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Au Revoir to European Democracy: “A Calm Judgement of Business Necessity”


Dave Emory’s entire life­time of work is avail­able on a flash dri­ve that can be obtained here. (The flash dri­ve includes the anti-fas­cist books avail­able on this site.)

Joseph Goebbels, Hitler’s pro­pa­ganda chief, once said: ‘In 50 years’ time nobody will think of nation states.’

COMMENT: View­ing events in Europe brings to mind the clos­ing words of James Stew­art Mar­t­in’s All Hon­or­able Men. Qui­et­ly, the Euro­zone debt cri­sis has brought about an order­ly tran­si­tion to the “calm judge­ment of busi­ness neces­si­ty” with which Mar­tin closed his book.

As Greece and Italy have seen gov­ern­ments appoint­ed by the Ger­man dom­i­nat­ed “tech­noc­ra­cy” with no demo­c­ra­t­ic input what­so­ev­er from the pop­u­la­tion of those coun­tries, we can begin to see the out­lines of the gam­bit of “fas­cism instead of finan­cial col­lapse.”

The alter­na­tive to a glob­al finan­cial meltdown–we are told–is to hand over the con­trols to “tech­nocrats” to imple­ment the “busi­ness neces­si­ty” brought about by the delib­er­ate­ly irre­spon­si­ble, destruc­tive poli­cies of the large finan­cial insti­tu­tions whose prof­it-mak­ing has engen­dered the cri­sis.

In this regard, it is use­ful to under­score a cou­ple of arti­cles researched by R. Wil­son from the Dai­ly Tele­graph [UK].

“Ger­man Memo Shows Secret Slide Towards a Super State” by Bruno Water­field; Dai­ly Tele­graph; 11/17/2011.

EXCERPT: The six-page memo, by the Ger­man for­eign office, argues that Europe’s eco­nom­ic pow­er­hous­es should be able to inter­vene in how belea­guered euro­zone coun­tries are run.

The con­fi­den­tial blue­print sets out Germany’s plan to tack­le the euro­zone debt cri­sis by cre­at­ing a “sta­bil­i­ty union” that will be “imme­di­ate­ly fol­lowed by moves “on the way towards a polit­i­cal union”.

It will prompt fears that Germany’s euro cri­sis plans could result in a Euro­pean super-state with spend­ing and tax plans set in Brus­sels.

The pro­pos­als urge that the Euro­pean Sta­bil­i­ty Mech­a­nism (ESM), a euro­zone bailout fund that will be estab­lished by the end of next year, should be trans­formed into a ver­sion of the Inter­na­tion­al Mon­e­tary Fund for the EU.

The Euro­pean Mon­e­tary Fund (EMF) would be able to take full fis­cal con­trol of a fail­ing coun­try, includ­ing tak­ing coun­tries into receiver­ship.

The leaked doc­u­ment, The Future of the EU: Required Inte­gra­tion Pol­i­cy Improve­ments for the Cre­ation of a Sta­bil­i­ty Union, comes as David Cameron meets Angela Merkel, the Ger­man chan­cel­lor, in Berlin today to talk about treaty changes and the euro­zone cri­sis.

The Ger­man plan begins with a pro­pos­al to cre­ate “auto­mat­ic sanc­tions” that could be imposed on euro mem­bers spend­ing beyond tar­gets set by the Euro­pean Com­mis­sion. Ger­many is demand­ing that if euro rules are “con­sis­tent­ly vio­lat­ed”, it should be able to demand action from the Euro­pean Court of Jus­tice.

The six-page memo, by the Ger­man for­eign office, argues that Europe’s eco­nom­ic pow­er­hous­es should be able to inter­vene in how belea­guered euro­zone coun­tries are run.

The con­fi­den­tial blue­print sets out Germany’s plan to tack­le the euro­zone debt cri­sis by cre­at­ing a “sta­bil­i­ty union” that will be “imme­di­ate­ly fol­lowed by moves “on the way towards a polit­i­cal union”.

It will prompt fears that Germany’s euro cri­sis plans could result in a Euro­pean super-state with spend­ing and tax plans set in Brus­sels. . . .

COMMENT: Chan­cel­lor has turned her thumb down on a pro­posed British ref­er­en­dum on the EU.

It was a pro­posed Greek ref­er­en­dum that led to the installation–without any demo­c­ra­t­ic input from the Greek people–of a pro­vi­sion­al gov­ern­ment includ­ing doc­tri­naire fas­cists in promi­nent posi­tions.

“Ger­many’s Secret Plans to Derail a British Ref­er­en­dum on the EU” by Bruno Water­field; The Tele­graph; 11/18/2011.

EXCERPT: Angela Merkel, the Ger­man chan­cel­lor, is today expect­ed to tell David Cameron that Britain does not need a ref­er­en­dum on EU treaty changes, despite demands from senior Con­ser­v­a­tives for more pow­ers to be repa­tri­at­ed to Britain.

The leaked memo, writ­ten by the Ger­man for­eign office, dis­clos­es rad­i­cal plans for an intru­sive new Euro­pean body that will be able to take over the economies of belea­guered euro­zone coun­tries.

It dis­clos­es that the EU’s largest econ­o­my is also prepar­ing for oth­er Euro­pean coun­tries, which are too large to be bailed out, to default on their debts — effec­tive­ly going bank­rupt. It will prompt fears that Ger­man plans to deal with the euro­zone cri­sis involve an ero­sion of nation­al sov­er­eign­ty that could pave the way for a Euro­pean “super state” with its own tax and spend­ing plans set in Brus­sels.

Britain would be rel­e­gat­ed to a new out­er group of EU mem­bers who are not in the sin­gle cur­ren­cy. Mr Cameron will today trav­el to Brus­sels and Berlin for tense nego­ti­a­tions with Mrs Merkel amid grow­ing dis­agree­ment between the lead­ers over how to deal with the euro­zone.

The Prime Min­is­ter is increas­ing­ly exas­per­at­ed that Ger­many refus­es to pro­vide more finan­cial help for Italy and oth­er strug­gling coun­tries amid con­cerns that the cri­sis is hav­ing a “chill­ing effect” on the British econ­o­my. Mrs Merkel yes­ter­day said she expect­ed Mr Cameron to “exam­ine a stronger involve­ment with oth­er coun­tries” once the euro­zone cri­sis had been resolved.  . . .

COMMENT: “Ter­rafractyl” pro­vid­ed us with anoth­er arti­cle indi­cat­ing that the trans­for­ma­tion of the PIIGS coun­tries (Por­tu­gal, Italy, Ire­land, Greece, Spain) into Ger­man vas­sal states is accel­er­at­ing.

“Merkel Tight­ens Grip on Euro­zone: Why did Irish Bud­get Plans End Up in Berlin?” by Rob  Davies and Hugo Dun­can; Mail Online; 11/18/2011.

EXCERPT: Fears that Germany’s grip on the euro­zone is tight­en­ing increased last night after it emerged that details of Ireland’s bud­get plans were leaked to Ger­man politi­cians.

A doc­u­ment cir­cu­lat­ed in the Ger­man Bun­destag revealed Dublin’s pro­pos­als to save the debt-rid­den coun­try £3.25billion.

The details were for next year’s bud­get, which have not yet been approved by the Irish Taoiseach Enda Ken­ny.

He was forced into an embar­rass­ing denial that his plans were being inspect­ed in Berlin.

Any sug­ges­tion that Ire­land is run­ning its aus­ter­i­ty cuts past Europe’s eco­nom­ic pow­er­house for approval will fuel con­cern that Ger­many is using its wealth as a lever to amass pow­er over the 17-nation sin­gle cur­ren­cy bloc.


25 comments for “Au Revoir to European Democracy: “A Calm Judgement of Business Necessity””

  1. That’s a nice coun­try you got there. It would be a shame if any­thing hap­pened to it:

    Ger­many last night declared that Britain would be forced to scrap the pound and join the euro – as David Cameron returned home emp­ty-hand­ed from cri­sis talks in Berlin.

    In a high­ly-provoca­tive inter­ven­tion, Ger­man finance min­is­ter Wolf­gang Schauble sug­gest­ed the UK’s strug­gling econ­o­my meant the pound was doomed, and urged the Prime Min­is­ter to back Europe’s ail­ing sin­gle cur­ren­cy.

    Mr Schauble said the euro would emerge stronger from the cur­rent cri­sis – leav­ing Britain on the side­lines unless it signed up. He said Britain would be forced to join ‘faster than some peo­ple on the British island think’ – despite a pledge by Mr Cameron nev­er to do so.


    Lead­ing Ger­man mag­a­zine Der Spiegel ran a promi­nent fea­ture describ­ing Britain as the ‘dis- eased empire’.

    And Rain­er Brüder­le, head of Mrs Merkel’s coali­tion part­ners, said: ‘Britain can’t be free­load­ers in the euro­zone.’


    I’m actu­al­ly kind of a sur­prised that the Cameron gov­ern­ment isn’t more gung ho about join­ing the euro­zone. I mean, at this point Berlin is basi­cal­ly offer­ing to play Dr. Aus­ter­i­ty for the whole EU. Just imag­ine: Gov­ern­ments around the con­ti­nent get to grind to their social spend­ing down to the bone, but it’s total­ly not their fault. Ger­many made them do it. And the best part is that this awe­some ser­vice is total­ly free.

    Posted by Pterrafractyl | November 24, 2011, 7:51 pm
  2. http://uk.reuters.com/article/2011/11/18/uk-ireland-germany-concern-idUKTRE7AH1B920111118

    “The media and oppo­si­tion react­ed furi­ous­ly at the fact that the details of the Decem­ber bud­get were pre­sent­ed to Ger­man law­mak­ers before their Irish coun­ter­parts, height­en­ing fears that its EU-IMF bailout has under­mined Irish sov­er­eign­ty.

    “Ger­many is our new mas­ter,” ran a ban­ner front-page head­line in the Irish Dai­ly Mir­ror. Oppo­si­tion lead­ers in par­lia­ment described the leaks as “incred­i­ble” and “unprece­dent­ed” and demand­ed the gov­ern­ment explain.

    New Ger­man laws give its par­lia­ment the right to be ful­ly informed about bailout coun­tries’ progress before new trench­es of funds are paid out and Ire­land’s main oppo­si­tion par­ty led cries Ger­many was now call­ing the shots in Europe.”

    Posted by Leif | November 25, 2011, 5:18 am
  3. Heh, now I see why our oli­garchs hate unions so much: they hate the com­pe­ti­tion. That’s one thing about oligarchies...you only get one and it prob­a­bly hates you:

    Euro Zone May Free Banks From Tak­ing Bond Loss­es
    Pub­lished: Fri­day, 25 Nov 2011 | 1:34 PM ET
    By: Reuters

    Euro zone states may ditch plans to impose loss­es on pri­vate bond­hold­ers should coun­tries need to restruc­ture their debt under a new bailout fund due to launch in mid-2013, four EU offi­cials told Reuters on Fri­day.


    Dis­cus­sions are tak­ing place against a back­drop of flag­ging mar­ket con­fi­dence in the region’s debt and as part of wider nego­ti­a­tions over intro­duc­ing stricter fis­cal rules to the EU treaty.

    Euro zone pow­er­house Ger­many is insist­ing on tighter bud­gets and pri­vate sec­tor involve­ment (PSI) in bailouts as a pre­con­di­tion for deep­er eco­nom­ic inte­gra­tion among euro zone coun­tries.


    But claus­es relat­ing to PSI in the statutes of the Euro­pean Sta­bil­i­ty Mech­a­nism (ESM) — the per­ma­nent facil­i­ty sched­uled to start oper­at­ing from July 2013 — could be with­drawn, with the major­i­ty of euro zone states now opposed to them.

    The con­cern is that forc­ing the pri­vate sec­tor bond­hold­ers to take loss­es if a coun­try restruc­tures its debt is under­min­ing con­fi­dence in euro zone sov­er­eign bonds. If those stip­u­la­tions are removed, most coun­tries in the euro zone argue, mar­ket sen­ti­ment might improve.

    “France, Italy, Spain and all the periph­er­als” are in favor of remov­ing the claus­es, one EU offi­cial told Reuters. “Against it are Ger­many, Fin­land and the Nether­lands.” Aus­tria is also opposed, anoth­er source said.


    Ger­man offi­cials dis­miss any sug­ges­tion of a ‘grand bar­gain’ being put togeth­er, but offi­cials in oth­er euro zone cap­i­tals, includ­ing Brus­sels, say such a deal is tak­ing shape and sug­gest Berlin will move when it has the com­mit­ments it is seek­ing, although it’s unclear when that will be.

    Ger­man Chan­cel­lor Angela Merkel said after meet­ing French Pres­i­dent Nico­las Sarkozy in Stras­bourg on Thurs­day that there was no quid pro quo being set up.

    “This is not about give and take,” she said.


    Yeah, why play “give and take” when “take and take” works to well. It’s inter­est­ing how that strat­e­gy nev­er seems like an option for non-super-elites:

    Novem­ber 24, 2011 2:27 PM
    Glob­al health fund halts new pro­grams


    GENEVA — The world’s biggest financier in the fight against three killer dis­eases says it has run out of mon­ey to pay for new grant pro­grams for the next two years — a sit­u­a­tion like­ly to hit poor AIDS patients around the world.

    An offi­cial with the Glob­al Fund to Fight AIDS, Tuber­cu­lo­sis and Malar­ia said Thurs­day that they have been forced to cease giv­ing new grants until 2014 because of glob­al eco­nom­ic woes brought on by debt crises in the Unit­ed States and Europe.

    An inde­pen­dent pan­el rec­om­mend­ed in Sep­tem­ber that the fund must adopt tougher finan­cial safe­guards after it weath­ered a storm of crit­i­cism and doubts among some of its biggest donors.

    The fund cre­at­ed the pan­el — chaired by for­mer U.S. Health and Human Ser­vices Sec­re­tary Michael Leav­itt and ex Botswana Pres­i­dent Fes­tus Mogae — in March to address con­cern among donors after Asso­ci­at­ed Press arti­cles in Jan­u­ary about the loss of tens of mil­lions of dol­lars in grant mon­ey because of mis­man­age­ment and alleged fraud.

    The Gene­va-based fund was set up in 2002 as a new way to coor­di­nate world efforts against the dis­eases and to speed up emer­gency funds from wealthy nations and donors to the places hard­est hit.

    Since its cre­ation, the fund, which is strict­ly a financ­ing tool, has dis­bursed some $15 bil­lion for pro­grams — $2.8 bil­lion this year alone, includ­ing to pay for treat­ment for around half the devel­op­ing world’s AIDS suf­fer­ers. With dona­tions hard­er to come by, the fund says it can only afford to keep exist­ing AIDS pro­grams going, but not expand its ser­vices or add new patients.


    Among those deci­sions were that hun­dreds of mil­lions of dol­lars in grants planned for Chi­na, Brazil, Mex­i­co and Rus­sia will now be used for oth­er pur­pos­es, fund offi­cials said.

    “It is deeply wor­ri­some that inad­ver­tent­ly the mil­lions of peo­ple fight­ing with dead­ly dis­eases are in dan­ger of pay­ing the price for the glob­al finan­cial cri­sis,” the fund’s exec­u­tive direc­tor, Dr. Michel Kazatchkine, said in a state­ment.


    The fund released 12 reports on its web­site ear­li­er this month that turned up an addi­tion­al $20 mil­lion of mis­man­age­ment, alleged fraud and mis­spending. Ear­li­er probes had detect­ed about $53 mil­lion in loss­es, accord­ing to fund doc­u­ments.


    Aha, here’s why glob­al health won’t get a bailout. Out of the $2.8 bil­lion in this years expen­di­tures, only $73 mil­lion was mis­man­aged. You got to think BIG if want to get bailed out these days.

    Posted by Pterrafractyl | November 26, 2011, 6:11 pm
  4. http://www.huffingtonpost.com/2011/11/24/dexia-liquidity-facilities_n_1111764.html

    Dex­ia, Fran­co-Bel­gian Bank, Using Emer­gency Liq­uid­i­ty Facil­i­ties To Tack­le ‘Very Dra­mat­ic’ Prob­lem

    First Post­ed: 11/24/11 08:07 AM ET

    BRUSSELS (Ben Deighton) — Fran­co-Bel­gian bank Dex­ia (DEXI.BR) is access­ing emer­gency liq­uid­i­ty facil­i­ties in Bel­gium, France, Spain and Italy, a bank­ing source said on Thurs­day, as ana­lysts described its liq­uid­i­ty sit­u­a­tion as “very dra­mat­ic.”
    The source said the bank was mak­ing use of the Emer­gency Liq­uid­i­ty Assis­tance (ELA) facil­i­ty of the Bel­gian cen­tral bank as well as “nation­al cen­tral banks in France, in Spain, in Italy,” where Dex­ia has units.

    One ana­lyst said the fact Dex­ia was tap­ping nation­al cen­tral banks’ liq­uid­i­ty via the Euro­pean Cen­tral Bank net­work showed how bad the sit­u­a­tion had become for the lender.

    “The emer­gency win­dow of the ECB ... is very expen­sive, so it shows that the liq­uid­i­ty sit­u­a­tion is very dra­mat­ic,” the ana­lyst said, speak­ing on con­di­tion of anonymi­ty.

    “At some point you run out of unen­cum­bered assets to post at the ECB, and then the only way to fund your­self is via the ELA, which is clear­ly not a good sign,” the ana­lyst said.

    Dex­ia and the cen­tral banks of France and Bel­gium both declined to com­ment.

    The source added that Dex­ia would try to raise mon­ey on mar­kets again after the final­iza­tion of a 90 bil­lion euro ($120 bil­lion) guar­an­tee scheme agreed in Octo­ber by France, Bel­gium and Lux­em­bourg.

    Bel­gian Finance Min­is­ter Didi­er Reyn­ders said Wednes­day that he hoped to reach an agree­ment with the Euro­pean Com­mis­sion about the restruc­tur­ing plan for Dex­ia (DEXI.BR) in the com­ing days.

    Posted by R. Wilson | November 26, 2011, 8:24 pm
  5. Wow, it looks like they real­ly are going to push the whole “the bond vig­i­lantes made us do it” approach. What a grand new social con­tract upon which to base your new order: “Do not anger the mar­ket gods”. I’m start­ing to think the Seast­eading project is obso­lete.

    “We are in an eco­nom­ic war with a num­ber of pow­er­ful spec­u­la­tors who have decid­ed that the end of the euro is in their inter­est”

    Ger­many, France press coer­cive euro zone debt rules
    By Stephen Brown and Jan Strupczews­ki

    BERLIN/BRUSSELS | Mon Nov 28, 2011 9:23am EST

    (Reuters) — Ger­many and France stepped up a dri­ve on Mon­day for coer­cive pow­ers to reject nation­al bud­gets in the euro zone that breach EU rules, as a mar­ket rout of Euro­pean debt eased tem­porar­i­ly on hopes of out­side help for Italy and Spain.

    The OECD rich nations’ eco­nom­ic think-tank said the Euro­pean Cen­tral Bank should cut inter­est rates and step up pur­chas­es of gov­ern­ment bonds to restore con­fi­dence in the euro area, which now posed the main risk to the world econ­o­my.

    In Brus­sels, finance min­is­ters of the 17-nation cur­ren­cy area meet­ing on Tues­day are due to approve detailed arrange­ments for scal­ing up the Euro­pean Finan­cial Sta­bil­i­ty Facil­i­ty res­cue fund to help pre­vent con­ta­gion in bond mar­kets, and release a vital aid life­line for Greece.

    Berlin and Paris aim to out­line pro­pos­als for a fis­cal union before a Euro­pean Union sum­mit on Decem­ber 9 increas­ing­ly seen by investors as pos­si­bly the last chance to avert a break­down of the sin­gle cur­ren­cy area


    “We are work­ing inten­sive­ly for the cre­ation of a Sta­bil­i­ty Union,” the Ger­man Finance Min­istry said in a state­ment. “That is what we want to secure through treaty changes, in which we pro­pose that the bud­gets of mem­ber states must observe debt lim­its.”

    It dis­missed a report by the news­pa­per Die Welt that Ger­many and the five oth­er euro zone states with top-notch AAA cred­it rat­ings could issue joint bonds for them­selves and part­ners.

    Moody’s Investors Ser­vice warned that the rapid esca­la­tion of the euro zone sov­er­eign debt and bank­ing cri­sis threat­ened all Euro­pean gov­ern­ment bond rat­ings.



    The lead­ers of two small­er euro zone coun­tries, Fin­land and Lux­em­bourg, voiced unease about the Fran­co-Ger­man plans because they appeared to bypass the Euro­pean Com­mis­sion, which is seen as a guar­an­tor of equal treat­ment for all mem­ber states.

    “We don’t find this type of sys­tem good and I am not too sure if it will get wider sup­port. The dis­ad­van­tage of this pro­pos­al is that it would bypass the EU, the Com­mis­sion would have a very small role,” Finnish Prime Min­is­ter Jyr­ki Katainen told reporters.

    Lux­em­bourg Prime Min­is­ter Jean-Claude Junck­er, who chairs euro zone finance min­is­ters, also warned against look­ing for instru­ments out­side the EU treaty.

    In France, Agri­cul­ture Min­is­ter Bruno Le Maire said euro zone coun­tries would have to give up some bud­get sov­er­eign­ty to save the euro from hos­tile “spec­u­la­tors.”

    “We won’t be able to save the euro if we don’t accept that nation­al bud­gets will have to be a bit more con­trolled than in the past,” Le Maire told Europe 1 radio.

    “We are in an eco­nom­ic war with a num­ber of pow­er­ful spec­u­la­tors who have decid­ed that the end of the euro is in their inter­est,” he said.

    Hand­ing over fis­cal sov­er­eign­ty to the exec­u­tive Euro­pean Com­mis­sion is polit­i­cal­ly sen­si­tive in France, which has a strong Gaullist, nation­al­ist tra­di­tion.

    Pres­i­dent Nico­las Sarkozy’s office sought to quash a week­end news­pa­per report that Berlin and Paris were plan­ning to con­fer “supra­na­tion­al pow­ers” on Brus­sels, sug­gest­ing such intru­sion would only apply to coun­tries such as Greece that were under EU/IMF bailout pro­grams.

    Asked whether the Com­mis­sion would be grant­ed intru­sive pow­ers over nation­al bud­gets in the euro zone, Le Maire said: “Why not? The French peo­ple have to real­ize what is at stake — the preser­va­tion of our com­mon cur­ren­cy and our sov­er­eign­ty.”

    Posted by Pterrafractyl | November 28, 2011, 7:54 am
  6. The offi­cial posi­tion on euro­zone “reform” appears to now be “Nor­mal­ly these kinds of treaty changes take years to work out, but the mar­kets demand a clear sig­nal right now. Giv­en this real­i­ty, the only solu­tion now is to hasti­ly push through EU treaty changes with pro­found impli­ca­tions that no one has time to dis­cuss. Keep in mind that they will have have to please the mar­ket’s desires at that moment. Also keep in mind that the mar­ket has been recent­ly enam­ored with the writ­ings of Johnathan Swift so its desires may seem aus­tere. We appre­ci­ate your con­tin­ued acqui­es­cence.”

    That’s pret­ty much it:

    Merkel Seeks Swift Action on What May Be Long Job to Save the Euro

    BERLIN — Chan­cel­lor Angela Merkel on Fri­day called for swift action to amend Euro­pean treaties to address the under­ly­ing caus­es of the debt cri­sis that has shak­en Europe and jeop­ar­dized the future of the com­mon cur­ren­cy.


    While Mrs. Merkel called for quick changes, “if pos­si­ble by the end of the year,” his­tor­i­cal­ly there has been noth­ing speedy about the rem­e­dy she pro­posed: fix­ing the “mis­takes of con­struc­tion” in the euro zone by alter­ing the treaties that gov­ern the Euro­pean Union. It took years to nego­ti­ate and rat­i­fy the last major change, the Lis­bon Treaty, after the fail­ure of the pre­vi­ous effort to write a Euro­pean con­sti­tu­tion.


    But Europe’s lead­ers are evi­dent­ly hop­ing to use the shad­ow of impend­ing cri­sis to speed the process. Mrs. Merkel’s call for a new treaty tracked with a speech made Thurs­day by Pres­i­dent Nico­las Sarkozy of France, with whom Mrs. Merkel has been nego­ti­at­ing. Some experts say there are more expe­di­tious ways to effect treaty changes than the tra­di­tion­al path fol­lowed by the Lis­bon Treaty.

    Mrs. Merkel’s assess­ment of what was need­ed appeared to be well received by Euro­pean finan­cial mar­kets, which had been strength­en­ing this week any­way, part­ly on hopes that Euro­pean lead­ers would address the cri­sis. The Stoxx 600 index, a broad barom­e­ter, rose 1.2 per­cent for the day and 9 per­cent for the week, its biggest gain in three years, Bloomberg News report­ed. The euro was trad­ing at $1.348, up from $1.346 on Thurs­day.


    Some finan­cial experts have also spec­u­lat­ed that Mrs. Merkel and Mr. Sarkozy are try­ing to cre­ate the impres­sion of irre­sistible momen­tum toward struc­tur­al change in Europe as polit­i­cal cov­er for the cen­tral bank. If the pub­lic and the bank believe that steps are being tak­en to rein in irre­spon­si­ble gov­ern­ments, the experts say, then the bank’s Ger­man-influ­enced lead­er­ship is more like­ly to act deci­sive­ly.

    The pres­i­dent of Germany’s pow­er­ful cen­tral bank, Jens Wei­d­mann, said Fri­day that the long-term solu­tion to the euro cri­sis was the respon­si­bil­i­ty of gov­ern­ments, rather than of the cen­tral banks. Coun­tries must be will­ing to cede some con­trol over their spend­ing poli­cies, he said, for exam­ple by agree­ing to auto­mat­ic tax increas­es if their bud­get deficits rise above lim­its agreed to by treaty.

    If polit­i­cal lead­ers announce a cred­i­ble plan this com­ing week, he said, “calm could quick­ly return to mar­kets.”


    I’m not exact­ly sure why the mar­kets would be enthu­si­as­tic about treaty changes that man­date tax hikes when bud­get deficits exceed lim­its since that will almost always hap­pen dur­ing reces­sions. Unless, of course, the mar­kets desire to see a euro­zone that is root­ed not in inter­nal trade amongst mem­ber nations, but instead upon dri­ving the weak­er mem­bers into per­ma­nent aus­ter­i­ty in order to drag down the val­ue of the euro low enough so that Ger­many’s exports can com­pete with Chi­na glob­al­ly (not for­ev­er, mind you, that would be cru­el. Just a lost gen­er­a­tion or two). That seems pos­si­ble. Or maybe the mar­kets are just plan­ning on a dif­fer­ent type of export pol­i­cy. So many options

    Posted by Pterrafractyl | December 3, 2011, 5:07 pm
  7. Since Merkozy is already hard at work over­haul­ing the euro­zone treaty and for­mal­ly turn­ing it into a con­sti­tu­tion­al­ly enchrined debtor’s prison, it’s a great time to update the name “euro­zone”. “Euro­zone” sounds too cold and tech­no­crat­ic. That won’t do as a dis­trac­tion from the cold tech­noc­ra­cy its about to fall into. How about “The zone of eter­nal for­give­ness”:

    Felix Salmon
    A slice of lime in the soda

    The euro zone’s ter­ri­ble mis­take
    Dec 5, 2011 23:36 EST

    The FT is report­ing today that the new fis­cal rules for the EU “include a com­mit­ment not to force pri­vate sec­tor bond­hold­ers to take loss­es on any future euro­zone bail-outs”. If this prin­ci­ple real­ly does get enshrined into some new treaty, it will be one of the most fis­cal­ly insane dere­lic­tions of states­man­ship the world has seen — but it cer­tain­ly helps explain the short-term ral­ly that we saw today in Ital­ian gov­ern­ment debt.

    Right now, the com­mit­ment is still vague:

    Ms Merkel agreed that pri­vate sec­tor bond­hold­ers would not be asked to bear some of the loss­es in any future sov­er­eign debt restruc­tur­ing, as she had insist­ed this year in the case of Greece’s sec­ond bail-out. How­ev­er, future euro­zone bonds will still include col­lec­tive action claus­es pro­vid­ing for poten­tial vol­un­tary resched­ul­ing of pri­vate debt.

    Ms Merkel said it was imper­a­tive to show that Europe was a “safe place to invest”.

    You can safe­ly ignore the bit about col­lec­tive action claus­es. They’re part of the sov­er­eign-debt archi­tec­ture now, and tak­ing them out would be far more trou­ble than it was worth: they have to stay in, no mat­ter what. The impor­tant thing is that they won’t be used — because if no one’s going to ask bond­hold­ers to bear any loss­es, then they won’t have any pro­pos­als to agree to.

    The impe­tus for this com­plete­ly insane pol­i­cy seems to have come from the ECB, which gen­uine­ly seems to believe that bail­ing in pri­vate-sec­tor banks, in the Greece restruc­tur­ing, was the “ter­ri­ble mis­take” which caused the cur­rent euro cri­sis. Talk about con­fus­ing cause and effect: it was Greece’s fis­cal dis­as­ter which caused the restruc­tur­ing and the nec­es­sary bail-in.

    To under­stand just how stu­pid this is, all you need to do is go back and read Michael Lewis’s Ire­land arti­cle. The fate­ful deci­sion in Ire­land was to take the insol­vent banks and give them a blan­ket bailout, with the banks’ cred­i­tors all get­ting 100 cents on the euro. That only served to put a pos­i­tive­ly evil debt bur­den onto the Irish peo­ple, forc­ing a mas­sive aus­ter­i­ty pro­gram and caus­ing untold bil­lions of euros in fore­gone growth, while bail­ing out lenders who deserved no such thing.

    Are we real­ly going to repeat — on a much larg­er scale — the very same mis­take that Ire­land made? Does no one in Europe real­ize that this is the sin­gle worst thing they can do?


    So will they do the “sin­gle worst thing they can do”? Of course! The “mar­ket” will won’t give them a choice (which is rather unfor­giv­ing, all things con­sid­ered).

    Posted by Pterrafractyl | December 6, 2011, 8:37 am
  8. One of the more rel­e­vant aspects of the “Shin­ing Low-Debt City on a Hill” vision that appears to be the plan for the euro­zone is that hill­tops tend to have lim­it­ed space. We can’t all live up there at the same time. That sort of lim­its the val­ue of the shin­ing low-debt city on the hill as a shared vision for a con­ti­nen­tal union. Oh well.

    Posted by Pterrafractyl | December 6, 2011, 1:47 pm
  9. There’s a new, emerg­ing bonus to the euro­zone cri­sis and the pro­pos­al to chan­nel the bailout funds through the IMF. It turns the euro­zone cri­sis into a poten­tial polit­i­cal cud­gel for nation­al­ist pol­i­tics across the world. Case in point:

    Wor­ries about the IMF’s risk are also brew­ing in Wash­ing­ton.

    By Les­ley Wroughton

    WASHINGTON | Fri Dec 9, 2011 4:50pm EST

    (Reuters) — The prospect of Euro­pean heavy­weight economies like Italy or Spain turn­ing to the IMF for emer­gency res­cue loans is wor­ry­ing some nations that fear they could suf­fer loss­es on the funds they have extend­ed to the IMF.

    Despite the Inter­na­tion­al Mon­e­tary Fund’s sta­ble record — no bor­row­er has ever default­ed on an IMF loan and no coun­try has ever lost mon­ey lend­ing to the IMF — there are con­cerns about the IMF’s grow­ing expo­sure to the euro zone.

    That expo­sure could take a quan­tum leap if Italy and Spain need bailouts, a lev­el of assis­tance that would almost cer­tain­ly dwarf the loans already approved for Greece, Ire­land and Por­tu­gal in deals engi­neered with the Euro­pean Union.

    Emerg­ing mar­ket coun­tries, which are con­tem­plat­ing lend­ing more mon­ey to the IMF — which cou­ples mon­e­tary assis­tance with tough con­di­tions that seek to ensure a coun­try does not default — have raised con­cerns about risks to the IMF’s cap­i­tal, offi­cials from devel­op­ing coun­tries told Reuters.


    Wor­ries about the IMF’s risk are also brew­ing in Wash­ing­ton.

    Four U.S. law­mak­ers who met with IMF chief Chris­tine Lagarde this week expressed unease over the risk the fund would take on with a big­ger role in Europe.

    A request for a big IMF loan for Italy or Spain would put the Unit­ed States, which holds veto pow­er over most IMF lend­ing deci­sions, in an uncom­fort­able spot.

    The Amer­i­can pub­lic is still stung by the U.S. gov­ern­men­t’s big bailouts for banks dur­ing the 2007-09 finan­cial cri­sis and fears that mount­ing U.S. debts imper­il the nation’s future.

    With Pres­i­dent Barack Oba­ma fac­ing a tough bat­tle for re-elec­tion in Novem­ber, the White House is not keen to appear as Europe’s sav­ior, and the admin­is­tra­tion’s mes­sage to Europe has con­sis­tent­ly been: Put more of your own mon­ey on the line.

    Indeed, Repub­li­can law­mak­ers are seek­ing to yank a $108 bil­lion loan the Unit­ed States approved for the IMF in 2009, a move that would under­cut Wash­ing­ton’s abil­i­ty to influ­ence the con­di­tions attached to IMF loans.


    DeMint said he would seek to force anoth­er vote to stop U.S. Trea­sury Sec­re­tary Tim­o­thy Gei­th­n­er from sup­port­ing more Euro­pean bailouts. The Sen­ate vot­ed 55–44 in June against a pro­pos­al by DeMint to repeal IMF loan author­i­ty.

    Posted by Pterrafractyl | December 10, 2011, 3:46 pm
  10. Social wel­fare spend­ing AND defense? This is going to be inter­est­ing:

    Merkel, Sarkozy to Europe: shelve your sov­er­eign­ty, save the euro

    The plan put forth from the Ger­man and French lead­ers to save the euro amounts to a call for Euro­pean states to give up full con­trol over their own spend­ing.

    By Dan Mur­phy, Staff writer / Decem­ber 8, 2011

    An end to sov­er­eign con­trol over Euro­pean bud­gets. That was the big idea that Ger­many’s Angela Merkel and France’s Nico­las Sarkozy out­lined in a let­ter to Euro­pean Coun­cil Pres­i­dent Her­man Van Rompuy Wednes­day.


    The meat of the pro­pos­al

    A lot of the lan­guage around this issue has been indi­rect – not least among the Euro­pean politi­cians who favor giv­ing Brus­sels con­trol over the bud­gets of mem­ber states like Italy and Spain, whose strug­gles with sov­er­eign debt and slow growth have ter­ri­fied investors and econ­o­mists about the poten­tial for a cas­cade of Euro­pean defaults.

    Reuters said these Euro­pean politi­cians are call­ing “to tough­en up fis­cal gov­er­nance via treaty changes.” But the pro­pos­al amounts to offer­ing Europe a choice: Give up domes­tic polit­i­cal con­trol over how much you spend on social wel­fare and defense (for instance) or risk the demise of the euro.


    I won­der if that was jour­nal­is­tic artis­tic license at work or if social wel­fare and defense spend­ing real­ly are the tar­get areas being talked about for the new “adult super­vised” euro­zone? This will be fas­ci­nat­ing because pow­er­ful forces in every euro­zone coun­try would LOVE to be able to slash social spend­ing and blame it on the big bad Ger­mans. We might be look­ing at the world’s first out­sourc­ing of the role of the “bad cop” in domes­tic pol­i­tics. But part of the incen­tive will involve the domes­tic politi­cians demo­niz­ing Berlin for impos­ing the cuts. So they’re going to have to demo­nize Berlin while simul­ta­ne­ous­ly mak­ing the case for stay­ing in the euro­zone. Have fun with that.

    I also won­der how Turkey’s gen­er­als feel about join­ing the EU after hear­ing about that defense spend­ing over­sight.

    Posted by Pterrafractyl | December 10, 2011, 11:13 pm
  11. This explains a lot:


    The Ger­mans, for their part, seem almost to wel­come the col­lapse of mar­ket con­fi­dence: with­out the ris­ing pres­sure from mar­kets, Sil­vio Berlus­coni would not have resigned as prime min­is­ter of Italy. And with­out the incen­tive of fear, most Euro­pean part­ners would have been more reluc­tant to give Brus­sels over­sight author­i­ty over nation­al bud­gets — and the right to impose sanc­tions for vio­la­tors.

    The Ger­mans had a strate­gic insight or advan­tage to let the cri­sis get to the thresh­old with­in the Euro­pean Union nec­es­sary for France to be will­ing to hand over the kind of sov­er­eign­ty the coun­try has always resist­ed,” said Jacob Funk Kirkegaard of the Peter G. Peter­son Insti­tute for Inter­na­tion­al Eco­nom­ics in Wash­ing­ton. “You could say that the cri­sis has either been the wake-up call or the tool that Ger­many has used to beat them into sub­mis­sion.”

    Wow, so it’s now open­ly dis­cussed in the press how it seems that the Berlin was fan­ning the flames of cri­sis in order to brow beat its neigh­bors into sub­mis­sion. And yet every­one acts like these elites are act­ing in good faith. Is con­niv­ing eco­nom­ic colo­nial­ism seri­ous­ly the foun­da­tion for the new union? That may not help with social cohe­sion in the long run.

    Also, don’t be too sur­prised if we see the “bond vigilante”/austerity polit­i­cal the­atrics show come to the US if the euro­zone ever gets the short term bond issues with the P.I.I.G.S. under con­trol. Note that the Jacob Funk Kirkegaard fel­low that made the above insights works for the Peter G. Peter­son Insti­tute for Inter­na­tion­al Eco­nom­ics. I can’t imag­ine that they aren’t over­whelmed with joy to see the new per­ma­nent pover­ty engine com­ing to the EU, and all due to an inter­na­tion­al sov­er­eign lend­ing cri­sis fanned on by the EU’s eco­nom­ic heavy­weights play­ing chick­en with the euro­zone pub­lic’s lives. Not only are they prob­a­bly pleased but they’re prob­a­bly tak­ing notes:

    Ellen Brown

    Civ­il lit­i­ga­tion attor­ney; author, ‘Web of Debt’

    Super Com­mit­tee Dead­lock: Heads They Win, Tails We Lose
    Post­ed: 11/18/11 11:55 AM ET


    For the deficit hawks, how­ev­er, it all seems to be going accord­ing to plan. The super com­mit­tee is char­ac­ter­ized as an emer­gency mea­sure that was rushed through to avoid an arbi­trar­i­ly imposed August dead­line for freez­ing the debt ceil­ing, but it has actu­al­ly been in the works for years. In 2009, it was called the “Bipar­ti­san Task Force for Respon­si­ble Fis­cal Action”. That plan died when its Sen­ate spon­sors, Judd Gregg and Kent Con­rad, failed to secure 60 votes for pas­sage in the Sen­ate. The Gregg-Con­rad bill was crit­i­cized as rail­road­ing through leg­is­la­tion that would uncon­sti­tu­tion­al­ly slash domes­tic ser­vices with­out con­gres­sion­al debate, but its task force would actu­al­ly have been LESS auto­crat­ic than the super com­mit­tee, which has sweep­ing pow­ers and needs only a sim­ple major­i­ty among its 12 mem­bers to pre­vail.

    What has been forced out of the debate is whether cut­ting the bud­get is a good idea at all. The Peter Peter­son Foun­da­tion, which has been push­ing “aus­ter­i­ty” for years, has final­ly got­ten its way. Hedge fund mag­nate Peter G. Peter­son was Chair­man of the Coun­cil on For­eign Rela­tions until 2007 and head of the New York Fed­er­al Reserve between 2000 and 2004. He made his for­tune with the con­tro­ver­sial Black­stone Group, which he co-found­ed and chaired for many years. The Peter Peter­son Foun­da­tion was estab­lished in 2008 with a $1 bil­lion endow­ment to raise pub­lic aware­ness about U.S. fis­cal-sus­tain­abil­i­ty issues relat­ed to fed­er­al deficits, enti­tle­ment pro­grams, and tax poli­cies. The mon­ey was used to spear­head a mas­sive cam­paign to reduce the run­away fed­er­al debt. Hys­te­ria over the debt then prompt­ed Tea Par­ty new­bies in Con­gress to hold a gun to Con­gress’ head by arbi­trar­i­ly cap­ping the debt.

    In the cam­paign to edu­cate us to the debt’s per­ils, we were repeat­ed­ly warned that when for­eign lenders decid­ed to pull the plug, the U.S. would have to declare bank­rupt­cy; that we were mort­gag­ing our grand­chil­dren’s futures and sell­ing them into debt-slav­ery; and that all this was the fault of the cit­i­zen­ry for bor­row­ing and spend­ing too much. The Amer­i­can peo­ple, who are already suf­fer­ing mas­sive unem­ploy­ment and cut­backs in gov­ern­ment ser­vices, would have to sac­ri­fice more and pay the piper more, just as in those debt-strapped coun­tries forced into aus­ter­i­ty mea­sures by the IMF.


    You have to give cred­it where cred­it is due: Spend­ing a bil­lion dol­lars of your own ill-got­ten gains to threat­en the US pub­lic that if they don’t gut their invest­ments in their human cap­i­tal and the insti­tu­tions that edu­cate and pre­pare future gen­er­a­tions, they’ll be sell­ing their chil­dren and grand­chil­dren into debt-slav­ery. And the only solu­tion is to throw the coun­try into a deep depres­sion while we evis­cer­ate the safe­ty-net and “get dis­ci­plined”.

    I guess we should all stop whin­ing and just accept avoid­able mass impov­er­ish­ment. It’s only one or two lost decades. Hope­ful­ly.

    Posted by Pterrafractyl | December 11, 2011, 5:19 pm
  12. Posted by Pterrafractyl | December 11, 2011, 8:16 pm
  13. Uh oh Bel­gium, it looks like y’all got weak­er then expect­ed growth com­ing up. And that means the euro­zone Pow­ers That Be get to take their new pow­ers out for a spin. It’s the new nor­mal:

    Europe’s New Pow­ers Over Nation­al Bud­gets Face Test in EU-Bel­gium Clash
    By James G. Neuger — Jan 9, 2012 6:42 AM CT

    Europe’s new­found pow­ers over nation­al tax­ing and spend­ing face a first test when the Euro­pean Com­mis­sion prods Bel­gium to make deep­er sav­ings just over a week into the bud­get year.

    Under author­i­ty grant­ed last month, the com­mis­sion will on Jan. 11 decide whether an emer­gency Bel­gian spend­ing freeze is enough to dri­ve the deficit below the euro-area lim­it in 2012.

    A neg­a­tive ver­dict would expose Bel­gium, sad­dled with Europe’s fifth-high­est debt, to poten­tial sanc­tions in a prece­dent-set­ting tri­al of rules designed to over­come investors’ skep­ti­cism about the euro area’s response to the two-year-old debt cri­sis.

    “The key chal­lenge for Bel­gium is the reduc­tion of its siz­able pub­lic debt,” Olivi­er Biz­imana, an econ­o­mist at Mor­gan Stan­ley in Lon­don, said in a research note. “Near-term pres­sures on pub­lic debt have sig­nif­i­cant­ly increased, with ris­ing costs of bor­row­ing, low­er growth and a still-frag­ile bank­ing sec­tor.”

    With an eco­nom­ic phi­los­o­phy split between the fis­cal rig­or of its Dutch-speak­ing north and pro-wel­fare bias of the French- speak­ing south, Bel­gium is a lab­o­ra­to­ry for the polit­i­cal con­flicts that bedev­il Europe’s broad­er cri­sis man­age­ment. Efforts to heal that divide con­tin­ue today when Ger­man Chan­cel­lor Angela Merkel meets French Pres­i­dent Nico­las Sarkozy in Berlin as part of ad hoc con­sul­ta­tions lead­ing up to the next Euro­pean cri­sis sum­mit on Jan. 30.

    Bud­get-Cut­ting Pow­ers

    As home to the Euro­pean Union’s insti­tu­tions, Bel­gium tends to fol­low the EU script, as in the 1990s when the par­lia­ment grant­ed the prime min­is­ter extra­or­di­nary bud­get- cut­ting pow­ers to make sure the coun­try would qual­i­fy for the euro in the first wave in 1999.

    More recent­ly, the new gov­ern­ment was still being formed when it took less than 24 hours to reach a bud­get deal after Stan­dard & Poor’s Rat­ings Ser­vices on Nov. 25 low­ered Belgium’s cred­it rat­ing one step to AA with a neg­a­tive out­look.

    The next broad­side came on Jan. 5, when EU Eco­nom­ic and Mon­e­tary Affairs Com­mis­sion­er Olli Rehn cal­cu­lat­ed that weak­er- than-pro­ject­ed growth would push the 2012 deficit to 3.25 per­cent of gross domes­tic prod­uct, above the government’s tar­get of 2.8 per­cent.

    The EU’s pre­dic­tion weighed on Bel­gian bonds (GDBR10), push­ing the extra yield over Ger­man debt up by 6 basis points to 278 basis points, the most since the six-par­ty coali­tion took office on Dec. 6 after 18 months of wran­gling. The spread nar­rowed to 270 basis points at 1:41 p.m. in Brus­sels today.
    ‘Mat­ter of Urgency’

    Rehn gave Prime Min­is­ter Elio Di Rupo’s gov­ern­ment two options: imme­di­ate­ly slice 1.2 bil­lion euros to 2 bil­lion euros ($1.5 bil­lion to $2.6 bil­lion) out of the bud­get, or set aside a sim­i­lar-sized reserve by freez­ing spend­ing in the run-up to a planned Feb­ru­ary bud­get review. Rehn called it “a mat­ter of urgency” to guar­an­tee “a time­ly and last­ing cor­rec­tion of the exces­sive deficit in 2012,” accord­ing an EU let­ter pub­lished by De Tijd news­pa­per on its web­site.

    Bel­gium went for the sec­ond option — a 1.3 bil­lion-euro freeze that will have “zero impact” on the pop­u­la­tion, Bud­get Min­is­ter Olivi­er Chas­tel told Bel­ga newswire yes­ter­day. The cap is on spend­ing slat­ed for the end of the year, he said.

    The com­mis­sion con­sid­ers the spend­ing freeze a “pos­i­tive piece of news,” Amadeu Altafaj, Rehn’s spokesman, told reporters today in Brus­sels. The EU will issue an offi­cial assess­ment “soon,” Altafaj said while declin­ing to give a spe­cif­ic date.

    ‘Very Ane­mic’

    Belgium’s first-half eco­nom­ic prospects range from “very ane­mic (BEGDPQS) growth” at best to a con­trac­tion of 0.5 per­cent at worst, said Luc Coene, head of the Bel­gian cen­tral bank. He backed the EU push for bud­get cuts and steps to boost the nation’s “mea­ger” employ­ment lev­el.

    “It is very impor­tant to make this com­mit­ment to reas­sure the mar­kets and reduce our inter­est bur­den,” Coene said in a joint inter­view with La Libre Bel­gique news­pa­per and RTBF radio.


    Expan­sion­ary aus­ter­i­ty: It’s the new “trick­le down eco­nom­ics”:

    Ger­many Auc­tions Bills With Neg­a­tive Yield
    By Lukanyo Mnyan­da and Bri­an Parkin — Jan 9, 2012 6:30 AM CT

    Ger­many sold six-month trea­sury bills at a neg­a­tive yield for the first time amid demand for the debt secu­ri­ties of Europe’s largest econ­o­my as a haven from the sov­er­eign debt cri­sis in neigh­bor­ing nations.

    The gov­ern­ment auc­tioned 3.9 bil­lion euros ($4.98 bil­lion) of secu­ri­ties matur­ing in July at an aver­age yield of minus 0.01 per­cent, the Fed­er­al Finance Agency said in an e‑mailed state­ment today. It was the first time it sold the secu­ri­ties at a neg­a­tive yield, Joerg Mueller, a spokesman in Frank­furt, said in a tele­phone inter­view. The Nether­lands sold secu­ri­ties due in March at a yield of zero on Jan. 3.

    “For the Ger­man tax­pay­er, this is obvi­ous­ly good news,” said David Sch­nautz, a fixed-income strate­gist at Com­merzbank AG in Lon­don. “There are investors out there who real­ly wor­ry about the return of their mon­ey. That’s why they are OK donat­ing to Ger­many some of their mon­ey just to make sure they get it back. It just under­pins how ner­vous the over­all mar­ket is.”


    Incred­i­bly dam­ag­ing eco­nom­ic poli­cies that some­how enrich the ultra-rich: noth­ing new here!

    Posted by Pterrafractyl | January 9, 2012, 8:24 am
  14. Jamie Dimon just dis­cussed his vision for how to fix the hous­ing mar­ket. It seems to involve putting some­one “in charge” of the “hous­ing mar­ket”, lock­ing mort­gage lenders and reg­u­la­tors in a room until some­thing was worked out, get­ting rid of pesky new under­writ­ing reg­u­la­tions, and kick start­ing the still-dead mort­gage-backed secu­ri­ties mar­ket.

    There isn’t any­thing par­tic­u­lar­ly sur­pris­ing about Jamie Dimon wish­ing for some sort of banker czar to swoop in an return things to the good ol’ days of 2007. It’s just always a lit­tle unset­tling when these guys talk in a “if I where in charge” man­ner. Because 1. They ARE in charge, just not quite so direct­ly. and 2. They seem to want to be more direct­ly in charge. You have to won­der how long it’ll be before we have a nice new “bank czar” set up to cut through all the reg­u­la­to­ry “red tape” that’s hin­der­ing “inno­va­tion”. The instal­la­tion of a sin­gle per­son or pan­el that gets extra-“take charge” pow­ers seems to be one type of solu­tion to end­less “grid-lock” that can gar­ner bipar­ti­san sup­port these days (e.g. the Sim­pl­son-Blowles Debt Pan­el that want­ed to throw mom­ma from a train). With Detroit already on the chop­ping block in Michi­gan’s emer­gency finan­cial man­age­ment social exper­i­ment and the euro­zone’s grand adven­ture in some sort of cur­ren­cy-union fas­cist finan­cial death trap, the czar/emergency manager/appointed tech­no­crat form of soft-fas­cism is poised to get show­cased in quite a few demo­c­ra­t­ic coun­tries in 2012.

    Posted by Pterrafractyl | January 15, 2012, 9:22 pm
  15. @Pterrafractyl: There does appear to be some hope in Greece, though.

    A Greek mem­ber of a ‘alter­nate his­to­ry’ forum I fre­quent often, post­ed a very inter­est­ing poll on Sat. morn­ing:


    If the left tru­ly has made that many gains, then that is great news. Let us hope the con­ser­v­a­tive ND will suf­fer humi­la­tion as well. =)

    Posted by Steven L. | January 15, 2012, 11:26 pm
  16. Posted by Pterrafractyl | February 20, 2012, 9:02 am
  17. More on the “per­ma­nent troi­ka”:

    De Jager Backs ‘Per­ma­nent Troi­ka’ in Athens to Mon­i­tor Econ­o­my
    By Fred Pals — Feb 20, 2012 10:05 AM CT

    Dutch Finance Min­is­ter Jan Kees de Jager said he sup­ports a per­ma­nent pres­ence of inter­na­tion­al mon­i­tors in Athens to over­see Greece’s imple­men­ta­tion of aus­ter­i­ty mea­sures as part of a sec­ond res­cue pro­gram.

    I am myself in favor of a per­ma­nent troi­ka in Athens,” De Jager told reporters in Brus­sels today, refer­ring to the Euro­pean Com­mis­sion, Euro­pean Cen­tral Bank and Inter­na­tion­al Mon­e­tary Fund.

    “When you look at the derail­ments in Greece which have occurred sev­er­al times now, it is nec­es­sary that there is some kind of per­ma­nent pres­ence of the troi­ka in Athens,” he said. “But I am also in favor of an escrow account where the mon­ey is dis­bursed first and then from that escrow account we have more cer­tain­ty.”


    “We will lis­ten to the find­ings of the troi­ka,” De Jager said of today’s meet­ing. “We need guar­an­tees on super­vi­sion. We need sig­na­tures of the lead­ers of the two biggest polit­i­cal par­ties. They need to sign for after the elec­tions. Greece needs to meet a whole set of con­di­tions. It needs to hap­pen and if not we won’t and can’t sign for a new deal.”

    Posted by Pterrafractyl | February 20, 2012, 1:37 pm
  18. Posted by Pterrafractyl | February 20, 2012, 11:15 pm
  19. Here’s an arti­cle filled with reminders of the volatile nature of Greece’s neigh­bor­hood:

    Turkey-Greece engage in mock dog­fights over Cyprus as Israeli PM arrives
    Pub­lished on Feb­ru­ary 17, 2012

    GREEK AND Turk­ish jets tan­gled in mock dog­fights in Cypri­ot air­space yes­ter­day just as Israeli Prime Min­is­ter Ben­jamin Netanyahu was arriv­ing on the island, reports said.

    Accord­ing to Sig­ma, around 11am three Greek Mirage-2000 fight­ers began shad­ow­ing two Turk­ish F‑16 jets after the lat­ter flew between Rhodes and Crete on their way from the east­ern Mediter­ranean where Turk­ish ships were con­duct­ing wargames with live ammu­ni­tion.

    The Turk­ish mil­i­tary exer­cise, the For­eign Min­is­ter said ear­li­er, took place with­in Cyprus’ Exclu­sive Eco­nom­ic Zone, in waters south of the island and close to, or inside, Block 12.

    The Greek jets report­ed­ly pur­sued the Turk­ish fight­ers all the way back into the Nicosia Flight Infor­ma­tion Region, at which point the Turk­ish planes changed course and head­ed off toward the Turk­ish main­land.

    Mean­while Greek For­eign Min­is­ter Stavros Dimas yes­ter­day referred to Turkey’s con­tin­u­ing chal­lenges to Greece’s air­space and sov­er­eign rights, urg­ing Ankara to respect inter­na­tion­al law and the Law of the Sea.

    “It is a behav­iour that must stop. Greece defends its rights. Unfor­tu­nate­ly, instead of talk­ing today about what unites us, we see chal­lenges that under­mine the prospects for improve­ment of our rela­tions”, Dimas said.

    He was speak­ing dur­ing a joint press con­fer­ence in Athens with NATO Sec­re­tary Gen­er­al Anders Fogh Ras­mussen.

    “As we have repeat­ed­ly empha­sized in the past, Greece and Cyprus do not intend to fol­low Turkey in the rise of threats and chal­lenges”, Dimas added.

    Posted by Pterrafractyl | February 20, 2012, 11:36 pm
  20. You have to won­der if the gold seizure clause is going to apply to oth­er euro­zone nations...could be a lot of yel­low met­al sit­ting in those vaults:

    Grow­ing Air of Con­cern in Greece Over New Bailout

    Pub­lished: Feb­ru­ary 21, 2012

    ATHENS — Even as the Euro­pean Union signed off Tues­day on a sweep­ing new arrange­ment to help avert a Greek default and sta­bi­lize the euro, many peo­ple here on the streets saw no end to their country’s woes.

    “They don’t want to kill us but keep us down on our knees so we can keep pay­ing them indef­i­nite­ly,” said Eva Kyr­i­adou, 55, as she stood in a square in down­town Athens where the smell of tear gas and the smashed facades from last week’s vio­lent riots still lin­gered.

    Indeed, the deal was reached amid a grow­ing air of stale­mate and con­cern. Greece’s for­eign lenders expressed doubts that the new aus­ter­i­ty mea­sures the Greek Par­lia­ment passed last week — includ­ing a 22 per­cent cut to the pri­vate-sec­tor bench­mark min­i­mum wage — would actu­al­ly be car­ried out, at least before ear­ly nation­al elec­tions as soon as April.

    Oth­ers are con­cerned that in the fine print of the 400-plus-page doc­u­ment — which Par­lia­ment mem­bers had a week­end to read and sign — Greece relin­quished fun­da­men­tal parts of its sov­er­eign­ty to its for­eign lenders, the Euro­pean Com­mis­sion, the Euro­pean Cen­tral Bank and the Inter­na­tion­al Mon­e­tary Fund.

    This is the first time ever that a Euro­pean and prob­a­bly an O.E.C.D. state abdi­cates its rights of immu­ni­ty over all its assets to its lenders,” said Lou­ka Kat­seli, an inde­pen­dent mem­ber of Par­lia­ment who pre­vi­ous­ly rep­re­sent­ed the Social­ist Par­ty, using the abbre­vi­a­tion for the Orga­ni­za­tion for Eco­nom­ic Coop­er­a­tion and Devel­op­ment. She was one of sev­er­al inde­pen­dents who joined 43 law­mak­ers from the two largest par­ties in vot­ing against the loan agree­ment.

    Ms. Kat­seli, an econ­o­mist who was labor min­is­ter in the gov­ern­ment of George Papan­dreou until she left in a cab­i­net reshuf­fle last June, was also upset that Greece’s lenders will have the right to seize the gold reserves in the Bank of Greece under the terms of the new deal, and that future bonds issued will be gov­erned by Eng­lish law and in Lux­em­bourg courts, con­di­tions more favor­able to cred­i­tors.

    While their country’s fate is being decid­ed in abstract, high-lev­el nego­ti­a­tions in Brus­sels, Berlin and Paris as much as in Athens, many Greeks said they had begun to feel that the debt write­down and new loan is aimed at sav­ing the banks more than the coun­try and its cit­i­zens.


    Posted by Pterrafractyl | February 21, 2012, 8:29 pm
  21. Ok, so it looks like the 2nd bailout of Greece will lit­er­al­ly involve Greece mak­ing a con­sti­tu­tion­al change so that it can direct­ly bail out the banksters. That’s right, Greece, itself, will be the enti­ty that actu­al­ly funds the new bailout “escrow” account using “inter­nal­ly gen­er­at­ed funds”, and the banksters get first dibs on it all. Wow.

    Posted by Pterrafractyl | February 22, 2012, 10:45 am
  22. Since the new Greek bailout terms include raid­ing Greece’s gold reserves, Italy real­ly needs to get some clar­i­fi­ca­tion on whether or not this rule is going to apply to them because, they got A LOT of gold and Berlin is already sali­vat­ing:

    Memo From Ger­many
    Suc­cess and Advice Cast a Giant as a Vil­lain, Not a Mod­el, in Europe

    Pub­lished: Novem­ber 15, 2011

    BERLIN — Through­out the cri­sis in the euro zone, as gov­ern­ments have fall­en, debt bur­dens have mount­ed and economies have stag­nat­ed or shrunk, Ger­many has float­ed above the fray. While its econ­o­my has hummed along nice­ly, its lead­ers have stead­fast­ly insist­ed that the path to redemp­tion for the debtors lies in aus­ter­i­ty and suf­fer­ing.


    Last week, Ger­many was awash with reports of a pro­pos­al float­ed at the Group of 20 meet­ing that might have allowed the Inter­na­tion­al Mon­e­tary Fund to draw on Ger­man gold reserves to bol­ster Europe’s res­cue fund.

    The con­dem­na­tion was swift and dis­pro­por­tion­ate­ly harsh for a sug­ges­tion that was basi­cal­ly doomed from the start. “The Ger­man gold reserves must remain untouch­able,” said Philipp Rösler, the econ­o­my min­is­ter and vice chan­cel­lor.

    A car­toon in the news­pa­per Süd­deutsche Zeitung showed three men try­ing to crack a bank safe marked “Bun­des­bank gold and for­eign cur­ren­cy reserves,” a ref­er­ence to the Ger­man cen­tral bank.

    The masked man attack­ing the safe with a drill had the Ger­man abbre­vi­a­tion for the Euro­pean Cen­tral Bank on his back, while the one plac­ing the dyna­mite bore the let­ters for the Inter­na­tion­al Mon­e­tary Fund. Hold­ing a flash­light was the pres­i­dent of the Euro­pean Coun­cil, Her­man Van Rompuy.

    Lead­ing politi­cians here defend­ed the inde­pen­dence of the Bun­des­bank but also took the oppor­tu­ni­ty to call for Italy to sell off its own gold reserves, the fourth largest in the world after the Unit­ed States, Ger­many and the Inter­na­tion­al Mon­e­tary Fund.

    “I am of the opin­ion that a coun­try should do every­thing in its pow­er to help itself,” said Gun­ther Krich­baum, chair­man of the com­mit­tee on Euro­pean affairs in the Ger­man Par­lia­ment, who spoke in favor of Italy’s sell­ing gold to help with its $2.6 tril­lion debt, “and in this regard Italy is far from exhaust­ing its options.”


    Posted by Pterrafractyl | February 22, 2012, 7:12 pm
  23. Europe’s oli­garchs just want­ed to remind you all that the euro­zone’s unions and labor pro­tec­tions are doomed, troi­ka or not.

    Posted by Pterrafractyl | February 23, 2012, 8:17 am
  24. In case you were inter­est­ed in just how much total gold might get loot­ed from the PIIGS cof­fers if the new gold-seizure pro­vi­sion gets applied through­out the euro­zone, Zero­hedge has an esti­mate: 3233.5 tons:

    Pro­ject­ed PIIGS Pil­lage: 3233.5 Tons Of Gold To Be Con­fis­cat­ed By Insol­vent Euro­pean Banks
    Sub­mit­ted by Tyler Dur­den on 02/23/2012 — 09:49 Cred­i­tors fixed Greece Ire­land World Gold Coun­cil

    While hard­ly dis­cussed broad­ly in the main­stream media, the top news of the past 24 hours with­out doubt is that in addi­tion to los­ing its fis­cal sov­er­eign­ty, and numer­ous oth­er things, the Greek pop­u­la­tion is about to lose its gold in a per­fect­ly legit­i­mate fash­ion, fol­low­ing amend­ments to the coun­try’s con­sti­tu­tion by unelect­ed banker tech­nocrats, who will make it legal for Greek cred­i­tors — read insol­vent Euro­pean banks — to plun­der the Greek gold which at last check amounts to 111.6 tonnes accord­ing to the WGC. And so we come full cir­cle to what the ulti­mate goal of banker inter­ven­tion in the Euro­pean periph­ery is — noth­ing short of full gold con­fis­ca­tion. So just how much gold will be pil­laged by the banker oli­garchy (it is amus­ing how many web­sites believe said gold is sacro­sanct by region­al nation­al banks, and thus the EUR is such a stronger cur­ren­cy as it has all this ‘gold back­ing’ — hint: it does­n’t, as all the gold is about to be trans­ferred to non-extra­di­tion coun­tries)? As the World Gold Coun­cil shows in its lat­est update, between all the PIIGS, who will with 100% cer­tain­ty suf­fer the same fate as Greece (which has shown that unlike dur­ing World War 2, it is per­fect­ly will­ing to turn over and do noth­ing) there is 3234 tonnes of gold to be plun­dered. And like­ly more as fur­ther con­sti­tu­tion­al amend­ments will like­ly make the con­fis­ca­tion of pri­vate gold the next big step. how much does this amount to? At today’s prices this is just shy of $185 bil­lion. Of course by the time the mar­ket grasps what is going on the spot price of the yel­low met­al will be far, far high­er. Or, poten­tial­ly far, far low­er and total­ly fixed as the open gold mar­ket is even­tu­al­ly done away with entire­ly in a rever­sion to FDR gold con­fis­ca­tion and price fix­ing days.


    There’s a nice chart of glob­al gold hold­ings at the link.

    Posted by Pterrafractyl | February 23, 2012, 10:29 am
  25. @Pterrafractyl–

    Read­ing the Sea­graves’ “Gold War­riors” will give the lis­ten­ers an idea of just how deeply cor­rupt the world’s gold mar­ket real­ly is.

    The book is heav­i­ly accessed in For The Record broad­casts.

    Posted by Dave Emory | February 23, 2012, 10:43 am

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