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Archive for the ‘Europe’ Category

Heresy in the temple

Posted by Charles II on September 10, 2015

Nasos Koukakis, CNBC:

The austerity imposed on Southern Europe after 2010 has led many famous economists to ban together and address the structural weaknesses of the monetary union. Some even have gone a step further by supporting European protest parties and leftist governments, demonstrating their opposition to the austerity policies.

Among them are Nobel Prize-winning economists Paul Krugman and Joseph Stiglitz; Jeffrey Sachs of Columbia University; James Galbraith of the University of Texas at Austin; and Thomas Piketty, professor at the Paris School of Economics.

In a joint letter, these acclaimed thinkers have asked the General Assembly of the United Nations today to back fundamental debt crisis principles concerning the restructuring of sovereign debts. The goal: to establish a legal framework for debt restructuring, allowing each state to solve its debt problems without risk of financial collapse and loss of sovereignty.

these economists have called for a relaxation of austerity, debt restructuring and investment-induced recovery. They are sharp critics of Germany’s commitment to budgetary discipline.

[John] Geanakoplos, an economist of Greek heritage [and James Tobin Professor of Economics at Yale] , believes that restructuring the public and private debt may eventually lead to smaller losses for the lenders.

Posted in economy, Europe | 2 Comments »

And German roaches are the proprietors

Posted by Charles II on July 15, 2015

Krugman, NYT:

So we have learned that the euro is a Roach Motel — once you go in, you can never get out. And once inside you are at the mercy of those who can pull your financing and crash your banking system unless you toe the line.

Posted in Europe, Greece | Comments Off on And German roaches are the proprietors

You can fool lots of the people…

Posted by Charles II on July 3, 2015

Nick Fletcher and Julia Kollewe, The Guardian liveblog:

Another opinion poll, from the Proto Thema website, shows the ‘Yes’ camp at 41.7% while the ‘No’ camp is at 41.1% and 10.7% are undecided.

100 researchers from the European University Institute have come out in support of the ‘No’ camp in Greece. The institute is an international postgraduate and post-doctoral teaching and research institute set up by European Union member states.

Oxford Economics says:

Whatever the referendum outcome, the ECB is unlikely to significantly increase ELA [emergency liquidity assistance to Greek banks] limits any time soon.

Economists at Société Générale say:

A ‘Yes’ vote: a semi-stable outcome at best.

A ‘Yes’ vote would allow negotiations to resume on the basis of the late June proposals. However, early elections or an unstable coalition would also follow a ‘Yes’ vote. And given the time and complexity entailed by a new programme, the third Greek bailout (worth between €60-80bn in our opinion) is unlikely to be approved before late August. As a result, Greece is set to default on its ECB debt repayments (both in July and August).

At least half a million Greeks are unable to vote in the referendum – unless they return to the country before Sunday’s poll. Under Greek law, people must travel home to where they are registered for voting.

Since the 2007-08 financial crisis, 405,666 Greeks have left the country, according to Eurostat, the European Union’s statistical office.

It’s appalling that over half the population is going to vote to accede to the Troika’s demands or is still undecided (and therefore, IMO, likely to vote from fear of the unknown rather than experience). If Tsipras fails to get his OXI (No) vote–despite the clear warnings from economists of all stripes that a Yes vote merely delays the inevitable by a few months–he will resign and leave Greece in the hands of the incompetents and the corrupt who got Greece into this mess.

One wishes that this would not prove to be yet another Greek tragedy. But there are only a few hours for public opinion to turn.

Posted in (Rich) Taxpayers League, Europe, financial crisis | 5 Comments »

Ah, nostalgia

Posted by Charles II on October 20, 2013

Andrés Cala, Consortium News:

In Galicia, an area in Spain’s northwest, the mayor of another town under Popular Party rule proudly showcases in his office a picture of fascist dictator Francisco Franco. The mayor also plays the fascist anthem to anyone who will listen. Yet, he has faced no official reprimand.

And earlier this month, a small town near Madrid, also governed by the Popular Party (or PP), allowed a fascist group to put up a stand in a public school exhibiting Franco-era and Nazi memorabilia. Officials later apologized and said that they weren’t aware of the stand.

Though anecdotal, these incidents fit with a rising public nostalgia for the Franco era in Spain and are symptomatic of a broader resurgence of extreme right-wing ideology in Europe and globally.

Another point of concern is that nationalist, populist and fascist movements have historically found fertile ground during times of economic pain… mainstream democratic parties have seen their legitimacy questioned and their political support drained.

In Spain – and to a lesser extent in some other European countries – the immediate danger is not so much from a handful of incipient reactionary movements, but rather from the underlying official permissiveness from more mainstream conservative parties, like the Popular Party, bordering on patronage.

Some elected Popular Party officials and party militants are openly making the Nazi salute, proudly displaying fascist flags and other memorabilia, and posting pro-Franco messages on social media sites.

Amid the Popular Party’s recent political success, with its latest high-water mark the gaining of an absolute majority in parliament, many of the party’s stalwarts have reminisced about the Franco era as a prosperous time, though it wasn’t.

Secessionist plans from Catalonia, Spain’s economic motor, have served to unite nationalist forces and radical fascist groups, but the most forceful opposition to Catalonian separation is coming from the right wing of the Popular Party, led by former Prime Minister Jose María Aznar. (emphasis added)

Cala goes on to add that this is a Europe-wide, if not a worldwide phenomenon, with France’s Marine Le Pen’s French National Front, Greece’s neo-Nazi Golden Dawn, and Progress Party leading the way into the abyss. Spain isn’t quite that far down the road… but the tolerance of the Popular Party for fascist expressions could end up mainstreaming it.

When will people learn that reaction doesn’t–almost by definition, can’t– solve problems?

Posted, with an addition about how the proper response to the rise of ultranationalism, anti-immigrant sentiment, and outright fascism is an extension and affirmation of human rights, at Daily Kos

Posted in Europe, fascism, history, Tea Party | 1 Comment »

Greece and the Underpants Gnomes; Egypt under the pharaohs

Posted by Charles II on June 17, 2012

Don’t ask me to explain the Greek left. If they had worked together, they would control Greece and could have led it out of the EU currency straitjacket. Instead, left-wing Syriza declined to work with the discredited socialists of PASOK and has ended up with center right discredited New Democracy forming a coalition with discredited PASOK to do the bidding of the EU in a program that will inevitably lead to mass suffering on a scale not seen in many decades in Europe. And according to Syriza, this is great:

SYRIZA leader Alexis Tsipras, 37, made clear his was now the main opposition party, swearing to fight on against the bailout and take power sooner or later.

“Very soon, the Left will be in power,” the former communist and student protest leader told elated supporters in central Athens after conceding defeat. “We begin the fight again tomorrow.”

1) Lose power
2) ??????
3) Victory!!!

Of course, Syriza is not half so crazy as the Austerians.

In Egypt, the Muslim Brotherhood is claiming a narrow victory over the military-backed candidate in the presidential race. Of course, this means nothing since there’s no constitution, no parliament, and the military has reclaimed absolute power:

Egypt’s Muslim Brotherhood declared on Monday that its candidate Mohamed Morsy won the country’s first free presidential race, beating Hosni Mubarak’s last prime minister and ending six decades of rule by presidents plucked from the military.

But shortly before the final result the generals who have run the country since the overthrow of Mubarak issued new rules that made clear real power remains with the army.

The order from Field Marshal Hussein Tantawi, the chairman to the Supreme Council, indicated that the army, which also controls swathes of Egypt’s economy, has no intention of handing substantial power now to its old adversary the Brotherhood.

“SCAF will carry legislative responsibilities … until a new parliament is elected,” the council’s order said.

In France, the Socialists are now in charge, and have no real power because Europe is in crisis and they’re committed to saving the EU. The only victors in all this seem to be the neo-Nazis. Some people are becoming convinced that none of the moderate parties have any solutions, and are willing to settle for a strongman.

Posted in Arab Spring, Europe, totalitarianism | 2 Comments »

Blessed are the little children….

Posted by Charles II on April 3, 2012

Josephine Moulds, The Guardian:

An 11-year-old boy from the Netherlands has joined the chorus of people calling for Greece to leave the euro in a surprise entry for the lucrative Wolfson economics prize.

Jurre Herman won €100 (£83) in gift vouchers for his devastatingly simple contingency plan for a breakup of the eurozone. Herman suggested Greeks should be forced to swap their euros for drachmas, so the Greek government could pay back its debts with the euros it collects. Any sceptics will surely be convinced by his drawing, which demonstrates a Greek guy, who “does not look happy!!”, delivering his euros to the bank.

Herman explains: “All these euros together form a pancake or a pizza (see on top in the picture). Now the Greek government can start to pay back all their debts, everyone who has a debt gets a slice of the pizza.”

While his fellow shortlisted and commended entrants boast impressive biographies listing their professorial chairs, advisory roles, bestselling tomes and multiple qualifications, Jurre’s says that he lives with his family, his pet dog and a bird and has “five friends with whom he plays all day, mostly outside”.

But showing an impressive understanding of economics, he notes: “The Greek people do not want to exchange their euros for drachmas because they know that this drachma will lose its value dramatically.” To tackle this thorny issue, he plans to fine those Greeks hiding their euros or transferring them to other European countries, by doubling the amount of euros they tried to hide.

“In this way I ensure that all Greeks bring their euros to a Greek bank and so the Greek government can pay back all the debts. I hope my idea helps you!!!!”

Too bad us adults aren’t that smart.

Posted in economy, Europe | 4 Comments »

Meet Angela Merkel, Dale Carnegie graduate

Posted by Charles II on February 15, 2012

Eleni Chrepa, Bloomberg:

Greek President Karolos Papoulias slammed Germany’s finance minister for recent comments about his country as stalled bailout talks stoked tensions between Greece and the northern European countries funding its rescue.

“I don’t accept insults to my country by Mr. Schaeuble,” Papoulias, who fought in the resistance against the Nazis during World War II, said in a speech today. “I don’t accept it as a Greek. Who is Mr. Schaeuble to ridicule Greece? Who are the Dutch? Who are the Finns? We always had the pride to defend not just our own freedom, not just our own country, but the freedom of all of Europe.”

Papoulias’s comments came as Wolfgang Schaeuble and other European officials pushed Greece to gouge more cuts out of its budget to qualify for a new bailout that would stave off an economic collapse. Schaeuble today blamed Greece’s New Democracy party, the second largest, for holding up agreement on a new rescue package and his deputy, Steffen Kampeter, compared Greece to a “bottomless pit.”

Granted, it’s very slightly unfair to blame Merkel for the comments by her Finance Minister, but its her administration. Aren’t the riots in the streets enough for the Germans to stop throwing gasoline on Greece?

This is why the US has generally been successful at the application of soft power, at least up until Bush 2. At least in the past, it was able to refrain from being an a–hole in public.

Posted in Europe, financial crisis | 3 Comments »

Neo-fascism in Hungary

Posted by Charles II on January 6, 2012

I don’t use the word lightly. Tony Patterson, The Independent:

There are hard times indeed for those in Hungary who like to think of themselves as enlightened, liberal, or even remotely left-wing. Yesterday, the concierge at the New Theatre stepped outside into the blustery cold of mid-morning Budapest. “We’ve only got 26 days left. Then it’s all over for us,” he explained ruefully. “We are – how do you say – under new management. It’s happening all over Hungary and there’s nothing we can do.”

The nationalist Fidesz government of Viktor Orban is not merely interested in wielding greater control over financial institutions. It has embarked on a Kulturkampf – a cultural revolution – which seems bent on imposing its right-wing and xenophobic ideology on all walks of life, ranging from minorities and religions to the media, judiciary and arts.

Anything that smacks of unacceptable left-wing thinking is being singled out as a target for denunciation or destruction by the Orban government’s culture police.

The new constitution also withdraws official recognition from over 300 religious denominations, including Islam, Buddhism and several Catholic orders.

Attacks on the media, the arts, the judiciary, even religious organizations–any power that stands athwart the power of the state. This is what fascism looks like.

Posted in Europe, fascism | 4 Comments »

More fun in Euroland

Posted by Charles II on January 6, 2012

Hungarian and Egyptian yields spike, Chinese land prices slump.

More joy as it arrives in my mail box.
Update: Ah, well, US jobs increase, so all is well, say the European markets. Even Asia is not so bad: Japan down, China up.

But there’s a fair amount of negative news in Europe, even though the US news is good.

Posted in Arab Spring, China, economy, Europe, financial crisis | Comments Off on More fun in Euroland

The panic button is the one with the Vogon engraved into it

Posted by Charles II on December 9, 2011

Ok, we should be getting back into panic mode just in time for Christmas.

(Image from The Guardian)

Via Ritholtz, this article by Martin Hesse and Anne Seith, Der Spiegel:

Europe’s banks urgently need fresh capital to meet tougher EU rules, but they will have problems raising it amid the current crisis of confidence plaguing the euro zone. The survival of Commerzbank, Germany’s second-largest bank, is at stake, and Berlin is considering a full nationalization of the bank if necessary.

Bank managers say that the ballooning debts of a number of euro-zone countries are to blame for this renewed banking crisis only three years after the collapse of Lehman Brothers — and they contend that the crisis management pursued by Brussels, Berlin and Paris has merely exacerbated the problem

the world’s leading central banks provided some relief to lenders last week. They showered the increasingly dry financial system with cheap money. But the flood of cash has not removed the causes of the crisis. The banks will only stabilize when investors regain trust in their stability.

“It’s a mystery to me how some banks can be expected to meet the higher capital requirements at such short notice,” says bank expert Michael Göttgens from the auditing and consulting company Deloitte.

The traditional way would be to raise capital by issuing new shares on the stock exchange. Investors, though, are avoiding European bank stocks precisely because of the sovereign debt crisis. To make matters worse, financial institutions will probably also generate lower returns over the long term due to the more stringent regulatory demands.

banks can also increase their capital ratios by reducing their balance sheets — in other words, by granting fewer loans.

According to FT, stress tests say that German banks need $17.4B, French banks need more than $9B, Italian banks $20B, Spain aboit $34B, Portugal $9B, Austria $5B, Belgium $8B. The UK supposedly has capital sufficiency, but I wouldn’t bet on it. IMO, thanks to the arrogance of its financial wizards, the UK could be an epicenter for a meltdown in derivatives. Anyway, that’s over $100B that has to be moved into capital reserves, which can’t be good for economic growth, whether it’s by taking money from other uses into buying shares or by slashing lending.

Is there a reason to panic? Not the actual financial situation, which could be resolved through modest steps. But the leadership in both the US and Europe–and China and Japan–is so clueless that there’s plenty of reason to be afraid. Basically, as Krugman has pointed out, no one in power understands macroeconomics, even economists. All of the lessons learned during the Great Depression, all of which are obvious from macroeconomics and familiar to anyone who studied Samuelson, have been forgotten.

Added: Joseph Stiglitz read Samuelson.

Posted in Europe, financial crisis | 3 Comments »

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