That’s what Reuters says. Which just goes to show you how utterly pointless confidence indicators are when you use a sample of incurably optimistic clowns who caused most of the trouble in the first place. We can ‘put Cyprus behind us’, say there hasn’t been a suicide in Athens for 36 hours, or rejoice at the coming of the Carneyvore to the Bank of England: confidence in the EU is beyond false: it is pure fantasy.
Now that Cyprus has been tucked away onto page 13 by the subeds, we would all do well to keep track of how all the neighbouring carnivores are being rewarded for their cooperation with the Brussels-am-Berlin heist. Last Thursday, The UN Secretary General’s Special Adviser Alexander Downer hosted a dinner between President of Cyprus Nikos Anastasiades and the Turkish Cypriot leader Dervis Eroglu. Mr Downer was at pains to point out that the dinner did not “constitute an intention on behalf of the United Nations to resume the direct talks between the two sides on the Cyprus problem.” They were obviously just there for the beer.
Greeks, of course, see only one problem on the island: the illegal northern part invaded unlawfully by Turkey a long time ago. They would like the Turks to bugger off, and it isn’t an unreasonable request: they do, after all, have no right (in a sovereign sense) to be there at all. However, although the meal was most emphatically not a precursor to new negotiations, it was a bit of a Downer when UN-Man said “…a careful preparation must be done before negotiations can resume….The main thing is to get the preparatory work done and done properly, the two sides obviously have to do that.” Er, not if they have no intention of resuming direct talks they don’t.
You can see this as nothing at all – three chums and their wives having dinner – or not. I’m in the ‘not’ camp. But if you think dinners about no talks to prepare for not having talks is a tad surreal, try this new advice to investment clients from Citibank:
‘Although we still see risks of Greece leaving the euro in the next few years, we have removed “Grexit” from our central scenario in 2014. The governing coalition looks somewhat less fragile than we previously thought and, with key legislative actions for 2013 behind us, we do not see major triggers for the coalition to break down in the near term. Despite a significant drop in living standards, social unrest that could destabilise the government remains contained so far, although risks of an abrupt eruption remain.
Yet, the Greek public debt is still on an unsustainable path in our view, likely to approach 180% of GDP by end-2013, and the economy remains in recession. But the recent slightly better compliance with the fiscal targets and, in general, a better cooperative stance by the Greek government towards international lenders should make the lenders more open to some additional debt relief – in the form of OSI – later this year or in 2014.’
It reads a bit like advice to folks living on the slopes of Vesuvius, except that the impression of dormancy is slightly marred by the tell-tale trickle of molten lava coursing through Mrs Cicero’s kitchen. There’s no economy to speak of, no young people in a job, no social unrest tonight at 3 am, no way the debt can be paid back, no chance of the projected tax intake being reached and – best of all – no major triggers are apparent. It’s all about taking the triggers out of the guns in the end. Guns with no triggers don’t work. Somehow, I get the feeling that Citi didn’t take this graph fully into account:
As you can see, all the Clubmeds have rocket trajectories of youth unemployment suggesting they’re set fair to leave the stratosphere some time soon, on their way to Planet Gogg. Greece’s rate has been growing at about one percentage point a month, and will at this rate hit 70% before the year is out. Thank God we took the triggers out of the guns. Zero Hedge has a marginally different view on how things are progressing:
‘Germany prospers. Everyone else suffers. The EU unemployment rate hits 12.2% which is a concocted number far below actuality but that is what they say, that is what is believed, but our old friend reality always has a funny way of showing up when you least expect him. In France they now have 3.26 million unemployed with two uninterrupted years of monthly rises in their unemployment rate and a 1.2% increase from March. Nearly 337,000 more people are out of work in France than there were when Hollande was elected in May 2012. Unemployment is Spain at 26.8%, some 6.2 million people out of work while the economy has shrunk -1.3% in the last two quarters. Italy’s economy is projected to shrink by -1.8% this year according to the OECD while their unemployment rate hits 12%, a thirty-six year high. Besides Germany these are the pillars of the European Union, and that union is crumbling.’
On the other hand, said Bloomberg, ‘Economic confidence in the euro area increased in May, adding to signs the region is beginning to emerge from the longest recession in the single-currency era’. Time for someone to tell us whether it’s a butterfly emerging from a chrysalis, or Rosemary’s Baby shooting past the clitoris.
I can add some personal colour to the French picture. Everyone is looking for extra work and everyone is evading tax. The annual inflation rate in France was recorded at 0.7% in April. It’s a joke: everything is going up in price. And this of course brings us back to my favourite subject, indeflation. Since I and one other invented this word about three years ago, slowly but surely more and more scholarly articles have begun to accept that the flation for which we’re heading will be both fish and fowl: but in a nutshell, it seems to me like everything the citizen gets or buys is going to inflate in cost….while most of what he or she sells, eg labour, is going to deflate. Call me old-fashioned, but that has a sort of Weimar ring to it.
As I predicted here some months back, Canadian Mounted Currency Policeman Mark Carney moves into the Bank of England this month, his avowed intent being to crush the value of the Pound. Feels like there’s a fair amount of inflation inherent in that one. I’ve been in a minority of one about the CMCP riding into town to sort out Blighty following his hugely successful Canadian tour, in that his thinking seems to me to have all the profundity of an Iraqi puddle. But now at last someone agrees with me.
Adam Button at Forex Live insists that Mark’s contribution to Canadian stability “has been grossly exaggerated”:
‘It’s tough to read the BOC statement from early September 2008 and give Carney any sort of credit as a great central banker. Dislocations in credit markets were overwhelming at the time, but Carney said ““The course of the U.S. economy and the ongoing turbulence in global financial markets – have evolved broadly in line with the Bank’s expectations”.’
Three days later, Lehman collapsed. Carney abruptly switched tack after Lehman collapsed, but Button thinks he didn’t hit the panic button hard enough until December – by which time, the global economy was on its knees. “In truth, he benefited more from Canada — a country that coasted through the crisis because of a commodity boom and fortuitous government banking policy — than Canada benefited from him,” Mark concludes.
So then, we’re all set for the big turnaround here in Yerp. There are green shoots here and there who think the crisis is receding, but then they are plant life. And my Daffodil of the Week award goes to Sir Andrew Cahn, who writes in today’s Telegraph thus:
‘Institutional structures are better than passing political policies as a route to keeping the peace. Britain is safer because of the EU. Not only is EU peace taken for granted, but so is the prosperity it has generated. In Britain, for example, many now see the eurozone as a burden on the economy, arguing that we would be more prosperous outside it. It is difficult to understand this argument.’
Which is fine Sir Andrew, because I find it impossible to understand your conclusion. Sir Andrew Cahn, by the way, is vice-chairman, public policy, of Nomura, and a member of the World Economic Forum’s Global Agenda Council on Europe. Yes people, we are in safe hands.
IMF releases Greek tranche, asks for better tax collection
The International Monetary Fund agreed late on Friday to disburse 1.7 billion euros to Greece under its second bailout to the country after the government took measures including a bill to dismiss public-sector employees.
Greece now needs to focus on improving tax collection, the Washington-based IMF said in an e-mailed statement after meeting.
“Greece is well underway to complete its ambitious fiscal adjustment plan, and is on track to meet its 2013 fiscal targets,” IMF Managing Director Christine Lagarde said in the statement.
“A critical priority is to tackle tax evasion by pressing forward rapidly with reform of the revenue administration to improve operational independence and make the burden of adjustment more equitable.”
More than three years after Greece revealed it had misled its euro partners on the state of its finances, the economy of the Mediterranean nation continues to shrink while relying on loans from the euro area and the IMF to pay pensions and wages.
Greek lawmakers in April passed a bill including plans to fire 15,000 workers by the end of next year as the government of Prime Minister Antonis Samaras cleared the latest hurdle to receiving international aid payments.
Yesterday’s approval follows the green light given by European finance chiefs last month under the joint 130 billion-euro rescue.
Lagarde in the statement reminded euro nations that they gave assurances “that they will consider further measures and assistance, if necessary, to reduce debt to substantially below 110 percent” of gross domestic product by 2022.
“Their continued commitment to provide adequate financial support to Greece during the life of the program and beyond until it has regained market assess, provided that Greece complies fully with the program, is also essential.”
The rescue package for Greece was approved in early 2012 after an initial 110 billion-euro bailout of the nation in 2010. The second rescue also included the largest sovereign debt restructuring in history.
On Athens visit, Dijsselbloem leaves options open on new Greek debt relief and recap via ESM
The possibility of Greek public debt being reduced further is unlikely to be decided before April 2014 but Greece is likely to find out on June 20 if the 50 billion euros it has borrowed to recapitalize its banks will be recorded on the books of the European Stability Mechanism rather than as national debt, Eurogroup chief Jeroen Dijsselbloem said in Athens on Friday.
The Dutch finance minister met Prime Minister Antonis Samaras and PASOK leader Evangelos Venizelos as well as Finance Minister Yannis Stournaras. Three key issues came up during his meetings: reducing Greece’s official sector debt, the recapitalization of Greek banks and the reduction of taxes.
With regard to an official sector debt haircut, Dijsselbloem said there is no reason to discuss this issue at the moment and that it would not be on the agenda before April next year. He said the reduction would be discussed if Greece produced a primary surplus and stuck to its fiscal consolidation program, which he said was being “successfully implemented” at the moment.
The Eurogroup chief said there were no indications the bailout program, which runs until the end of 2014, would have to be altered, “I see no reason at this time to discuss any lengthening or changing of the program,» Dijsselbloem told journalists. He said that Greece could also consider reducing taxes if it has met its fiscal targets, while taking into account any needs to cover possible financing gaps in 2015 and 2016.
Arriving in Athens a day after Eurostat figures showed economic sentiment in Greece to be at a five-year high, Dijsselbloem was optimistic about Greece returning to growth. “We have the first signals of the return of the economy... for economic recovery next year,” he said.
The Dutch finance minister also arrived as the European Financial Stability Facility (EFSF) released another 7.2 billion euros for the 50-billion-euro bank recapitalization program.
Greece has now received a total of 48.2 billion euros in EFSF bonds and Dijsselbloem did not rule out on Friday the possibility that the final amount will pass over to the ESM. He admitted, though, that the issue of what to do with so-called legacy debt was “very sensitive.” The Dutch official added that a final decision would probably be taken at the June 20 meeting of eurozone finance ministers, when the issue of bank resolution will also be discussed.
Greece leading rise in eurozone unemployment, Eurostat's April figures show
Greece had the highest unemployment in the European Union and had the largest rise in the jobless rate across the 27-nation bloc in the preceding year, according to April figures published by Eurostat on Friday.
Although the Greek figures used were for February, Greece had the highest unemployment rate with 27, followed by Spain on 26.8 percent and Portugal 17.8 percent.
The lowest unemployment rates were recorded in Austria (4.9 percent), Germany (5.4 percent) and Luxembourg (5.6 percent).
Compared with a year ago, the unemployment rate increased in eighteen member states and fell in nine, Eurostat said.
The highest increases were registered in Greece (21.9 percent to 27.0 percent between February 2012 and February 2013), Cyprus (11.2 percent to 15.6 percent), Spain (24.4 percent to 26.8 percent) and Portugal (15.4 percent to 17.8 percent).
The largest decreases were observed in Latvia (15.5 percent to 12.4 percent between the first quarters of 2012 and 2013), Estonia (10.6 percent to 8.7 percent between March 2012 and March 2013) and Ireland (14.9 percent to 13.5 percent).
The euro area seasonally-adjusted unemployment rate was 12.2 percent in April 2013, up from 12.1% in March. The EU27 unemployment rate was 11.0%, unchanged compared with the previous month.
Eurostat estimates that 26.5 million men and women in the EU27, of whom 19.375 million were in the euro area, were unemployed in April 2013.
Compared with March 2013, the number of persons unemployed increased by 104 000 in the EU27 and by 95 000 in the euro area. Compared with April 2012, unemployment rose by 1.673 million in the EU27 and by 1.644 million in the euro area.
By now it is conventional wisdom that the Italian economy is foundering alongside all other peripheral European nations as a result of a failed artificial currency leading to an inability for external rebalancing, a flawed monetary system leading to a collapse in credit demand,and the lack of any structural reform (and sorry, but when your budget deficit is soaringalongside your debt it's anything but"austerity's fault"). However, there is hope. According to Italy's trade union CGIL, good news may be just around the corner as Italy looks set to recover its pre-crisis unemployment level... In 2076, or a brief 63 years from now. "So, you're telling me there's a chance."
It will take 63 years to recover employment levels of 2007. Only in 2076 will Italy return to the 25,026,400 units of labor standards in 2007 from 23,531,949 in 2014. This is stated in the office economic study of CGIL, which takes as its starting point the current context.
Some other metrics may not need to wait three generations until they "recover", among which GDP, which should return to pre-crisis levels in 2026, investment - by 2024, and productivity should be back in a brisk three years.
So much for the good news.
Now the bad news: "the level of real wages willnever recover."
We are not sure if this was the base case, or the optimistic one. In either case, at least Italy has the Euro, and all that No Plan B "political capital" backing it.
CBC appoints KPMG London to evaluate Bank of Cyprus' balance sheet
The Authority intents to finalize the conversion rate within the next 15 days from the delivery of the evaluation report.
FAMAGUSTA GAZETTE
• Saturday, 01 June, 2013
The Central Bank of Cyprus announced it has appointed audit firm KPMG London to carry out an independent evaluation of the assets of the Bank of Cyprus and the Cyprus Popular Bank, CBC announced on Friday.
"The CBC acting as Resolution Authority has appointed KPMG London to carry out an independent evaluation of the assets and liabilities of Bank of Cyprus and Cyprus Popular Bank," CBC Spokeswoman Aliki Stylianou told CNA, adding the evaluation is expected to be completed by mid July.
"After the completion and delivery of the valuation report, the Resolution Authority will determine the rate of conversion into equity of 22.5% of the uninsured deposits of the Bank which are now frozen," Stylianou said.
She added that the Authority intents to finalize the conversion rate within the next 15 days from the delivery of the evaluation report. — (KYPE)
Restrictive measures in Cyprus unchanged for a second week in a row
Cash withdrawals from automatic teller machines remain at €300 per day. Cashless payments and/or transfers were increased from €10,000 to €15,000 per month per persons and to €75,000 per legal persons.
FAMAGUSTA GAZETTE
• Saturday, 01 June, 2013
Cyprus Ministry of Finance has issued the fourteenth decree on capital restrictions maintaining capital controls restrictions on the island`s financial system unchanged for a second week in a row. The decree will apply for seven days. Cash withdrawals from automatic teller machines remain at €300 per day. Cashless payments and/or transfers were increased from €10,000 to €15,000 per month per persons and to €75,000 per legal persons. Furthermore, fixed term deposits can be terminated in case of repayment of a loan or a credit card within a certain institution. Payments and/or transfers up to €500,000 per transaction can be made without the Committee’s approval, whereas payments and/or transfers from €500,001 to €1,000,000 per transaction, are subject to the approval of the Committee. Living expenses up to €5,000 per quarter as well as tuition fees, of a person who is studying abroad and is a first degree relative of a Cyprus resident, are permitted on the basis of supporting documents. Capital controls have been imposed on the island’s banking sector following a Eurogroup agreement over a €10bn euro international bailout that forced uninsured deposits at its two biggest lenders to pay part of the cost of the rescue.
A CYPRIOT court has frozen assets worth around €5.3 billion belonging to former Laiki Bank strongman Andreas Vgenopoulos and two other people, the Central Bank (CBC) announced yesterday.
The interim court orders, which have a global reach, were secured by the administrator overseeing the resolution of Laiki, formerly the island’s second-biggest lender.
The court froze assets belonging to Vgenopoulos and former Laiki CEO Efthimios Bouloutas worth €3.79 billion and those belonging to former board member Kyriacos Magiras worth €1.5 billion.
It also banned Vgenopoulos’ Marfin Investment Group (MIG) Holdings SA from making any payments or transfers to the benefit of the three men.
A hearing concerning the orders will be held on June 11.
The orders were secured after a lawsuit was filed against the trio and eight other former Laiki executives — including CEO Christos Stylianides — and MIG, demanding damages for several reasons.
The defendants were accused of granting unsecure or insufficiently secured loans or loans that entailed undue risk, violating prudent banking practices, and insufficient supervision and management in relation to the merger between Greece’s Marfin Egnatia and Laiki.
Vgenopoulos, Bouloutas and Magiras were accused of acting in a devious manner.
From the three and MIG, Laiki is demanding compensation for the loss incurred through the merger due to a conspiracy between the four.
A court ruling was also sought that any money related with the claims in the suit will be transferred to the bank.
Vgenopoulos is widely viewed as being responsible for Laiki’s eventual downfall, which started when it merged with Greece’s Marfin Egnatia bank.
He denies any wrongdoing.
“The positive thing in these developments is that all claims are led before justice so that the mud slinging and slander will be finally dealt with court decisions,” Vgenopoulos said in a statement yesterday.
“Eighteen months after the departure of Laiki’s management under my chairmanship, no relevant evidence of deceit or illegal personal gain has been exposed, simply because none exists.”
He added that Cypriot courts were not authorised to deal with the case and appeared certain he would be vindicated in the end.
Vgenopoulos blames Cypriot authorities for the demise of the bank because they mistakenly accepted the EU-sanctioned write-down of Greek debt in October 2011.
The write-down proved costly.
Cyprus was forced to shut down Laiki 18 months later and impose massive losses on depositors in Bank of Cyprus second bank to keep it afloat and get €10 billion in aid from international lenders.
MIG has said it would seek compensation via an international arbitration tribunal after its 9.5 per cent stake in Laiki in 2006 whittled down to less than 1.5 per cent.
A Greek parliamentary enquiry had called attention to “serious conflicts of interest” in Laiki’s Greek operation.
It had loaned money to a community of Greek monks involved in land deals and to others who used the money to support a share sale by Marfin Investment Group, a company linked to Laiki through a shared chairman – Vgenopoulos — until November 2011.
Cyprus working closely with US on major laundering case
By George Psyllides
CYPRUS’ anti-money laundering unit (MOKAS) said it was cooperating closely with US authorities in a major case involving the operators of a digital currency exchange with links on the island through numerous bank accounts.
US prosecutors have filed an indictment against the operators of digital currency exchange Liberty Reserve, accusing the Costa Rica-based company of helping criminals around the world launder more than $6 billion in illicit funds linked to everything from child pornography to software for hacking into banks.
The indictment lists 45 bank accounts – 22 in Cyprus at four banks: Hellenic, National Bank of Greece, Eurobank (Greek) and Cyprus Development Bank (CDB).
Eva Papakyriacou, the head of MOKAS, said the unit has been working closely with US authorities since 2012.
“Not only after their request but also after our banks, some at least, spotted some suspicious transactions and reported them to the unit,” she said.
Papakyriacou said Cypriot authorities had done a lot in this case and had received thank you letters from the US.
She also denied that there were 22 accounts in total that were linked to Cyprus.
One of the shell companies appearing on two accounts at Hellenic was in fact a Cypriot company with the same name as a Belizean entity connected to the case.
Hellenic Bank said it had spotted the accounts and reported the matter to MOKAS in January 2012.
“Acting early and pre-emptively, Hellenic found the accounts mentioned in the indictment and took all the appropriate measures,” a statement from the lender said.
Hellenic said it has been in constant contact with MOKAS ever since.
These actions “show in deed the Hellenic Bank’s commitment to fight illicit money,” it said.
CDB, which had been named as keeping one such suspicious account, said it followed the rules on money laundering.
“The bank applies the necessary measures to prevent and stamp out illicit financial transactions systematically and consistently. Towards this end, it cooperates with MOKAS whenever necessary,” CDB said.
US Attorney Preet Bharara called the case perhaps “the largest international money laundering case ever brought by the United States”.
“Liberty Reserve has emerged as one of the principal means by which cyber-criminals around the world distribute, store and launder the proceeds of their illegal activity,” according to the indictment filed in US District Court for the Southern District of New York.
Officials said authorities in Spain, Costa Rica and New York arrested five people yesterday, including the company’s founder, Arthur Budovsky, and seized bank accounts and Internet domains associated with Liberty Reserve.
The indictment detailed a system of payments that allowed users to open accounts under false names with blatant monikers like “Russia Hackers” and “Hacker Account”.
The use of digital currency has expanded over the past decade, attracting users ranging from video gamers looking for ways to buy and sell virtual goods to those who lack faith in the traditional banking system.
Touted by some investors as the future of money, these virtual currencies have gained the attention of US regulators looking to bring them under anti-money-laundering rules.
Spanish prime minister Mariano Rajoy passed legislation last year to help businesses lower wages. Photograph: Miguel Vidal/Reuters
Wages have fallen across Spain in the past year as the government tries to cheapen labour for employers just as austerity measures cut back the welfare state.
Salaries fell by an average of 0.6% in the year to the first quarter, with inflation pushing the real loss in the purchasing power of those Spaniards in work to 2%.
Private sector salaries were harder hit than those of public employees. A further 800,000 jobs were lost, with the unemployment rate now at 27%.
Falling wages are seen as good news by prime minister Mariano Rajoy's conservative People's party government, which believes wage devaluation is one of the few options left to Spain now it is part of the euro and can no longer devalue its own currency.
"This will help us become more competitive," the country's employer's federation said.
Rajoy's government passed new labour legislation last year to help businesses control or lower pay. It claimed the measures were needed to prevent employers lowering their wage bill by firing workers.
Further wage falls seem likely, with young people fortunate enough to find work in a country with 57% youth unemployment now earning considerably less than their elders. The Adecco employment agency said that salaries with new job offers in 2012 were 4% below those offered the previous year.
The Bank of Spain on Friday proposed further labour reforms, including the lowering of the minimum wage. "The seriousness of the labour market situation advises maintaining and intensifying reform," the bank said in its annual report. "It would be worth exploring the possibility of establishing new formulas that would allow ... exceptional mechanisms to prevent the minimum wage from acting as a constraint."
The bank also recommended workers retire later to boost pension funds.
Spain remains one of the biggest contributors to the European Union's unemployment rate, which rose to 12.2% in April.
Spain achieved its first recorded trade surplus in March, as cash-strapped Spaniards turned their backs on imports. Modest export growth held out some hope for the industry and service sector.
Exports grew 2.7% in March from the same period one year ago, while imports dropped 13%.
One year. That is the time that the government has to undertake major reforms. The European Commission has published today the document with recommendations to the European Council on the National Reform Plan. Includes advice on pensions, taxes, government spending, administrative reform, etc.. There is virtually nothing that Brussels (and the governments of EU members) does not create the need to change, accelerate or deepen. On Wednesday Brussels gave Spain more time to reach a budget deficit of 3%, but warns that to achieve this, it is still necessary to continue with the fiscal effort. Brussels calls for "a systematic review of the tax system by March 2014." Normally, these words have meant raising taxes on consumption (VAT or special) to relax the pressure on other that penalize wealth creation, such as income tax or social contributions. But in the current document there are only requests to raise taxes.
The above snip did not do full justice to the idiocy of the latest Brussels demands. The only thing I support is pension reform. Tax hikes will do nothing but cause another plunge in revenues and another rise in unemployment. Mike "Mish" Shedlock
The simmering feud between France and Germany erupted into a heated political exchange following Pressure on Hollande to take bold action to revive the French economy, calling for new pension and labour market reforms. "The commission’s list of recommendations for Paris, which it expects to be delivered in return for allowing France two extra years to meet its budget deficit targets, covered all the hard issues the socialist government faces: cutting public spending; restoring badly diminished competitiveness, opening up restricted markets, reforming the tax regime and loosening tight labour market regulations." France Tells Brussels to Shove It The exchange got quite interesting when Merkel Allies Bashed Hollande Over Needed Reforms
Leading members of Angela Merkel’s ruling Christian Democratic Union in Germany have fiercely criticised François Hollande, accusing the French president of “shaking the foundations of the European Union”, only hours before the two leaders met in Paris in a bid to repair their troubled relations. Deep German concern about the French government’s resistance to economic reform and hostility to EU pressure emerged after Mr Hollande said it was not for the European Commission “to dictate” reforms to Paris. “There is no need for European recommendations; what’s needed is obvious. It’s not for the commission to dictate what we have to do,” Mr Hollande said in response to the commission, whose call was part of its annual assessment of budget plans for all 27 EU members. The French president’s “vehement criticism of the European Commission’s reform proposals . . . contradicts the spirit and letter of European agreements and treaties”, said Andreas Schockenhoff, a deputy chairman and foreign policy spokesman of the CDU in the German parliament. “Someone who talks like that is shaking the foundations of the EU.” Norbert Barthle, budget spokesman of the CDU in the Bundestag, said the two-year extension granted to Paris in meeting the 3 per cent deficit target was more than Germany had expected. “France won’t be able to bank on such indulgence again,” he added, saying that Mr Hollande had misunderstood the nature of European co-operation if he thought he could accept the benefit proposed by the commission but reject the conditions attached.
Reflections on the Obvious Somehow it is OK for France to stipulate conditions on Greece, on Ireland, on Cyprus, on Portugal, and on Spain but not be told what to do itself. Yes it is "obvious" what to do.
The number of people out of work in France hit a record high in April, the daily Les Echos said on Thursday, casting more doubt on President Francois Hollande's pledge to reverse a long-running rise in unemployment. The number of registered jobseekers rose by about 40,000 in April from March's previous high, the financial daily reported ahead of the official publication of the figures later on Thursday. It did not quote its sources. The government is holding to its pledge to turn around the trend by year-end despite multiple forecasts to the contrary, hoping that the economy will start to pick up in the second half of 2013 and that subsidised jobs will help keep a lid on unemployment. The European Commission, the OECD and France's own jobless benefit fund all see unemployment continuing to rise through 2014. The EU executive said on Wednesday it expects French unemployment to reach 10.6 percent this year after 10.2 percent last year and keep increasing to 10.9 percent in 2014.
"Obviously Obvious" The odds of a major economic recovery in France in 2013 with socialists in control are essentially zero, and subsidizing jobs is the wrong approach in the first place. Both of those statements are "obviously obvious", except to socialist fools and Keynesian clowns. Mike "Mish" Shedlock
Paris investigators placed the French branch of Swiss bank UBS under formal investigation Friday on suspicion it helped try to persuade rich French clients to open undeclared accounts in Switzerland, a legal source said.
UBS was also named as an "assisted witness" in an investigation into a money laundering operation that was part of a tax fraud, the source added.
The alleged offences date back to the 2000s, the source said.
Investigators suspect UBS allowed its Swiss staff to illegally approach French clients, and to have set up a shadow accounting system to hide movements of capital between France and Switzerland.
A former head of UBS France, Patrick de Fayet, a former head of the bank's office in the northern French city of Lille and a UBS executive in the eastern city of Strasbourg are already under investigation.
The French probe was launched after allegations from a former UBS employee turned whistleblower.
An anonymous note seen by AFP that was sent to the ACP, the Bank of France's regulatory arm, alerted the body to the parallel accounts that ran between 2002 and 2007. These listed accounts opened in Switzerland by businesses but not declared in France.
The investigating magistrates handling the UBS affair have sent a list containing 353 names of people suspected of having held a Swiss account and have requested details from the Swiss authorities.
The issue jumped back to the top of the government's agenda in the wake of a scandal surrounding the former budget minister Jerome Cahuzac who in April was himself placed under investigation for tax fraud.
After months denying the allegations, Cahuzac had admitted to opening an undeclared Swiss bank account in 1992, and, after Switzerland pledged to cooperate with foreign tax authorities in 2009, transferring the some 600,000 euros ($770,000) to Singapore.
His role as budget minister included tackling tax evasion.
The DZ Bank is hardly one of Germany's best known banks. Many people have never heard of it, though it is the central institution of more than 900 savings banks and Raiffeisen banks, and carries a balance of more than €400 billion, making it Germany's fourth largest,behind Deutsche Bank, Commerzbank and KfW.
But thanks to a recent strategic decision, that might soon change. The DZ Bank Group and its subsidiary Union Investment have chosen to withdraw completely from speculation on foodstuffs, according to a letter the bank sent to the consumer watch organization Foodwatch that SPIEGEL ONLINE has seen. In the document, DZ Bank executive board member Lars Hille also calls for tighter regulations for the commodities market.
Foodwatch head Thilo Bode says the move sets a good example. "The decision shows they are taking responsibility for society. A control on trading volumes, like that being demanded by DZ Bank, is a basic precondition to prevent excessive speculation and the hunger crises it causes." He adds that other institutions should follow this example instead of doing all they can to thwart necessary financial market regulations.
The DZ Bank decision highlights the deep differences among German financial institutions when it comes to the controversial practice of speculating on foodstuffs. Commerzbank and several Landesbanken (state-owned savings banks) had previously announced their intention to back out of food commodities speculation. But neither Deutsche Bank nor Allianz has followed them. Both say that it has not been proven that speculation on foodstuffs results in hunger and shortages.
EU Considering Regulations
Organizations such as Foodwatch disagree, pointing to studies showing that speculation leads to price bubbles. For DZ Bank, the risk was simply too great. The bank quietly announced in January that it was suspending such trading indefinitely, but few took notice. In its letter to Foodwatch, board member Lille was much clearer. He said the bank welcomes the fact that the effects of speculation on food prices are being intensively studied.
The letter says that DZ Bank will allow securities based on agricultural commodities to expire in 2013 and has ceased purchasing agricultural derivatives from other banks. The same holds true for funds managed by Union Investment.
Hille also made clear in the letter that his bank supports the creation of stricter financial market regulations. DZ Bank would like to see "controls on transaction volumes, particularly the introduction of effective position limits for exchanges and central clearing platforms." In other words, DZ Bank would like to limit the degree to which hedge funds and other speculators participate in so-called over-the-counter, or off-exchange, trading. Such limits existed until the beginning of the 2000s, but were then eliminated as deregulation progressed. Since then, the share of speculators on agricultural commodities markets has risen from 30 percent to 80 percent.
European leaders are hoping to agree on financial market reforms, including position limits of the kind supported by Hille, at the end of June. But the financial sector has managed to significantly weaken the draft proposal, adding several loopholes, Foodwatch head Bode says. "The limits for speculators have been effectively neutralized," he says, adding that DZ Bank has positioned itself in opposition to many in its own sector.
Activists of the anti-globalist Blockupy movement scuffled with dozens of riot police who charged into a marching crowd to disperse protesters, reports RT’s Peter Oliver. The march has been reportedly stopped.
#blockupy#frankfurt organizers claim police presence on route shows the authorities planned to disrupt march.
What was supposed to be a march through the middle of German’s financial capital by anti-austerity demonstrators really lasted only about 500 meters, when several hundred riot police in full kit came among the crowd.
The protesters started throwing paint-filled objects at the police so puddles of paint are here and there, RT’s Peter Oliver reported. Later the paint filled bags were confiscated by police.
The organizers maintain there are tens of thousands of protesters and Peter Oliver witnesses a whole column of protesters going around the ECB headquarters.
The police force has split into two groups now. They do not let anybody through so the demonstration is not moving anywhere, as police and protesters are locked in a stand-off.
Water cannons arrived at the scene of a peaceful protest, Oliver reports.
Riot police officers have already used pepper spray several times and some people have been taken away, but it is not clear if they have been arrested.
one person arrested by the police #blockupy and they want us to take an alternative route #frankfurt
RT’s crew working at the scene has been separated by the riot police dividing demonstrators. The crew reports the use of fences and barbed wire by police.
Photo from twitter.com user @PeterGOliver_RT
Protests in Frankfurt-am-Main started on Friday when some 3,000 'Blockupy' protesters, clutching signs demanding “humanity before profit”, blocked the main entrance of the ECB, the organizers announced that the coalition has “reached its first goal” of the day.
The anti-globalism march was called to celebrate the anniversary of the 'Occupy' rallies by blocking the European Central Bank.
The protesters moved to city’s downtown from activists' camp in the Frankfurt suburbs, set up earlier.
Police reported that though some protesters thrown stones and there were some clashes at the barricades, all in all the Friday protests were conducted peacefully.
Not sure what the wisdom behind #blockupy#frankfurt standoff is. protestors getting increasingly pissed off with not being allowed move.
The ECB, which has headquarters at Kaiserstrasse 29, in Frankfurt-am-Main, has promised to remain operational during the planned demonstrations.
Photo from twitter.com user @PeterGOliver_RT
Photo from twitter.com user @PeterGOliver_RT
Photo from twitter.com user @PeterGOliver_RT
Blockupy activists lay blame for the debt crisis in Europe with the banks and in particular the ECB for its role in imposing austerity measures on EU citizens.
The austerity measures proposed by the so-called troika, consisting of the ECB, International Monetary Fund (IMF) and the European Commission have not reduced the national debts of the European countries. An increase of taxes and cuts of governmental social programs they promote have actually worsened the situation, deepening recession and increasing unemployment in the EU dramatically.
Hanno Bruchmann, an anti-austerity activist, believes that “There have been many capitalist crises before, but now it is happening in the US and Europe, the financial crisis has transformed into a debt crisis, and now is the moment in which this has become a permanent capitalist crisis on a big scale."
A demonstration in German's Frankfurt-am-Main is expected to gather up to 20,000 protesters. Several European capitals are set to see large rallies later in the day.
Photo from twitter.com user @PeterGOliver_RT
Protesters hold posters during an anti-capitalism "Blockupy" demonstration in Frankfurt June 1, 2013.(Reuters / Kai Pfaffenbach)
Riot police stand guard during an anti-capitalism "Blockupy" demonstration in Frankfurt June 1, 2013.(Reuters / Kai Pfaffenbach)
An estimated 2,500 supporters of the anti-capitalist group "Blockupy" demonstrated in the German financial capital of Frankfurt on Friday, blocking access to the European Central Bank (ECB) in protest of euro-crisis austerity policies.
Banging on drums and carrying signs that read slogans such as "Block the ECB -- Fight Capitalism and Austerity" and "Humanity before Profit," the demonstrators cut off roads leading into the downtown financial district.
"The business operations of the ECB have been successfully hindered," a spokeswoman said, according to the German news agency DPA. "We are making Europe-wide resistance to devastating policies of poverty visible."
The European Blockupy movement, which formed after the Occupy Wall Street movement in 2011, is critical of euro-zone leaders' approach to the debt crisis. Forcing struggling countries to raise taxes and implement tough austerity measures has only served to deepen the Continent-wide recession, they allege.
Banks Prepared for Protest
As the protest got underway in the morning, riot police surrounded the ECB building and took positions at other nearby financial institutions, while a helicopter hovered overhead. A police spokesman said he wouldn't necessarily characterize the event as a blockade, however.
Banks in the area were reportedly able to prepare for the demonstration, with many employees either taking the day off or working from home. Some traders were also reportedly working from undisclosed locations or provisional trading halls.
"So far, besides a few isolated incidents, everything has been peaceful," a police spokesman told the DPA. Further protests were planned for later in the day in downtown Frankfurt and at the airport, Germany's busiest international hub.
The demonstrations are being held about one year after some 20,000 people took part in a similar event in the city, when police detained hundreds of protesters. They also come ahead of Europe-wide protests planned for June 1.
A 'pretend' butcher shop in County Fermanagh, Northern Ireland (Photograph: Bryan O'Brien / THE IRISH TIMES)
A town in Northern Ireland is getting spruced up for the arrival of some special guests.
World leaders are gathering in the town of Enniskillen for the G8 summit next month.
And to get ready, the town is putting up fake storefronts on shuttered businesses.
Anchor Marco Werman speaks with Irish Times reporter Dan Keenan about the efforts to make the town look prosperous.
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Marco Werman: I do it. You do it. We all do it, I hope, especially if I’m coming to your house. We do it when we have special guests. Fresh towels in the bathroom, give the counters a wipe, maybe even hide our dirty laundry in the closet. Well, the town of Enniskillen, in County Fermanagh, Northern Ireland is sprucing up for some very special guests: President Obama, German Chancellor Angela Merkel, and Russian President Vladimir Putin, to name just three. In a little over two weeks they and other leaders will gather for a G8 summit at a golf resort in Enniskillen. And as the date approaches the cleanup is moving into high gear. It includes new coats of paint on houses, tidying up lawns, and putting up fake storefronts on shuttered businesses. Irish Times reporter Dan Keenan visited Enniskillen and saw the cleanup process. Describe these fake buildings, first of all. What do they look like?
Dan Keenan: These are basically empty shops that are being now made to look as if they are thriving businesses, and they’ve done that in a very clever fashion indeed.
Werman: How do they do it?
Keenan: What they’ve done is they have filled the shop front window with a picture of what was the business before it went bankrupt or closed. In other words, grocery shops, butcher shops, pharmacies, you name it, they have placed large photographs in the windows that if you were driving past and glanced out the window, it would look as if this was a thriving business. It’s an attempt really by the local authority to make the place look as positive as possible for the visiting G8 leaders and their entourages, and it’s really tried to put a mask on a recession that has really hit this part of Ireland really very badly indeed.
Werman: So it’s kind of like a trompe l’oeil, and I saw a picture in one newspaper. I’m a little confused because the door looked open.
Keenan: Yeah, it looks as if the door is open and inside you can see a well-stocked shop. It’s nothing of the sort. That door has been locked shut for well over a year because that particular business went bust this time last year, and that is an image to make it look as if everything is normal in the town and in the county, but unfortunately it’s not. The County of Fermanagh has suffered terribly as a result of the credit crisis and the resulting recession.
Werman: How are the citizens of Enniskillen reacting to this? It’s kind of, not very funny, is it?
Keenan: It’s not funny. We’re inclined to take a very light-hearted look upon it but the residents of this part of the world are looking upon the arrival of the G8 positively because at the end of the day, it’s not often you have the eight wealthiest and most powerful leaders on Earth visiting your part of the world. But on the other hand, they are a little bit skeptical of really very shallow attempts like this to make the place look better than it actually is. They would rather that it was an honest attempt to promote Fermanagh in its most positive light and really they would prefer if these problems were not masked in the way that they are.
Werman: Where is the money coming from for all these very accurate-looking photographs of meat and other things for sale?
Keenan: This is one big initiative really stemming from the Foreign Office in London. This is David Cameron’s gig. It’s his invitation, it’s his decision to host the G8 in County Fermanagh, which is, don’t forget, part of the United Kingdom. It’s also on the island of Ireland, it’s in Northern Ireland, but he will be the hosting head of government and it’s his say so. Much of the money that has been spent in and around the host town of Enniskillen, about more than £300,000 worth, that’s getting on from half a million dollars, the bulk of the cash and certainly the driving force behind the plans to tidy up the place, that’s all coming from London.
Werman: Dan, you and I are talking about these fake storefronts, other news outlets are talking about it. Presumably the leaders in their limos will know that that butcher shop they see on their drive to the resort is not real. Do you think that some Irish, some people in Enniskillen, are hoping that the leaders realize that it’s fake, and will understand just how bad things have gotten there?
Keenan: The fact that it’s made my newspaper and it’s made the newspapers across the Atlantic, and of course if you look on the Twitter-sphere, it’s everywhere at this stage, so they can do what they like but whenever people get talking about an initiative such as this, then the truth will come out, and that’s what’s happening.
Werman: Irish Times reporter Dan Keenan speaking with us from Dublin. Thank you, Dan.
Sir Andrew Cahn…”EU has generated prosperity”
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