe-bashing has long been a favorite sport

The IHT should know.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jan 28th, 2009 at 01:50:13 AM EST
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"... the question many were asking was this: Could Europe's much-reviled social welfare system actually end up being the model for the 21st century world?..."

Why do I doubt that many were asking this question, or anyone of significance?

  1. Can anyone give a short explanation of the Swiss and Dutch health systems, especially vs the French (the most highly regarded of systems, by most accounts.)

  2. Would vis-à-vis have been appropriate in the sentence above instead of vs?

Never underestimate their intelligence, always underestimate their knowledge.

Frank Delaney ~ Ireland

by siegestate (siegestate or beyondwarispeace.com) on Wed Jan 28th, 2009 at 03:37:32 AM EST
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Proposed Nabucco Gas Pipeline Gets European Bank Backing | Europe | Deutsche Welle | 27.01.2009
The heads of the EU's European Investment Bank and the European Bank for Reconstruction and Development (EBRD) said Tuesday, Jan. 27, that they are prepared to provide financial backing for the Nabucco gas pipeline. 

Spurred on by Europe's worst-ever gas crisis earlier this month, which left millions of homes across the continent without heat in the depths of winter, Hungarian Prime Minister Ferenc Gyurcsany invited top-ranking officials from both the EU and the countries involved in Nabucco to inject fresh momentum into the slow-moving project.

Nabucco, an ambitious but still-unbuilt gas pipeline aimed at reducing Europe's energy reliance on Russia, is a 3,300-kilometer (2,050-mile) pipeline between Turkey and Austria. Costing an estimated 7.9 billion euros, the aim is to transport up to 31 billion cubic meters of gas each year from the Caspian Sea to Western Europe, bypassing Russia and Ukraine.

Nabucco currently has six shareholders -- OMV of Austria, MOL of Hungary, Transgaz of Romania, Bulgargaz of Bulgaria, Botas of Turkey and RWE of Germany.

by Fran (fran at eurotrib dot com) on Tue Jan 27th, 2009 at 04:30:47 PM EST
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BBC NEWS | Europe | EU pipeline scheme gains momentum

Central and southern European leaders have voiced strong backing for a major pipeline project that could reduce EU reliance on Russia for gas.

But the talks in the Hungarian capital Budapest did not result in a pledge of direct financing for the 3,300km (2,050-mile) Nabucco gas pipeline.

Nabucco would bring Central Asian gas to western Europe via Turkey and the Balkans, bypassing Russia.

It is expected to account for no more than 5% of EU gas needs.

The Budapest meeting followed serious disruption to European gas supplies during Russia's recent dispute with Ukraine.

by Fran (fran at eurotrib dot com) on Tue Jan 27th, 2009 at 04:32:14 PM EST
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It's so damn frustrating to see so much political capital invested in this. What a waste.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Jan 28th, 2009 at 08:54:40 AM EST
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Russia 'halts missile deployment'

My hope is that this would be the first in a series of reciprocal moves that would bring Russia and the US and Europe back into innovative partnership on not just energy issues.

You can't be me, I'm taken

by Sven Triloqvist on Wed Jan 28th, 2009 at 09:06:55 AM EST
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I asked this question in your diary. now this could all be a bio-fuel type mistake, but I have to wonder seeing as the pipeline is supposed to go awfully close to real supplies.

<blockuqote>I was wondering if all of this was a bluff. There's a huge amount of political effort going into building a pipeline and I refuse to believe they'd be building it to nowhere unless the somewhere was politically not to be spoken aloud.

Instead of turning left, how about turning right ? Mosul ? I R A N ? </blockuqote>

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Wed Jan 28th, 2009 at 09:31:38 AM EST
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Treasury easily sells record $40 billion in two-year notes

The bond market had a welcoming gift for new Treasury Secretary Timothy Geithner today: The government had no trouble selling a record sum of two-year notes.  Strong bidding at the auction of $40 billion of notes could help allay worries that the Treasury's massive borrowing plans for this year will run into waning investor demand.

The auction also is a sign that many investors remain too fearful to put their money into anything without an iron-clad guarantee of principal.

"It tells you everybody's still looking for safety," said John Canavan, a fixed-income analyst at Stone & McCarthy Research in Skillman, N.J.

Investors put in $107 billion in bids for the two-year notes, compared with bids totaling $81 billion when the Treasury offered $38 billion in two-year securities for sale last month.  The annualized yield on the new two-year T-notes was 0.925%, just slightly above the yield at the December auction.

Still, shorter-term securities typically are easier for the government to sell than longer-term issues. Yields have rebounded on 10-year and 30-year Treasuries in recent weeks from last month's record lows, suggesting that investors were beginning to pull back.

Regarding the Chicago School allegations regarding stimulus spending cited in today's open thread, perhaps the easiest way to get money from the wealthy spent on socially useful investments in this climate is for the government to borrow the money from them via treasuries and then for the government to spend that money on investments said wealthy business people are afraid to do themselves.  They have made such a mess of things they prefer 2% with a government guarantee to any alternatives.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jan 27th, 2009 at 06:19:30 PM EST
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Treasury awards TARP balance | ABCNews | 27 Jan 2009

As Obama ended his day with Republican lawmakers, the Treasury Department said today that it had distributed another $386 million to 23 banks in 16 states Friday. They were the first awards from the $700 billion federal bailout fund since Obama took office a week ago.

Today, the president met separately with GOP members of the House and Senate as debate began on the massive $825 billion combination of tax cuts, bailouts and public works spending.
"He wants to hear their ideas. If there are good ideas, and I think he assumes there will be, that we will look at those ideas," White House spokesman Robert Gibbs said.

Diversity is the key to economic and political evolution.
by Cat on Tue Jan 27th, 2009 at 08:00:44 PM EST
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The Dutch ING bank is announcing €3.9 billion ($5 billion) losses and cutting 7000 jobs. But it started from a "catastrophic" success of its postal banking.

FT.com: Knock-on effect of success in online banking hits ING

ING embarked on a gradual expansion of direct banking a decade ago, seeking to capitalise on its experience in retail savings operations, which was built up through running Postbank at home, the post office savings bank.

In the US, where it launched ING Direct in 2000, the bank chose to become a "thrift" or savings association that was required to put at least 55 per cent of its assets into mortgages.

Since ING could attract online savers with eyecatching interest rates much quicker than it could write its own mortgages, the bank started buying mortgage-backed securities.

"Originating mortgages takes time," said Koos Timmermans, chief risk officer. "So the first thing we did was invest in Fannie Maes and Freddie Macs. We built a portfolio, but after reaching a level of $9bn-$10bn we said it's prudent to also look at other originators."

That led to the €27.7bn Alt A portfolio, a group of securities that lie between subprime and prime and which in recent months had dragged ING's share price ever lower.

by das monde on Wed Jan 28th, 2009 at 03:51:36 AM EST
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Smart policies, stimulus bill needed to maintain momentum in 2009

The U.S. wind energy industry shattered all previous records in 2008 by installing 8,358 megawatts (MW) of new generating capacity (enough to serve over 2 million homes), the American Wind Energy Association (AWEA) said today, even as it warned of an uncertain outlook for 2009 due to the continuing financial crisis.

The massive growth in 2008 swelled the nation's total wind power generating capacity by 50% and channeled an investment of some $17 billion into the economy, positioning wind power as one of the leading sources of new power generation in the country today along with natural gas, AWEA added.  At year's end, however, financing for new projects and orders for turbine components slowed to a trickle and layoffs began to hit the wind turbine manufacturing sector.    

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Jan 28th, 2009 at 05:14:05 AM EST
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FT.com / Global Economy - Deep gloom marks Davos opening
Deep gloom hung in the mountain air around Davos in the opening session of the World Economic Forum on Wednesday, with economists, officials of international organisations and finance ministers predicting a troubled period with a high risk of protectionism.

There was little confidence that the programmes of fiscal stimulus in many advanced countries would be very effective in mitigating the degree of decline in global output in 2009 and no hope that a coordinated strategy would be agreed among rich and poor countries.

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Wed Jan 28th, 2009 at 08:05:15 AM EST
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FT.com / Global Economy - Capital flows to developing world at risk of collapse
Capital flows to emerging markets are in danger of collapsing this year as the financial crisis in advanced economies risks choking off the supply of credit to the developing world, an association of large banks warned on Tuesday.

The Institute for International Finance forecasts net private sector capital flows to emerging markets will be no more than $165bn (€125bn, £116bn) this year, less than half the $466bn inflow in 2008 and only one fifth of the amount sent in the peak year of 2007.

The figures underscore the impact the banking crisis and risk-averse investors are having on emerging market economies, one of the central issues at this year's World Economic Forum in Davos, which starts on Wednesday.

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Wed Jan 28th, 2009 at 08:11:46 AM EST
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FT.com / Global Economy - Global crisis `could cost 50m jobs'
Global unemployment and poverty are set for a "dramatic increase" in the coming year as the world economic crisis deepens, according to a new report.

Projections by the International Labour Organization, a UN agency, on global employment trends predict that on a worst-case scenario, recorded unemployment could rise by more than 50m from baseline 2007 levels to 230m or 7.1 per cent of the world's labour force by the end of 2009.

In the same scenario the number of people in "working poverty", earning less than $2 a day, could rise to 1.4bn or 45 per cent of all workers, from 1.2bn in 2007.

This would leave as many people below the poverty line as there were in 1997, wiping out all the gains over the past decade and marking "a return to a situation in which more than half of the global labour force would be unemployed or counted as working poor."

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Wed Jan 28th, 2009 at 08:17:09 AM EST
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scream at people that say we should not dump capitalism or finance despite the recent crisis, because we should not forget the past 25 years of prosperity and poverty destruction?

The successes of the recent past WERE ALL FAKE!

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Jan 28th, 2009 at 08:57:03 AM EST
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