organization:european central bank

  • Venezuela’s PDVSA declares emergency as tankers returning : document | Reuters

    Plans by the German operator of a portion of the Venezuelan state oil company’s tanker fleet to return 10 vessels because of unpaid fees prompted a unit of state-run PDVSA on Tuesday to declare a maritime emergency, according to a document from the state-run firm and sources.

    PDVSA’s weak finances, the result of mismanagement, a sharp decline in oil output and U.S. sanctions designed to oust President Nicolas Maduro, have prompted dozens of suppliers and partners to stop working for the company.

    The United States and more three dozen other countries have thrown their support behind an interim government being formed by the country’s congress chief, Juan Guaido.

    PDVSA’s maritime arm, PDV Marina, lacks about 160 people, including captains, machinists and operators, to immediately take back the 10 vessels from Bernhard Schulte Shipmanagement (BSM), according to a notification by PDV Marina’s security department that was viewed by Reuters.

    BSM officially notified PDV Marina’s top authorities of its “unilateral decision to deliver the fleet operated by the company due to lack of payment and cash flow for paying pending salaries and staff onboard,” putting PDVSA in a “critical situation to receive the tanker fleet,” the document said.

    PDVSA did not respond to a request for comment. A BSM representative was not immediately available to comment after working hours.

    BSM last month confirmed its crews would abandon PDVSA vessels Rio Arauca and Parnaso, held in Portugal due to unpaid fees to several companies. A third vessel operated by BSM, the Icaro, was seized in Curacao by a group of shipping companies claiming unpaid bills from PDVSA.

    BSM operated a fleet of 13 tankers owned by PDVSA and two very large crude carriers jointly owned by PDVSA and China’s PetroChina. The amount owed by PDV Marina to BSM is at least $15 million, according to a source at the company and a document seen by Reuters.

    Over a dozen tankers with Venezuelan oil around the world have been arrested in recent years by authorities or otherwise prevented from leaving because PDVSA has not paid for services.

    The two tankers retained in Portugal arrived in 2017 for repairs and were caught in the middle of legal fights between PDVSA and creditors.

    In Curacao, a PDVSA operated refinery got a court order to free the seized tanker Icaro and place its oil in storage until the dispute is resolved. The vessel remains anchored in Curacao waters, according to Refinitiv Eikon vessel data.

    • Venezuela’s PDVSA says still working with German shipping firm | Reuters

      Venezuela’s state-run oil company PDVSA said on Thursday it has not halted business with maritime contractor Bernhard Schulte Shipmanagement (BSM), after the German firm notified it would remove crews operating 10 of 15 PDVSA vessels over unpaid fees and return the tankers.

      PDVSA’s maritime arm PDV Marina declared an emergency on Tuesday due to lack of staff to immediately receive the vessels that BSM proposed to return to Venezuelan ports due to unpaid bills of at least $15 million.

      The vessels - Nereo, Proteo, Zeus, Hero, Eos, Teseo, Rio Caroni, Rio Apure, Rio Orinoco and Arita - had BSM crews onboard on Thursday, a source from the company said, adding that payment is being negotiated with PDVSA.

      Three other vessels operated by BSM for PDVSA remain anchored in Portugal and Curacao until the resolution of legal disputes linked to fees that PDVSA owes to maritime agencies, port authorities and shipyards.

      Our subsidiary PDV Marina continues working with BSM... PDV Marina offers maritime transportation of hydrocarbons and tug boat services, reaching satisfactory daily rates,” it said via a Twitter post.

      PDVSA did not elaborate on its plans to operate the returned vessels. BSM had no immediate comment on the returns of the vessels.

      PDVSA’s financial problems are complicating the state-run firm’s ability to hire 160 captains, machinists and operators needed to operate the 10 vessels, the source said. PDVSA is offering to pay staff in Bolivars.

      ECB pushes out rate hike, offers cheap cash to banks
      PDV Marina does not have staff enough for all the vessels. That is not new. PDVSA owes everybody money, even its own crew,” said a tanker inspector in Venezuela who asked not to be identified for fear of retaliation. 

      BSM operates a fleet of 15 PDVSA vessels, including eight Aframaxes mostly used for moving oil between Venezuela’s domestic ports and the Caribbean; four Suezmaxes previously serving export destinations but recently also navigating Venezuelan waters; the Aframax Arita covering routes to Asia; and two very large crude carriers jointly owned by PDVSA and PetroChina.

      The German company’s crew last month abandoned two vessels anchored in Portugal - the Rio Arauc_a and the _Parnaso - after keeping staff aboard for more than 20 months. The firm has said legal responsibility for the vessels rests with the arresting parties.

      Over a dozen tankers with Venezuelan oil around the world have been arrested by authorities in recent years or otherwise prevented from sailing because PDVSA has not been able to pay for operation, hull cleaning, inspections, and other services.

  • Inquality and Wealth Distribution in Germany - SPIEGEL ONLINE

    “50% pour 5%”

    European Central Bank statistics show that wealth distribution in Germany is extremely unequal. But a new analysis by the German Institute for Economic Research shows that the situation is even worse than initially thought.

    #Allemagne #inégalités #visualisation #interactif

  • Allemagne : 12,5 millions de personnes sous le seuil de pauvreté, un record.

    Par Jean-michel Gradt – La pauvreté a progressé de 15 % en 2013 pour toucher 12,5 millions de personnes, un record, indique l’étude publiée par la fédération d’aide sociale Paritätischer Wohlfahrtsverband.

    #Allemagne #pauvreté #inégalités

    Je ne vois pas la date de publication (dans l’URL on voit 14 avril 2017), mais je mets sur seenthis pour archivage

    • Allemagne : pauvres en pays riche

      L’Allemagne est présentée comme un modèle à suivre et la campagne électorale d’Angela Merkel s’appuie surtout sur une réussite chiffrée. Mais, pour beaucoup d’Allemands, la réalité est tout autre. Un Allemand sur cinq est en situation de précarité. à Berlin, un enfant sur trois est considéré comme « pauvre ». Et 20% des actifs sont condamnés à des emplois mal payés.
      #documentaire #film #working_poor #travailleur_pauvre #retraite #retraités #mère_célibataire #sous-traitance #travail #exclusion #mort_sociale (c’est le mot utilisé par une mère de 3 enfants qui se retrouve à l’aide sociale) #exclusion #aide_sociale #flexibilisation_du_marché_du_travail #précarisation #précarité #exclusion #fracture_sociale #survie

    • Welcome to Poor Germany

      How the Merkel government is risking Germany’s future by underinvestment and other ill-applied policy approaches.

      “Poor Germany?“ Really? Is that not a crass overstatement? Isn’t Germany the powerhouse of Europe, boosting a huge export surplus, historical low unemployment and shrinking government debt? Yes, it is.

      But this view is superficial and overlooks what is happening behind the shiny facade of a booming economy. The country is wasting its future by consuming too much and not investing in the future. To blame are the various governments led by Angela Merkel.

      In their sum total, the individual causes of this under- and malinvestment, as detailed below, explain much of the sense of profound frustration that voters feel with Germany’s major political parties. They explain a widening sense of national malaise that extends far beyond the oft-cited issue of migration.
      The fetish of the “black zero”

      It all starts with the politics of the so-called “black zero” in government finances, which is nothing else than the commitment to a permanent budget surplus for the government at the national level.

      Achieving this goal was quite easy over the last years. Thanks to ECB policy and the unresolved crisis of the Eurozone, interest rates on German government bonds fell below zero. Due to this effect alone, the German finance minister has saved 300 billion euros in interest expenses since 2009.

      In addition, the economic boom fueled by the low interest environment and the relatively weak euro reduced costs for unemployment support and led to record high tax revenues in Germany.

      Still, the “black zero” is an illusion created by politicians, notably former finance minister Wolfgang Schäuble, to boost their own image. A closer look reveals that the “black zero” comes at a high cost and, if one applies proper accounting, is even not true.
      Crumbling infrastructure

      Fixated on the goal of the budget surplus, the German government continued its practice of taking a very high share of the incomes of the average German citizen (Germany has the highest fiscal burden of all OECD countries behind Belgium). It also cut expenditures in certain areas, notably infrastructure spending.

      As a result, the public infrastructure of Germany is deteriorating. About 50% of Germany’s highway bridges were built between 1965 and 1975. They are in urgent need of replacement. In addition, 17.5% of all motorways need to be urgently reconstructed, as well as 34% of country roads.

      This casts a dark shadow over the long-held idea that Germany has world-class infrastructure. To be sure, the deteriorating quality of German infrastructure is hindering private investment and undermines the country’s future economic growth potential.

      To make up for the underinvestment of the past years, an immediate investment of more than 120 billion Euro is required. Long term, Germany would need to invest at least on the level of the OECD average of 3.2% of GDP, implying additional spending of 33 billion per year, or 1,000 billion over a period of 30 years.

      This one dimension of severe underinvestment alone demonstrates that the “black zero” is pure political fantasy. Instead of addressing these issues, the current government has announced it will reduce investments in the coming years even further.
      Lacking digitalization

      But it is not just country roads and highways that are falling apart. German schools suffer from chronic underinvestment in buildings, never mind the stunning lack of digitalization and tens of thousands of missing teachers. This is in spite of this shortfall having long been visible, given the impending retirement wave of public-school teachers.

      Only 2% of all German households have fast internet via fiber, compared to the 22.3% average in the OECD. In Spain, not as rich as Germany, more than 50% of households have access to fast internet. This not only hinders economic development, but gives German companies a clear-cut incentive for investing outside of Germany.

      The German military, the Bundeswehr, is suffering from outdated and non-functioning equipment. Many of its fighter jets, tanks and ships are not ready for combat. The soldiers do not even have adequate clothing for winter time.

      One would think that this would be a matter of embarrassment for the country’s politicians, but they remain rather nonchalant about it. Perhaps they see it as a politically convenient way to avoid being asked to support the West’s joint international missions.

      Fixing this shortfall will require another 130 billion euros just to get the German military working again. In the long run, the country will need to fulfil the NATO target of spending 2% of GDP on defence. This would imply a budget increase of roughly 26 billion euros per year, or 750 billion over a 30-year period.

      But despite paying lip service to these needs, the junior partner in the government, the SPD, remains opposed to making the required funds available.

      At the same time, the governments of Angela Merkel increased the spending on social welfare to a new record of nearly 1,000 billion euros per year. This is remarkable given that Germany currently experiences record low unemployment and a booming economy.
      Pushing savings abroad

      The obsession of German politicians with the “black zero” not only has significant negative implications for the economic outlook due to lacking investments, but also in light of global trade tensions. The export surplus notably is not only the result of a weak euro and hyper-competitive German industries, as is argued so often (falsely), but significantly also the result of insufficient spending and investment within Germany.

      The corporate sector, private households and the government itself are all net savers, pushing savings abroad and contributing to the significant trade surplus of more than 8% of GDP. A significant trade surplus and excess savings go hand in hand.

      Contrary to folklore, this surplus is not even in Germany’s own interest. For one, Germany’s track record of investing its savings abroad is downright bad. During the financial crisis, German banks, insurance companies and pension funds lost in the range of 400 to 600 billion euros. Today, a significant part of our savings ends up as non-interest bearing receivables of the Bundesbank as part of the ECB system (the so-called Target 2 balance).

      Overall, it is not a good idea, to be a creditor in a world awash with more and more debt. But Germany continues to disregard this fundamental insight, to its own detriment.

      The German government is also blind to the fact that the trade surplus leads to increasing frustration in other countries, not just in the case of U.S. President Donald Trump, but also in France and Italy. The risk of protectionist measures especially targeted against the automotive industry, which German government politicians are otherwise overly keen on protecting, is high.
      There is an alternative

      It would be much smarter if the German government would use the excess savings of the private sector to fund the urgently needed investments in the country. This would:

      • Offer the private sector a safe and attractive opportunity to save within Germany

      • Improve German infrastructure in all dimensions

      • Reduce the country’s trade surplus and therefore reduce the risk of protectionist measures

      • Reduce the exposure of German savers to doubtful creditors abroad.

      Obviously, it would be in everybody’s interest if Germany were to change its policies.

      via @wizo

  • Trump threatens Europe’s stability, a top leader warns - The Boston Globe

    For the first time in our history, in an increasingly multipolar external world, so many are becoming openly anti-European, or Eurosceptic at best,” Tusk wrote. The letter was released ahead of an EU summit meeting in Malta on Friday; Tusk is responsible for setting the agenda for the meetings.

    Particularly the change in Washington puts the European Union in a difficult situation; with the new administration seeming to put into question the last 70 years of American foreign policy,” he wrote.

    The EU has been struggling to contend with fractious internal forces. Among them: the vote by Britain to leave the bloc, the organization’s failure to establish a unified response to the arrival of hundreds of thousands of asylum seekers, and the debt crisis that has driven many Greeks into poverty. And then there are external pressures like Russia’s annexation of Crimea.

    Before the election and since taking office, Trump has lauded the vote by Britain, known as Brexit, and said the country would thrive outside the EU. He met with Nigel Farage, a populist leader of the Brexit campaign, before seeing Prime Minister Theresa May. And at one point he went so far as to suggest that May appoint Farage as Britain’s ambassador to the United States.

    Trump has also praised President Vladimir Putin of Russia and indicated he would pursue friendlier relations with Moscow, even as Russia encourages chaos on the EU’s eastern border.

    Tusk’s letter does not reflect a new policy for the EU, and member states of the 28-nation bloc are not required to act on Tusk’s advice when they meet on Friday. But many European leaders have made their differences with Trump known.

    After the United States said it was temporarily blocking refugees from entering the country, Chancellor Angela Merkel of Germany felt compelled to point out to Trump the obligations of nations under the Geneva Conventions to protect refugees of war on humanitarian grounds. And President François Hollande of France said he had reminded Trump that “the ongoing fight to defend our democracy will be effective only if we sign up to respect to the founding principles and, in particular, the welcoming of refugees.

    May, of Britain, sought in a meeting with Trump last week to confirm his commitment to NATO; he was dismissive of the alliance, the bedrock of European security, during his campaign.

    Now, the sentiments expressed in Tusk’s letter are pushing European leaders’ exasperation with the US president further into the public view.

    Tusk has sounded the alarm about the existential crises facing the bloc before, but never with the urgency he displayed in the letter. And he has never before included a longstanding ally like the United States in the list of challenges.

    An increasingly, let us call it, assertive China, especially on the seas,” he wrote, “Russia’s aggressive policy toward Ukraine and its neighbors, wars, terror, and anarchy in the Middle East and in Africa, with radical Islam playing a major role, as well as worrying declarations by the new American administration all make our future highly unpredictable.

    Much of the frustration Tusk displayed in his letter stemmed from what Guntram B. Wolff, director of Bruegel, a research organization in Brussels, said was Trump’s “de facto supporting” of populist forces that could further upend the European order.

    Far-right populist challengers in France, Germany, and the Netherlands have adopted some of his antiestablishment rhetoric in their own campaigns.

    Still, Wolff said it was unwise to enter into a war of words with the Trump administration.

    We need to uphold our values here, but does it mean that we need now a declaration where we put the United States on the same level as ISIS?” he said, using an alternative name for the Islamic State group. “No, I don’t think so. I don’t think it that would be helpful in any way.

    The trans-Atlantic volley of opprobrium Friday included an accusation by Peter Navarro, the director of Trump’s new National Trade Council, that Germany was manipulating its currency to gain a trade advantage. Navarro told The Financial Times that Germany was using a “grossly undervalued” euro to “exploit” the United States and its partners in Europe.

    That did not sit well with Merkel, who defended the European Central Bank’s independent role at a news conference on Friday: “Because of that we will not influence the behavior of the ECB. And as a result, I cannot and do not want to change the situation as it is.

    The value of the euro is near a 13-year low compared with the dollar, allowing German carmakers and other manufacturers to sell their goods more cheaply in the United States. But German firms also employ around 670,000 people in the United States, including many in a BMW factory in Spartanburg, S.C., the carmaker’s largest in the world, and a Mercedes factory in Tuscaloosa, Ala. These are the sort of manufacturing jobs that Trump says he wants to keep in the United States.

    Jan Techau, director of the Richard C. Holbrooke Forum in Berlin, a research center dedicated to diplomacy, said Tusk’s letter was less a warning to the US president than it was a message to Europeans not to be lured away from union, or to be tempted away from the bloc by favorable bilateral ties offered by the Trump administration.

    He is encouraging everyone to fall into that trap,” Techau said of the US president.

    Tusk, by contrast, is making the case for Europeans to stick together for their own survival.

    “_He wants to remind them that there is something bigger at stake than just what they are going to be talking about in Malta,” Techau said.

    • On appréciera particulièrement la remontrance du président français qui s’y connait quant au traitement des réfugiés …

      And President François Hollande of France said he had reminded Trump that “the ongoing fight to defend our democracy will be effective only if we sign up to respect to the founding principles and, in particular, the welcoming of refugees.

  • German banks count cost of global shipping crisis | Reuters

    German banks are struggling to recoup tens of billions of dollars of loans as a global shipping industry slump hits them hard.

    The lenders - among the biggest backers of shipowners over the past 20 years - are behind up to a quarter of the world’s $400 billion of outstanding shipping loans, three shipping financiers told Reuters.
    German banks account for close to $100 billion of shipping debt out of a world total of around $400 billion,” said Dagfinn Lunde, who spent more than a decade as head of shipping at Germany’s DVB Bank until the end of 2013.
    It seems like the shipbuilding and ship finance sectors are ... imploding,” Anthony Gurnee, chief executive of ship operator Ardmore Shipping Corp (ASC.N), told an industry conference in London last week.

    His comments echo remarks made by Stefan Ermisch, the chief executive of shipping finance specialist HSH Nordbank [HSH.UL], who recently described the shipping sector as “on the floor”.
    The ECB is currently analysing the data and will likely take further measures afterwards, said the source, adding: “The ECB suspects some European banks use too optimistic models to calculate the value of shipping loans and ships.

    The ECB declined to comment.

  • Moscovici: pas d’amende pour l’Espagne, pour «éviter un sentiment d’humiliation»

    La Commission européenne a renoncé à infliger une amende pour déficit excessif à l’Espagne et au Portugal pour éviter « un sentiment d’humiliation », affirme dimanche dans le quotidien espagnol El Pais le commissaire aux Affaires économiques, Pierre Moscovici. « Imposer des amendes aurait généré un sentiment anti-européen et une perception d’humiliation dans un pays comme l’Espagne, qui a fait énormément de sacrifices ces derniers temps », affirme le Français Pierre Moscovici, après que la Commission a renoncé à sanctionner l’Espagne et le Portugal pour dérapage budgétaire.

    Did Germany Just Blink? | naked capitalism
    By Don Quijones, Spain & Mexico, editor at Wolf Street. Originally published at Wolf Street

    Of Europe’s 27 commissioners, only four voted in favor of applying the fines; the other 23 voted against. According to El País, the deciding factor in the decision was an impromptu phone call from German finance minister Wolfgang Schäuble to some of the more conservative commissioners, giving them the green light to forego the fine.


    For a taste of just how disastrous the political fallout would be for Italy’s embattled premier, Matteo Renzi, here’s an excerpt from a furious tirade given by Italian financial journalist Paolo Barnard on prime-time TV, addressing Renzi directly:

    You went to meet Mrs. Merkel to ask for a minor public funded bail-out of Italian banks and you got a sharp NO. But did anyone tell you that Germany from 2009 onwards bailed out its failing banks with public money?

    “Banks, that is, with holes in their balance sheets visible from the Moon. Germany bailed them out to the tune of 704 billion euros. It was all paid for by European taxpayers’ money, public funds that is.

    “It was done through the EU Commission of Mr Barroso and by Mr Mario Draghi at the ECB. Didn’t you know that Mr Renzi? Couldn’t you have barked this right into Ms Merkel’s face?”

    Barnard rounded off his rant with a rallying call for Italians to follow the UK’s example and demand an exit from the EU — a prospect that should be taken very seriously given that one of the manifesto pledges of Italy’s rising opposition party, the 5-Star Movement, is to call a referendum on Italy’s membership of the euro.

    Such a vote would be impossible since the Italian constitution expressly forbids referendums on international treaties such as those that hold the EU together. But as Reuters reports, 5 Star’s party leader Matteo Salvini and the party’s founder, Beppe Grillo, have vowed to pursue a legislative change to allow an ad-hoc exception to the Italian constitution.

    Whether or not a referendum on the euro takes place, one thing that’s clear is that a post-Renzi Italy will be a much more difficult, unpredictable force to deal with than the current Renzi-governed Italy. And if Italy ever did decide to leave the Union, whether in an orderly or disorderly fashion, it would be the end of the road for the European project.

    For that reason alone, the Commission and Germany will almost certainly end up granting further concessions to Italy and its Southern European neighbors, including a taxpayer-funded rescue of MPS. It may even include a bail-out top-up for Portugal’s crumbling financial system, which was left out of last week’s stress tests.

    The challenge for Merkel and other leaders of core euro zone nations will be trying to persuade their already disgruntled voters of the need for increased solidarity with their struggling neighbors to the South. That may well be a bridge too far. By Don Quijones, Raging Bull-Shit.

  • ECB starts in-depth review of banks’ ship portfolios -sources | Reuters

    The European Central Bank is taking a hard look at lenders’ ship financing portfolios amid a broad deterioration in the shipping market, keeping banks on edge about the potential need for more capital and higher loss provisions, five people familiar with the situation said.

    The ECB’s banking supervisor sent an email at the end of last week asking a raft of European banks for details of their shipping loans and the status of their loan loss provisions as an “initial step” in a broader review of lending in the sector, one of the sources quoted the email as saying.

    It is a very extensive request,” the source told Reuters.

  • the unbalanced evolution of homo sapiens: An imaginary dialogue between the “bosses”


    Biggest Multinational Corporations (BMCs) : What the hell are you doing? You dictate governments to cut salaries and pensions, proceed in massive layoffs! You destroy our consumers!

    Banksters : Don’t worry we know what we are doing.

    BMCs : No you don’t. You reduce our profits!

    Banksters : Calm down! We are major shareholders in many of you. Do you think we want to lose?

    BMCs : Then what, exactly, is your plan?

    Banksters : Look, can you imagine what would happen if people were receiving higher salaries and pensions?

    BMCs : Yes, we would be selling more products and making more profits!

    Banksters : Far from it! Your losses would be much more than your profits for a number of reasons!

    BMCs : Can you be more specific?

    Banksters : First: if more money were going to the market, then they would lose much of their value and we would lose profits because we are the ones who print money! That’s why we invented inflation, to keep governments in fear and directing money back to us through the so-called Quantitative Easing Policies.

    BMCs : But inflation happens anyway!

    Banksters : Yes, but it is controlled. We control it. When money start to spread in the society “above acceptable limits”, we create financial crises to take them back. We dictate governments to take measures and apply austerity policies directing money back to us. We keep money valuable to everyone and secure our profits.

    BMCs : Ok, how about the other reasons?

    Banksters : Second: small-medium businesses would have more customers because consumers would have the “luxury” to buy higher quality products locally, even if they were more expensive than yours of low quality due to mass production, so, you would have to deal with thousands of competitors locally because much more of them could survive!

    Third: expensive labor force. You would have to pay higher salaries, therefore lose profits.

    Fourth: without government budget cuts you would have to pay more money through taxes in healthcare and education and other social benefits. Plus, you will have the opportunity for new business in healthcare and education.

    BMCs : Ok, how about extremely low salaries in India, China and SE Asia. We lose a huge market there.

    Banksters : Can you imagine if one day all these people demand Western salaries? That’s why we dictate the fairytale of budget cuts and fiscal discipline to countries. So that to reduce salaries in West and say to Asians: look, don’t ask for too much, look what happens in West. You will get your raise up to a certain limit.

    You see? Once we equalize salaries everywhere, you will get your new market there. New consumers who could spend as much as Americans and Europeans. Plus you will get rid of regulations and fire employees at will without consequences. Governments and politicians by then would become totally powerless.

    BMCs : And how will you do that practically?

    Banksters : But we are doing it already! The experiment in Greece continues as planned. Once we bring salaries at the level we want, and destroy the welfare state, we will continue to the rest of the eurozone.

    BMCs : Well, alright with the PIIGS, but how about France, Germany and the entire north? People will never accept such policies there.

    Banksters : They will. We will start with Italy and Spain. We will order rating agencies to attack, exclude them from markets and throw them to the ECB trap. They will be forced to take similar measures, as Greece did, in order to receive liquidity. Then, we will attack France and Germany.

  • Negative Interest Rates – Are There Any Positives? | naked capitalism

    Posted on March 29, 2016 by Yves Smith

    Yves here. I’m a bit mystified that central bankers were so confident that an untested experiment like negative interest rates would work out as planned, particularly since some of the assumptions as to why they thought it would work seem utterly barmy. But this is what happens when you put stock in theories that were debunked (by no less than Keynes), like the loanable funds model, that mainstream economists treat as gospel.
    By Steve Worthington, Adjunct Professor, Swinburne University of Technology. Originally published at The Conversation

    Negative rates have been introduced by some central banks worldwide. In theory doing so should both devalue their currency, making their exports cheaper and imports more expensive, and at the same time encourage consumer spending. It should also boost lending by financial institutions, as the value of capital being held by both individuals and banks is ever decreasing.

    Sadly this theory when put into practice has been found wanting. The Bank of Japan introduced a negative interest rate of minus 0.1% in January 2016 and the yen subsequently increased in value compared to its competitor currencies. Indeed in 2016 the yen is the best performing G10 currency against the US$.

    Similarly the Swiss National Bank flagged a negative interest rate of minus 0.25% to be introduced in January 2015, but the inflow of funds into the Swiss franc continued and the rate was finally reduced on its introduction to minus 0.75%, with the aim of discouraging capital inflows. However despite these moves the Swiss National Bank continued to accumulate foreign exchange reserves into the second half of 2015.

    The European Central Bank (ECB) further increased its negative interest to minus 0.4%, on bank deposits held at the ECB in mid March 2016, as it attempted to manipulate downward the value of the Euro. The impact of this was undermined somewhat by allowing the European banks to borrow from their central bank at the same minus rate, depending on how much they lend to businesses and consumers. An initial dip in the value of the Euro when the minus 0.4% was announced was then followed by a sharp rise, as the implications of the whole package became clearer.

    So will negative interest rates continue to be used as a weapon from the central bank armoury, or will the unpredictable behaviour of consumers and investors undermine the intentions of the central banks?

    If the weapon of negative interest rates does not work as expected on currency values or domestic consumption and investment, what else is there left to deploy to prevent deflation and a further slow down in economic actively? Economics indeed truly is dismal science.

    #économie #capitalisme #banques

  • Ireland’s Recovery Has Nothing to Do With Austerity
    Voters headed to the polls this Friday should take heed: The Celtic Tiger got its groove back despite — not because of — the EU and IMF’s advice.

    By Philippe Legrain
    February 24, 2016

    Ireland’s Recovery Has Nothing to Do With Austerity
    After years of crisis, austerity, and wage cuts, Ireland’s economy grew by 7 percent last year, faster than China’s. With a general election on Feb. 26, the governing coalition has been quick to claim credit for this turnaround, as have policymakers in Berlin and Brussels who celebrate Ireland as the poster child of the harsh medicine they prescribed in the country’s financial assistance program. “See,” they say to Greeks and others, “if you do what you’re told, it works.” But while Ireland’s economic recovery is impressive, it has happened despite the European Union and International Monetary Fund’s policies that the government faithfully followed, not because of them.

    Understanding Ireland’s present requires first understanding its recent past. Twenty-five years ago, Ireland was the poorest country in northern Europe. Yet by the eve of the financial crisis, it had leapt to being among the richest. Thanks to growth rates matching Asia’s dynamic economies, it was dubbed the “Celtic Tiger.” That remarkable economic progress was based on attracting foreign investment, notably from American firms, with its attractive business climate, including its low corporate taxes and skilled workforce. That foreign investment, in turn, fueled an export boom. But the years before the crisis also saw the emergence of a huge property bubble, financed by reckless bank lending, which ended in an almighty bust after 2007.

    Given the size of the bubble, the bust was bound to be painful. But government policy made matters much worse. In late September 2008, in the turmoil following the collapse of Lehman Brothers, the previous Fianna Fail administration extended a two-year government guarantee to all the creditors of Ireland’s busted banks. In effect, this put taxpayers on the hook for the banks’ astronomical losses. By late 2010, when the government finally saw sense and sought not to extend the guarantee, it was strong-armed into bailing out banks’ creditors anyway by eurozone policymakers. In an outrageous abuse of power, the then president of the European Central Bank, Jean-Claude Trichet, threatened, in effect, to force Ireland out of the eurozone should it not comply.

    The upshot was that Irish taxpayers were lumbered with some 64 billion euros in bank debt — around 14,000 euros ($15,400) per person. They were forced to bail out the German, French, and British banks and other foreign bondholders who had financed Ireland’s bubble. And Ireland was pushed into the clutches of the EU and the IMF. Over the next three years, they imposed huge budget and wage cuts as a condition for lending the Irish government 67.5 billion euros, primarily to bail out the foreign creditors of bust Irish banks.

    The current Fine Gael-Labour Party coalition, which took office in March 2011, cannot be blamed for that. But it can be criticized for failing to fight in Ireland’s corner in Brussels, naively relying instead, to no avail, on other eurozone governments’ goodwill to deliver justice on the bank debt. Moreover, the present government cannot claim credit for the recovery. This was primarily due to a combination of Ireland’s underlying strengths and more favorable external factors, rather than the EU-prescribed policies that it has followed.

    For sure, the government needed to tighten its belt once the tax revenues from the property bubble had vanished. But the pace and scale of austerity were unduly harsh, not least because of the bank bailouts. Moreover, the government’s Germanic drive to bolster exports by driving down wages was misconceived. Lower wages made Ireland’s huge debts, both private and public, harder to bear. They depressed domestic demand further, pushing up unemployment. And slashing wages was based on a false premise. While Irish civil servants enjoyed bumper pay raises in the bubble era, wages in the export sector never got out of line with productivity. And since Ireland competes on the basis of its increasingly high-tech business clusters, not its low wages, wage cuts were not a sensible road to growth.

    Why, then, has the Celtic Tiger rebounded? In part, because the economies of Ireland’s two biggest export markets, Britain and the United States, have recovered, so export-led growth has resumed. A weaker euro has also helped. Above all, as research by Aidan Regan of University College Dublin shows, many of the export sectors in which the dynamic Irish economy increasingly specializes — notably biotech, pharmaceuticals, and business and computer services — have boomed. And they boosted output and employment while raising wages, not slashing them.

    A note of caution is due. Part of the recovery is an accounting fiction due to U.S. tech and other firms allocating profits to Ireland for tax purposes; the only benefit Ireland derives from this profit shifting is the low taxes charged on it. Nor is the economy out of the woods yet. While unemployment has fallen sharply, it is still 8.9 percent, and many talented young people have emigrated. Overall wages remain depressed. The government still ran a budget deficit of some 1.7 percent of GDP last year. And the Irish economy is acutely vulnerable to a slowdown in the United States or a bursting of what some think is a tech bubble.

    Still, it remains nonsense that the EU policies that the Fine Gael-Labour Party government faithfully followed triggered recovery. Nor is it true that economies with very different structures and an unbearable burden of government debt, such as Greece, could emulate Ireland’s success if only they followed instructions.

    Ireland now needs a clean broom. Fianna Fail and Fine Gael have alternated in governing the country since just after its independence nearly a century ago. Their differences derive from their stances in the post-independence civil war, rather than from ideology. Since neither has proved competent, alternatives are needed.

    Regrettably, the search for alternatives has often led down blind alleys in other European countries. Greece’s radical-left government has so far failed to obtain debt relief from its EU creditors and is not confronting the oligarchs and special interests that also hold the economy back. The racism and protectionism of the likes of Marine Le Pen’s National Front in France would be a disaster.

    But disenchanted Irish voters are rallying to mostly reasonable independents and new parties that reflect a variety of views from conservative to social democratic. Together, the upstarts are polling 29 percent, ahead of both Fine Gael and Fianna Fail. Irish people can confidently reject the old establishment parties that have mismanaged the country in recent years and embrace positive change.

    #irlande #crise_bancaire #crise_financière

  • The ruling class meets at Davos - World Socialist Web Site

    The ruling class meets at Davos
    19 January 2016

    On Wednesday, some 2,500 corporate executives, celebrities and government officials will converge at the World Economic Forum in Davos, Switzerland to discuss “improving the state of the world” between skiing the alpine slopes and $1,000-a-plate gala dinners.

    The heads of Goldman Sachs, JPMorgan Chase and virtually every other major bank and hedge fund will rub shoulders with the government officials nominally in charge of regulating them, including US Treasury Secretary Jacob Lew, Commerce Secretary Penny Pritzker and European Central Bank President Mario Draghi.

    #davos #ruling_class #refondation_du_capitalisme

  • Greece Loses Last Trace Of Sovereignty After EU Takes Control Of Greek Borders | Zero Hedge

    Banque AIG :
    Bernard ConnollyEurope – Driver or Driven?EMU and the
    Lust for Crisis ACI Congress, May 30, 2008

    "Ever since this summer’s dramatic “referendum” farce, and the subsequent hijacking of the Greek banking system by the ECB’s ELA, Greece has officially been a nation without state sovereignty. Europe reminded Greece of just this a few days ago when days after its waved the carrot before Turkey promising billions in aid, and an EU acceptance fast track, it threatened Greece with expulsion from the Schengen customs union (a union which as a subsequent leak revealed will likely be “temporarily” shuttered for as long as two years unless the refugee crisis is brought under control).

    Perhaps to confirm that few things will stand in its mission-creep to subjugate the sovereignty of European member states, starting with the poorest and most insolvent, namely Greece, we find out that the EU and its border agency, is not only preparing to take over border control of countries that have been found to be “ill-equipped” to deal with the refugee problem, but has already launched this plan into action in Greece.

    Because after being threatened with expulsion from the Schengen zone, Greece (which does not actually share a contiguous, physical border with any Schengen nation) caved in and accepted an offer from the European Union to bolster its borders with foreign guards as well as other aid, including tents and first aid kits. This decision follows reports that Greece was unwilling to accept foreign border guards on its territory, but these were later denied by the government.

    Greece asked #Frontex yesterday to provide rapid intervention teams to the Aegean islands.

    — Frontex (@Frontex) December 4, 2015

    The deployment of additional officers will begin next week.

    As Keep Talking Greece writes, “the masks have fallen. Hand in hand, the European Union and the Frontex want to cancel national sovereignty and take over border controls in the pretext of “safeguarding the Schengen borders”. With controversial claims, they use the case of Greece to create an example that could soon happen “in the border area near you.” And the plan is all German.”

    Paranoia? Or just another confirmation that the Eurozone is using every incremental, and produced, crisis to cement its power over discrete European state sovereignty and wipe out the cultural and religious borders the prevent the amalgamation of Europe into a Brussels, Berlin and Frankfurt-controlled superstate? "

  • Report from Greece : From Thessaloniki to Iraklion (Summer 2015)

    Chronique des jours d’avant et d’après référendum, et intervention de Silvia Federici contre les illusions européennes de gauche

    The European Union has become a fetish for the Left, the ideological campaign of ‘Europeism’ has been successful, generating among most a great fear at the idea of leaving the eurozone.

    The Marxist autonomist Left is guilty of the same disease. The formation of a Eurozone has been hailed (to this day, see the recent conference on the crisis in Athens) as a terrain of working class re-composition, but actually we have seen that this has not been the case. Greece has confronted the battle with the European central bank and Bruxelles by itself. No mobilization, no significant expression of solidarity has cone from other countries. This lack of solidarity is especially worrisome, since the working classes of Europe have faced a decade and a half of austerity and structural adjustment and should know the implications of the disciplining of Greece.
    From a class perspective the crisis is
    (a) the lack of coordination and solidarity among European working classes;

    (b) the inability of European working class to delink from capital and the political class, despite the obvious attack to which it is being subjected which will be generalized and intensified in years to come if the TTIP (Trans-Atlantic Trade and Investment Partnership) is realized;

    (c) the inability of the European left to distinguish between the Europe of the bosses and the Europe of the proletariat and its commitment to a Europeanism that is suicidal, preventing a ‘rupture.’ If Greece had left the Eurozone, it could have triggered a real process of re-composition, instead of being used to discipline all the workers in the other countries, who every night have been reminded of what can happen to them if they step out of line, and reject the reforms imposed on them.

    The only bright spot is the referendum, which was the first loud NO to globalization in Europe and, as some have noted, a Latin American moment in European class politics. The No! of Greece could have also begun a confrontation with EU politics that is now redirected against immigrants, as the case of Italy demonstrates.

    #luttes #Union_Européenne #OXI #Silvia_Federici

  • streeck2015_european-law-journal_heller-schmitt-and-the-euro.pdf

    Dans un article récent inspiré de la crise grecque, Wolfgang Streeck remonte la généalogie du néo-libéralisme, via l’ordo-libéralisme allemand de l’après-guerre, jusqu’à « l’état autoritaire » selon Carl Schmitt - la BCE comme « dictateur idéal ».

    (l’article commente une conférence de Schmitt prononcée en 1932 devant la fédération des industries rhénanes, « Une économie saine dans un état fort »)

    Given the jurisdictional asymmetry between the ECB and the EMU member
    countries, as well as the absence of an equally effective political counterpart at the level
    of the EMU as a whole, the ECB is the ideal dictator –the only agent capable of taking decisive

    #Union_Européenne #euro #BCE #Grèce #néo-libéralisme #ordo-libéralisme #Foucault #Etat_d'exception #Souverain

  • #Yanis_Varoufakis : « Paris est la destination finale de la troïka »

    En pleine fringale médiatique (il a également publié un texte dans le Monde diplomatique de ce mois), l’ancien ministre grec des Finances Yanis #Varoufakis (photo AFP) publie sur son blog, en anglais, l’intégralité d’une interview qu’il a donnée au quotidien espagnol El Pais. Comme toujours avec lui, c’est passionnant, mais on ne peut pas tout résumer. Voici quelques extraits :

  • Varoufakis reveals cloak and dagger ’Plan B’ for Greece, awaits treason charges - Telegraph

    A secret cell at the Greek finance ministry hacked into the government computers and drew up elaborate plans for a system of parallel payments that could be switched from euros to the drachma at the “flick of a button” .

    The revelations have caused a political storm in Greece and confirm just how close the country came to drastic measures before premier Alexis Tsipras gave in to demands from Europe’s creditor powers, acknowledging that his own cabinet would not support such a dangerous confrontation.

    Yanis Varoufakis, the former finance minister, told a group of investors in London that a five-man team under his control had been working for months on a contingency plan to create euro liquidity if the European Central Bank cut off emergency funding to the Greek financial system, as it in fact did after talks broke down and Syriza called a referendum.

  • The problem of Greece is not only a tragedy. It is a lie.

    In their travels to the court of the mighty in Brussels and Berlin, Tsipras and Varoufakis presented themselves neither as radicals nor “leftists” nor even honest social democrats, but as two slightly upstart supplicants in their pleas and demands. Without underestimating the hostility they faced, it is fair to say they displayed no political courage. More than once, the Greek people found out about their “secret austerity plans” in leaks to the media: such as a 30 June letter published in the Financial Times, in which Tsipras promised the heads of the EU, the European Central Bank and the IMF to accept their basic, most vicious demands - which he has now accepted.

    When the Greek electorate voted “no” on 5 July to this very kind of rotten deal, Tsipras said, “Come Monday and the Greek government will be at the negotiating table after the referendum with better terms for the Greek people”. Greeks had not voted for “better terms”. They had voted for justice and for sovereignty, as they had done on January 25.

    The day after the January election a truly democratic and, yes, radical government would have stopped every euro leaving the country, repudiated the “illegal and odious” debt - as Argentina did successfully - and expedited a plan to leave the crippling Eurozone. But there was no plan. There was only a willingness to be “at the table” seeking “better terms”.

    The true nature of Syriza has been seldom examined and explained. To the foreign media it is no more than “leftist” or “far left” or “hardline” - the usual misleading spray. Some of Syriza’s international supporters have reached, at times, levels of cheer leading reminiscent of the rise of Barack Obama. Few have asked: Who are these “radicals”? What do they believe in?

  • Will Europe’s leaders come to their senses about Greece ? - The Washington Post

    The Greeks have made their choice. Faced with two painful alternatives, they chose to stand with their elected leaders and to reject overwhelmingly the harsh, unending austerity that their creditors demanded. Now Europe’s leaders must make their choice. Will they come to their senses and open new negotiations with the Syriza government? Or will they remain unbending, force Greece into official bankruptcy and inexorably out of the euro?

    Too much of what has been reported in the U.S. media in these last, fraught weeks has echoed fulminations of the creditors that distort reality. Syriza has been painted as a party of the extreme left, with Prime Minister Alexis Tsipras’s government depicted as irresponsible and irreverent. This scorn comes from troika functionaries committed to enforcing utterly ruinous policies and whose behavior towards a democratically elected government has been insulting in the extreme.
    Now, Europe would do well to have some adult leadership. The European Central Bank (ECB) should resume the lending needed to reopen the Greek banks. The European community should resume negotiations, offering Greece a course that holds some hope for a way out — at the very least a less harsh austerity and a greater flexibility as to how the budget balance or surplus is achieved. If the democratically elected government of Greece chooses to crack down on the country’s wealthy tax dodgers rather than cut the pensions of the poorest retirees, its creditors should not stand in the way.

    Au tour du WaPo d’appeler à un comportement… adulte !

  • Yanis Varoufakis: Angela Merkel has a red and a yellow button. One ends the crisis. Which does she push? | Comment is free | The Guardian |
    This is an extract from Yanis Varoufakis’s book The Global Minotaur: America, Europe and the Future of the Global Economy, published by Zed Books

    The red button

    If you press it, chancellor, the euro crisis ends immediately, with a general rise in growth throughout Europe, a sudden collapse of debt for each member state to below its Maastricht limit, no pain for Greek citizens (or for the Italians, Portuguese, etc), no guarantees for the periphery’s debts (states or banks) to be provided by German and Dutch taxpayers, interest rate spreads below 3% throughout the eurozone, a diminution in the eurozone’s internal imbalances, and a wholesale rise in aggregate investment.
    The yellow button

    If you press it, chancellor, the situation in the eurozone remains more or less as it is for a decade. The euro crisis continues to bubble along, albeit in a controlled fashion. While the probability of a break-up, which will be a calamity for Germany, remains non-trivial, the chances are that, if you push the yellow button, the eurozone will not break up (with a little help from the European Central Bank), German interest rates will remain extremely low, the euro will be nicely depressed (‘nicely’ from the perspective of German exporters), the periphery’s spreads will be sky-high (but not explosive), Italy and Spain will enter deeper into a debt-deflationary spiral that sees to a reduction of their national income by 15% over the next three years, France shall slip steadily into quasi-insolvency, GDP per capita will rise slowly in the surplus countries and fall precipitously in the periphery. As for the first “fallen” nations (Greece, Ireland and Portugal), they shall become little Latvias, or indeed Kosovos: devastated lands (after the loss of between 25% and 40% of national income, a massive exodus of their skilled labour) on which our people will holiday and buy cheap real estate. In aggregate, if you choose the yellow button, chancellor, eurozone unemployment will remain well above UK and US levels, investment will be anaemic, growth negative and poverty on the up and up.

    Which button do you think, dear reader, the chancellor would want to push?

  • How the #euro caused the Greek crisis #€ #EU #Europe #Greece #ECB

    "Control over the supply of currency is one of the most important tools of economic stabilization that any country has. If used poorly, it can wreak devastation. But if used correctly, it can be a great cure for unemployment.

    The problem is that Europe’s various countries have very different economies and very different economic situations. It’s impossible to make monetary policy that’s equally appropriate for Greece and Germany, and since Germany is larger and more important the European Central Bank winds up doing what’s right for #Germany. That’s a sensible enough decision under the circumstances, but it means that Greece is perpetually stuck with an inappropriate monetary policy with disastrous consequences for the Greek economy.

    In theory, this could be fixed with a much deeper form of economic integration that would continuously send vast sums of money from richer European countries to poorer ones

    But for understandable reasons, the citizens of richer countries don’t like that idea.

    Consequently, Europe has ended up stuck with an unworkable economic system. The single #currency is a valuable and important sign of Europe’s political commitment to peace, #integration, and unity but it makes managing #unemployment and #inflation essentially impossible"

    Having the USA lecture us about solidarity is quite humiliating.

  • #Stiglitz: Europe’s attack on Greek democracy #Tsipras

    "The rising crescendo of bickering and acrimony within #Europe might seem to outsiders to be the inevitable result of the bitter endgame playing out between #Greece and its creditors. In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and #democracy much more than money and economics."

    • Joseph Stiglitz: how I would vote in the Greek referendum | Business | The Guardian

      That concern for popular legitimacy is incompatible with the politics of the eurozone, which was never a very democratic project. Most of its members’ governments did not seek their people’s approval to turn over their monetary sovereignty to the ECB. When Sweden’s did, Swedes said no. They understood that unemployment would rise if the country’s monetary policy were set by a central bank that focused single-mindedly on inflation (and also that there would be insufficient attention to financial stability). The economy would suffer, because the economic model underlying the eurozone was predicated on power relationships that disadvantaged workers.

      And, sure enough, what we are seeing now, 16 years after the eurozone institutionalised those relationships, is the antithesis of democracy: many European leaders want to see the end of prime minister Alexis Tsipras’ leftist government. After all, it is extremely inconvenient to have in Greece a government that is so opposed to the types of policies that have done so much to increase inequality in so many advanced countries, and that is so committed to curbing the unbridled power of wealth. They seem to believe that they can eventually bring down the Greek government by bullying it into accepting an agreement that contravenes its mandate.

      It is hard to advise Greeks how to vote on 5 July. Neither alternative – approval or rejection of the troika’s terms – will be easy, and both carry huge risks. A yes vote would mean depression almost without end. Perhaps a depleted country – one that has sold off all of its assets, and whose bright young people have emigrated – might finally get debt forgiveness; perhaps, having shrivelled into a middle-income economy, Greece might finally be able to get assistance from the World Bank. All of this might happen in the next decade, or perhaps in the decade after that.

      By contrast, a no vote would at least open the possibility that Greece, with its strong democratic tradition, might grasp its destiny in its own hands. Greeks might gain the opportunity to shape a future that, though perhaps not as prosperous as the past, is far more hopeful than the unconscionable torture of the present.

      I know how I would vote.

  • Varoufakis’s Great Game by Hans-Werner Sinn - Project Syndicate

    Capital flight does not mean that capital is moving abroad in net terms, but rather that private capital is being turned into public capital. Basically, Greek citizens take out loans from local banks, funded largely by the Greek central bank, which acquires funds through the European Central Bank’s emergency liquidity assistance (ELA) scheme. They then transfer the money to other countries to purchase foreign assets (or redeem their debts), draining liquidity from their country’s banks.

    Other eurozone central banks are thus forced to create new money to fulfill the payment orders for the Greek citizens, effectively giving the Greek central bank an overdraft credit, as measured by the so-called TARGET liabilities. In January and February, Greece’s TARGET debts increased by almost €1 billion ($1.1 billion) per day, owing to capital flight by Greek citizens and foreign investors. At the end of April, those debts amounted to €99 billion.

    A Greek exit would not damage the accounts that its citizens have set up in other eurozone countries – let alone cause Greeks to lose the assets they have purchased with those accounts. But it would leave those countries’ central banks stuck with Greek citizens’ euro-denominated TARGET claims vis-à-vis Greece’s central bank, which would have assets denominated only in a restored drachma. Given the new currency’s inevitable devaluation, together with the fact that the Greek government does not have to backstop its central bank’s debt, a default depriving the other central banks of their claims would be all but certain.

    A similar situation arises when Greek citizens withdraw cash from their accounts and hoard it in suitcases or take it abroad. If Greece abandoned the euro, a substantial share of these funds – which totaled €43 billion at the end of April – would flow into the rest of the eurozone, both to purchase goods and assets and to pay off debts, resulting in a net loss for the monetary union’s remaining members.

    All of this strengthens the Greek government’s negotiating position considerably.

    #BCE #fuite_des_capitaux #TARGET #ELA #collatéraux #Grèce #dette

  • the unbalanced evolution of homo sapiens: Official: #Tsipras exposes Euro-banking #mafia and its puppets

    The first revelation confirms the dirty role of the ECB as a liquidity asphyxiation tool for the eurozone members who refuse to apply the neoliberal agenda and take harder austerity measures.

    As Alexis Tsipras said: “... on the 18th of February the European Central Bank made a decision that from a political point of view is not a regular or a rational one. So they limited the capacity and the possibility on behalf of the Greek state to issue and re-buy Greek bonds. So there was a capping as regards the treasury bonds, so at EUR9 billion, whereas the normal capping stands at EUR15 billion. So in this way they excluded the possibility of the bank to finance, to re-finance the Greek government, the Greek sovereign debt, by EUR6 billion. ” (

    #BCE #Grèce