http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_05/03/2013_485923
( Greece getting ready to start Operation Witch Hunt ! )
Search is on for sackable civil servants
Gov’t monitors public administration to find up to 8,000 employees who have broken the code of conduct 
The government is in the process of identifying civil servants who have violated the code of conduct, who used false documents to obtain their position or who have been absent without leave in a bid to respond to demands for layoffs by the country’s international creditors. The ministries of Finance and Administrative Reform expect that the monitoring will help to select between 7,000 and 8,000 public sector workers who will leave the civil service by the end of 2014, with the completion of all legal procedures. This will be the main issue at Finance Minister Yannis Stournaras’s meeting on Wednesday with the troika – as the representatives of European Commission, the European Central Bank and the International Monetary Fund are collectively known – which is pressing Athens for immediate progress on the subject. The program of departures from the public sector is the most important prior action required for the disbursement of the March tranche of the bailout package, worth 2.8 billion euros. After yesterday’s ECOFIN meeting of European Union finance and economy ministers, reporters reminded Stournaras that he had expressed certainty about a month ago regarding the approval of the February installment. The Greek minister responded that “this time it is not up to me.” Meanwhile the new regulation for the settlement of expired debts to the tax authorities is almost ready after the troika gave its approval to the Finance Ministry, realizing that debtors are unable to repay their obligations as things stand. Ministry officials have told Kathimerini that the regulation for expired debts is at an advanced stage, including a clause for the writing off of debts that cannot be collected (amounting to some 80 percent of the 55-billion-euro total), but on the issue of public sector layoffs, there is still a long way to go before Athens and its creditors reach any sort of agreement. The troika will also hold a meeting with Development Minister Costis Hatzidakis on Wednesday so he can provide them with a clear picture of the course of the streamlining program ahead of their key meeting on Thursday with Prime Minister Antonis Samaras. |
and....
http://globaleconomicanalysis.blogspot.com/2013/03/eu-calls-on-spain-to-hike-taxes-again.html
Tuesday, March 05, 2013 11:59 AM
EU Calls on Spain to Hike Taxes Again, Economic Stupidity at its Finest
The sheer stupidity out of nannycrats in Brussels is staggering. Smack in the midst of a depression, Brussels once again calls on Spain to hike taxes. Via Google translate from El Economista ...
The European Commission today called on Spain to restrict the application of the reduced VAT rate and raise fuel taxes to reduce the deficit, and continue reforms in the labor and pensions, delaying the effective retirement age. These requests collide with the ideas defended by the Spanish Government no further adjustment and lower taxes in 2014.Economic Stupidity at its Finest
Brussels also calls on the Government to implement a stricter budgetary stability law to the autonomous regions in breach of their deficit targets and accelerate the implementation of budgetary control office.
Brussels admits that the increase in VAT which applies since last September (from 18% to 21% and the basic rate from 8% to 10% reduced rate) is a "progress" to improve the effectiveness of the Spanish tax system. "However, there is scope to limit the application of different VAT rates low and to increase environmental taxes, especially fuels," says the report.
For those not familiar with the VAT system in Europe, there are varying tax rates on numerous categories of products and services.
The lowest VAT rate in Spain went from 8% to 10% and Brussels wants Spain to limit the number of items that get the lowest rate. Brussels calls the hike in the minimum VAT to 10% and the top VAT to 21% "progress".
Tax hikes in the middle of a depression is "economic stupidity", not progress.
Monitoring Spain's Deficit
Not counting bank bailouts, El Economista reports Spain ended 2012 with a deficit at 6.74%.
The Minister of Finance and Public Administration, Cristobal Montoro, today confirmed that the total government deficit ended the year 2012 on the 6.74% of gross domestic product (GDP), as reported yesterday the Prime Minister Mariano Rajoy. Also reported that the deficit of the regions was 1.73%, two-tenths above the target.Battle Over Adjustments
The government closed last year with a deficit of 70.822 million euros, equivalent to 6.74% of GDP, .44 percentage points above the target agreed with Brussels (6.3%). The deficit rises to 9.99% when taking into account the banking aid, which added 3.25 percentage points. This figure is higher than that recorded in 2011, from 9.44% of GDP.
The hole in the budget of the regions was 1.73%, when the target was 1.5%, while the local government hole was 0.2%, better than the 0.3% that had been planned.
No More Adjustments
The finance minister has said he will not take further tightening measures in 2013 because it is not necessary. "There will be no need for further action," said Montoro.
The two biggest problems in Spain are government spending and lack of labor reforms, so the solution cannot possibly be higher taxes. Yet, higher taxes is exactly what Brussels demands, smack in the midst of an economic depression, and smack in the face of a "no more adjustments" statement from Spain's finance minister.
Those tax hikes are guaranteed to be counterproductive. One can also expect still more bank bailouts. Thus, a rational-thinking person expects another huge budget deficit miss by Spain in 2013 and beyond.
For more on the hopelessness in Spain (and the eurozone in aggregate), please see
- Michael Pettis on Misguided European Optimism
- Car Sales Plunge 10% in Germany, 12% in France, 17% in Italy; US Plunge Coming Up
The unfortunate thing in this mess is having to listen to Keynesian clowns shout "I told you so" regarding "austerity" when not a single Austrian economist anywhere would be supportive of these tax hikes (and it is tax hikes and lack of labor reforms, not "austerity" that is wrecking Europe).
Mike "Mish" Shedlock
and.....
http://globaleconomicanalysis.blogspot.com/2013/03/grillonomics-beppe-grillo-exchanges.html
( Grillonomics - it's just not for dinner anymore ! )
Tuesday, March 05, 2013 2:19 PM
"Grillonomics" Beppe Grillo Exchanges Emails with Krugman, Calls on Stiglitz and Fitoussi to Create Five-Star Economic Plan
Beppe Grillo's anti-corruption, eurosceptic, Five Star Movement (M5S) is now the largest political party in Italy.
Enter "Grillonomics"
Via Google translate from French, Les Echos reports Fitoussi and Stiglitz are working on the economic program of Beppe Grillo.
Enter "Grillonomics"
Via Google translate from French, Les Echos reports Fitoussi and Stiglitz are working on the economic program of Beppe Grillo.
All eyes are beginning to converge on the "economic program" Beppe Grillo, still limited to a page and a half on the site M5S.
With Italian economist Mauro Gallegati acting as coordinator, Nobel Prize winning economist Joseph Stiglitz and French economist Jean-Paul Fitoussi were called on to help formulate the economic doctrine M5S.
"To move from protest to proposal, the first step is to get studying. In this context, I am trying to organize a task force of academics begin to teach the newly elected" said economist Mauro Gallegati, an economics professor at the University of Ancona.
"Bruce Greenwald of Columbia University in New York and Jean-Paul Fitoussi will give me a hand," says Gallegati who rejects the label of "Beppe Grillo's Economic Guru." The real "sponsor" of M5S's economic program, based on the decay and the development of clean energy, is mainly Nobel Laureate Joseph Stiglitz (Columbia University), with Bruce Greenwald as one of the closest staff.That is a substantially Mish-modified translation from French. I am not sure what "cascades of holding for listed companies" means.
Paul Krugman has also maintained a dialogue with Beppe Grillo for several years.
Globalization, Guaranteed Income, Debt Reductions
"Globalization as has been managed seems a pact with the devil. We can ensure that globalization works, not only for the rich and powerful, but for everyone" said a message posted on the M5S blog with a link to a Stiglitz video "Make Globalization Work".
Grillo supports a concept of a guaranteed "citizenship income" for all, whose cost is estimated at between 20 and 30 billion euros.
M5S advocates "reducing the debt through strong interventions on the cost of the State with the fight against waste and the use of new technologies to make the citizen access to information and services without the need for intermediaries." It also provides for the abolition of stock options and cascades of holding for listed companies.
It will be interesting to see what this collection of economists comes up with, because Grillo is eurosceptic and I doubt those whose advice Grillo seeks are in the same camp.
One thing is for sure: austerity is likely to head out the window, and that will cause fits in Brussels and Germany.
Mike "Mish" Shedlock
and...
http://www.nakedcapitalism.com/2013/03/is-the-eurozone-nearing-a-make-or-break-point.html
TUESDAY, MARCH 5, 2013
and.....
http://www.ansamed.info/ansamed/en/news/sections/generalnews/2013/03/05/Greece-Athens-News-closes-down-61-years_8348599.html
Greece: Athens News closes down after 61 years
Capital's only English-language newspaper
(ANSAmed) - ATHENS - Athens News has become the latest victim of the economic crisis in an already battered Greek media industry, closing its doors after 61 years in business. The English language newspaper, which launched in 1952, was the only one of its kind in Athens. Its online site has been inactive for months. Online news site Zougla reported news of the closure as well as the announcement that 15 workers who hadn't received their salary since September last year, have been laid off.(ANSAmed).
http://www.ansamed.info/ansamed/en/news/sections/politics/2013/03/05/Grillo-says-MPS-won-back-technocrats_8347946.html
Grillo says MPS won't back technocrats
Monti admin was 'most political in post-war period'
(ANSAmed) - ROME, MARCH 5 - Beppe Grillo on Tuesday ruled out the prospect of his 5-Star Movement (M5S) supporting a technocrat government to overcome the impasse after Italy's election failed to produce a winner.
"The M5S will not vote confidence in a technocrat government, I never said it would," the former comedian wrote on his blog.
Grillo also criticised the record of outgoing Premier Mario Monti's technocrat government which, among other things, changed Italy's labour laws to make it easier for firms to fire workers.
"The Monti government has been the most political of the post-war period," he said. "Before no one had ever questioned Article 18 (of the 1970 worker statute) that defends workers".
"The M5S will not vote confidence in a technocrat government, I never said it would," the former comedian wrote on his blog.
Grillo also criticised the record of outgoing Premier Mario Monti's technocrat government which, among other things, changed Italy's labour laws to make it easier for firms to fire workers.
"The Monti government has been the most political of the post-war period," he said. "Before no one had ever questioned Article 18 (of the 1970 worker statute) that defends workers".
and.....
"Better Than Expected" European Data Sends Implied Dow Jones Open To All Time High
Submitted by Tyler Durden on 03/05/2013 - 06:19
If Friday and yesterday it was Europe's reporting of ugly and below expectation economic data that pushed US stock futures ultimately higher, today it will be Europe's modest economic data beats that will send futures, where else, higher, and result in the Dow Jones breaking its nominal all time highs at the open or shortly thereafter. Following the Chinese economic update in its State of the Union address, which as we reported earlier, saw China set more moderate growth targets for itself resulting in the SHCOMP nearly wiping out Monday's losses, it was Europe's turn to shine which it did following the report of various Service PMI, which unlike last week's horrible manufacturing PMI data, were better than expected with the natural exception of Spain which printed at 44.7, well below the January 47.0, the first drop since September driven by the sharpest job losses since March of 2009, and Italy which dropped from 43.9 to 43.6, same as expected. The core countries' Services PMI beat: France coming at 43.7, on expectation of an unchanged print from last month's 42.7, and Germany printing at 54.7 vs also an expectation of an unchanged 54.1. Not very surprisingly, however, it was not the EURUSD which benefited the most from this data, which has lost nearly 50 pips from its overnight highs following the better economic news, but the various equity futures which have one centrally-planned goal: to take out all time DJIA highs or else, and unless something changes in the next three hours, precisely this will happen.
and....
China's "State Of The Union" Address Warns Of Tepid Growth, Sees Larger Deficit, Hawkish On Housing
Submitted by Tyler Durden on 03/05/2013 - 04:14
The most notable overnight event was the release of the Chinese Government Work Report as part of the annual meeting of the National People's Congress which kicked off today and runs until March 17. This is the Chinese equivalent of the US State of the Union address, delivered in this case by the outgoing premier Wen Jiabao. In it, Wen summarized his administration’s achievement in the past ten years in some detail, but still voiced a sense of crisis when talking about existing social and economic problems. The key highlights were the closely watched economic targets for 2013, which while not surprising, were at the lowest levels in the past decade, confirming that the Chinese slowdown in both economic and loan growth is likely here to stay as the economy downshifts from its mercantilist approach, even while pesky inflation pressures persist.
and....
http://www.guardian.co.uk/business/2013/mar/05/eurozone-crisis-osborne-eu-bank-bonus-cap
( UK's Osborne really fought hard to preserve banker pay - priority made clear so know we know who butters the bread.. )
Ian Traynor: Osborne wins limited support
From Brussels, our Europe editor Ian Traynor has very rapidly filed this report of the events at Ecofin:
George Osborne told EU finance ministers on Tuesday that he could not support proposals to limit bankers’ bonuses to a year’s salary.Osborne won limited support for “technical” tweaks to the draft legislation, although it appeared unlikely that Britain would make big gains in seeking to reverse the key points.Osborne argued that Britain already had the toughest regime in the world on bankers’ remuneration and that the proposals to cap bonuses could “have a perverse effect”.The caps could “undermine” the aim of reining in unmerited bonuses, would result in bankers’ salaries rising steeply and would make it harder to claw back bonuses not commensurate with performance.Wolfgang Schäuble, the powerful German finance minister, threw Britain a slender lifeline, saying he wanted to avoid the contentious issue being put to a vote. In the interests of securing a consensus, he called for the further elaboration of “technical points” on how the bonus curbs should be implemented.
There was also disagreement on when the new regime should become effective. The proposal calls for the caps to be introduced at the beginning of next year, but some ministers called for a delay.“I can’t support the proposal on the table,” said Osborne, who is hoping to shift the caps issue towards greater emphasis on discounted and deferred five-year bonuses based on longer-term performance and less cash-oriented than share options.The meeting began with Michel Barnier, the EU commissioner for the single market, argued robustly for the caps.“Remuneration is a sensitive issue, sensitive for our citizens, for our taxpayers,” Barnier, said. “We want to discourage risk-taking.”Some bankers, he added, indulged in risky business because they were paid to.“Enough is enough. We’ve got to put a stop to that.”Chairing the meeting, Michael Noonan, the Irish finance minister, closed the discussion saying there was a “broad majority” behind the proposals. But that there would be further discussion “on some technical points” on how to implement the bonus caps and on the timing issue.Any changes would need to be agreed with the European Parliament which forced the issue of curbs on bankers’ bonuses.
Eurozone service sector keeps shrinking
The EU finance leaders meeting in Brussels now have been reminded that the eurozone economy is in a bad way – new economic surveys have shown that its service sector is contracting at a faster pace.
France's service sector shrank sharply again in February, according to today's PMI*, which showed the second largest contraction since March 2009 (it was recorded at 43.7, up from January's 43.6).
And Italy's service sector declined at a faster pace, with a PMI of 43.6 down from 43.9 in January.
Germany's service sector is growing steadily, with a PMI of 54.7 (down from January's rollicking 55.7, though).
But the overall eurozone service sector PMI still showed another conrtraction, at 47.9, down from 48.6 in January.
* Purchasing Manager's Index – which polls hundreds of business people in a particular country to see how their firm is performing. Any number below 50 equals a contraction, while 50+ means the sector grew.
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