Today’s collection of headlines economic, political, and environmental begins with on ominous note with The Independent:
Advances in artificial intelligence could lead to mass unemployment, warn experts
Academics say half of US jobs could be automated within a decade or two
Experts have warned that rapidly improving artificial intelligence could lead to mass unemployment just days after Google revealed the purchase of a London based start-up dedicated to developing this technology.
Speaking on Radio 4′s Today programme, Dr Stuart Armstrong from the Future of Humanity Institute at the University of Oxford said that there was a risk that computers could take over human jobs “at a faster rate than new jobs could be generated.”
“We have some studies looking at to which jobs are the most vulnerable and there are quite a lot of them in logistics, administration, insurance underwriting,” said Dr Armstrong. “Ultimately, huge swathe of jobs are potentially vulnerable to improved artificial intelligence.”
Dr Murray Shanahan, a professor of cognitive robotics at Imperial College London, agreed, noting that improvements in artificial intelligence were creating “short term issues that we all need to be talking about.”
BBC News booms:
US economy growing at 3.2% in the fourth quarter, official figures show
The US economy grew at a 3.2% annual rate for the final quarter of 2013, according to the country’s Commerce Department.
Many predict that 2014 will produce the strongest growth since the end of the US recession in mid-2009.
Optimism over the health of the world’s largest economy led to a further easing of the Federal Reserve’s stimulus measures on Wednesday.
A cautionary note from Reuters:
Exclusive: U.S. banking regulator, fearing loan bubble, warns funds
A U.S. bank regulator is warning about the dangers of banks and alternative asset managers working together to do risky deals and get around rules amid concerns about a possible bubble in junk-rated loans to companies.
The Office of the Comptroller of the Currency has already told banks to avoid some of the riskiest junk loans to companies, but is alarmed that banks may still do such deals by sharing some of the risk with asset managers.
“We do not see any benefit to banks working with alternative asset managers or shadow banks to skirt the regulation and continue to have weak deals flooding markets,” said Martin Pfinsgraff, senior deputy comptroller for large bank supervision at the OCC, in a statement in response to questions from Reuters.
Among the investors in alternative asset managers are pension funds that have funding issues of their own, he said.
Banksters behaving badly from Reuters:
U.S. seeks $2.1 billion from Bank of America in fraud case
The U.S. government has raised the amount it is seeking in penalties from Bank of America Corp (BAC.N) to $2.1 billion after a jury found the bank was liable for fraud over defective mortgages sold by its Countrywide unit.
The request in a court filing late on Wednesday was based on gross revenue generated by the fraud, the government said. The Justice Department had previously asked for $863.6 million.
The initial request was based on gross losses it said government-sponsored mortgage finance companies Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) incurred on loans purchased from Countrywide Financial Corp in 2007 and 2008.
Tapering with BBC News:
US Federal Reserve slows monthly bond-buying to $65bn
The US Federal Reserve announced a $10bn (£6bn) reduction in its monthly bond purchases from $75bn to $65bn in the second straight month of winding down stimulus efforts.
The central bank had been buying bonds in an effort to keep interest rates low and stimulate growth.
In a statement, the Fed said that “growth in economic activity picked up” since it last met in December.
Although the move was expected, US shares still fell on the news.
Screwing the poor with The Guardian:
Congress axes $8.6bn from food stamps in farm bill
Richer farmers get bigger subsidies in immediate snub to Barack Obama’s State of the Union call for action on inequality
Congress has agreed to cut $8.6bn from the federal food stamp program while increasing government subsidies for richer farmers, dealing a swift rebuke to Barack Obama’s call for a year of action on economic inequality.
Within hours of the president’s State of the Union speech, the House of Representatives voted overwhelmingly to adopt the measures as part of a wide-ranging farm bill that passed by 251 to 166 votes and has already been endorsed by the Senate’s Democratic leadership.
The cuts to federal food stamps come on top of a $5bn cut in November and will reduce payments to 1.7 million of the poorest Americans by an estimated $90 a month.
Golden State woes from the San Francisco Chronicle:
Amid one of the worst droughts in California’s recorded history, state officials say 17 communities and water districts could run dry within 100 days
The threatened towns and districts are mostly small and in rural areas. They get their water in a variety of ways, from reservoirs to wells to rivers. But in all cases, a nearly rainless winter has left their supplies approaching empty.
In the greater Bay Area, Cloverdale and Healdsburg in Sonoma County are among those at risk of running out of water. The small Lompico Water District in the Santa Cruz Mountains is also on the list.
Bloomberg itemizes:
California Farms Going Thirsty as Drought Burns $5 Billion Hole
The drought in California, the top U.S. agricultural producer at $44.7 billion, is depriving the state of water needed to produce everything from milk, beef and wine to some of the nation’s largest fruit and vegetable crops, including avocados, strawberries and almonds. Lost revenue in 2014 from farming and related businesses such as trucking and processing could reach $5 billion, according to estimates by the 300-member California Farm Water Coalition, an industry group.
The state was the driest ever in 2013, a third straight year of little moisture. California Governor Jerry Brown declared a drought emergency on Jan. 17 as arid conditions he called “unprecedented” continued well into the annual rainy season that runs from October through March. Reservoirs on Jan. 27 were at 61 percent of average, while the mountain snow-pack as of Dec. 30 that supplies most of the state’s water was at 20 percent of normal for that time of year, data show.
And a global story from New Europe:
UNDP: Income inequality increased compared with 1990s
UNDP published a report on income inequality in the developing countries stressing that inequality increased by 11 per cent between 1990 and 2010.
According to the report, more than 75 per cent of the population in developing countries is living today in societies where income is more unequally distributed than it was in the 1990s. The report underlined that inclusive growth policies are important policy tools for reducing income inequality.
Helen Clark, administrator of the UNDP said according to a press release that “inequalities on today’s levels are unjust in both developing and developed countries…Over the last few decades, poverty rates have declined in every region of the world; emerging market countries have grown with unprecedented speed; and life
Advice from China Daily:
Replace dollar with super currency: economist
The World Bank’s former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system.
“The dominance of the greenback is the root cause of global financial and economic crises,” Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank. “The solution to this is to replace the national currency with a global currency.”
Lin, now a professor at Peking University and a leading adviser to the Chinese government, said expanding the basket of major reserve currencies — the dollar, the euro, the Japanese yen and pound sterling — will not address the consequences of a financial crisis. Internationalizing the Chinese currency is not the answer, either, he said.
On to Europe and a regulatory call from Deutsche Welle:
EU presents more proposals to curb risky banking activities
The European Commission has proposed measures to rein in risky banking activities in heeding the lessons from the global financial crisis. It focused on stopping dubious trading by lenders “too big to fail.”
The proposals presented in Brussels on Wednesday centered on 30 large European banks, accounting for more than 65 percent of the EU’s total banking assets.
According to the suggestions made, these lenders would be banned from proprietary trading, a practice under which banks make bets using their own money and not that of customers.
The lenders could be forced to also separate other risky trading activities from their deposit-taking business which would make them far less vulnerable in a crisis situation.
Deutsche Welle again, with labor action:
European air traffic controllers go on strike over EU initiative
Air traffic controllers have begun a two-day strike over an EU initiative they fear will cause job cuts and more difficult working conditions, causing some delays. The EU is to vote on the measure on Thursday.
Air traffic controllers across several EU nations were expected to go on strike on Wednesday. The move was prompted by the EU’s Single European Sky initiative, which seeks to centralize the continent’s airspace and reduce congestion and inefficiencies costing airlines an estimated 5 billion euros ($6.8 billion) annually.
Some 20 flights out of Lisbon in Portugal were cancelled on Wednesday, while Rome’s Fiumincino hub was also hit with cancelations and delays. In anticipation of the focus turning to Paris, the civil aviation authority asked airlines to reduce traffic into the French capital by 20 percent.
German workers had originally planned on joining the strike action. However, an injunction filed by German flagship carrier Lufthansa last week prevented them from doing so.
Britain next and an alarm from Xinhua:
Warning bells ring over British current account deficit
The British economy performed well in 2013 with 1.9 percent GDP growth, and some economists predict growth of up to 3 percent this year, but warning bells are sounding over the size of Britain’s current account deficit.
Simon Wells, chief UK economist with HSBC Global Research, raised worries over the unbalanced nature of growth in the British economy and the current account deficit, which stands at 5.1 percent of GDP in Q3 2013, close to a peacetime record.
Wells said, “Of the 40 countries covered by HSBC economists, the UK has the fifth largest current account deficit. And while most countries have narrowed deficits over the past five years, the UK’s is one of the few that have widened.”
The Guardian takes note:
Mortgage lending at six-year high
Bank of England says £12.4bn of new mortgages were approved in December 2013
The number of mortgages taken out to buy homes reached its highest level in almost six years in December, figures from the Bank of England showed, as the housing market continued to gather speed despite the slide into winter.
A total of 71,638 loans were approved for house purchase, above the previous six-month average of 65,001 and the highest monthly figure since January 2008 when the credit crisis and economic slowdown started to take hold of the market.
The government’s Funding for Lending scheme to offer cheap fund to banks and building societies, and the second part of Help to Buy which offers a taxpayer-backed guarantee on mortgages up to 95%, have both made home loans cheaper and more accessible to those with small deposits.
And a polyglot headline from the London Telegraph:
The 800,000 people living in Britain with little or no English
Analysis of census figures shows how most people living in Britain who do not have a good command of English do not have a job
Migrants with little or no English are 50 per cent more likely to be unemployed than native speakers and three times as likely to have no formal qualifications.
The study also showed that those who do work are condemned to the lowest paid and most laborious jobs if they do not have a working command of English.
Significantly the problem is most acute among women. Overall 60 per cent of those living in England and Wales but unable to speak the national tongue are female.
Bordering on controversy with TheLocal.de:
UK and Germany locked in immigration debate
The UK and Germany are locked in the same debate over the arrival of a new wave of immigrants from eastern Europe. But despite their arguments being the same, their presentation is very different, argues The Local’s Tom Bristow.
A conservative party calls for new measures to prevent migrants moving abroad to access welfare benefits. The left hits back, defending freedom movement as a cornerstone of the European Union.
A slogan from the conservative party in the ruling coalition government is deemed populist, even racist by the pro-immigration camp – “Those who cheat are out.”
That slogan could have come from UK Prime Minister David Cameron – yet it came from the Christian Social Union (CSU), the Bavarian allies of Chancellor Angela Merkel.
Profiteering with The Independent:
Passports for profit: British company to make ‘disgusting amounts of money’ from controversial EU passport sale
A British company has been accused of making “disgusting amounts of money” from a controversial scheme by Malta to sell European Union passports to tycoons and celebrities ranging from a former Formula One world champion to a Chinese billionaire.
Henley & Partners, a private company registered in Jersey which specialises in “citizenship solutions”, stands to make at least €60m (£49m) from its role as the designer and principal contractor for the scheme, which will sell passports for €1.15m a piece.
The programme, which is due to begin processing its first applicants next month and will provide a right to reside anywhere in the EU, including Britain, has attracted sharp criticism both within the Mediterranean island and abroad.
Iceland next, and a counterfactual from Bloomberg:
Let Banks Fail Is Iceland Mantra as 2% Joblessness in Sight
Iceland let its banks fail in 2008 because they proved too big to save.
Now, the island is finding crisis-management decisions made half a decade ago have put it on a trajectory that’s turned 2 percent unemployment into a realistic goal.
While the euro area grapples with record joblessness, led by more than 25 percent in Greece and Spain, only about 4 percent of Iceland’s labor force is without work. Prime MinisterSigmundur D. Gunnlaugsson says even that’s too high.
“Politicians always have something to worry about,” the 38-year-old said in an interview last week. “We’d like to see unemployment going from where it’s now — around 4 percent — to under 2 percent, which may sound strange to most other western countries, but Icelanders aren’t accustomed to unemployment.”
Denmark next, and a walkout over a bankster win from The Guardian:
What would Birgitte do? Socialists quit Denmark coalition over energy deal
Goldman Sachs’s investment in state-owned energy prompts walkout and Borgen-esque political crisis
With Borgen no longer around to keep British audiences entertained, real-life politics in Denmark continues to give the fictional version a run for its money when it comes to drama.
After a recent spate of controversies and ministerial resignations, the Danish centre-left government suffered another blow on Thursday when the Socialist People’s party (SF) left the ruling coalition amid anger over Goldman Sachs’s investment in Denmark’s state-owned energy company.
Goldman’s 8bn kroner (£900m) purchase of a 19% share in Dong Energy has been championed by the government but caused a revolt among SF’s parliamentary group. After a night of tension and discussions, SF’s leader, Annette Vilhelmsen, announced her resignation and said her party was leaving the coalition.
Germany next, and do as we say, not as we do from Independent.ie:
Germany loosens own pension rules while demanding austerity from rest of EU
Germany’s coalition government presented a pension reform plan today that will cost €160bn to 2030 by letting some workers retire earlier, loosening the purse strings at home when Berlin has demanded austerity from its euro zone partners.
Despite criticism from industry and the pro-business wing of Chancellor Angela Merkel’s party, the cabinet endorsed what is likely to be the most expensive single measure of the legislative period when it moves through parliament in May.
An additional 900,000 workers will be able to retire earlier than expected aged 63 over the next two years provided they have worked for 45 years. Some mothers will get pension increases.
TheLocal.de has income:
Foreign investment floods into Germany
Foreign investment into Germany increased by almost 400 percent last year, rising to €23.4 billion, a UN report revealed on Tuesday. It comes amid rising consumer and investor confidence.
In 2012 foreign direct investment stood at just €6.5 billion.
But 2013′s rise was helped by major deals including the purchase of Kabel Deutschland by Vodafone for €5.6 billion.
Germany also rose up the global rankings of the world’s most attractive foreign investment locations to 14th from 40th the year before.
Europe Online admonishes:
Deutsche bank warns of challenging year ahead
Deutsche Bank is making progress in restructuring its operations but faces further costs as a result of a string of lawsuits, the co-chief of Germany’s biggest bank said Wednesday.
The coming 12 months “will be another year of challenges,” Juergen Fitschen said in Frankfurt.
Deutsche announced earlier this month a surprise fourth-quarter loss because of a weak performance by its key investment banking operations and hefty legal costs following the bank’s involvement in a series of scandals.
New Europe exudes:
Record-high for consumer confidence in Germany
Consumer confidence in Germany is rising, and according to the latest data by a research group it reached to a level, last seen in 2007.
According to international market research group GfK, consumer confidence in Germany reached 8.2 points in January from 7.6 points in December. The research group said that the January reading was higher than expected by analysts and propelled the consumer index to a level last recorded in August 2007. German citizens were more optimistic regarding their economic and income expectations and their willingness to buy was improved.
According to the press release, Germans consider the national economy to be clearly on the upturn at present and this is reflected in the fifth consecutive improvement in economic expectations. “In the wake of this, income prospects climbed to reach a 13-year high. Willingness to buy also improved and surpassed its seven-year high of the previous month,” the report says.
While Deutsche Welle declines:
Beer sales in Germany lowest since early 1990s
Over the past years, Germans have drastically reduced their beer consumption. Fresh figures showed 2013 was no exception, with sales reaching their lowest level since the country’s unification.
With Germany still considered to be a major beer-drinking nation, annual sales of alcoholic beer in the country reached a new low in 2013, the National Statistics Office ( Destatis) announced Thursday.
While the nation still had 1,300 breweries making about 5,000 varieties of the beverage, they sold only 94.6 million hectoliters last year, a fall of 2 percent compared with 2012 and a drop to levels last reached shortly after German unification in 1990.
On to Amsterdam and an increasingly common trend from DutchNews.nl:
Postal deliveries could be cut to three days a week, if EU says yes
If the European Union gives permission, Dutch postal company PostNL could cut its deliveries to three days a week, a spokesman says in Wednesday’s AD.
European Union rules state post must be delivered five days a week but moves are being made to relax this, the AD says. PostNL stopped Monday deliveries at the beginning of this year.
‘If the EU allows it, we will cut back to four or perhaps even three delivery days,’ spokesman Werner van Bastelaar told the AD.
DutchNews.nl falls off:
Dutch savings are down for the first time in 20 years
For the first time in 20 years the Dutch have less in their savings accounts, Nos television says on Wednesday.
Figures from the Dutch central bank, ING and national statistics office CBS show the total amount of savings has gone down €1bn a month since reaching a high point of €330.5bn last summer.
There are four main reasons for the decline, the CBS says: one in 20 households are so hard up they have no more money to put aside; others are using savings to pay off debts and mortgages; investing in the stock market is popular again; and people who have lost their jobs are using up their savings to live on.
France next and an economic sweet spot from TheLocal.fr:
French arms industry enjoys boom in trade
Crisis, what crisis? While certain sectors in France continue to suffer in the downturn France’s arms industry is doing a roaring trade. A new report, that won’t be welcomed by pacifists, revealed this week that sales of arms abroad have rocketed.
Despite the seemingly endless stream of bad economic news for France, there is at least one sector that’s booming: weapons. French arms makers confirmed €6.3 billion in orders to foreign countries in 2013, which represents a 31 percent jump on the previous year.
The figures released on Wednesday by the Ministry of Defence ensure France keeps its spot at number four among the world’s largest providers of weapons. The United States, the United Kingdom and Russia all sold more weapons than France in 2013.
Departures note from TheLocal.fr:
Foreign investors desert France in 2013: report
As if high unemployment, heavy public debt and an unhappy populace weren’t enough, France also saw a double digit drop in foreign investment in 2013, according to a new United Nations report on Wednesday.
Signalling yet more bad news for France’s troubled economy, a United Nations report said the country saw a 77 percent decline in direct foreign investment last year, while the global average was an 11 percent increase.
France’s results were the worst in the European Union, according to the United Nations Conference on Trade Development report released on Tuesday.
A culture war panic from France 24:
French parents pull children from school over ‘gender theory’ scare
France’s education chief threatened Wednesday to summon parents who pull their children from school after a wave of absenteeism. The row was sparked by a rumour about sex education classes that could become a new ideological battleground in France.
Thousands of parents in France received a text message on their mobile telephones last week urging them to keep their children from school on Monday. The collective action was to protest an alarming development in French primary schools: the attempt to teach students that “they are not born as boys or girls, but can choose to become one or the other.”
The grassroots campaign opposing teaching of so-called “gender theory” in French schools asked parents to go further by taking their kids out of school one day every month. It recommended this be done with no prior warning to teachers.
Hints of things to come? From TheLocal.fr:
‘First ever’ bill proposes legal cannabis in France
France is no Amsterdam when it comes to marijuana laws, in fact it has some of the toughest possession statutes in Europe, but a first of its kind bill proposed this week could change that. The lawmaker behind the legislation tells The Local why marijuana should be legalized in France.
People smoking a joint in France face a maximum penalty of a year behind bars and a €3,750 fine for the first offence, yet 13.4 million French people admit to sparking up at least once in their life. Even France’s top cop, Interior Minister Manuel Vallls, said in a recent interview, he’d tried it “maybe once.”
The numbers go up as you look at the younger portion of the population. France had the unhappy distinction of being the European “champion” of teen pot smokers in 2011 when 24 percent of its 16-year-old kids admitted to smoking at least once a month, daily Le Monde reported.
Swiss hard times intolerance from TheLocal.ch:
Support for immigrant quotas rises before vote
A plan by Swiss right-wing populists to reimpose immigration quotas for citizens from the European Union has won increased support ahead of a referendum, raising the prospect of a clash with Brussels, a new poll shows.
A total of 43 percent of those surveyed said they backed the “Stop Mass Immigration” measure which goes to a vote on February 9th, according to the survey released on Wednesday by public broadcaster SRG. That marked a major gain on the 37 percent support shown in a poll released just two weeks ago.
The survey was commissioned from the GfS Bern public opinion institute, which found that opposition to the measure had dropped by five points to 50 percent.
On to Spain and a warning from El País:
Brussels warns of risks to Spain from the crisis in emerging markets
Report says economic recovery “remains fragile”
Commission expects bad bank to have posted losses last year
The upbeat message Economy Minister Luis de Guindos gave to his colleagues at an Ecofin meeting on Tuesday on the Spanish economy contrasts with the more cautious tone of the final report on Spain’s compliance with the bailout program for its banks, made public on Wednesday by the European Commission (EC).
De Guindos told fellow European economy and finance ministers that he expects the economy to grow 1 percent this year, above the Spanish government’s official forecast of 0.7 percent, with the pace of activity sufficiently strong to allow net job creation. He also minimized the possibility of fallout from the latest crisis in emerging markets, particularly Argentina. “We can’t fall any more. Now the recovery begins,” De Guindos said, arguing that Spain “has scarcely any exposure to Argentina and other emerging markets.”
However, Brussels’ report, based on a joint mission by the EC and the European Central Bank to Madrid in the period December 2-13, warns that: “The economic recovery […] remains fragile as imbalances continue to be worked out, and subject to external risks such as a reversal of the current benign global financial environment and a slowdown in emerging markets, especially in Latin America, to which Spanish companies are particularly exposed.”
More misery demanded from TheLocal.es:
‘Spain’s record wage cuts not enough’: IMF
The International Monetary Fund has asked Spain to further reduce salaries even though it has already slashed average wages by 20 percent over the past two years – the fastest drop in the country’s democratic history.
The International Monetary Fund has revised up its 2014 growth forecast for Spain to 0.6 percent, or more than triple the figure it forecast in October last year, but this is still very modest and it continues to expect more.
The monetary body claims the 20 percent drop in average wages over the past two years does not make up for the excessive salary increases seen prior to that, a factor which they claim has contributed to Spain’s ailing unemployment rate.
El País reduces:
Spanish banks drastically cut exposure to sovereign debt
Sector sold 22.4 billion euros in government bonds in December
Lenders gearing up for ECB stress tests later this year
Spain’s banks in December picked up the pace at which they have been offloading their holdings of sovereign debt ahead of the solvency tests they will be subjected to by the European Central Bank later this year.
According to ECB figures released Wednesday, Spain’s banks took advantage of improved market conditions to sell 22.4 billion euros worth of government bonds, more than double the 10 billion they sold in November and October’s 8.9 billion. After the latest sell-off, the exposure of Spain’s banks to sovereign debt stands at 272 billion euros.
The extent of European banks’ exposure to sovereign debt will be one of the key features in the stress tests to which they will be submitted. If banks are required to write down the value of sovereign debt not being held to maturity to current market levels, this might entail them having to increase their capital to enhance their solvency.
Off the books with the London Telegraph:
Untaxed work equal to 25pc of GDP in Spain
Cash transactions carried out behind the Spanish taxman’s back in 2012 hit nearly €253bn
Untaxed transactions in Spain have surged to equal nearly a quarter of the country’s output as unemployed workers scrape a living in the black economy.
The cash economy has flourished since 2008, when the collapse of a building boom hurled Spain into a double recession, a report by Treasury experts and academics said.
Cash transactions carried out behind the taxman’s back in 2012 hit nearly €253bn, or 24.6pc of gross domestic product, according to the report released by GESTHA, a tax inspectors’ union.
More cultural warring from thinkSPAIN:
Mass protest outside European Parliament in Brussels over Spain’s abortion reform
AT least 2,000 people staged a demonstration outside the European Parliament building in Brussels yesterday (Wednesday) evening in protest over Spain’s abortion law reform.
As well as members of the public of all nationalities, organisations including the European Women’s Lobby, Abortion Right, the European Humanist Federation, Catholics for Choice and the International Planned Parenthood Federation were joined by MEPs from the socialists, liberalists, the ‘greens’ and United Left.
Banners read, ‘Rights for men, but also for women’; ‘Free abortion’, and ‘All of us are Spanish women’ – a message of support meaning restrictions on legal abortion could one day affect any of them.
El País draws the line:
Five regions rebel against Popular Party’s education reform
Commissioners claim Minister Wert’s law is step backward and segregates students
The regions not governed by the Popular Party on Wednesday objected to the controversial new Education Law, known as the LOMCE — the seventh overhaul of the public system since the restoration of democracy in Spain — as retrogressive and divisive, and lamented the lack of debate on the legislation.
Initially drawn up to address high dropout rates, the law also enhances the role of religion in schools and permits state funding for educational centers that segregate students by gender. The law was passed in Congress with only the votes of the PP, which has an absolute majority in the lower house.
At a news conference, the educational commissioners of the Basque Country, Andalusia, Asturias, Catalonia and the Canary Islands accused Education Minister José Ignacio Wert of a “lack of institutional loyalty” in failing to adequately consult the regions on the changes. The regions are responsible for the education and health services.
TheLocal.es enumerates:
One third of Spanish kids at risk of poverty
More than a third of children in Spain live at risk of poverty, the aid charity Save the Children said on Wednesday, blaming austerity measures for worsening the situation.
The number of under-18s “at risk of poverty or marginalization” — an official EU measure of various aspects of economic hardship — soared to more than 2.8 million in 2012, the charity said.
That was equivalent to 33.8 percent of Spain’s children, it said in a report that used the latest official European Union data.
El País deplores:
Council of Europe slams Spain for denying healthcare to illegal immigrants
Organization’s Committee on Social Rights concerned about general slide on basic protection
The economic crisis has undermined social protection in Spain. The Council of Europe, which oversees respect for human rights in 47 countries on the continent, on Wednesday expressed concern over “regressive legislative developments concerning access to health care by foreigners illegally present in the country.”
The conclusion is part of a wide-reaching report by the European Committee on Social Rights that examines whether national laws conform to the European Social Charter.
The 2013 conclusions, released on Wednesday, found that Spain was one of several countries that had regressed on social rights compared with earlier periods. Other states where healthcare, social welfare and occupational safety have been curtailed included Austria, France, Finland, Belgium, Bulgaria, Czech Republic, Denmark, Lithuania and Latvia.
On to Lisbon and a demand from the Portugal News:
Socialists demand pension cut clarification
The Portuguese Socialist (PS) party has demanded that the prime minister specify what pension and wage cuts were considered to be temporary and accused the government of acting with a lack of transparency and creating uncertainty among the population.
These criticisms were made by António Galamba MP, a member of the PS national secretariat at a press conference where he also accused the centre-right coalition of rehearsing “propaganda manourvres” and trying to “sell illusions”.
“Isn’t it time for the government to clarify what cuts are temporary and what are definitive? “, he asked, after accusing the government of a lack of transparency by creating a work group to prepare definitive cuts to the pension system.
Italy next and a rebuke from ANSAmed:
Council of Europe blasts Italy on pensions, poverty
Lacks ‘overall and coordinated approach’
Italy is failing to address growing levels of poverty and to provide retirees with an adequate level of subsistence, a Council of Europe committee said in a report released on Wednesday.
The report, drawn up by the European Committee of Social Rights, noted that Rome had not demonstrated ‘’the existence of an overall and coordinated approach providing adequate measures to combat poverty and social exclusion’‘.
Italy’s national statistics bureau Istat reported in late December that the number of people in crisis-hit Italy living in absolute poverty had doubled between 2005 and 2012 and tripled in the industrial north, up to 6.4% from 2.5%. More than 1.7 million families live in a state of absolute poverty – for a total of 4.8 million individuals – amid rising unemployment and a stubborn recession, Istat said.
Raising a ruckus with The Guardian:
Italian parliament erupts amid vote on central bank capital
Opposition MPs storm government benches after speaker cuts short debate on measure to boost commercial banks
There have been chaotic and at times violent scenes in the Italian parliament after the lower house speaker made unprecedented use of her powers to cut short a filibuster by deputies of Beppe Grillo’s Five Star Movement (M5S).
Late on Wednesday, M5S MPs stormed the government benches, put on symbolic gags and kept up a barrage of whistling after the speaker, Laura Boldrini, cut short the debate and ordered a vote on a complicated and intensely controversial measure to square Italy’s public accounts. One of Grillo’s followers said an MP from the governing majority had slapped her during the disorder.
Opposition MPs claim that the measure would hand more than €7bn (£5.8bn) of taxpayers’ money to the banks.
Emulation from TheLocal.it:
27 percent of Italians want to be more German
Over a quarter of Italians would like their country to be more like Germany, while some would prefer Italy to resemble Cuba or China, a poll this week has found.
Despite the anti-German rhetoric of populist politicians, targeting the country’s leader Angela Merkel, this week’s Ipsos poll showed that Italians may be warming to Europe’s economic powerhouse.
Twenty-seven percent of Italians said they would like Italy to more closely resemble Germany, swiftly followed by 19 percent opting for a more Norwegian approach.
After the jump, the latest on the Greek meltdown, Ukrainian uncertainty and admonitions, Turkish anxieties, Indian inflation, Thai turmoil, mixed news from China, Japanese easing, ecological alarms and woes, plus the latest edition of Fukushimapocalypse Now!. . .
Our first Greek headline via Greek Reporter:
Signs Greek Economy Bottoming Out
Greece’s economy is expected to hit rock bottom by the end of the year, the seventh of a deep recession but the effects could linger and create a small reduction after that, the Greek think tank IOBE said, in a more dire assessment of the potential for a recovery than the rosy estimates made by the government.
Prime Minister Antonis Samaras and Finance Minister Yannis Stournaras project the 183 billion euro ($248.47 billion) economy, which has shrunk by almost 25 percent, will pull out of the recession and grow by 0.6 percent this year.
“While a point of balance has been achieved without stronger investment and implementation of structural reforms, this could prove fragile at a fiscal and political level,” IOBE said in its quarterly report without providing detailed estimates.
Kathimerini English protests:
Greek farmers vow more action after talks break down
No agreement was reached during Wednesday’s meeting between Agriculture Minister Athanasios Tsaftaris and protesting farmers, who vowed to escalate their action.
“We won’t sit on our hands,” said Vangelis Boutas, a unionist from Karditsa, central Greece, warning that roadblocks would be set up as of Monday.
Unionists are demanding that farmers with an annual turnover of up to 40,000 euros should be exempt from a regulation forcing them to keep account books.
To Vima predicts:
Deutsche Welle considers a second debt haircut to be inevitable
German economist Bastian proposes a Greek debt agreement similar to the 1952 London agreement with Germany
According to a report by Deutsche Welle, a second debt “haircut” will be necessary for Greece to recover, despite the remarkable progress in finances which has been documented.
The German broadcaster’s report explains that Greek figures are not always reliable, which creates skepticism amongst Eurozone members, which in turn causes many delays. Last year’s 691 million euro primary surplus for example was essentially a hoax, since the Greek government quite simply refused to pay any of its debts in December 2013.
The Greek government’s main goal of returning to the market necessitates a primary surplus. This, according to economist Jens Bastian, is not likely to happen though since the debt is constantly increasing and Greece does not have the ability to pay it off on its own. Mr. Bastian explains that even if tax evasion is tackled and the taxpaying base is increased, Greece will be unable to cover is public debt.
An arrival, noted by The Guardian:
Greece bailout: MEPs land in Athens to investigate effect of troika’s loans
Inquiry comes amid mounting criticism of the wreckage austerity has left since Greece accepted emergency loans
An inquiry into whether international creditors have inflicted more harm than good on Greece – the most problematic of the four countries bailed out since the onset of Europe’s debt crisis – intensified on Wednesday with the arrival in Athens of MEPs conducting the investigation.
In a reversal of roles, the seven-strong team of MEPs began an on-the-ground examination of the tough cost-cutting policies that Athens’ “troika” of lenders – the EU, European Central Bank and International Monetry Fund – has prescribed as a cure for the nation’s financial woes.
The two-day visit comes amid mounting criticism of the wreckage austerity has left in its wake since Greece, locked out of capital markets, was forced to resort to emergency loans to avert default.
ANSAmed has hopes:
Crisis: Greek economy to bottom out in 2014, IOBE says
Greece’s economy is expected to bottom out in 2014 after a six-year recession, but national output may still suffer a small contraction, daily Kathimerini online reports quoting Greek think tank Foundation for Economic and Industrial Research (IOBE) which on Thursday expressed a less optimistic view than the government and its international lenders.
Athens projects the 183 billion euro economy, which has shrunk by almost a quarter during the protracted slump, will pull out of recession and grow by 0.6% this year. The Athens-based think tank projected the country’s unemployment rate would drop to 26% this year from an estimated 27.3% in 2013, helped by a rise in exports and stronger investment activity.
Exasperation from Keep Talking Greece:
UPD Virtual reality: “Family of four has to live on €1,000? says Greek government
Do you believe that a family of four can cover its needs for food, clothing, housing, children education, heating, medical care, medicine, electricity, telephone, water etc with just 1,000 euro per month? You may not believe this, but the Greek government does.
According tot daily To Ethnos, the government prepares a law for the settlement of red bank loans. According to government calculations that a family can live on this money, the banks will issue the repayment installments.
Based on this virtual reality “price list”, banks will deduct the monthly expenses from the income and the amount left over will go to repayment of loans.
ANA-MPA declines:
Greek consumer confidence index down in Q4 2013 (Nielsen)
Greece’s consumer confidence index fell by three points to 45 in the fourth quarter of 2013, after rising for the previous three quarters of the year, Nielsen said on Wednesday.
Nielsen, in its quarterly report, said that the global consumer confidence index was unchanged at 94 points in the fourth quarter of 2013, while the European index eased by one point to 73 in the October-December period.
The report said that a decline in the Greek index showed that Greek consumers remained largely uncertain over their job security and the economy (47 pct and 32 pct respectively). Eight in 10 Greeks doubted that the country could overcome the economic crisis anytime soon, expecting an economic recession to prevail for at least the next 12 months.
Neos Kosmos restructures:
Plans unveiled for police force overhaul
Faced with a resurgence in urban guerrilla activity, the government unveiled plans to overhaul the Greek Police (ELAS)
Faced with a resurgence in urban guerrilla activity, the government unveiled plans to overhaul the Greek Police (ELAS) in a bid to improve patrols and cut spending.
During an Athens press briefing, Public Order Minister Nikos Dendias said the aim of the authorities is to reduce the force’s response time by up to 25 percent and to bring Greek officials’ performance ratings up to the same level as the European Union average.
ANSAmed sells off the commons:
Greece: Parliament OKs sale of 66% of power operator
The decision approved with 151 of the House’s 300 MPs
Greek lawmakers on Wednesday voted in favor of a bill for the privatization of Greece’s Independent Power Transmission Operator (ADMIE), as Kathimerini online reports. The bill foresees the sale of a 66% stake in the state-owned company, with the minimum 151 of the House’s 300 MPs approving the decision.
The privatization of ADMIE will be completed in one single stage and will secure the state’s participation at 34%. The cost of the state’s stake will be determined by the amount of the final offer from the private investor that will acquire the remaining 66%.
Sources told Kathimerini in December that the Chinese State Grid (SGCC), the biggest network company in the Asian country, and Italian power transmission operator Terna are in contact with the government for the acquisition of the controlling stake.
Taxing times with Keep Talking Greece:
Greek Parliament Budget Office: taxes skyrocketed since 2010, up to 450% in fuel
The Budget Office of Greek parliament summarized the tax increases that took place since the country sought the aid of International Monetary Fund. The report was thought as an answer to finance Minister Yiannis Stournaras who denies the Greek households were overtaxed.
“A series of tax increases from 2010 up today , combined with the reductions of taxable wages and the unemployment have created an explosive mix of economic and social suffocation, “ the Budget Office notes in its report.
On to the Ukraine and missing in action with the New York Times:
Ukraine’s President Takes Sick Leave; Crisis Talks Stalled
Viktor F. Yanukovych, the president of Ukraine, went on sick leave on Thursday, stalling negotiated efforts to resolve the country’s political crisis.
A statement on the president’s website said Mr. Yanukovych, 63, was taking time off because of a respiratory illness and fever. It offered no indication of how long he was expected to be absent. The statement was attributed to a deputy director of the presidential department for medical affairs.
Mr. Yanukovych has faced pressure from Russia to take a harder line with protesters opposing his government, rather than continue negotiations that could lead to his ceding some power to pro-Western members of the opposition.
BBC News approves:
Ukraine parliament passes protest amnesty law
The Ukrainian parliament has passed a law providing amnesty to protesters detained during recent unrest.
Opposition parties abstained from voting, in anger at a condition in the bill which means it will only apply if protesters abandon government buildings they have occupied in recent days.
Protesters on the streets of the capital also rejected the move.
The protests began in November after President Viktor Yanukovych reversed a decision to sign an EU trade deal.
EUbusiness calls hands off:
Kremlin warns against Ukraine interference after Merkel talks
The Kremlin said on Wednesday any outside interference in Ukraine’s affairs was unacceptable, after talks between President Vladimir Putin and German Chancellor Angela Merkel.
“Regarding the situation in Ukraine, it has been stressed that any outside interference is unacceptable,” the Kremlin said in a carefully worded statement.
Turkey next and a mixed result from Reuters:
Turkey’s face-saving rate hike spares lira, may hit growth
A massive rate hike may have stalled the Turkish lira’s fall and salvaged the central bank’s credibility, but it stunts growth at a politically fraught time for Prime Minister Tayyip Erdogan and may not shield Turkey from a fragile global backdrop for long.
The bank raised all its key interest rates in dramatic fashion at an emergency policy meeting late on Tuesday, ignoring opposition from Erdogan as it battled to defend the lira following its fall to a series of record lows.
The boldness of the actions stunned investors, propelling the lira to its biggest one-day gain in more than five years and stirring hopes it would short-circuit a vicious cycle of selling in emerging markets.
But gains of almost 4 percent on the day quickly faded in later trade on Wednesday as market focus switched to a later monetary policy decision by the U.S. Federal Reserve.
On to Asia, starting in India with the Financial Express:
RBI Governor Raghuram Rajan effects dramatic shift as India quietly begins tryst with inflation targeting
Without explicitly saying so, the Reserve Bank of India (RBI), with Governor Raghuram Rajan in hot seat, has effectively begun to target inflation based on consumer prices, a dramatic shift in approach for a central bank that has struggled to manage the balance between growth and inflation.
The RBI unexpectedly raised policy interest rates by a quarter percentage point to 8.00 percent on Tuesday.
In doing so, it cited a “glide path” towards lowering the consumer price index (CPI) below 8 percent by next January and 6 percent a year later — targets that were laid out in sweeping proposals released last week to revamp the way monetary policy is conducted in India.
South China Morning Post draws Thai battle lines:
Red-shirts ‘ready to resist’ Thai army coup, set up capital in Chiang Mai
Supporters of Prime Minister Yingluck Shinawatra say she may set up her government in Chiang Mai if the army takes power in Bangkok
The embattled Thai government’s hardline “red-shirt” supporters in the country’s north say they are ready to resist any attempt by the military to stage a coup.
Some supporters say they also expect popularly elected Prime Minister Yingluck Shinawatra to retreat to Chiang Mai and set up government there if the army tries to take power in Bangkok amid ongoing anti-government demonstrations.
While some experts consider the government relocating an unlikely prospect, supporters like red-shirt activist Mahawang Kawang say their movement is large enough to challenge the military.
And Nikkei Asian Review adds context:
Wealth gap driving Thai political turmoil
The political chaos in Thailand shows no signs of ending. And unless the country’s glaring economic disparities are addressed, the government of Prime Minister Yingluck Shinawatra will continue to clash with the opposition forces, led by former Deputy Prime Minister Suthep Thaugsuban.
The longstanding feud has its roots in a military coup that ousted former Prime Minister Thaksin Shinawatra, Yingluck’s older brother, in 2006. Since then, Thaksin’s supporters and opponents have repeatedly clashed and held demonstrations.
At the end of November last year, anti-Thaksin forces calling for toppling the Yingluck government occupied government offices in Bangkok, while Thaksin’s supporters staged a pro-government rally against the occupation.
According to a survey conducted by the Asia Foundation of the U.S., which interviewed people from both camps on Nov. 30, 57% of those against Thaksin lived in Bangkok, compared with 32% for supporters. Of those against Thaksin, 32% said their monthly household income was more than 60,000 baht ($1,848), while only 4% of Thaksin’s supporters topped that level. The results clearly indicated that the clash was about a conflict between wealthy and middle-class urbanites on one side and lower-income people living in rural areas on the other.
China next, and a contested claim from South China Morning Post:
Obama’s claim US tops China as No 1 investment destination questioned
US President Barack Obama proclaimed America had usurped China as the world’s No 1 investment destination, a bold statement that left some economists scratching their heads.
The White House cited an AT Kearney survey as the basis for Obama’s remark in his State of the Union address on Tuesday, noting the US topped the global consulting firm’s list for expected foreign direct investment.
But the US ranks lower in other prominent surveys. Forbes’ annual report on the best country to do business in put Ireland at the top, with the US at No 14, according to Politico’s website. It also noted that the Milken Institute – which measures countries on 67 variables, including economic fundamentals and regulations – put the United States at No 22, behind Hong Kong at No 1.