Wednesday, 30 November 2011

German historian asks "Cultural" tax infavor of Greeks

An interesting article from Καθημερινή about Leonora Seeling, historian and author who suggests: "Five cents a word, to save Greece":
"A German historian and writer rose against the insulting reports in the German press about Greece. As noted in Deutsche Welle's website («DW»), it's Leonora Seeling, which sought to impose a temporary, cultural tax for the financial rescue of Greece.
According to the publication, Mrs Seeling is not an expert about Greek issues in Germany. However, she has taught in German and French universities, history of mathematics and physics, has published literature and has done many trips the last decade in Greece and now she objects firmly by writing a book.
Her book, "Arykanda (as it was the ancient city of Lycia), which was published by a small publishing house in Stuttgart is written in the form of speaking to citizens and is entitled:" 5 cents, to save Greece. It is - according to the newspaper - "a warm unconditional advocacy for Greece by a German author.
The reason of her public position was the annoying tone of german publications against Greece. Moreover, the question for Mrs Seeling is not to identify the weaknesses of Greek fiscal policy, but to find reasons at any cost to save Greece, which it considers valuable as the cradle of European civilization.
For this reason, Mrs. Seeling proposed the imposition - at a European level - of a minimal, symbolic cultural tax: indeed, whoever is currently using Greek words to pay five 'cheap' cents for each one of them. That is, when the German say "Idee", when the French pronounce "idee" or the British "idea", to be awarded immediately 5 cents in the Greek public purse. The same goes for the words psyche and psychoanalysis, democracy and politics, museum, Europe, euro and so on.
With passion, persistence and apparent joy Mrs Seeling counts the millions and billions that will be entering the empty Greek 'money box'. Indeed, she is absolutely convinced that the European people owe this tax in Greece because without its intellectual and scientific achievements would exist today neither European culture, nor European technology, nor aircraft will be moved, nor the ships would cross the seas.
The second aim of the German writer is to "snuggle" the Germany authors-publications, which with a professor's style rushed to condemn the practice of Greek practice and culture. For this reason, she reminded that next to the Greek naively overt corruption - "democratic corruption", as it is called - is the lofty and hypocritical corruption of the German economy and politics.
For this reason, Mrs. Seeling made the comparison of the earnings of a Greek government official, along with the cut of 10%, with the highest bonus - under certain conditions - that get the German unemployed. She has also proposed the reduction of Greek purchases of German arms to 50% or more. According to «DW», Leonora Seeling says, "I did all this, simply because I am an educated German who's stepped on the toes because they challenged Greece."
Tuesday, 29 November 2011

Poland urges Germany to do more to solve euro crisis

File picture of Radoslaw Sikorski

Polish Foreign Minister Radoslaw Sikorski has called on Germany to do more to resolve the debt crisis in the eurozone and avert the euro's collapse.
In an unusually forthright speech, he said such a collapse would be "the biggest threat to the security and prosperity of Poland".
Eurozone finance ministers are meeting in Brussels later to discuss ways to expand the region's bailout fund.
This is seen as key to preventing more countries being sucked into the crisis.
Poland is not yet in the 17-nation eurozone, but is treaty-bound to join the single currency, as are its fellow former communist neighbours in the EU.
In a speech in Berlin on Monday evening, Mr Sikorski said: "There is nothing inevitable about Europe's decline. But we are standing on the edge of a precipice. This is the scariest moment of my ministerial life but therefore also the most sublime."

"the biggest threat to the security and prosperity of Poland".
Eurozone finance ministers are meeting in Brussels later to discuss ways to expand the region's bailout fund.
This is seen as key to preventing more countries being sucked into the crisis.
Poland is not yet in the 17-nation eurozone, but is treaty-bound to join the single currency, as are its fellow former communist neighbours in the EU.
In a speech in Berlin on Monday evening, Mr Sikorski said: "There is nothing inevitable about Europe's decline. But we are standing on the edge of a precipice. This is the scariest moment of my ministerial life but therefore also the most sublime."
"The biggest threat to the security and prosperity of Poland would be the collapse of the eurozone.
"And I demand of Germany that, for your own sake and for ours, you help it survive and prosper. You know full well that nobody else can do it.
"I will probably be the first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity."
"You have become Europe's indispensable nation.
A breakup of the eurozone - a possibility now being openly talked about - "would be a crisis of apocalyptic proportions beyond our financial system", he added.
On Monday, France and Germany proposed closer ties between eurozone economies, including binding limits on borrowing.
Saturday, 26 November 2011

Germany is the real winner in a transfer union

by Sebastian Mallaby

Financial Times
November 24, 2011

Over the past 18 months, Germany has tried every trick
to limit its contribution to the euro bailouts. It has pushed
self-defeating austerity onto bankrupt countries. It has
called in the International Monetary Fund. It has tried to
pass the hat to China. It has discovered an improbable
and futile taste for leveraging up the European Financial
Stability Facility. But now these tricks have uniformly failed,
and the continent approaches the abyss – with Germany itself
suffering the humiliation of a failed bond auction. It is time
for Germany to decide once and for all: how much will it pay
to save Europe?
Germans can reach the sensible answer only if they discard
the myth, widely cherished in northern Europe, that peripheral
southern countries are the undeserving beneficiaries of a
charitable transfer union. You can see whence this myth comes:
the Greeks do retire in their fifties; they did lie about their
budget deficit; and it is galling when they demand serial bailouts.
But despite those aerial photographs of untaxed Athenian swimming
pools, the north’s resentment of lazy southerners is overdone.
The truth is that Germany derives myriad benefits from the currency
union. It should pay more to save it.
Start with a simple point about exchange rates. Since 2009, stable
open economies from Brazil to Switzerland have seen hot inflows of
money and upward pressure on their currencies. If Germany had not
been tethered to the euro, its money would have behaved like the Swiss
franc, spoiling the recent party in its manufacturing heartland. Between
August 2009 and May 2011, German exports jumped by 18 per cent.
A reasonable estimate suggests they would have risen only 10 per cent
if Germany had been outside the euro.
Conversely, if peripheral Europe had not been tethered to the euro,
its currencies would have fallen over the same period. Rather than
facing a financial shock and a crisis of competitiveness, they would
have faced the first without the second. Of course, the currency union
that makes adjustment in the periphery so excruciating is the very
same currency union that handed Germany its export boom. Rather
than condemning lazy southerners, the Germans should share the loot.

Friday, 25 November 2011

Trader Alessio Rastani on the BBC: Goldman Sachs Rules The World Not Governments

Wednesday, 23 November 2011

Premarket: Now Germany can't sell bonds

Globe and Mail Blog

What is the world coming to when even Europe's strongest economy has trouble selling bonds? Stocks reflected nervousness after one of Germany's worst debt auctions in more than a decade and data showed Chinese manufacturing shrank sharply.
Banks and miners were among the biggest losers. Britain's FTSE 100 lost 0.3 per cent, France's CAC 40 edged 0.1 per cent lower and Germany's DAX inched 0.2 per cent higher. Hong Kong's Hang Seng slid 2.1 per cent.

Dow futures were down 93 points, or 0.8 per cent, at 11,372 about two and a half hours before the New York Stock Exchange opened. S&P 500 futures fell 7.7 points, or 0.7 per cent, to 1,175.10.
Commodity currencies, such as the Canadian dollar and the Australian dollar fell. The loonie was trading at 95.95 U.S. cents as the U.S. dollar rallied to its highest against a basket of major currencies in seven weeks.
One of Germany’s worst bond sales since the launch of the euro sparked concerns the debt crisis was even beginning to threaten Berlin.The Bundesbank was forced to buy 39 per cent of the 6 billion euros of debt Germany had hoped to sell to investors after banks bought just 3.644 billion euros of the issue.
Yields on 10-year German Bunds surged 5.5 basis points to 1.964 per cent. Italian and Spanish bond yields dipped after reports of intervention in the bond markets from the European Central Bank.
Germany’s debt agency said the shortfall in the sale reflected worsening market nerves and that it would sell back the retained amount to investors on secondary debt markets and that Germany would not face a funding shortage.
Monday, 21 November 2011

UKIP Nigel Farage - How dare you tell the Italian and Greek people what to do !!! Nov 2011

UK Independece Party leader Nigel Farage MEP disgusted at the puppet governments the EU has now implemented in Italy and Greece

Conspiracies, Coups and Currencies

As the debt-ceiling negotiations stalled out over the summer, a global coalition — led by Germany, China and the International Monetary Fund — began working behind the scenes to ease Obama out of the White House. The credit downgrade was the final blow: the president had lost the confidence of the world’s shadow government, and his administration could no longer survive.
Within days, thanks to some unusual constitutional maneuvering, Obama resigned the presidency and Michael Bloomberg was invited to take the oath of office. With Beijing issuing veiled threats against our currency, Congress had no choice but to turn the country’s finances over to the Senate’s bipartisan Gang of 6, which in turn acceded to Chinese and German “supervision” of their negotiations. Meanwhile, there was a growing consensus in Europe and Asia that only a true global superstate could prevent the debt contagion from spreading ...
FOR Americans, the scenario I’ve just imagined is a paranoid fantasy, the kind of New World Order nightmare that haunts the sleep of black-helicopter watchers and Trilateral Commission obsessives.
But for the inhabitants of Italy and Greece, who have just watched democratically elected governments toppled by pressure from financiers, European Union bureaucrats and foreign heads of state, it evokes the cold reality of 21st-century politics. Democracy may be nice in theory, but in a time of crisis it’s the technocrats who really get to call the shots. National sovereignty is a pretty concept, but the survival of the European common currency comes first.
There were few tears in Italy and Greece for Silvio Berlusconi and George Papandreou, the prime ministers — respectively corrupt and hapless — whose downfalls were engineered by the Brussels-Berlin-Paris axis. But their forced departures, however welcome, open a troubling window on what a true European state would look like. Stability would be achieved at the expense of democracy: the rituals of parliaments and elections would endure, but the real decision-making power would pass permanently to the forces represented by the so-called “Frankfurt Group” — an ad hoc inner circle consisting of Germany’s Angela Merkel, France’s Nicolas Sarkozy and a cluster of bankers and E.U. functionaries, which has been spearheaded European crisis management since October.
The preview is important because this is precisely the future that almost every informed commentator assumes Europe needs to embrace in order to save the euro and prevent an economic meltdown. The old conventional wisdom held that a continentwide currency union was a wonderful idea, and that euroskeptics were all knuckle-dragging troglodytes. The new conventional wisdom is that yes, well, maybe the knuckle-draggers were right about the perils of the euro, but it’s far too late to back out now.
Saturday, 19 November 2011

Goldman Sachs rules Europe

Our friends from Goldman Sachs…

Mario Monti, Lucas Papademos and Mario Draghi have something in common: they have 

all worked for the American investment bank. This is not a coincidence, but evidence of 

a strategy to exert influence that has perhaps already reached its limits.

Serious and competent, they weigh up the pros and cons and study 
all of the documents before giving an opinion. They have a fondness 
for economics, but these luminaries who enter into the temple only 
after a long and meticulous recruitment process prefer to remain 
discreet. Collectively they form an entity that is part pressure group, 
part fraternal association for the collection of information, and part 
mutual aid network. They are the craftsmen, masters and grandmasters 
whose mission is "to spread the truth acquired in the lodge to the rest of 
the world."

According to its detractors, the European network of influence woven 
by American bank Goldman Sachs (GS) functions like a freemasonry. 
To diverse degrees, the new European Central Bank President, Mario 
Draghi, the newly designated Prime Minister of Italy, Mario Monti, 
and the freshly appointed Greek Prime Minister Lucas Papademos 
are totemic figures in this carefully constructed web.

Heavyweight members figure large in the euro crisis Draghi was 
Goldman Sachs International’s vice-chairman for Europe between 2002 
and 2005, a position that put him in charge of the the “companies and 
sovereign” department, which shortly before his arrival, helped Greece 
to disguise the real nature of its books with a swap on its sovereign debt.

Monti was an international adviser to Goldman Sachs from 2005 until his 
nomination to lead the Italian government. According to the bank, his 
mission was to provide advice "on European business and major public 
policy initiatives worldwide". As such, he was a "door opener" with a brief 
to defend Goldman’s interest in the corridors of power in Europe.

The third man, Lucas Papademos, was the governor of the Greek central 
bank from 1994 to 2002. In this capacity, he played a role that has yet to 
be elucidated in the operation to mask debt on his country’s books, 
perpetrated with assistance from Goldman Sachs. And perhaps more 
importantly, the current chairman of Greece’s Public Debt Management 
Agency, Petros Christodoulos, also worked as a trader for the bank in London.

Two other heavyweight members of Goldman’s European network have also 
figured large in the euro crisis: Otmar Issing, a former member of the 
Bundesbank board of directors and a one-time chief economist of the European 
Central Bank, and Ireland’s Peter Sutherland, an administrator for Goldman 
Sachs International, who played a behind the scenes role in the Irish bailout.

Relay exclusive information to the bank’s trading rooms. How was this loyal 
network of intermediaries created? The US version of this magic circle is 
composed of former highly placed executives of the bank who effortlessly 
enter the highest level of the civil service. In Europe, on the other hand, 
Goldman Sachs has worked to accumulate a capital of relationships. But 
unlike its competitors, the bank has no interest in retired diplomats, highly 
placed national and international civil servants, or even former prime 
ministers and ministers of finance. Goldman’s priority has been to target 
central bankers and former European commissioners.

Its main goal is to legally collect information on initiatives in the near future 
and on the interest rates set by central banks. At the same time, Goldman 
likes its agents to remain discreet. That is why its loyal subjects prefer not to 
mention their filiation in interviews or in the course of official missions.
These well-connected former employees simply have to talk about this and 
that secure in the knowledge that their prestige will inevitably be rewarded 
with outspoken frankness on the part of those in powerful positions. 

Put simply they are there to see "which way the wind is blowing," and 
thereafter to relay exclusive information to the bank’s trading rooms.
Friday, 11 November 2011

Albrecht Ritschl: "If Germany paid war compensations, it would go bankrupt immediately”

19/10/2011 - 09:00

Interview with Isaac Karipidis

Arriving on the fourth floor in one of the buildings of the London School of Economics ...
It is not difficult to find the office of the German professor of economic history, Albrecht Ritschl. Above the door is stuck a card depicting a Piggy-Piggy to swim in the sea, holding in the mouth the Greek flag. Entering the office, the first thing you face is a photocopy of a 200 drachma bill of Rigas Feraios.
Professor Ritsl became known, as he admits, not very popular in his country, because he, through his articles in the British press and through the interviews in German magazines, has essentially argued that the attitude of Germany towards the financial problem in Greece is unacceptable, a position which he expressed even in the magazine Spiegel, which is not ... famous for philhellenic approaches. Indeed, in an interview in the magazine this summer said that if Greece, along with other countries' claims the compensations (note: the Second World War) and Germany is forced to pay, then they’d even get our ... shirts ".According to the professor, the German postwar "miracle" is due to a large extent on the fact that Greece has never claimed reparations from Germany, as others did. "That Germany should not forget," as he said in "Hot".
Professor Ritsl was born in Munich in 1959. He has taught at many different universities in Europe. From Barcelona and Zurich to Berlin. In recent years Professor of Economic History at one of the most popular universities in the financial world, the London School of Economics.

Sir, do you really have anything to do with Greece?
No, no.
How do you explain such a strong Greek presence in your office?
(Laughter.) I have some basic knowledge of Economic History of the 20th century thanks to my profession. Eventually, in an interview they asked me how bad things were in early 1900 - a time which is anyway not far from ours. I asked, then, give a comparison of the problem of Greece with the conditions then prevailing, and thus began my contact with your country.

Your relationship, then, with Greece was inaugurated when the problems started in our country?
(Laughter.) Yes, so it is. It is a coincidence. Unless, of course, the deep relationship that we all have with Greece, which is over 2,000 years. European culture, European course would be completely different without the positive contribution of the Greek spirit. But that's another story ...
Speaking strictly for my relationship with your country, I would say it started because of financial problems and mainly because of how the rest of Europe dealt with them and especially Germany.

Really, how did Germany dealt with them? How do you see the attitude of Germany towards Greece?
I must say that now, these recent weeks, the attitude of Germany has changed. It is not so intransigent and so cumbersome as  It was before.
Today there are two major trends within the country, which collide, even among themselves. One argues that there should be no default in the eurozone. Debts must be paid to the last cent not to expose Europe to international markets. The other "school", the other trend, if you will, which recently gained ground, says it should be restructured debt. According to proponents of this view, there is nowhere in the EU a rule, which impose the full financial support of a country on the verge of bankruptcy. And historically, indeed, this is the way in which the debt of a country goes.

You, as professor of economics, which solution do you favor?
Sir  Karipidis, I must say-and I know that this will not appeal to your readers, it is almost impossible for Greece to pay its debt. The debt of Greece in relation to production is much greater. So the restructuring is almost imperative. I am able also to tell you that within the German government, no longer speak for a large proportion of the debt restructuring of Greece. It is no secret anymore. Moreover, politically speaking, I would say that Greece has never been ready to enter the euro. Before you enter the Eurozone in a system such as the eurozone, you have to develop a strong, modern tax environment. I think the Greek government was not ready to face the difficulties of such a mechanism. This, indeed, we are seeing and experiencing now. Nevertheless, I must say that there is no reason to look back but to see how we deal with the situation together. All countries to cooperate for the common good of the eurozone. To see how we get out from this path, without creating more damage to the global economy.

Often, however, Germany, at least in our eyes, does not seem so minded as you say ...
There you are wrong, sir Karipidis ... The German government several times in the recent past have not acted with the required efficiency. Also, if you look a little old in the history of Germany, we see that this too has its own huge mistakes - not only politically but also economically.

What do you mean?
After the Second World War, Germany left behind a Europe essentially damaged. Furthermore, because of frivolous options, the same over the past century,  has gone bankrupt three times. If it were not for the U.S., which helped financially after the war, and countries such as Greece, which never claimed war damages, now my country would not have the economic power it has. I've said it before and am not afraid to repeat to you, Karipidis: Germany is the biggest sinner in the 20th century and perhaps of modern economic history. My compatriots seem to have selective memory on this issue. If you interpret it psychologically, it's because we always tend to remember only the good side of ourselves. (Laughter.) Nevertheless, it is right to remind my countrymen of historical events, which anyway remain vivid in the minds of people living in other European countries.
You know, for these positions I'm not very popular in my country ... Of course, I must say, as an economist and researcher, and that your country has a large responsibility for the current situation. As people, you spend much more than you produce and your life is not justified by your income.

Really, could Greece today claim reparations from Germany?
Allow me to tell you that this is a purely legal question, to which I will not take place. I know that it has launched a debate among legal circles in Europe -even informally-but I can not have a scientific perspective. I am not a lawyer. This, however, you will say with certainty is that the real issue is not whether Germany owes war reparations to Greece, but that we should all deal with this difficult situation. The point is that Germany must understand that it has its own share of responsibility and must leave the arrogant rhetoric. It should go into more effective and efficient approach to the problem. Germany must not forget that two generations ago was able to stand on its feet thanks to the generous attitude of Western powers, including Greece. It should be stopped, then, to see the solution only with numbers and see it with a more effective and wider political view.

I will not disagree with you on the necessity of immediate treatment of the problem should’ t we, however, look at the agreements signed in the past and have not been met? I refer to the Agreement on German debt was signed in London in 1953.According to this, if a reunification of the two Germanies took place, Germany would have to pay war reparations. Germany was unified in 1990, but compensation is not given ...
It is not such a simple issue ... The agreement says that Germany will pay its debts when it will be reunited and the new state created will be the "legal" successor of the German Empire. Like, say, before the war. It is still not clear whether Germany that emerged after 1990 is the "legal" successor of the German Empire. If it is proven, then the debts of the German Empire are passed in the state of Germany and countries like Greece can claim compensation from either the German courts or even by European courts. The issue is still open. Of course, Germany's view is that the united Germany is not the "legal" successor of the German Empire, and therefore not liable for any damages. I must say, however, that if Germany eventually asked to pay all such damages, not only to Greece but also in the world, then it will go bankrupt immediately. Because the amount that will be charged, will be much higher than the amount that Germany can afford.

Before closing, I would like to ask you what do you think should be done to Greece to come out from this difficult situation.
Look, things are very serious. To be perfectly honest, what is done should be done with great care not to have bad consequences. You should at all costs to avoid riots and strike a final and lasting solution in the least possible impact on the Greeks. The one issue this debt. Personally, I think much of it should be deleted. I am not able to tell you how much, but surely the number is large. The other major issue is that Greece from now on should begin to live with its own resources and not by loans and grants from other countries or the EU. One thing is certain: The years during which Greece was living with borrowed money are gone. From now on, your country faces a painful period to adjust to new, arguably more realistic, and unfortunately, my assessment is that this period will last many years ...

Although you do not sound particularly optimistic, I can only thank you, sir Ritsl for the discussion we had!
Thank you, sir Karipidis, and do not forget that Germany after the war was much worse than what is Greece today!
Published in the journal Epikaira: 14/10/2011