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Britain on the edge of Europe.
The outcome of the Brussels summit on December 8th and 9th is a disaster for the UK and also threatens the integrity of the single market. For more than 50 years, a fundamental principle of Britain’s foreign policy has been to be present when EU bodies take decisions, so that it can influence the outcome. [...]
Greece: How to Slow the Nosedive.
The latest negotiations between Greece and its lenders have ended, at least momentarily. Athens has agreed to endure ever-more painful pension, spending, and wage cuts, with monthly minimum salaries dropping 20 percent. The powerful leaders of ‘the troika’ — the International Monetary Fund, the European Union, and the European Central Bank — have charted the [...]
Britain and the EU.
On Friday, December 9th, 2011, at the EU summit in Brussels, the British Prime Minister David Cameron refused to sign up to a new treaty, aimed at solving the Euro zone crisis. He did it on the ground that the EU partners failed to offer safeguards for the UK-based financial services. He had a reason [...]
Greece – the weakest member of the Euro zone.
On Thursday, February 9th, 2012, the Greek political leaders supporting the Prime Minister Lucas Papademos’s government of national unity agreed a new 3.3 billion euro programme of spending cuts. On Friday, February 10th, the Greek unions launched a 48-hour strike. Protesters clashed with the police on the streets of central Athens. Scores of youth in [...]
Kim’s dynasty still holds the power.
The death of Kim Jong Il has left North Korea, a Stalinist dictatorship and a failing state, in the hands of his youngest son, Kim Jong Un. On December 19th, 2011, he was officially dubbed the ‘Great Successor’. He will continue a family dynasty. Kim Jong Il (the ‘Dear Leader’) died of a heart attack [...]
Britain on the edge of Europe.
Posted by Charles Grant on February 21st, 2012
The outcome of the Brussels summit on December 8th and 9th is a disaster for the UK and also threatens the integrity of the single market. For more than 50 years, a fundamental principle of Britain’s foreign policy has been to be present when EU bodies take decisions, so that it can influence the outcome. David Cameron, the prime minister, has abandoned that policy. Britain will not take part in a new fiscal compact that most other EU countries will join.
France and Germany have persuaded the other eurozone countries that treaty changes are needed to enshrine stricter budget policies and closer economic policy co-ordination. The new procedures would apply only to countries in the euro. Most member-states wanted to enact those reforms through amending the existing EU treaties. That would ensure that countries in the euro, and those outside, would be subject to a single set of rules and institutions.
But Britain blocked that deal, pushing France, Germany and most other member-states to proceed with a new treaty, to sit alongside the EU treaties. The new treaty may face difficulties: the Irish may hold a referendum on it and could easily vote no. But Paris and Berlin are determined to press ahead with the fiscal compact and if the Irish vote against it they are likely to find themselves excluded.
Cameron blocked a treaty for all 27 because he could not obtain agreement on a protocol to protect the City of London. This protocol demanded a switch from majority voting to unanimous decision-making on a number of issues that matter for the City, including the extension of the powers of EU regulatory authorities, and rules that prevent national governments from imposing stricter requirements on bank capital.
Greece: How to Slow the Nosedive.
Posted by Dimitri Papadimitriou on February 14th, 2012
The latest negotiations between Greece and its lenders have ended, at least momentarily. Athens has agreed to endure ever-more painful pension, spending, and wage cuts, with monthly minimum salaries dropping 20 percent. The powerful leaders of ‘the troika’ — the International Monetary Fund, the European Union, and the European Central Bank — have charted the direction of Greek public policy for years to come: substantial austerity measures, including the lay-offs of thousands of workers.
Within those confines, how can Greek competitiveness be rebuilt? The overwhelming, key, and most urgent imperative should be to raise employment levels. Here’s why:
- The long-term effects of extreme unemployment on an economy have been well documented. The loss of output is permanent. Workers’ skills deteriorate and become outdated, making the labor pool unattractive to potential employers.
- “Informal” work — the ‘shadow’ sector — swells at the expense of the nation’s formal economy, and in Greece, the grey-market is not just a statistical ding. It’s widely estimated to compose (as is also the case in Italy) more than one quarter of the GNP.
- Inequality increases. In Greece, Ireland, Portugal and Spain the recent rise is estimated to be as much as 10 percent. Dangerous ideological shifts accelerate, too.
- Social cohesion disintegrates rapidly. Poverty, homelessness, and crime go up, along with poor health, depression, suicide rates and countless personal tragedies.
Greece now stands directly in the path of this onrushing apocalypse express. Between spring 2009 and mid 2011, its unemployment rose a heart-stopping 91.8 percent. The overall unemployment rate is now 20 percent; among youths, it’s close to 40 percent, and expected to keep climbing. The damaged lives include 20,000 homeless, living in makeshift shelters during a miserably severe European winter, and an upswing in suicides and poverty.
As joblessness continues to snowball — and if the odds-makers in the credit markets are right, expect an avalanche — the unemployed themselves can involuntarily become a powerful force that prevents economic growth.
The Greek parliament passes a new austerity package.
Posted by globalopinion on February 13th, 2012
In early Monday morning, February 13th, 2012, the Greek parliament passed a new 3.3 billion euro austerity package into law.
199 lawmakers in the 300-seat parliament voted in favour of the package and 74 against. 43 deputies from the main political parties, the socialists PASOK party and the conservative New Democracy party voted against the legislation (22 and 21 politicians, respectively). They were immediately expelled after the vote.
A passage of the legislation has cleared the way for a release of a new 130 billion euro bail out loan from the EU/IMF, Greece’s second since 2010. However, a final decision on the new bail out rescue package is not expected until March 2012.
Unfortunately, there is still no clarity regarding a degree, to which Greece’s private creditors will participate in the new bail out package. The private creditors will have to write off up to 70% of their claims.
Without the new funds, Greece will not be able to meet a big 14.4 billion euro bond payment due on March 20th, 2012 (see globalopinion.pl ‘Greece – the weakest member of the Euro zone’).
Britain and the EU.
Posted by globalopinion on February 12th, 2012
On Friday, December 9th, 2011, at the EU summit in Brussels, the British Prime Minister David Cameron refused to sign up to a new treaty, aimed at solving the Euro zone crisis. He did it on the ground that the EU partners failed to offer safeguards for the UK-based financial services. He had a reason to do that. Financial industry located in the City of London (London’s financial district), is the biggest exporter, taxpayer and provider of well-paid jobs in Britain.
On December 12th, 2011, Mr Cameron explained his veto to the British Parliament. The Lib Dem deputy Prime Minister, Nick Clegg, who had criticized David Cameron over the veto, accusing him of endangering the interests of the British economy and falling to play a diplomatic game effectively, was notably absent.
The ‘fiscal compact’ is a pact for a stricter budgetary discipline. It was drafted at the EU summit in Brussels, which took place on December 8th – 9th, 2011 (see globalopinion.pl ‘The latest EU’s attempts to bring the euro crisis to an end’ 29/01/2012). It says that each country that signs up will have to write into a constitution a debt-brake rule to keep a budget roughly in balance – a structural deficit of no more than 0.5%. Automatic fines will be applied, when things start to go out of kilter. The pact states that the European Court of Justice (ECJ) can impose fines up to 0.1% of a country’s GDP, if the rules are broken.
On Monday, January 30th, the first EU summit in 2012 took place in Brussels. 25 out of the 27 member states of the EU signed up to the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, a treaty of stricter fiscal discipline. Only Britain and the Czech Republic refused to sign up. However, the treaty will enter into force on January 1st, 2013, provided that twelve Euro zone countries have ratified it.
Greece – the weakest member of the Euro zone.
Posted by globalopinion on February 11th, 2012
On Thursday, February 9th, 2012, the Greek political leaders supporting the Prime Minister Lucas Papademos’s government of national unity agreed a new 3.3 billion euro programme of spending cuts. On Friday, February 10th, the Greek unions launched a 48-hour strike. Protesters clashed with the police on the streets of central Athens. Scores of youth in hoods used sledge hammers to smash up paving stones, before hurling them at the riot police.
A new package of austerity measures would probably go before the Greek parliament for a crucial vote on Sunday, February 12th, 2012. Among the agreed measures are a 20% reduction in the minimum wage as part of an effort to increase competitiveness of the Greek economy and cuts in the public sector workforce. According to the programme, 15 000 public sector workers will be laid off by the end of 2012 and the total number of public sector jobs will be reduced by 150 000 by the end of 2015. There will be further cuts in pensions as well. Wages are to be frozen until a soaring unemployment rate will come down to 10%.
The Greece’s international creditors (the troika of international lenders, the EU/IMF/ECB) have said that all the mentioned above measures must be approved, before Greece receives a new 130 billion euro bail-out loan/package, promised in October 2011 (see globalopinion.pl ‘A new package to save Greece, but the Euro zone debt crisis remains unresolved’ 05/11/2011).
The Prime Minister Lucas Papademos told the Greek lawmakers that they must approve the latest programme of austerity measures or the country would suffer a disorderly default and an eventual exit from the Euro zone. On March 20th, 2012, Greece faces a 14.4 billion euro bond redemption. If Athens doesn’t obtain a new bail out aid/loan package, then it will default.
Kim’s dynasty still holds the power.
Posted by globalopinion on February 5th, 2012
The death of Kim Jong Il has left North Korea, a Stalinist dictatorship and a failing state, in the hands of his youngest son, Kim Jong Un. On December 19th, 2011, he was officially dubbed the ‘Great Successor’. He will continue a family dynasty.
Kim Jong Il (the ‘Dear Leader’) died of a heart attack on December 17th, 2011, at the age of 69. He was a son of Kim Il Sung (the ‘Great Leader’), a founder of the modern North Korea, who died in 1994, at the age of 82.
Kim Jong Il was well prepared to take over in 1994. He had been designated a successor in 1980 and had opportunities and time to solidify his power. Prior to his father’s death he had run North Korea’s propaganda operations and later its nuclear and missile programmes. He had been well-known and lauded as a revolutionary hero by the country’s propaganda machine, before his full ascension to the power.
North Korea is a totalitarian state. The regime uses the ideology, propaganda and terror to have an absolute control over the society. The North Korea’s population is divided into three classes. First one is dubbed a ‘loyal core’. The second includes people of uncertain loyalty – the ‘wavering’ ones. The lowest class includes people, who are defined as ‘hostile’ to the Kim’s regime (see globalopinion.pl ‘North Korea doomed to years of dictatorship’ 16/12/2010).
People who are classified as ‘hostile’ are doomed to die in the North Korea’s gulag system. They are often sent there without a trial or explanation of their alleged crimes. The regime also imprisons the relatives of people it suspects of hostile activities.
President Obama’s third State of the Union address.
Posted by globalopinion on January 30th, 2012
On Tuesday night, January 24th, 2012, President Barak Obama delivered his final ‘State of the Union’ address, before the November’s presidential election. He used the speech as a platform for his re-election bid.
At the beginning and in the end of his address to the Congress, President Obama spoke about the US army as an example of a group of people, who can work together to achieve a common mission. ‘They are not consumed with personal ambition. They don’t obsess over their differences. They focus on the mission at hand’ said Obama. Later he added: ‘Imagine what we could accomplish if we followed their example’.
The American political scene is very polarized. Since the mid-term election, which took place in November 2010, the Republican majority in the House of Representative has blocked most of the Democrats’ legislation. Since that day, the US Congress has been paralyzed by a bitter ideological division between the members of the two parties.
The Democrats and the Republicans cannot achieve any agreement on the most basic and unresolved problems, such as: reduction of the gigantic national debt, climate change policy, a new immigration law, income inequality, deteriorating infrastructure, falling educational achievements and the federal entitlements programmes, Social Security, Medicare, and Medicaid, which need to be reformed immediately.
