The latest numbers are bad, and all over. We’ve got a wide-ranging report on the latest news from the continent, and one item showing how the eurocrisis is making life worse for some of China’s poorest.
We open with regional news, then move on to latest developments in the accelerating Spanish crisis, including near-record rates at the latest bond sale, more developments from Germany [including a criminal probe of the president and Merkel's Moody's response], warnings of more bailouts ahead, and a financial crisis for Italian cities.
Lots to report from Greece, where the Troika’s busy at work, a deeper recession is predicted, more Grexit rumblings, more coalition posturing and another blast from Syriza, a U.N. call for Greece to open up its natural resouces for exploitation and a Greek court ruling paving the way for gold mines in one of the country.s leading tourist areas, labor warnings and a pair of walkouts, and a bank breakup.
Then there’s the deepening British recession, a busted Irish bankster and a deepening Irish housing collapse, a Norwegian border-tightening, a new euro trade agreement with Israel, a program to make Parisian transit workers less, well, French, and that bad news for Chinese recyclers.
Europe’s just part of widening chaos
Once again, the news is bad, really bad — and all over.
In a globalized economy, borders provide no barriers to economic woes, and the European implosion is just part of a broader and increasingly bleak economic picture.
From Paul Wiseman of the Associated Press:
Mounting fears about Spain’s financial health help illustrate why the global economy is in its worst shape since 2009.
Six of the 17 countries that use the euro currency are in recession. The U.S. economy is struggling again. And the economic superstars of the developing world — China, India and Brazil — are in no position to come to the rescue. They’re slowing, too.
The lengthening shadow over the world’s economy illustrates one of the consequences of globalization: There’s nowhere to hide.
>snip<
The slowdown in the developing world could make it harder for the economies of Europe and the United States to climb out of their ruts. And the weaker the rich countries get, the harder it will be for developing economies to regain their old fast pace.
“In today’s interconnected world, we can no longer afford to look only at what goes on within our national borders,” IMF Managing Director Christine Lagarde said earlier this month. “This crisis does not recognize borders. This crisis is knocking at all our doors.”
Read the rest.
Major Spanish downgrade coming soon
Not unexpected, but certain to add more fuel to the fires already raging in Spain.
The warning comes from the rating agency DBRS.
Luciana Lopez of Reuters:
The agency warned that four factors could push Spain and the euro zone deeper into crisis: a sharper recession as stressed economy-wide financing conditions persist, an insufficient backstop of capital, external shocks, and setbacks to fiscal and structural adjustment.
“In the immediate future, if investor confidence is not restored, financial stabilization and economic recovery are likely to be delayed, increasing the difficulty of the fiscal adjustment and the need for bank recapitalization,” wrote analysts Fergus McCormick and Alan G. Reid.
“Furthermore, if the stress on Spanish bond yields were to persist, it could call into question the affordability of sovereign debt. In this event, Spain may need to turn to official creditors” for help beyond its request for aid to the ailing banking sector.
DBRS said last month it would decide by late August whether to cut its ratings of Spain and Ireland below the crucial A threshold, a move that could substantially raise the cost of funding for the two countries’ hard hit banks.
Read the rest.
Yet another Spanish region needs a bailout
Catalonia follows Catalonia and Murcia in a declaration that funds for their regional governments have run dry.
The increasing tensions within Spain’s political regions make a full-blown Spailout all but inevitable.
From the BBC:
Spain has already been granted a loan package of 100bn euros ($125bn; £80bn) for use by its banks, a different form of support than that given to the bailouts of Greece, the Republic of Ireland and Portugal.
But a number of the country’s 17 autonomous regions are in deep debt and are lining up to tap a new 18bn-euro public fund.
The request for help from Catalonia, the second-biggest, follows on the heels of a similar call for assistance from Valencia.
The region’s finance minister told the BBC the region had “no other bank than the government of Spain”.
Others are expected to join them in asking the central government for a handout at a time when it is having to pay more and more to borrow for its own financing needs.
Read the rest.
Job losses rise across the eurozone
And the private sector is being hit hard at the same time as austerian demands are cutting away jobs in the public sector.
From Agence France-Presse:
Eurozone private sector activity contracted for the 10th time in 11 months in July, sending the rate of job losses to their highest in two-and-a-half years, a key survey showed Tuesday.
The Purchasing Managers Index (PMI) compiled by business research firm Markit was stuck at 46.4 in July according to a preliminary “flash” reading, indicating another month of contraction in activity.
“The July reading was in line with the average seen in the second quarter, for which the PMI signalled the steepest quarterly downturn for three years,” Markit said.
The figures suggest “the euro area downturn showed no signs of letting up at the start of the third quarter and is consistent with GDP falling at a quarterly rate of around 0.6 percent, which is similar to the rate of decline we expect to see for the second quarter,” said Markit chief economist Chris Williamson.
“The downturn is being led by an increasingly severe slump in manufacturing, where output is falling at a quarterly rate of around 1.0 percent,” he said.
While employment fell only slightly in Germany, France saw jobs cut at the fastest pace since December 2009.
Read the rest.
Spain forced to pay near-record interest
The sums are the second highest since the creation of the common currency zone.
Higher interest payments, needless to say, will divert still more money out of the country to the world’s investing class, with diminishing revenues to meet the need of the soaring numbers of unemployed.
Unstopped, the lethal debt spiral can end only in collapse and eventual default, followed, under the austerian script, by the surrender of what remains of the nation’s resources, leaving behind a ravaged shell of a nation.
From Paul Day and Julien Toyer of Reuters:
Spain paid the second highest yield on short-term debt since the birth of the euro at an auction on Tuesday, reflecting a growing belief that the country will need a full sovereign bailout that the euro zone can barely afford.
Spain’s increasingly desperate struggle to put its finances right has seen its borrowing costs soar to levels that are not payable indefinitely. Italy, commonly regarded as too big to bail out, has been dragged along in its wake.
The Spanish Treasury sold the three billion euros of 3- and 6-month bills it was aiming to although yields climbed with the six-month paper jumping to 3.691 percent from 3.237 percent last month.
Read the rest.
Merkel scoffs at the Moody’s warning
Yesterday’s notice that the rating agency had issued negative outlooks for Germany, the Netherlands, and Luxembourg has met with a blithe dismissal by the Iron Chancellor.
She could hardly say anything else.
From Bloomberg’s Rainer Buergin:
Chancellor Angela Merkel’s government said Germany will remain Europe’s haven during the financial crisis, pushing back against Moody’s Investors Service’s decision to lower the outlook on the country’s top credit rating.
The risks in the euro zone are “not new” and Germany remains “in a very sound economic and financial situation,” the Finance Ministry said. In counterpoint to Moody’s, it cited the verdict of financial markets that have rewarded Germany with record low borrowing costs.
“Germany will, through solid economic and financial policy, defend its ‘safe haven’ status and continue to responsibly maintain its anchor role in the euro zone,” the Berlin-based ministry said in an e-mailed statement. “Together with its partners, it will do everything to overcome the sovereign debt crisis as rapidly as possible.”
Euro-area bonds fell today after Moody’s lowered the outlook to negative for the Aaa credit ratings of Germany, the Netherlands and Luxembourg. Moody’s cited “rising uncertainty” over Europe’s debt crisis. It left Finland as the only country in the 17-nation euro region with a stable outlook for its top ranking.
Read the rest.
Deutsche Welle reports on German reactions to the Moody’s warning downgrade for the country:
Commerzbank analyst Carolin Hecht said Moody’s assessment had basically contained “nothing that hasn’t been known yet.”
“That is why exchange rate fluctuation between the euro and the US dollar has remained in the range of between 1.214 and 1.2109,” she told Reuters news agency
However, a statement issued by Metzler Bank said that the action of Moody’s reflected a more “critical” stance by international ratings agencies towards the eurozone’s healthier economies.
A similar statement issued by National Bank, and also carried by Reuters, said the ratings move would limit the German government’s “room to maneuver” in the debt crisis and may undermine Berlin’s willingness to accept the issuance of “collective eurozone bonds” as a measure of last resort.
The German government reacted coolly to Moody’s negative outlook for its sovereign debt, stressing that the country would remain the eurozone’s “anchor of stability.”
The Finance Ministry said in a statement that it had “taken note” of Moody’s opinion, but criticized that the agency mainly put the focus “on short-term risks, while stability prospects in the long term are not mentioned.”
Economics Minister Philipp Rösler noted that the German economy was structurally in “robust shape.”
Read the rest.
Eurobank eurozone rescue imminent?
Without another cash infusion to ailing member states, the eurzone’s in even great peril, according to experts interviewed by Agence France-Presse.
Absent a rescue, things can only get worse:
The European Central Bank may have to ride to the eurozone’s rescue again very soon, analysts said Tuesday, as Spain looks set to be the next country engulfed by the never-ending debt crisis.
The long-running turmoil shows no sign of abating, with Spanish borrowing costs soaring to dangerously high levels and bailed-out Greece’s rescue programme seemingly on the rocks.
And in yet another blow Tuesday, ratings agency Moody’s warned it could strip euro kingpin Germany of its coveted triple-A rating.
>snip<
“Without substantial ECB action, the eurozone may soon lose the ability to control the market panic,” Berenberg Bank economist Christian Schulz wrote in a note to investors.
In Paris, French Foreign Minister Laurent Fabius said he hoped that Spain would not need a full bailout, but if so, it could require a boost to Europe’s rescue fund or ECB action.
Analysts feel the Europe’s current anti-crisis strategy is having only a limited effect and the ECB is the only player currently capable of acting fast enough.
Read the rest.
Germany bends over backward for Spain
That’s because Spain’s on board for the Merkel agenda, that shift of final say over national budgets from national legislatures to the folks in Brussels.
With the bank bailout already underway and the call for broader Spailout imminent, there’s good reason for a conservative Spanish government to sign on the with agenda set by a conservative German government.
Besides, when push comes to shove, the blame can always be foisted off on their distant eurocrats, right?
From Julien Toyer of Reuters:
Spain and Germany’s Finance Ministers called on Tuesday for a quick implementation of the decisions of the last European Union summit, and in particular the setting up of a banking union along with a single European supervisor.
“The ministers underline the importance to work – along with the European partners – for the swift implementation of the decisions of the European Council of June 29,” Luis de Guindos and Wolfgang Schaeuble said in a joint statement.
“This includes, in particular, the full construction of an effective banking union, along with a single European banking supervisor,” they also said.
A French Spailout shout-out
The foreign minister says he hopes a full Spailout won’t be needed, but if so. . .
From EurActiv:
French Foreign Minister Laurent Fabius said on Tuesday that he hoped that Spain would not need a full bailout, but if so, it could require a boost to Europe’s rescue fund or European Central Bank action.
“I hope it will not be necessary to intervene again,” Fabius told France 2 television. “If we have to intervene, it could be (via) an increase of firewalls… or interventions by the (European) central bank.”
>snip<
For Spain, as for other European Union members, “we must simultaneously be serious in terms of the budget and (ensure) that there is a growth dimension” to the EU’s efforts, Fabius said.
The French government has stressed promoting growth as a way of pulling the eurozone out of crisis, while Germany has put the focus on budget discipline, creating a rift that both sides now seek to heal.
Read the rest.
Yet another legal question in Germany
That nation, the economic and financial powerhouse of the continent, is increasingly reluctant to split with more cash, but the government does want that sovereignty shift to Brussels.
But the decision about whether or not Germany can sign on to the new legal agenda depends on a high court decision which will determine if the country’s figurehead president can exercise his major political power: Adding the signature required for legislation to become law.
But not it’s the fate of the president himself that’s in doubt.
From Deutsche Presse-Agentur:
The public prosecutor in Hanover applied Thursday for German President Christian Wulff’s immunity to be lifted, the first step towards opening a formal investigation of possible corruption charges. If parliament in Berlin decides to allow the inquiry to proceed, Wulff would be the first German president in history to face a formal criminal investigation.
Wulff, a conservative, has rejected calls to resign since mid-December, when allegations were raised over his relationships with wealthy friends while he was premier of Lower Saxony state. The prosecutors said there was a “preliminary suspicion” that Wulff may have “accepted a benefit,” which is an offence for a public official, punishable by up to three years’ prison. David Groenewold, a manager of film investment deals, was named as the suspected giver.
Last week, Wulff denied through his lawyer that he and his fiancee obtained a free holiday with Groenewold at a German beach resort. Wulff insisted he had paid, in cash, for the three-night stay in 2007. “Naturally, the presumption of innocence prevails, despite the preliminary suspicion,” the prosecutors added in Hanover, the Lower Saxon capital. They declined to discuss the evidence, but referred to recent reports by investigative journalists. The media had reported Groenewald paid the whole party’s bill with his credit card in Westerland on the island of Sylt.
A year earlier, premier Wulff’s state government had approved a 4-million-euro (5.3-million-dollar) credit guarantee for one of Groenewold’s projects. The guarantee expired without being used. Wulff’s personal lawyer, Gernot Lehr, declined comment on the announcement.
Read the rest.
And on to Italy. . .
Italian crisis spreads, cities near bankruptcy
Prime minister Mario Monti’s already consolidated provincial governments in an attempt to cut costs, but now some of the countries largest cities themselves are perched on the precipice.
From Nick Squires of the London Telegraph:
Italy’s financial outlook darkened on Monday amid warnings that 10 cities are at risk of bankruptcy and schools may not be able to open in the autumn because of drastic spending cuts.
The cities at risk of running out of money include Naples, Palermo in Sicily and Reggio Calabria, on the toe of the Italian boot, according to the Italian press.
“The situation is becoming worse by the day,” said Graziano Del Rio, the president of a national association of municipal councils.
The warning came just days after Mario Monti, the prime minister, expressed fears that Sicily, which has a high degree of fiscal autonomy, was on the brink of a default.
Read the rest.
And on to Greece. . .
Germans remarkably silent on Greece today
That’s presumably because of all the heart that landed on Economy Minister and Deputy Chancellor Philipp Rösler, leader of the Free Democratic Party [FDP], for his outspoken declaration Sunday that Greece was essentially broken and basically unfixable [our paraphrase] — and that a Grexit no longer held horrors for him.
As Spiegel reports, “Rösler was accused of being reckless and unprofessional by saying in a television interview that he was “more than skeptical” that Greece’s reform efforts will succeed.”
The newspaper reported some of the choicer denunciations of the minister:
A fellow FDP member, Michael Link, a state secretary in the Foreign Ministry responsible for European policy, warned on Monday against making self-fulfilling prophecies and said the German government’s position was that no country should be pressured into leaving the euro zone. “If it is possible to keep it together, we should do it,” he said of the euro zone, speaking on the sidelines of an EU foreign ministers’ meeting in Brussels.
Jorgo Chatzimarkakis, a Greek-German member of the European Parliament for the FDP, was less diplomatic. He said he was astonished by the “extent of unprofessionalism” in Rösler’s comments.
>snip<
Gustav Horn, director of the union-aligned Macroeconomic Policy Institute think tank, called Rösler’s comments “grossly reckless.” Rösler had shown “that he unfortunately still hasn’t understood the euro crisis,” Horn told business daily Handelsblatt.
But the message was still coming through loud and clear from the Rösler’s party today:
Patrick Döring, general secretary of the FDP, said the German parliament would not back another bailout package for Greece. “It could create confidence in markets if Greece weren’t part of the euro zone any more,” he told the Passauer Neue Presse newspaper. “Greece can regain its competitiveness and return to health more quickly outside of the euro zone.”
Read the rest.
Greek recession strikes deeper, Samaras says
The coalition Prime Minister predicts shrinake of more than seven percent, with no prospects of any growth for another two years.
From Capital.gr:
Greece’s recession may be deeper than 7 percent this year, Prime Minister Antonis Samaras said on Tuesday, estimating that the country would not return to growth before 2014.
“We will start containing the recession this year and we will be able to move onto recovery at the beginning of 2014,” Samaras told a parliamentary group meeting, according to Reuters.
Greece is in a fifth straight year of recession and blames the deeper than expected contraction for missing its tax revenue and budget deficit goals.
We’re not talking Grexit, says Austrian minister
But it’s a provisional statement, to which a “now” needs to be attached.
Seems like the finance minister won’t be discussing it until after the Troika team now in Athens finishes their work. And with the Greek prime minister begging for a two-year extension for implementing all that austerity spelled out in the existing memorandum. . .
From Reuters:
A Greek exit from the eurozone is not under discussion, Austrian Finance Minister Maria Fekter said on July 24, adding that Europe would have to wait for a key report on Greece before deciding on further steps.
“It is not being discussed at the moment,” Fekter told journalists when asked whether Greece might leave the currency union. “We are waiting for the troika’s report,” she said, adding that the report was expected in September.
Officials from the troika of lenders keeping Greece are in Athens to decide whether to keep the nation hooked up to a 130 billion-euro ($158 billion) lifeline or let it go bust.
Fekter said that until their report was done, it had to be assumed that the country would be able to stand on its own feet by 2020, as has been agreed, as long as it could fulfill a programme of reforms to which it has committed.
End Troika talks now, says Tsipras
And it’s not just a negative state; it’s also a call for a eurosummit to consider other ways out of the crisis.
From Keep Talking Greece:
Main opposition leader and Syriza chief Alexis Tsipras called on Greek government to end any discussion with the representatives of the EC-ECB-IMF troika, and propose an EU Summit meeting to focus on a different strategy for Greece.
Addressing the Syriza parliamentary group on Monday, Tsipras voiced his party’s determination to engage in dynamic action against privatisations and made a special reference to the case of ATEbank, calling it a “premeditated crime”.
He also referred to the Hellenic Postbank, stressing that “private interests and their stooges” will be met with his party’s strong reaction.
The Syriza leader further lashed out at the three-party government, accusing it of letting time pass instead of negotiating, effectively accepting the country’s “total isolation”, as he claimed.
Read the rest.
More from the news agency AMNA:
He spoke of “imminent bankruptcy measures,” adding that “the programme has failed.” He also said that the memorandum has gone bankrupt and “its architects, like the IMF, are the first to jump ship.”
“If (German Chancellor) Merkel wishes us to go bankrupt, it would be best if we dare her to say so herself and let her shoulder the consequences,” Tsipras before pointing out that “the memorandum and the 72 economic measures announced before the elections, will lead the country to a social collapse come fall and those who do not realize it are simply inadequate and dangerous.”
Earlier in the day, Syriza had issued a statement marking the 38th anniversary since the fall of the 1967-1974 military junta in Greece and the restoration of democracy, stressing that now was the time for Greeks to “raise the voices and overthrow the memorandum policies, bringing democracy back to the foreground”.
The party said that Greeks and peoples throughout Europe must unite their voices in support of a just, peaceful, democratic and socialist society.
It also stressed that the anniversary was a time to honour the thousands of people that had fought, been imprisoned and sacrificed themselves for dignity, freedom and democracy.
“Our own obligation as the Left is, to fight alongside the people for a better present and future, in every place of work and study, in every neighbourhood, to defend our rights to dignity, work and social goods,” the party statement said.
Read the rest.
Tsipras is staking out a clear alternative to coalition, and should the Troika refuses any alternatives to the existing misery-laden memorandum, Syriza will be in a strong position should political turmoil force yet another election.
The Troika arrives, readies for meet
The hit team is on hand, and they’ll be running the numbers in preparation for a Friday meeting with Samaras.
From Ekathemerini:
Representatives of Greece’s troika of lenders were due in Athens on Tuesday to begin the last phase of their inspection before producing a report on Greece’s fiscal program that could decide whether the country will receive any more loans.
The government was searching for 2.5 billion euros more in savings to meet the target of 11.5 billion set by the troika fro 2013 and 2014.
The effort to finalize the 11.5-billion-euro package is broadly based on a report by the Center of Planning and Economic Research (KEPE) which recommends a range of measures, including setting a ceiling on pensions, worth an estimated total of 5.1 billion euros
The combined efforts of the various ministries added another 3 billion euros to the running total with an additional 1 billion euros reportedly scraped together in a meeting chaired by Finance Minister Yannis Stournaras on Monday.
Prime Minister Antonis Samaras is due to meet the leaders of the two other parties in his coalition government, PASOK’s Evangelos Venizelos and Democratic Left’s Fotis Kouvelis, on Thursday afternoon to discuss the cuts.
Samaras is due to meet the troika officials on Friday, a day after they hold talks with Stournaras.
Read the rest.
Samaras fires off a message to Germany
Basically, it’s “We can do the austerity thing, so keep your damn traps shut.”
From Keep Talking Greece:
Greek prime minister Antonis Samaras sent a clear message to those speaking lenders of Greece who keep casting doubt whether the debt-ridden country would manage to exit the crisis – or the euro. Without directly naming FDP leader Philip Roesler it is more than obvious that Samaras’ arrows were shot in German direction.
“…there are some foreign officials who come out every once in a while and predict that Greece will not manage it! I say it openly that I consider them as saboteurs of the national effort! We do what we can to bring the country back on its feet and they do all they can so that we fail. I really do not know, if they do it on purpose or out of foolishness. But I do know, that they are irresponsible,” Samaras said speaking to parliamentary group of conservative Nea Dimocratia on Tuesday morning.
Read the rest.
Thar’s gold in them thar ills!
Austerity is all about capture of state resources and their transfer into private hands.
Now the United Nations is adding fuel to the fire, basically calling on Greece to open up its natural resources to exploitation.
From Greek Reporter’s Marianna Tsatsou:
Taking into account a United Nations report, one can realize why many countries all over the world are trying so hard to take control over Greece. The report was published in French Le Figaro newspaper and made clear that Greece, apart from the hydrocarbon, has a great deal of important mineral wealth.
“According to surveys and dug outs held in several areas of Greece, the country is upon a plate having decades of extremely rare minerals which can be applied in industry, aeronautical engineering etc., and all of them in great quantity,” continues the UN report.
It is also mentioned that Greece is a unique source of huntite in the world. Huntite is a carbonate mineral and is used mostly in industry in a natural mixture of hydromagnesite as a flame retardant. The heat of a fire will cause huntite to decompose releasing carbon dioxide into the flames. This contributes in slowing down the spread of the fire.
Le Figaro editor comments that this is “Greece’s ace up its sleeve” and that it should take advantage of huntite, lignite and other minerals to exit its financial crisis. The French paper adds that the country’s globally significant minerals may have been the key factor for this “competition” among mighty states- they are making efforts to exploit the country’s wealth in the future.
Furthermore, the UN stresses the fact that Greece has many other minerals, of which they have never taken advantage including clay, limestone, shale and gypsum.
Read the rest.
The U.N. pronouncement was followed by a Greek court decision rejecting environmentalists’ concerns over a major gold mining project in one of the country’s primary tourist destinations, Halkidiki, on the northern Aegean coastline.
The region has already been torn over a logging fight.
From Athens News:
The country’s Council of State court (COS) gave the green light to gold mining in Halkidiki on July 23 on a provisional basis.
According to the COS jurists, their ruling was based on the 20% unemployment rate in Halkidiki, considering that the investment will create between 892 and 1,300 new job positions. The court made a statement asserting that there are no environmental concerns stemming from the investment.
The ruling is temporary until the council holds a full hearing on the case at a later point, added the court official and another official close to the proceedings.
The Greek state launched procedures to terminate a contract signed with TVX Hellas S.A. for the exploitation of the gold mines in the region of Kassandra, which resulted to an out of court settlement.
A new contract (No. 320/2004) was later signed between the Greek state and the Canadian company Hellas Gold S.A., which bought the Kassandra mines for 11 million euros. The new contract prompted the reaction of several local residents, who appealed to the COS seeking to suspend it, again citing environmental protection issues.
Read the rest.
Once again, job creation is cited as the rationale for a move that benefits corporate investors, while environmental concerns are swept aside, declared nonexistent in the court’s ruling.
Union alliance leader warns of social unrest
It’s one of those no-brainers, but it takes a figure of international staturt to make into the news hole.
Austerity destroys lives and jobs, and makes life miserable even for those who keep their jobs, so how can it do other than inspire unrest?
From Athens News:
International Trade Union Confederation (ITUC) General Secretary Sharan Burrow presented the findings of an European survey conducted by the ITUC at a press conference held at the offices of the General Confederation of Employees of Greece (GSEE) in Athens.
Noting that 91 percent of Greek workers had seen their income reduced relative to previous years, with 7 percent remaining at the same level and only 3 percent having any sort of increase in income, she warned that the dangers of social unrest were very real.
Burrow arrived in Athens as the head of an ITUC delegation on Sunday, during which she held talks with Greek trade unionists, workers in order to record violations of trade union rights in Greece and elsewhere in Europe.
Read the rest.
Two major labor actions were held in Greece Wednesday, walkouts by municipal rail service workers and by city public workers, both in Athens.
Greek bank sheds private banking arm
The decision follows a “request” from eurocrats who made them an offer they couldn’t refuse, given that Eurobank took a big hit on those Troika-ordered writedowns demanded as a condition of last year’s bailout.
From Reuters:
Greece’s second-largest lender EFG Eurobank said on Monday it would split from EFG Group at the request of European regulatory authorities.
EFG Group would transfer 43.55 percent of its 44.7 percent stake in the Greek lender to nine younger members of the Latsis family, a major shareholder in Eurobank which made its fortune in shipping, the bank said.
“Eurobank is no longer going to be consolidated into the financial statements of the EFG Group,” it said in a statement.
European regulatory authorities had asked for the distinction of the two groups in terms of branding and management and eventually a distinction in ownership, the bank added.
Eurobank, like other Greek banks, has been battered by the country’s debt crisis. It lost 5.5 billion euros in 2011, hit by debt swap writedowns.
Read the rest.
Separating private investment arms from public banks? Gee, maybe we should try that here on this side of the Atlantic.
And on to other countries. . .
British recession worst in six decades
How’s that austerity going for ya, huh, Mr. Brown?
From Peter Cripps of The Independent:
Britain’s longest double-dip recession for more than 50 years will be confirmed in official figures due tomorrow.
Gross domestic product (GDP) – a broad measure for the total economy – is forecast to have shrunk by around 0.2 per cent between April and June in its third quarter in a row of contraction.
That would mark the longest double-dip recession since quarterly records began in 1955 and is believed to be the worst since the Second World War.
The last double-dip recession was in the 1970s, when the economy was hamstrung amid soaring oil prices and a miners’ strike, but that only lasted two quarters.
Read the rest.
Given the critical role played by rate-fixing banks based in London, there’s a certain irony here.
But Britain’s certainly not immune to the same forces at play elsewhere in Europe, even if it calculates in pounds instead of euros.
Irish bankster busted for cooking books
Another good idea we should try out over here in the U.S.
From the BBC:
The former head of Anglo Irish Bank, Sean FitzPatrick, has been arrested by Irish police in connection with alleged financial irregularities at the bank.
Mr FitzPatrick has been appearing in court in Dublin.
He is the third former senior executive from Anglo Irish Bank to appear in court within the past 24 hours.
All three men face 16 charges in relation to an alleged failed attempt to prop up Anglo’s share price after a stock market collapse.
Anglo was nationalised at a cost of about 30bn euros (£23.4bn) to Irish taxpayers.
Read the rest.
Irish housing collapse continues
While things over here have reached a temporary bottom and held, the Irish housing crash continues to rage unabated — with house prices down more than half in the last five years and continuing to slide.
From Eoin Burke-Kennedy of the Irish Times:
Residential property prices across the country fell by 14.4 per cent in the 12 months to the end of June, according to the latest data from the Central Statistics Office (CSO).
The figures show property prices fell by 1.1 per cent during the month of June, reversing the 0.2 per cent rise recorded in May which was the first monthly rise in nearly five years.
According to the Residential Property Price Index, which is compiled by the CSO using mortgage drawdown data supplied by banks, property prices in Dublin fell 1 per cent last month and were 16.4 per cent lower than a year ago.
Dublin house prices decreased by 0.8 per cent in the month and by 16.4 per cent on an annual basis while Dublin apartment prices were 17.9 per cent on the same month in 2011.
Property prices in the capital are now 57 per cent lower than their 2007 peak.
Read the rest.
Norway plans to tighten borders
While not a member of the European Union, Norway has signed on to the Schengen Agreement, which allows for free passage across European borders.
Now the country is getting ready to opt out and reimplement border controls.
The government’s stated concern? Eastern European gangsters.
From EurActiv:
A member of the governing coalition in Norway, a non-EU country that is a member of the Schengen passport-free area, said it would be in the country’s interest to take care of its own borders.
The Norwegian media reported that Jenny Klinge, an MP from the Centre Party (Senterpartiet), a government coalition partner, said the Schengen Agreement makes it easier for criminals to enter the country. She insisted that the government re-take control of the country’s borders.
Klinge said the problem was particularly serious because Bulgaria and Romania could enter the Schengen area in the autumn.
A decision on Bulgaria and Romania’s accession to the European passport-free area has been long overdue. A ministerial meeting in September will come back to the issue, but the outcome remains uncertain as a number of countries, including the Netherlands, remain opposed.
Bulgarian news media quoted Klinge as saying that if and when Bulgaria and Romania become part of Schengen, it would be very difficult for Norwegian authorities to deal with organised crime coming from that region. A European Commission report published last week says Bulgarian organised crime groups are active in 15 EU member states and are among the most widespread in Europe.
Read the rest.
Fascinating that the Bulgarian mob has spread so rapidly. But with roots back to a Soviet era surveillance state, they learned the right skills to survive in the virtual panopticon Western neoliberal states.
When all else fails, another trade agreement
And this time with Israel as the beneficiary.
Israel’s been getting more than it’s dose of austerity, thanks to Benjamin Netanyahu’s own peculiar brand of austerity, and, like the Greek version, it’s also led to a rise in public anger and one spectacular suicide.
Now its about to get some more in the form of yet another trade agreement sure to bring profits for a few.
Benjamin Fox of EUobserver
The EU is today to confirm moves to strengthen economic ties with Israel, facing off criticism that trade conditions should be frozen due to the diplomatic impasse over Israeli settlements in the occupied territories.
The proposal, to be rubber-stamped at the annual meeting of the EU-Israel Association Council on Tuesday (24 July), covers 60 trade and diplomatic policy areas, including increased access to the EU’s single market, closer cooperation on transport and energy, and enhanced ties with nine EU agencies, including the police body Europol and the European Space Agency. Israel will also be in line to receive direct financial assistance worth €6 million over the next three years.
The EU is Israel’s main trading partner with total trade worth €29.5 billion in 2011. The 27-member bloc agreed its first bilateral trade deal with Israel in 2000. However, plans for a comprehensive EU-Israel free trade agreement were frozen by the EU in January 2009 following Israeli attacks on the Gaza strip. The EU said that progress on trade talks was dependent on Israel’s commitment to the Middle East peace process, in which the EU forms part of the international Quartet.
The move comes just weeks after EU foreign affairs chief Catherine Ashton denounced plans unveiled by Benjamin Netanyahu’s government in June to expand settlement building in the occupied territories, insisting that they were “illegal under international law and threaten to make a two-state solution impossible.”
Read the rest.
Meanwhile, in Paris. . .
With all that’s going on in the world — and particularly in Europe — the Parisian transit system is cracking down.
On bad manners.
From Andrea Davoust of France 24:
Note to visitors from abroad: you are not the only ones annoyed by snotty waiters, aggressive commuters and shameless queue-jumpers in France.
The French – although long stereotyped as bad-mannered – are exasperated, too. And now they’re fighting back.
“Lack of manners” was quoted as the number one source of stress for 60% of French people, according to a recent study by French polling institute Ipsos.
Last month Paris’s transport company, RATP, said 97% of its passengers had witnessed “uncivil” behaviour on the French capital’s buses and metro lines.
The company even published a “Top 10″ list of the behaviours that most annoyed French commuters.
Unsurprisingly, loud mobile phone chatter topped the list, irking 86% of people surveyed. Refusing to let passengers off a train before jumping on – a classic Parisian nuisance – also featured high up in the table.
In an attempt to shame ill-mannered commuters, RATP has launched a campaign for “civility” on the public transport network.
Read the rest.
Chinese fallout from the eurocrsis
Just how wide has the eurocrisis spread?
How about all the way to China, where it’s impacting the lives of some of that country’s poorest, folks who search the streets and trash bins for paper to recycle.
From CNN:
“There are an estimated 10,000 people who are recycling scavengers in Hong Kong,” says Sze Lai Shan, a well-known local rights activist and social worker for Hong Kong’s Society for Community Organization, or SOCO.
But paper scavengers. . .are making much less money today than last year. The reason is thousands of miles away, says Jacky Lau, president of one of Hong Kong’s oldest recycling companies.
“Europe is facing many economic problems and this has translated to fewer manufacturing orders for clothes and toys in China,” explains Lau. “Fewer orders mean a slowing demand for paper boxes, so prices have fallen dramatically.”
Read the rest.
