Financial News
Demand For EFSF Paper Collapses As World Wakes Up To Post Bailout Hangover
Greeks Set To Scream Bloody Murder As Pension Fund Threatens To Recoup €8 Billion In "Illegally" Paid Out Proceeds
http://www.zerohedge.com/news/greeks-set-scream-bloody-murder-pension-fund-threatens-recoup-%E2%82%AC8-billion-illegally-paid-out-pro
http://www.businessinsider.com/heres-why-sacking-italians-could-spark-terrorism-2011-10
By GEORGE JAHN - Associated Press
China remains confident Europe can solve its crippling debt crisis even though it continues to balk at requests for it to use its financial firepower.
President Hu Jintao told reporters Monday his country is closely following developments in Europe as the 17 countries that use the euro grapple with a debt crisis that has seen three countries bailed out and threatening to engulf Italy, the eurozone's third largest economy .
"We are convinced that Europe has the wisdom and the competence to conquer its momentary difficulties," he said during an official visit to Austria.
Europe is closely watching comments by Hu and other Chinese officials in the hope the country will use some of its huge cash reserves to help prevent the region's debt crisis from spilling over into increasingly shaky economies like Italy and Spain.
Beijing so far has promised to help only by continuing business as usual, trading with Europe and stockpiling some of China's multibillion-dollar trade surpluses in the safest European government bonds.
by Shuai Anning
BEIJING, Oct. 31 (Xinhua) -- As the leaders of the world's most powerful economies are set to meet in the French coastal town of Cannes later this week for the sixth Group of 20 (G20) Summit, they are still worried sick about the state of the global economy.
More than three years after the then fourth U.S. largest investment bank Lehman Brothers filed for bankruptcy protection, causing a global financial crisis that made the world economy suffer its most severe recession after World War II, investors and policy makers are still racing against time to stabilize financial markets, boost investors' confidence and foster fragile economic growth.
With the U.S. economy, the world's largest, having slowed sharply and the eurozone mired in a sovereign debt crisis that threatens to tear apart Europe's ambitious single currency project, one can't help but wonder what is wrong with the world economy, or more specifically, what is wrong with Western economies.
MISPLACED BLAME
For the past centuries, developed economies have been called "advanced" for a reason. They have been leading world economic growth and helped many developing countries create jobs and prosperity through a robust system of cross-border trade and investment flows.
But for the past few years, from the United States to Europe to Japan, advanced economies are not only experiencing one crisis after another, putting the whole world economy at risk, they also seem to have lost their ability to deal with the crisis in a smart and honest way.
Even worse, some Western politicians just choose to blame everybody else for their own problems.
For example, they blame red-hot commodities' prices on robust demand growth in emerging economies when ultra loose monetary policies in advanced economies are causing rampant market speculation and asset bubbles.
In the run-up to the upcoming G20 summit, some are again trying to pin the blame for the financial crisis and fragile world economic recovery on China's foreign exchange rate regime.
If Western politicians continue to regard China as a scapegoat, they will not only stoke disappointment and frustration in emerging economies, but also miss the opportunity to address the fundamental problems that created the crisis in the first place and the systematic deficiencies that are hindering their efforts to seek strong, balanced and sustainable economic development in the future.
THE REAL PROBLEMS
It is widely accepted that the crash of the U.S. housing market is the primary cause of the global financial crisis and that innovative or sometimes fraudulent financial practices helped spread it around the world. Inadequate government oversight is also partly to blame.
If the financial sector cannot be better controlled, a Wall Street obsessed with speculation and fraud will continue to thwart all efforts to revive economic growth.
For the eurozone countries, the current debt crisis has become a heavy price to pay for their dishonest implementation of their union treaty that stipulates a member country's deficit to GDP should not exceed three percent, and public debt to GDP should not exceed 60 percent.
Ever since the eurozone came into existence, not only so-called peripheral states like Greece have repeatedly violated the treaty rules -- so did other members.
When no one in the eurozone takes the rules designed to protect the integrity of the union seriously, the credibility of the union is called into question, and another crisis is sure to follow.
Next to dishonesty, the political incompetence of some Western economies is another cause for concern.
The United States, once known for its efficiency and great ability to reach difficult compromises, has not been able to live up to its reputation recently as Democrats and Republicans refused to set aside partisan differences for the national good. As Abraham Lincoln once said, a house divided against itself cannot stand.
In a similar fashion, the 17 member states of the eurozone seem to have forgotten that when they gave up their national currencies in favor of the euro, they were actually committing to a common fate.
THE ONLY WAY OUT
There is no quick fix for the ongoing financial crisis, but being painfully honest with oneself is the first step in the right direction.
Western economies only have themselves to blame. They should examine what went wrong with their systems and put aside differences to resolve the crisis together.
Both the United States and Europe are crucial export markets and also China's strategic economic partners. Therefore, far from gloating, China also has to suffer from the sustained economic turbulence in advanced economies.
The upcoming G20 summit offers another opportunity for the international community to address the most difficult challenges the world economy currently faces. Hopefully, honesty and cooperation will prevail over prejudice and narrow-mindedness.
The world's leading economies need to develop an urgent action plan this week in order to address short-term vulnerabilities in the global economy and to ensure the IMF has enough cash to continue bailing out troubled states, European Commission president Jose Manuel Barroso has warned.
http://www.independent.ie/business/european/barroso-warns-g20-about-need-for-urgent-debt-plan-2921286.html
Joint letter from Herman Van Rompuy and Jose Manuel Barroso to G20: in full
http://www.telegraph.co.uk/finance/financialcrisis/8858304/Joint-letter-from-Herman-Van-Rompuy-and-Jose-Manuel-Barroso-to-G20-in-full.html
Sarkozy tells French to be like Germans
BRUSSELS - The ruling euro-sceptic ODS party in the Czech Republic wants to push for a referendum on the country's future eurozone accession, claiming that the rules have changed since 2003 when Czechs said yes to the EU and the euro.
The recent agreement on another bail-out for Greece and on boosting the eurozone's bailout fund is fuelling Czech calls for a referendum, said Czech MEP Jan Zahradil, leader of the European Conservatives and Reformists.
"We should allow non-eurozone members – such as my country the Czech Republic – to decide again whether they wish to enter. We signed up to a monetary union, not a transfer union or a bond union in our accession treaty. This is the major reason why the Czech Prime minister wishes to call the referendum on this matter," Zahradil said in a statement
really good
and really obvious
Joh Grffing
There are more than a few similarities between the newly forged federal Europe and the former Soviet Union.It is quite ironic that only 30 years after the fall of the Berlin wall and the end of Soviet communism, a new tyranny has risen, predicated on the same failed centralist political tactics tried and tested in the old Soviet Union. Just ask Russia how that worked out.And yet with the recent debt crisis spreading across Europe, the problem with centralism as a model has been illustrated yet again, since it is now apparent to all watching that a supranational central bank that sets uniform interest rates and controls the liquidity of an entire continent is unable to contain major dislocations and financial disruptions in member states. The financial contagion that resulted from European loan defaults, most notably in the case of Greece, has prompted calls for yet more centralization.Factions inside the European Commission are discussing proposals to make defaulting states "wards" of the Commission, effectively ending national sovereignty for indebted states. Each "ward" would be assigned a budget officer who would oversee spending in the geographical area under his or her direction.How is this to be tolerated on a continent that once prized freedom and accountable, democratic government? American victory in World War II seems overshadowed by the willful acquiescence to despotic rule which now characterizes European political organization. The world watches with bated breath as European nations line up to surrender precious, historic freedom to Brussels. And Greece, the cradle of democracy, is next on the menu.The parallels between the Soviet Union and the European Union are undeniable.The unelected European Commission acts as supreme legislator, ipso facto, the politburo. (See the text of the Lisbon Treaty as amended, specifically the provisions dealing with the powers of the Commission.) As a matter of fact, there is no higher power than the European Commission. Unlike the separation of powers found in the political organization of the United States, or the two-tiered system of checks and balances found in the legislative structure of the former United Kingdom, the European Commission can revise, edit, repeal, remake, and remand laws passed by the duly elected representatives of the European people. This process has been allegedly improved with a procedure called "co-decision," but the wind still blows from Brussels. When all is said and done, assuming the European Parliament is uncooperative, the Commission can simply rule by fiat, and implement policy via regulation, which is immediately binding in all member states.And far from a traditional democratic body, the European Parliament is a publicity stunt, elected through a "list" system that minimizes poplar choice. People vote for a party list, eliminating competitive elections, very similar to the one-vote, one-candidate Soviet system. If candidates on the list are not representative of local tastes, citizens will have no recourse but to vote for another party, which presents its own challenges. In essence, the European Parliament fulfills the role of the former Supreme Soviet, backing the policy prescriptions of the Politburo and giving a democratic face to the European Union (EU).And eerily similar to the Soviet approach of divide and conquer, hundreds of artificial regions have replaced traditional provinces and counties on a host of policy questions, and these abstract constructs answer directly to Brussels, ipso facto Soviet Socialist Republics (SSRs). In point of fact, regional governments can now compete independently of national parliaments for European Union (EU) funds, neutering national sovereignty and creating new financially-driven loyalties that supersede questions of national patriotism.The centrality of regionalism to the EU agenda is embodied in "Framework" regulation 2052/88 instituted by regional visionary Jacques Delors during his time as European Commission President: it provides a swift means of delivering regulation upon the subject peoples of Europe without the filtering mechanism of national parliaments. As regulations, apart from directives, instantly become law in EU member states without parliamentary scrutiny, it makes sense to have European administrative units that are charged with the implementation of European policy.The Delors regulation made it lawful in all EU member states for regional authorities, which were a requirement after the Single European Act, to deal directly with Brussels on a host of issues without consulting with, or working with, national parliaments. The Treaties of Amsterdam and Maastricht even gave regional authorities an advisory role in all EU legislation, regulations, and directives. Currently, the EU's end-run around national parliaments only extends to "structural funds," which encompasses most economic issues. But as "EU law takes primacy over the law of member states," there would be little, if any, recourse for national parliaments following new regulations that expanded on the current EU practice of benign neglect.Joseph Stalin once observed that people will more readily surrender sovereignty to vague regional entities with which they have more in common, than to an abrasive and offensive world authority. In his 1912 essay "Marxism and the National Question," Joseph Stalin maintained that "regional autonomy is an essential element in the solution of the national problem." The 1936 Official Program of the Communist International proclaimed:
Eastern Europe tasted liberty for a brief moment and has been plunged back into the darkness of despotism once more. The tragedy is unbearable. An ideological curtain has descended across the Atlantic. The only question remaining is, does America have the stomach for another Cold War?"
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