Tag Archives: European Union

Christmas comes early for Germany after 55-billion-euro accounting error

open quoteThe discovery of the mother of all accounting errors at a troubled bank under government protection has made Germany some 55 billion euros richer, the Finance Ministry said late on Friday.

The discovery of a whopping accounting error has made Germany instantly 55.5 billon euros ($78.5 billion) richer.

The error was caused by a double booking at the state-owned bad bank, created to handle the toxic assets of bankrupt Hypo Real Estate bank, which was nationalized in 2009.

Freeing up the cash means that German national debt, as a percentage of gross domestic product, dropped from 83.7 to 81.1 percent. The error was caused when accountants subtracted funds, instead of adding them.close quote (Read more)

Bureaucracy in Greece Defies Efforts to Cut It

open quotetories of eye-popping waste and abuse of power among Greece’s bureaucrats are legion, including officials who hire their wives, and managers who submit $38,000 bills for office curtains.

The work force in Greece’s Parliament is so bloated, according to a local press investigation, that some employees do not even bother to come to work because there are not enough places for all of them to sit.

But as Europe looks for any sign of hope that Greece is on the road to reform, there are growing concerns about its ability — and willingness — to trim its payroll, a crucial element in bringing expenses under control enough to win continued international financing. close quote (Read more)

I’m pleasantly surprised to see this reported on. Usually, anybody who calls for cuts is condemned as a right wing fascist nut job.

Rating agencies making sovereign debt look bad? Criminalize rating agencies!

EU Considers Ban on Country Ratings

open quoteThis week alone has seen a ratings downgrade for Spain as well as a threat by agencies to review France’s AAA status — and the markets have taken notice. Once again, it would seem, ratings agencies are making things difficult for European countries.

Now, the European Union is considering doing something about it.

European Internal Market Commissioner Michel Barnier is considering a move to ban the agencies from publishing outlook reports on EU countries entangled in a crisis, according to a report in Thursday’s issue of the Financial Times Deutschland newspaper.

In an internal draft of a reform to an EU law applying to ratings agencies obtained by the paper, Barnier proposes providing the new EU securities authority, the European Securities and Markets Authority (ESMA), with the right to “temporarily prohibit” the publication of forecasts of a country’s liquidity.close quote (read more)

Un-flipping believable.

The Twitsted Logic of EU Defenders

Patrick Barron comments on today’s Open Europe summary:

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Meanwhile, the Guardian reports on Deputy Prime Minister Nick Clegg’s speech in Warsaw today, in which he is expected to argue, “Any change to governance structures must not lead to a weaker and divisive Europe where the aims of ‘Euro ins’ are set against those of ‘Euro outs’. There can be no inhibiting of trade, for example, and no obstructing the single market. Any decision that affects the 27 must always be taken by the 27.”
Open Europe blog Spectator Coffee House blog FT Mail Guardian Times

One of the tactics of the Euro elitists is to equate support for the Euro as support for free markets and opposition to the Euro as opposition to free markets. This is a logical fallacy. Many countries engage in free trade with one another even though they do not use a common currency. Nevertheless, if Nick Clegg’s desire is to expand trade while minimizing currency conversion costs, he should support a return to the classical nineteenth century gold standard in which each country’s currency was merely an expression of a certain weight of gold. He should reflect upon these words of Ludwig von Mises in Human Action:

“The gold standard was the world standard of the age of capitalism, increasing welfare, liberty, and democracy, both political and economic. In the eyes of the free traders its main eminence was precisely the fact that it was an international standard as required by international trade and the transactions of the international money and capital market. It was the medium of exchange by means of which Western industrialism and Western capital had borne Western civilization into the remotest parts of the earth’s surface, everywhere destroying the fetters of age-old prejudices an superstitions, sowing the seeds of new life and new well-being, freeing minds and souls, and creating unprecedented progress of Western liberalism ready to unite all nations into a community of free nations peacefully cooperating with one another.”

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French Professor on Greek bailout

From todays Open Europe summary:

open quoteIn Le Figaro, French Professor Édouard Tétreau argues, “France has already voted two bailout plans for Greece in two years, coming with a cost of more than €30bn – the equivalent of what is raised from income taxes in France in seven months. Who would agree, in our country, to work seven months to subsidise the lifestyle of people who are unable to pay their own taxes? By subsidising this organised robbery, we are not doing Greece, or Europe, a favour.” close quote

Professor Kerber: Germany should leave the eurozone

From today’s Open Europe news summary:

Professor Kerber: Germany should leave the eurozone
German Professor Markus Kerber argues in Handelsblatt that “Germany should leave the eurozone”, noting that “the impossibility to apply all those big EU measures towards Greece should lead to the conclusion that the solution for the eurozone’s problems no longer can be found within the current system, but should be reached through an organised exit from the eurozone.”

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Iceland remains free from international banks.

open quoteIceland is free. And it will remain so, so long as her people wish to remain autonomous of the foreign domination of her would-be masters — in this case, international bankers.

On April 9, the fiercely independent people of island-nation defeated a referendum that would have bailed out the UK and the Netherlands who had covered the deposits of British and Dutch investors who had lost funds in Icesave bank in 2008.

At the time of the bank’s failure, Iceland refused to cover the losses. But the UK and Netherlands nonetheless have demanded that Iceland repay them for the “loan” as a condition for admission into the European Union.

In response, the Icelandic people have told Europe to go pound sand. The final vote was 103,207 to 69,462, or 58.9 percent to 39.7 percent. “Taxpayers should not be responsible for paying the debts of a private institution,” said Sigriur Andersen, a spokeswoman for the Advice group that opposed the bailout.

A similar referendum in 2009 on the issue, although with harsher terms, found 93.2 percent of the Icelandic electorate rejecting a proposal to guarantee the deposits of foreign investors who had funds in the Icelandic bank.

. . . .

Under the terms of the agreement, Iceland would have had to pay £2.35 billion to the UK, and €1.32 billion to the Netherlands by 2046 at a 3 percent interest rate. Its rejection for the second time by Iceland is a testament to its people, who feel they should bear no responsibility for the losses of foreigners endured in the financial crisis.

That opposition to bailouts led to Iceland’s decision to allow the bank to fail in 2008. Not that the taxpayers there could have afforded to. As noted by Bloomberg News, at the time the crisis hit in 2008, “the banks had debts equal to 10 times Iceland’s $12 billion GDP.”

“These were private banks and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks,” Iceland President Olafur Grimsson told Bloomberg Television.

The voters’ rejection came despite threats to isolate Iceland from funding in international financial institutions. Iceland’s national debt has already been downgraded by credit rating agencies, and now those same agencies have promised to do so once again as punishment for defying the will of international bankers.

This is just the latest in the long drama since 2008 of global institutions refusing to take losses in the financial crisis. Threats of a global economic depression and claims of being “too big to fail” have equated to a loaded gun to the heads of representative governments in the U.S. and Europe. Iceland is of particular interest because it did not bail out its banks like Ireland did, or foreign ones like the U.S. did.

If that fervor catches on amongst taxpayers worldwide, as it has in Iceland and with the tea party movement in America, the banks would have something to fear; that is, the inability to draw from limitless amounts of funding from gullible government officials and central banks. It appears that the root cause is government guarantees, whether explicit or implicit, on risk-taking by the banks.close quote (Read more from netrightdaily.com)

A Loophole Allows Multiple Counterfeiters of the Euro

open quoteThis link to an Open Europe News Summary Blog reveals that any country in the Euro Zone can print as many Euros as it wishes simply by notifying the European Central Bank. This is why Ireland was able to print 51 billion Euros last week to bail out its banks. Here’s the quote from the Open Europe blog:

The Irish Independent learnt last night that the Central Bank of Ireland is financing €51bn of an emergency loan programme by printing its own money… …A spokesman for the ECB said the Irish Central Bank is itself creating the money it is lending to banks, not borrowing cash from the ECB to fund the payments. The ECB spokesman said the Irish Central Bank can create its own funds if it deems it appropriate, as long as the ECB is notified.

This is very disturbing. In effect it allows mutliple, legitimate counterfeiters to print as much money as they wish; therefore, hyperinflation will ensue very quickly, because each Euro Zone member will have a great incentive to print money as fast as possible before prices go up. This could be the very quick end of the Euro, and it could create chaos in Europe and around the world.

American readers can consider this analogy: it is as if each state of the union could print as many dollars as it wished simply by notifying the Fed. Does anyone doubt that the dollar would collapse into hyperinflation overnight?
close quote (Read more from patrickbarron.blogspot.com)

In Quest for ‘Legal High,’ Chemists Outfox Law

open quoteANTWERP, Belgium—When the housing market crashed in 2008, David Llewellyn’s construction business went with it. Casting around for a new gig, he decided to commercialize something he’d long done as a hobby: making drugs.

But the 49-year-old Scotsman didn’t go into the illegal drug trade. Instead, he entered the so-called “legal high” business—a burgeoning industry producing new psychoactive powders and pills that are marketed as “not for human consumption.”

Mr. Llewellyn, a self-described former crack addict, started out making mephedrone, a stimulant also known as Meow Meow that was already popular with the European clubbing set. Once governments began banning it earlier this year, Mr. Llewellyn and a chemistry-savvy partner started selling something they dubbed Nopaine—a stimulant they concocted by tweaking the molecular structure of the attention-deficit drug Ritalin.close quote (Read more from online.wsj.com)

According to my friend, esoteridactyl, this wouldn’t fly in the U.S. because substances are banned based on their effect, instead of on their chemical composition.

Why is Greenland so rich these days? It said goodbye to the EU

open quoteIf you think that leaving the EU would be catastrophic, take a look at Greenland. By rights its people ought to be poor. Their island is isolated, suffers from freezing weather, has a workforce of only 28,000 and relies on fish for 82 per cent of its exports. But it turns out that since leaving the EU, Greenland has been so freed of EU red tape and of the destruction of the Common Fisheries Policy, that the average income of the islanders today is higher than those living in Britain, Germany and France.

Greenland’s politicians realised that the fisheries policy was ruining their fishing industry. They had the guts to stand up against the all the prophets of doom and let their people vote in a referendum on leaving the European Community, as the EU was then called. On January 1, 1985, it became independent of Brussels – the only country ever to do so.

Greenland was, with Britain, one of only two EU countries to be heavily dependent on fishing. In fact, Britain had, in some estimates, 80 per cent of Europe’s fish stocks when it entered the EU, because our fishermen had carefully managed them, while the fisherman of Spain, France and Italy had destroyed most of the Mediterranean stocks.

The surprising thing is that while the unemployment from closing (loss-making) coal mines is frequently denounced by Labour politicians, more British workers lost their jobs as a result of gigantic French and Spanish boats being permitted to raid our stocks.close quote (Read more from blogs.telegraph.co.uk)

German “heatball” wheeze outwits EU light bulb ban

open quoteBERLIN (Reuters) – A German entrepreneur is bypassing a European Union ban on light bulbs of more than 60 watts by marketing his own brand as mini heaters.

Siegfried Rotthaeuser and his brother-in-law have come up with a legal way of importing and distributing 75 and 100 watt light bulbs — by producing them in China, importing them as “small heating devices” and selling them as “heatballs.”

To improve energy efficiency, the EU has banned the sale of bulbs of over 60 wattsclose quote (Read more from news.yahoo.com)

European cities hit by anti-austerity protests

Get used to seeing this, and please notice that the protesters are part of the coercive government economy. Governments need to shrink. Once a government program goes into effect, it gets a constituency who will protest it’s reduction or removal. This is one of the reasons why governments, unlike businesses, only get bigger, regardless of whether their services are wanted.

open quoteTens of thousands of protesters from around Europe have been marching across Brussels in a protest against spending cuts by some EU governments.

Other protests against austerity measures are being held in Greece, Italy, the Irish Republic and Latvia.

A general strike is also taking place in Spain, hitting transport and other public services.

Trade unions say EU workers may become the biggest victims of a financial crisis set off by bankers and traders.close quote (Read more from )

Big Pharma Scores Big Win: Medicinal Herbs Will Disappear in EU

open quoteBig Pharma has almost reached the finish line of its decades-long battle to wipe out all competition. As of 1 April 2011—less than eight months from now—virtually all medicinal herbs will become illegal in the European Union.close quote (Read more from gaia-health.com)

Dear socialists, please read this article carefully. It is yet another example of how abusive businesses BENEFIT from big government. Please stop suggesting that more government is the solution for everything.