France rebels against austerity as Europe's recovery collapses

By Ambrose Evans-Pritchard

France’s finance minister sends tremors through European capitals with a defiant warning that his country would no longer try to meet deficit targets.

German GDP contracted 0.2pc, is France once again stuck at zero and Italy is already in a triple-dip recession

Eurozone strategy is in tatters after economic recovery ground to a halt across the region and France demanded a radical shift in policy, warning that austerity overkill is driving Europe into a depression.

Growth slumped to zero in the second quarter, with Germany contracting by 0.2pc and France once again stuck at zero. Italy is already in a triple-dip recession.

Yields on 10-year German Bunds fell below 1pc for the first time in history, beneath levels seen during the most extreme episodes of deflation in the 19th century. French yields also touch record lows. Much of the eurozone is replicating the pattern seen in Japan as it slid into a deflation trap in the late 1990s.

It is unclear whether tumbling yields are primarily a warning signal of stagnation ahead or a bet by investors that the European Central Bank will soon be forced to launch quantitative easing, buying government bonds across the board.

Michel Sapin, France’s finance minister, sent tremors through European capitals with a defiant warning that his country would no longer try to meet its deficit targets and would not inflict further damage on its economy by tightening into the downturn. “I refuse to raise taxes to close any budget gaps,” he said.

“What is absolutely necessary is to adjust the pace of deficit reduction to the exceptional situation we are in today. Growth is too weak in Europe and inflation is too low. We must therefore stop reinforcing the causes of this depression,” he told RTL television.

“We must face the figures in front of us with realism. The truth is that, contrary to the forecasts of the International Monetary Fund and the [European] Commission, growth has broken down, both in France and in Europe.”

He halved his French growth forecast to 0.5pc this year and to little more than 1pc next year, too weak to stop unemployment hitting fresh highs. The IMF has already warned that there will be no job growth until 2016.

Germany has so far refused to yield any ground on austerity policies but is increasingly vulnerable. Revised data show that the economy has been far weaker than thought over the past two years, falling into a significant double-dip recession last year. Professor Paul De Grauwe, from the London School of Economics, said: “They are victims of their own folly. Germany needs massive investment in its energy sector and it should be doing it now while it can borrow for almost nothing.”

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Amidst The Silent Greek Genocide

Still Here: Leon’s Healing Journey Of Soulful Blogging

Dearest fellow bloggers,
I disappeared for a while, I know. Please know that out of sight is not out of mind in my case. Too many personal and collective struggles keep our lives as hostages here. On the internal personal level, I have been going through one of my periods of necessary emotional regulation.…..
Moving on to the external level, there is this constant mortal threat for us here in Greece; what we are experiencing in our country is something you really do not hear much about, if at all. As we wrote to our dear Cheryl in an e-mail recently,

“Our whole career here in Greece (nothing ever beyond bare survival) is dead and gone, as is our whole country, only many do not realize this, thinking they can safely be a part of an unbelievably corrupt system. The two of us, like many people here who have been working only in the private sector, have never lived beyond our means, and still we have constantly-increasing debts due to the insane overtaxation imposed on us just for breathing here. We desperately look for various odd jobs trying to survive, but the Greeks are undesirable as employees in their own country due to insurance cost reasons, and we are not that young and fit anymore. 
We are really amidst a silent genocide the world knows nothing about. All mainstream media everywhere cover up the truth of just how ferociously the economy is used as a weapon against us. The numbers of worthy, honest people taking their own lives here are unbelievable, but no suicide-rate statistics are announced during these debt-crisis years, so that no one feels for the people here and prays for a balance to be restored. [...] 
We sadly depend on the few scraps Plutonia’s parents are mockingly throwing us; and they are throwing us less and less. They relish our suffering and the fact that we will never create a family of our own, because they are really distorted and evil people; you can be certain we are not saying this light-heartedly, our sweet Cheryl. We have suffered unspeakably all our lives in an absolutely unsuited-for-our-natures socio-political climate, in which neither they or Leon’s parents ever meant to help us integrate; quite the contrary, we have been kept cut off from society in many invisibly sickening ways. [...] We started blogging out of desperation, because we do not seem to have much time left in this life. We needed to connect with loving, compassionate, creative and spiritual people like yourself for the first time in our lives, so as not to lose our minds. We needed to explain our situation, find some understanding, and, in our turn, do everything in our power to maybe provide some loving support to some brothers and sisters out there who are suffering. [...] But due to this unprecedented overtaxation imposed on the population here which leads to our amassing debts, we are not allowed to do anything for money anymore. [...] 

The tax laws are extremely complicated and constantly becoming more and more destructive. We are among the many people here who are threatened with confiscations and imprisonment without ever having done anything illegal. This is a huge economic battlefield where more and more decent private-sector citizens are mercilessly slain. [...] ‘Leon’ and ‘Plutonia’ are our blogging names. They do carry our personal vibrations and we strongly identify with them, but, although dozens of ISBNs are circulating with our real names, although we have translated so many fiction and non-fiction books, our real names cannot appear in any project anymore. We cannot even receive any donations via the Internet. 
Our empty bank account will soon be blocked lest something goes in it, to be immediately withdrawn for our ‘debts’ to be paid to the man-eating status quo. By all statistical probabilities, the system will get its way with us, too. We do not say this with fear, we deny to give them this pleasure, but the fact is that we are being treated as numbers, not as people, and that the silent genocide continues. 
We do not know if and how we will be able to deal with homelessness or imprisonment or whatever they are preparing for large numbers of innocent, downtrodden people here. If this is our final labor of love, if our activity in the blogosphere gets terminated and our web space freezes in time, we want to have left something of our hearts and souls that has made the world a more humane place. We already consider ourselves fulfilled for having astrally embraced with you, our sweet Cheryl, and a few more fellow humans.”


http://solitarythinkers.wordpress.com/2014/04/01/still-here-leons-healing-journey-of-soulful-blogging/

WSJ: Greek Tax Insanity

Can a country tax itself into economic oblivion? An outside observer might well conclude that Greece is running an experiment to find out. The Greek government imposed another big tax increase Saturday to appease the European Union and the International Monetary Fund. The latest measures will raise the corporate income tax to 26% from 20% and push the top individual rate to 42% from 40%.
Nearly three years after Athens was first bailed out, it remains dependent on the EU and IMF to fund its budget deficits and roll over existing debt. That debt, by the way, has gone to 170% of gross domestic product from about 120% when the EU first intervened. Nearly all of the debt is owed to Greece’s European neighbors and the IMF.

Understandably, those creditors expect and want to be paid back. They have repeatedly eased the repayment terms and lowered the interest rates on those loans. But their insistence on ever-higher taxes won’t improve their odds of seeing their money again. The Greek economy has been shrinking for five years straight, and Athens started out with a huge budget deficit and bloated government when the crisis first erupted.

One of the measures passed Saturday is a requirement that nearly every Greek citizen fill out a tax return, in a bid to cut down on tax evasion. But those who feel no compunction about not filing a return today are unlikely to shrink from filing a false or incomplete return under even higher tax rates. Athens says it expects the new taxes to raise €2.3 billion euros this year. Here’s betting that these latest measures, like Greece’s earlier rounds of tax hikes, come up short.
Meantime, Greece’s neighbors seem to understand the benefits of lower rates. Bulgaria has a 10% corporate income tax and a 10% personal-income tax, and it expects 1.5% growth this year—not thriving, but not in free-fall, either. Turkey’s standard corporate income-tax rate is 20%. Growth there is expected to come in at around 4% this year.
We keep hearing that Greece needs to make its economy more competitive, which is true. But it won’t do that by making its tax code more punitive. Greece needs to break out of the EU-IMF austerity trap, and one way to do that would be with a flat-tax reform. Its current road will only lead to more hardship.

http://online.wsj.com/article/SB10001424127887324235104578239563893526152.html

source:http://justiceforgreece.wordpress.com