In both cases, the general government budget deficit looks much better when adjusted to take into account the state of the economy. The so-called structural or cyclically adjusted budget deficit of Italy is projected at 0.1 percent of potential GDP in 2013 from 1.3 percent last year by the European Commission.
In contrast, the Italian unadjusted budget deficit is bigger, and estimated at 2 percent of GDP in 2013 from 2.8 percent last year. The difference is explained by the inferior performance of actual GDP compared to potential GDP, that is, the level of output that could be achieved with all the cylinders of the economy working at full capacity.
The difference between actual GDP and potential GDP is much bigger in the case of Greece due to the protracted recession, and this is reflected in the fiscal figures. The reported budget deficit is seen falling to about 4.5 percent of GDP in 2013 from 6.6 percent in 2012.
However, when adjusted to take into account the business cycle, Greece’s structural or cyclically adjusted budget points toward a surplus of 1.8 percent of potential GDP in 2013 from a deficit of just 0.8 percent last year. The surpluses become even bigger when one adjusts the primary budget balance for the state of the economy.
Consequently, we may conclude that the country’s large budget deficits are due to the poor state of the economy, which in turn is mainly due to an overdose in fiscal austerity and secondarily to other factors, i.e. loss of confidence etc.
It is indeed ironic that the definition of the balanced budget in the Fiscal Compact – which came into force on January 1, 2013 for a number of EU member-states, having completed ratification by then – takes into account both the general budget balance and the structural budget balance. Specifically, the treaty defines a balanced budget as an overall budget deficit of less than 3 percent of GDP and a structural deficit of less than 0.5 percent of GDP for the member-states whose public debt-to-GDP ratio is above 60 percent.
On the other hand, the structural budget balance is not a target variable in the bailout programs, like the general and the primary budget balances, even though it features in the Fiscal Compact.
This makes a big difference because the dose of austerity could have been smaller, perhaps much smaller, if the cyclically adjusted budget balance had been a target in the economic adjustment programs. A smaller dose could have perhaps helped break the vicious cycle of excessive austerity deepening the recession and leading to missed fiscal targets, necessitating more restrictive measures.
Of course, Italy and Spain are implementing their own economic programs and this is not an issue of immediate concern for them, unlike for Greece and Portugal. However, convincing the European Union authorities, and more specifically the German government, to include the structural budget balance as a target variable in bailout programs along the lines of the Fiscal Compact could have been to the benefit of everyone concerned.
Ireland - keeps getting shafted....
It has endured a fiscal squeeze of 16pc of GDP. It has stabilized the colossal debts left from taking on the gambling losses of Anglo Irish Bank at EU behest, that is to say from shielding German, British, Dutch and Belgian lenders from systemic contagion at a critical moment.
It has clawed its way back to market credibility, issuing bonds at respectable rates. “Our last issue of routine 3-month treasury bills was at 0.26pc, not quite what Germany gets but very low,” said finance minister Michael Noonan.
It was spared serious contagion from last week’s anti-austerity revolt in Italy, evidence of sorts that the Celtic Tiger is off the sick list. Deo volente, it will be the first of the EMU victim states to regain its sovereignty by early next year and escape control of the EU-IMF Troika, though it will answer to inspectors for another 20 years and the yet unborn will be paying off the €67bn of Troika indenture until 2042.
“If measured in terms of what the Troika expects, we have been very successful,” said Mr Noonan.
Other measures are less cheerful. The EU’s latest survey on “poverty and social exclusion” shows that the number of children at risk in Ireland has reached 37.6pc, worse than Italy (32pc), Greece (31pc), Spain (30pc) or Portugal (29pc).
There is a fascinating twist to the data, a glimpse of what 1930s deflation can do to the social structure of an indebted society. Just 12.9pc of Ireland’s elderly are at risk of poverty, lower than in Germany, Austria, Belgium or Britain.
Budget-busting pensions granted in the good times have risen in real terms. So have savings. But young families that took out 100pc mortgages at the peak of the bubble face debt servitude after a 58pc fall in Dublin property prices, if they can keep their jobs. “What we need here in Ireland is a good dose of inflation,” confided one official.
European Commission chief Jose Manuel Barroso was in Dublin last week to celebrate Ireland’s heroic fortitude. Brussels needs a poster-child for its theory of “expansionary fiscal contraction” and discerns one in the Gaelic mists.
“The Irish economy is turning the corner. It shows that the bailout programmes can work”, he said, citing fresh figures that show a dead-cat bounce in jobs last Autumn before Europe crashed back into recession.
Whether or not Ireland’s economy is in fact turning the corner is a subject of hot debate, but what is crystal clear is that none of the Club Med countries trapped in depression can easily replicate the Celtic come-back.
Ireland will export as much as India this year, and more than Brazil, fruit of an industrial policy dating back to the early 1990s that has made the country a hub for global pharma, software, medical equipment, and financial services. It will rack up a very German current account surplus above 4pc of GDP.
Exports make up 106pc of GDP, compared to 35pc for Portugal, 30pc for Spain 30pc, 29pc for Italy, and 21pc for Greece. Ireland has a much higher trade gearing than Club Med peers, and that is what has kept the country afloat despite a 26pc collapse in domestic demand. Growth was 1.5pc in 2011 and 0.9pc in 2012, better than the EU average.
The export story is by now well-known. The global drug giants almost all have plants in Ireland, employing 44,000 people and producing half the country’s merchandise exports, though this may be losing its edge. The country is facing a “Patent Cliff” as a clutch of drugs - such as Pfizer’s statin pill Lipitor - come off patent in the US. It is the reason why Irish exports slipped 15pc in December.
Microsoft, Google, Facebook, Twitter, and a host of household names have regional headquarters in Dublin, whether drawn by a corporation tax of 12.5pc or by the critical mass of a high-tech skills. How much value is added to the Irish economy is an open question. Google rotates some 45pc of its global revenues through Ireland under transfer pricing schemes.
Even so, Ireland is clearly a different animal from the Greco-Latins. It never had a seriously misaligned currency within EMU. It had a misaligned monetary policy that set off a credit bubble. Real interests set in Frankfurt averaged minus 1pc from 1998 to 2007 (compared to plus 7pc in the early 1990s). As Irish eurosceptics foretold, the effects were ruinous.
The country has since deflated the froth. The gap in unit labour costs with the EMU-core has been closed again, at least on paper. “We have cut costs right through the economy with an internal devaluation of 15pc or 16pc,” said Mr Noonan.
One can quibble with the claims. Nearly all the gain in labour costs has been in the non-tradeable public sector - nurses, policemen, teachers - where wages have been slashed 14pc, with another 5.5pc to come. Productivity levels have been flattered by the annihilation of the building industry. “Private wages have declined only modestly,” says the IMF in its latest report.
Yet the point remains that Spain has not begun to see this level of deflationary shock. Were it to try with such a closed economy, it would tip into free-fall, push the jobless rate above 30pc, and cause the debt trajectory to spin out of control. As for Italy, its unit labour costs rose as fast as Germany’s last year. Its deflation lies ahead.
Club Med can take no comfort from Ireland’s success, but is even Ireland itself out of the woods? The budget deficit is still 8pc of GDP five years into the ordeal, and public debt is already nearing the limits of viability at 121pc of GDP this year.
Dublin has pencilled in a 3pc deficit by 2015, but dissidents say 6pc is more likely. The IMF warns that a “stagnation” scenario of 0.5pc growth a year into the middle of the decade would cause the debt ratio to spiral up to 146pc by 2021.
That is a serious risk as Europe persists in botching macro-economic policy, and US austerity threatens the fragile world expansion later this year.
As you can see from this chart, investment has collapsed to 10pc of GDP.
Source: CSO/National Treasury Management Agency
This is the lowest in recorded Irish history and the currently the lowest in the EU. “If this does not recover over the next couple of years, I’ll be worried”, said Rossa White from the National Treasury Management Agency.
Indeed, it is the crux of the matter. Spending has been slashed through the muscle and into the bone. This presumably is what Laszlo Andor, the EU employment commissioner, was talking about last week when he decried a slash-and-burn policy in the name of competitiveness that is tipping the crisis economies into a “downward spiral” and making it even harder to cut control debts. Are his colleagues in the Berlayment listening to him?
A mass exodus of 40,000 to 50,000 each year to the four corners of the Irish Diaspora have kept unemployment down to 14.1pc, but 60pc of those left on the rolls have been out of work for over year -- the highest rate in Europe -- and that is where the “hysteresis” effects of lasting damage bites hardest. It steals from growth from the future by degrading work skills.
Irish trade union chief David Begg was speaking with poetic licence last week when he accused the Troika of doing more damage to Ireland than the British Empire ever did in eight hundred years, snapping that the English had at least left some “beautiful Georgian buildings.” Needless to say, he has not forgotten the Wexford massacre and the potato famine, and nor have we at this newspaper. Yet he made his point.
“When we meet the Troika, we tell them that austerity is not working, and they tell us that it is. It is a dialogue of the deaf,” he said.
Mr Begg said he had come to realise that EMU is constructed in such a way that the “entire burden of cost adjustment” falls on workers if there is macro-shock. He is right. An internal devaluation is achieved by forcing unemployment to such excruciating levels that it breaks the back of labour resistance to pay cuts. It is the polar opposite of a currency devaluation that spreads the pain. Note that Iceland’s unemployment is just 5.4pc today, and Britain’s is 7.7pc.
“Such a callous disregard for distributional justice - which we have witnessed in this country over the last five years - is a fatal flaw,” he said.
“For much of its history, European integration has proceeded on the basis of a ‘Permissive Consensus’. European citizens thought it was a good thing, or at least did no harm. I doubt that view is still current. From what I hear in the circles in which I move, today’s labour movement is disaffected from the European project,” he said.
“What will happen when people eventually realise that they are trapped in a spiral of deflation and debt. We may reach the tipping point,” he said.
Europe’s labour movement is the dog that has not barked in this long crisis. Bark it will.
In Italy , the elites are playing with fire - after not liking the last Election results , would they dare install a second Technocratic and unelected Government ? Maybe is the answer.....
http://www.telegraph.co.uk/finance/financialcrisis/9906213/Anger-builds-in-Italy-as-old-guard-plots-fresh-technocrat-take-over.html
Anger builds in Italy as old guard plots fresh technocrat take-over
Italy’s president Giorgio Napolitano is exploring the creation of a second technocrat government to break the political log-jam and calm markets after key parties failed to reach an accord, risking a serious popular backlash.
Spain - the latest corruption and political intrigue as economic weakness continues - for years......
http://elpais.com/elpais/2013/03/03/inenglish/1362332253_539489.html
Mystery still surrounds the abortive inspection by police at PP headquarters
Interior opens inquiry to determine who ordered fingerprints to be dusted at party’s offices
Lawyer says that Bárcenas’ computers were not stolen, just put in another room for safekeeping
Police rushed to the Popular Party (PP) national headquarters on Friday afternoon after Luis Bárcenas filed a criminal complaint over stolen computers setting off considerable confusion throughout the day and raising the stakes even higher in a legal battle between the party’s embattled former treasurer and PP officials whom he worked for 30 years.
What was to be an inspection by a scientific police brigade to dust for fingerprints and take other evidence where the alleged robbery occurred was immediately canceled when Madrid’s police commissioner stepped in and stopped the investigation, sources said.
This perplexing situation unfolded over the course of several hours after Bárcenas filed a complaint against the PP’s chief counsel, Alberto Durán, for allegedly breaking into his office and stealing his laptops. It was the latest round in an ongoing public battle between the man who handled the party’s finances over the past two decades and top PP officials who are trying to distance themselves from balance sheets he purportedly kept that recorded bonuses paid out to the party hierarchy from a slush fund.
Bárcenas has filed a civil lawsuit against the PP for firing him from his post as political consultant without just cause on January 31, the day EL PAÍS published the handwritten ledgers. The PP, meanwhile, maintains that Bárcenas has not worked for the party since 2010, when he stepped down as party treasurer after being officially targeted as a probable defendant in the massive Gürtel kickbacks-for-contracts inquiry involving certain local PP governments and a network of corrupt businessmen.
Since then, Bárcenas made more headlines when it was discovered that he had 22 million euros – 38 million according to his acknowledgement before the High Court – in Swiss bank accounts. A judge has confiscated his passport and ordered him to report every 15 days as the investigation continues.
But Friday’s incident has only widened the rift between the disgruntled former treasurer and his one-time employer. About 1pm, Bárcenas walked into the police station in the Salamanca district, which he lives, to file a complaint against Durán for breaking the lock to his office at party headquarters on Génova street on February 18 and taking his personal computers so that they could be evaluated by technicians. What subsequently occurred afterwards is still unclear. According to sources, the Salamanca commander contacted his counterpart at the Chamberí district, where the PP headquarters are located, so that they could hand a Durán a citation so that he could come to Salamanca and give a statement, according to different police and PP sources.
Durán came downstairs and spoke to the officers in a small room where vending machines are located
About 30 minutes after Bárcenas lodged his complaint, the Chamberí station contacted the scientific police brigade to go PP headquarters to conduct an on-site inspection, including dusting for fingerprints and collecting any DNA evidence to determine who was responsible for the break-in, police sources said.
After they arrived, three officers from that brigade were told by the party’s security team that they would have to wait until PP officials were notified to see if they could proceed with the investigation. While they were waiting, an officer from the Chamberí station arrived with the subpoena for Durán. According to party sources, he was allowed to go up to the sixth floor where the party officials have their offices while the brigade team waited at the entrance of the PP headquarters.
Sometime later, Durán came downstairs and was invited to speak with the three waiting officers in a small room where vending machines are located. The brigade officers explained to him why they were there: to take fingerprints from Bárcenas’ office. But Durán told them that the former treasurer didn’t have an office, except for a space in the Andalusia conference room that he had been using. He then explained that he had sent Bárcenas several emails advising him to come and pick up his personal effects or otherwise they were going to be put in another room for safekeeping, but he never answered Durán.
The lawyer said that he was willing to go down to the Salamanca district station to give a statement.
Meanwhile, according to police sources, the Madrid provincial police commissioner ordered the technical police not to conduct the inspection because it wasn’t necessary.
It is not clear who ordered the scientific brigade to go to the PP in the first place. The Interior Ministry has opened an internal inquiry into the matter.
http://economia.elpais.com/economia/2013/03/02/actualidad/1362258698_087711.html
Assault on Banco de Valencia
The bailout fund accuses two former and the former CEO of offenses that caused a damage of 630 million to the state.
Almost all real estate transactions were
The Banco de Valencia, which the Minister of Economy, Luis de Guindos, recently described as the sum of "all things badly," suffered one of the biggest assaults of which has been a Spanish financial institution. Suffered property damage is around 630 million euros, according to the eight complaints filed so far in the High Court by the Fund for Orderly Bank Restructuring (FROB), which has managed the company since it was taken over in late 2011. The authors were the bank's own executives-including its president José Luis Olivas and its former CEO Parra-Sunday, several major developers Valencian, Spanish and a renowned entrepreneur, as president of Metrovacesa Joaquín Rivero as the FROB, who has reported a total of 29 people.
The Banco de Valencia, which the Minister of Economy, Luis de Guindos, recently described as the sum of "all things badly," suffered one of the biggest assaults of which has been a Spanish financial institution. Suffered property damage is around 630 million euros, according to the eight complaints filed so far in the High Court by the Fund for Orderly Bank Restructuring (FROB), which has managed the company since it was taken over in late 2011. The authors were the bank's own executives-including its president José Luis Olivas and its former CEO Parra-Sunday, several major developers Valencian, Spanish and a renowned entrepreneur, as president of Metrovacesa Joaquín Rivero as the FROB, who has reported a total of 29 people.
Eight complaints of FROB: 29 recipients
- Operation Metrovacesa.involved in this operation Joaquín Rivero, president of Metrovacesa. Rafael Ruiz-Jarabo, businessman. Sunday Parra, former CEO of Banco de Valencia.
- The Reva. states The state fund several construction related businesses: Salvador Vila, promoter. Juan Bautista Soler, promoter. Carlos Pascual, notary. Fernando Polanco, businessman. Teresa Villalba. Monferrer Alfonso, former director of the bank's real estate holdings. It is also linked Domingo Parra.
- Investment in Alicante and Murcia . This operation includes: José Luis Olivas, president of Bancaja, Banco Valencia and Valencia. José Cortina, former CEO of Bancaja Habitat. Aurelio Izquierdo, former Director General of Bancaja Habitat and president of Banco Valencia. Ramon Salvador Agueda, promoter, Parra and Monferrer.
- Homes in El Puig. Vicente Fons, businessman. Maria Victoria Soler, exvicepresidenta Metrovacesa.Izquierdo, Monferrer and Parra.
- Land south of Valencia .Sunday Parra, his wife, Maria Jose Aznar, and his son José Parra. Andrew Dimas, businessman. Francisco Andres, businessman.Salvador Pons, businessman.Isabel Pons.
- Business in Móstoles. Tito José San Román Pajares, businessman. San Román José Antonio Rosado, businessman. Parra.
- Palma de Mallorca. Cursach Society (Bartolomé Cursach, entrepreneur), Parra and Monferrer.
- Aguas de Valencia. Calabuig Eugenio, president of Aguas de Valencia. Enrique Calabuig.Celia Calabuig. Pedro Calabuig. Maria Mercedes Calabuig. Parra and his wife.
The rescue fund state designated as primarily responsible to Sunday Parra, contained in the eight complaints and you're accused of fraud, misappropriation and unfair administration. The FROB accused of ruinous decisions for the bank, very lucrative for entrepreneurs involved and which took on hand. Only the first of the lawsuits, filed last summer, in which he accompanied several members of the family and its background Calabuig control of Aguas de Valencia, the bailout fund that Parra remains pocketed more than 14 million euros in complex corporate transactions designed to clear the money trail.
The bill alleged criminal and irresponsible management of Parra, Olivas, who also chaired the Generalitat Valenciana and Bancaja-president Aurelio Izquierdo-bank-and-responsible Monferrer Alfonso estate holdings in the entity, even though the background directed by Enrique Carrascosa state has laid off more than 60% of the workforce, employers still have taken the one hand, the shareholders, who on Friday saw the titles lost 90% of its value until it is reduced to a penny. And secondly, the taxpayers: the entity has required 5,500 million in state aid that will not recover. Your buyer Caixabank, who paid a euro for the entity, will also include an asset protection scheme, the cost will rise another 500 million.The sum amounted to 6,000 million.
One of the objectives expressed by the FROB to announce the complaints was not in vain, trying to recover as much as possible of the money injected.
Most of the complaints are related to loans granted by the bank for real estate projects frustrated, which were canceled in exchange for participation in companies and assets, especially land-entity paid the price of gold, although in several cases the bursting of the housing bubble was a fact.
That would be, as the FROB, the case of transactions agreed with the promoter Ramon Salvador, owner of abundant land in Alicante and Murcia and charged in the case Brugal Part investigating the rigging of the general plan of the city of Alicante. In the operation known as La Reva, on more than nine million square meters of land in Riba-roja de Turia (Valencia), with employers Juan Bautista Soler, Salvador Vila and others. Project to build 6,500 homes in El Puig (Valencia), with Maria Victoria Soler, Juan Bautista and sister exvicepresidenta Metrovacesa. And the orange groves planned on the families of Andrew and Pons in Oliva (Valencia).
Complaints also reveal an allegedly criminal involvement of former CEO shareholding in the battle that was fought around Metrovacesa and its subsidiary Gecina, the largest French property, with Rivero and Rafael Ruiz-Jarabo. And credited Parra's appetite exceeded the Valencia region, as shown by the complaint that includes the employer Tito José San Román Pajares, Móstoles by an operation, and it is directed against a society of Cursach Bartholomew, president of RCD Mallorca.
http://economia.elpais.com/economia/2013/03/02/actualidad/1362257899_219022.html
"Spain will have 10 years of crisis and a 30% internal devaluation"
The president of the prestigious German economic institute advises Rajoy to follow the German model
It should not be easy to be Angela Merkel. German Chancellor takes years dictating European economic policy and faces, by the left flank, a large group of the brightest economists Stiglitz, Krugman, Blanchard and many others, who believe that neoliberal ideas are embedded in basic infrastructure Berlin and Europe, and they warn that austerity will not generate neither growth nor the trust we promised Berlin and Brussels.Just on the other side, there is a second group accuses Merkel of wimp.They argue that Berlin should oppose frontally European policies, from bailouts to the extraordinary measures the ECB, because they are a kind of placebo therapy wrong will not get more than delay the necessary adjustment and very painful to come. Hans-Werner Sinn, president of the influential German Ifo think tank, is perhaps the best example of that faction claiming to Merkel who opposes almost everything, holding that the wave of austerity has only just begun.
Controversial, opinionated, with a reputation for rigorous and with that peculiar air give Captain Ahab beard and ideological grounds that it becomes a kind of Moby Dick in the economy, Sinn is the closest thing to a pop star among German economists. His books-with titles hopeful: Can save Germany? - Are selling like hotcakes. His talks fill auditoriums.His views are a formidable traction, even in the chancery, who faces when considering yielding too much to Europe. Agitator and propagandist himself, at the start of the crisis set off any alarms with an apocalyptic prophecy: "Years from now, our children will be forced to go to the South of Europe to get our money back." Now, proclaims that the South has to undertake a sensational internal devaluation, and that there are no excuses: that or the end of the euro. Come from Munich, Sinn receives this newspaper at the headquarters of the Centre for European Policy Studies (CEPS) in Brussels. Hits hard. But interestingly some of their recipes match those of his antagonists most lefties and Keynesians. Things of that lasagna complexities which has become the European economy.
Question . Considers that the South has just begun the path settings.What then served three years of austerity?
"Less austerity now will mean more pain in the future"
Response . The tango effect that caused the euro for years now requires a strong rebalancing. There are no easy solutions: going to be painful. There are three alternatives.A: internal devaluation in the South. Two: internal devaluation in the South through the North expansion. And three out of the euro in some countries. Most likely a combination of these options. Spain, Portugal and Greece need an internal devaluation of 30%, France 20%, Italy, a price cut of 10%. While Germany be 20% more expensive. It is true that since the start of the crisis there were adjustments in the periphery, but generally poor.
"Greece is desperate, can not succeed with the euro"
P . What awaits Spain?
"Rajoy should back down wages but not win the election"
A. The advantage of Spain is its potential to recover competitiveness.Has shown flexibility, and that makes it possible to improve through exports.The disadvantage is its foreign debt of more than a billion euros. But most important is competitiveness, and there I am moderately optimistic. As well, I have no doubt that they expected a decade, even more austerity to reach that 30% internal devaluation.
"The only possibility is to move the German model across the EU"
P. The End of the tunnel ... 2023?
R . Yes, something like that, because the first measures just adopted. When Germany was in crisis, back in 1995, it began to raise its head until 2002, seven years later. Spain needs a period corresponding to that society and politicians understand the gravity of the crisis, to create the enabling environment for reform. That is coming. From there you have to wait another decade for efforts to succeed.
Q. Would Germany should not change policy to smooth the passage of the desert?
R . Germany can expand, other surplus countries can do the same. It is preferable that the German savings do not go to other countries, but believes a bubble in house. Market forces will favor this movement, although Germany is not easy. There is already an incipient construction boom, and prices and wages go up along with the economy. The export competitiveness will drop gradually.
Q. Is it that easy?
A. Maybe not. Germany will not expand as fast as did the South when we needed: the Germans have a paranoid relationship with inflation. But there are things that can help: a fiscal devaluation in the periphery (reducing social security contributions and raise VAT) facilitate things. In addition, there must be significant in the South take away: some countries can not meet their debts, and that's better than the bailouts.
Q. What mutualise debt?
R. is the right recipe to resurrect conflicts. It shows the history of the U.S..
P. The IMF, which is not exactly heterodox defends mutualisation. And keeps excess European austerity is counterproductive.
R . In the euro zone austerity is inevitable. It is an extremely difficult process, but there is no alternative. Some would want fewer adjustments. I understand. But less would mean less suffering austerity now in exchange for more pain in the future and increase the risk of rupture of the euro. There should be no illusions about the pain that comes. It will be tough. The internal devaluations can be cruel. But if a country thinks it will be too much, you can leave the euro.
P . This is the case of Greece, according to his thesis. What about Spain?
R . I do not think that Spain has to leave. Greece itself: is in a desperate situation, can not thrive in the euro. The current European demands sacrifice a generation to mass unemployment. Portugal is in a similar situation.
Q. What role does the ECB?
R . The ECB has used a compelling logic to not allow the collapse. But printing money underestimating the risks is not a long term solution. It has eased the pain, but it only postponed the necessary adjustments.The ECB, the Commission and the IMF misdiagnosed the crisis as if it were a purely fiscal and financial, without falling into the loss of competitiveness of the South. So we come to tinkering rather than real solutions. There are serious risks of destabilization to continue with the policy of bailouts.
Q. In Spain there is the feeling that the German Government crisis deepens with malicious statements and decisions ...
R . Depends ... The crisis was caused by excessive capital flows from Germany to the south, it overheated economies of the periphery and became dependent on foreign credit. Markets have understood that mistake, they are correcting. But you can not wash your face without getting wet.
Q. Any advice for Rajoy?
R. Rajoy must pass another more flexible labor reform wages downward. That made Schröder in 2003. Eliminated the minimum wage and the welfare state rolled depriving millions of people of their social benefits: it caused riots and protests. It took the position. However, it was the right policy. Rajoy may not get with that rule a long time, but that's what Spain needs.
P. Advises germanizar Spain: move the German model throughout Europe.
R . That is the only possibility.
http://www.telegraph.co.uk/news/worldnews/europe/france/9904848/Let-them-eat-horse-say-French-officials.html
( Taking a page from Queen Marie I see... And we know how that worked out ! )
http://www.telegraph.co.uk/news/worldnews/europe/france/9904848/Let-them-eat-horse-say-French-officials.html
Officials insist that as there is no health risk from the dishes and that their were withdrawn because of mislabelling they can be donated.
Stéphane Le Foll, France's agriculture minister said, however, it was for charities to decide if they wanted the controversial meals.
"From its side the government can only say that as far as health is concerned, it's fine. It's not for me to decide what should be done with it," Le Foll said.
His junior minister Benoît Hamon added: "It's up to the associations to decide under what conditions they may wish to take these dishes. Those who don't want them won't take them."
One of France's leading charities, Secours Catholique said the question of giving the withdrawn meals to the poor posed a "serious ethical problem" and it would refuse.
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Submitted by Tyler Durden on 03/03/2013 15:48 -0500
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