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November 30, 2011

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US Wants Debt Action As Obama Hosts Eurozone Summit

November 29, 2011 By Leave a Comment

WASHINGTON (AFP) - The United States said Monday that Europe needed to act “now” with force and decisiveness to attack the eurozone debt crisis, as President Barack Obama hosted a summit with top European officials.

The US-European summit at the White House came amid stark new warnings on the depths of the eurozone turmoil and renewed fears that the exposure to Europe of US banks could rebound and harm the slow US economic recovery.

“This is something they need to solve and they have the capacity to solve,” said White House spokesman Jay Carney.

“Our position is and has been that it’s critical for Europe to move with force and decisiveness now, particularly with new governments coming into place in Italy, Greece and Spain.”

Obama hosted European Council President Herman Van Rompuy, European Commission President Jose Manuel Barroso, High Representative Catherine Ashton and other officials for talks and lunch at the White House.

The talks, also including US Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner, opened with a brief photo-op, and were to conclude later with statements from both sides.

The US president has repeatedly stressed his anxiety over the eurozone crisis and halting efforts to fix it, and could pay a heavy price if economic panic vaults the Atlantic and slows the US recovery as he seeks reelection.

A study by Fitch ratings agency published last week warned that exposure of the US financial sector to European countries and banks was “sizable.”

The White House talks take place as France and Germany seek to frame yet another plan to seek to end the stubborn two-year debt crisis, and outside observers delivered pessimistic warnings on the extent of eurozone woes.

The Organization for Economic Cooperation and Development (OECD) warned that policymakers were failing to see the urgency of acting to tackle risks to the global economy, and rapped the United States as well as Europe.

Moody’s Investors Service warned that all European Union sovereign debt ratings, not just those of teetering nations like Italy, Greece and Portugal were at risk, pointing to a widening of the crisis.

“In the absence of policy measures that stabilize market conditions over the short term, or those conditions stabilizing for any other reason, credit risk will continue to rise,” Moody’s said.

Obama has consistently called on European leaders to construct a eurozone firewall and insists Europe has the capacity to fix the crisis — though questioned whether there is sufficient political will.

“I am deeply concerned and I have been deeply concerned. I suspect I will be deeply concerned tomorrow and next week,” Obama said when asked about his reaction to the crisis in the eurozone in Australia this month.

Despite its exposure to Europe and its status as the world’s top economic power, the United States has limited capacity to influence the eurozone crisis, and has been cajoling top European leaders to act decisively.

Washington’s moral standing on the issue has also been called into question by its failure to make its own tough political decisions needed to fix its bulging deficit, with little movement likely ahead of a 2012 election year.

And despite offering a platform for Obama to express renewed concern, it was unlikely the summit would make much progress as it lacks key players like German Chancellor Angela Merkel and French President Nicolas Sarkozy.

Reports said Monday that key eurozone leaders were considering a push for strict new budget rules for member states to fix the crisis, rather than recommending changes to EU treaties, which could take years.

The White House said the summit would address “efforts to strengthen economic ties and growth” but also take on developments in the Middle East following the Arab Spring and law enforcement and counterterrorism cooperation.

It was likely that Iran’s nuclear drive would also come up, following new steps by Washington and its allies to deepen Tehran’s isolation in the wake of a UN report citing new evidence of a nuclear weapons program.

 

Source: https://www.activistpost.com/2011/11/obama-has-repeatedly-stressed-his.html

Filed Under: America, Banks, Economy, European Union, Financial Crisis

British Foreign Office: Prepare For Riots If The Euro Collapses

November 28, 2011 By Leave a Comment

You would expect the Foreign Office mandarins to be prepared for every eventuality – but here’s a doomsday scenario which might just happen. British embassies are now taking active steps to prepare for the possibility of the euro collapsing – something that’s no longer as inconceivable as it once was. The Foreign Office is preparing contingency plans to help expats from the Costa del Sol and the Algarve who could be stranded without cash – or caught up in riots and civil unrest.

ZeroHedge:

As every major developed economy hits Bass’s Keynesian Endgame, the status quo is set to change dramatically. Nowhere is this climax playing out louder than in Europe and the implicit solution of Germany-uber-alles (while seemingly inevitable though nevertheless lengthy in execution) is likely to not sit well with many of the EMU nations. To wit, The Telegraph today reports that Britain’s Foreign Office is advising its overseas embassies to draw up plans to help expats should the collapse of the Euro turn explosive. Almost incredibly, a senior minister has revealed that Britain is now planning on the basis that a euro collapse is matter of time.

Students march with home-made placards during a demonstration in Madrid Thursday Nov. 17, 2011. The students are protesting education cuts after enduring nearly two years of recession prompted in part by the collapse of a real estate bubble. Spain’s economy has 21.5 unemployment, posted zero growth in the third quarter and is not expected to improve much next year.It is the periodic focus of fears it will be the next euro zone country to require a bailout, after Greece, Ireland and Portugal.

The Telegraph:

  • British embassies in the eurozone have been told to draw up plans to help British expats through the collapse of the single currency, amid new fears for Italy and Spain.
  • As the Italian government struggled to borrow and Spain considered seeking an international bail-out, British ministers privately warned that the break-up of the euro, once almost unthinkable, is now increasingly plausible.
  • Diplomats are preparing to help Britons abroad through a banking collapse and even riots arising from the debt crisis.
  • The Treasury confirmed earlier this month that contingency planning for a collapse is now under way
  • A senior minister has now revealed the extent of the Government’s concern, saying that Britain is now planning on the basis that a euro collapse is now just a matter of time.
  • “It’s in our interests that they keep playing for time because that gives us more time to prepare,” the minister told the Daily Telegraph.Recent Foreign and Commonwealth Office instructions to embassies and consulates request contingency planning for extreme scenarios including rioting and social unrest.Greece has seen several outbreaks of civil disorder as its government struggles with its huge debts.
  • British officials think similar scenes cannot be ruled out in other nations if the euro collapses.Diplomats have also been told to prepare to help tens of thousands of British citizens in eurozone countries with the consequences of a financial collapse that would leave them unable to access bank accounts or even withdraw cash.

A man dressed as a banker lies on a mattress as he is rolled along on top of students during a demonstration march in Madrid Thursday Nov. 17, 2011. The students are protesting education cuts after enduring nearly two years of recession prompted in part by the collapse of a real estate bubble. Spain’s economy has 21.5 unemployment, posted zero growth in the third quarter and is not expected to improve much next year.It is the periodic focus of fears it will be the next euro zone country to require a bailout, after Greece, Ireland and Portugal.

The New York Times:

While European leaders still say there is no need to draw up a Plan B, some of the world’s biggest banks, and their supervisors, are doing just that.“We cannot be, and are not, complacent on this front,” Andrew Bailey, a regulator at Britain’s Financial Services Authority, said this week. “We must not ignore the prospect of a disorderly departure of some countries from the euro zone,” he said.Banks including Merrill Lynch, Barclays Capital and Nomura issued a cascade of reports this week examining the likelihood of a breakup of the euro zone. “The euro zone financial crisis has entered a far more dangerous phase,” analysts at Nomura wrote on Friday. Unless the European Central Bank steps in to help where politicians have failed, “a euro breakup now appears probable rather than possible,” the bank said.Major British financial institutions, like the Royal Bank of Scotland, are drawing up contingency plans in case the unthinkable veers toward reality, bank supervisors said Thursday. United States regulators have been pushing American banks like Citigroup and others to reduce their exposure to the euro zone. In Asia, authorities in Hong Kong have stepped up their monitoring of the international exposure of foreign and local banks in light of the European crisis.

Source: https://www.theblaze.com/stories/british-foreign-office-prepare-for-riots-if-the-euro-collapses/

Filed Under: Economy, European Union, Financial Crisis, Police, United Kingdom, Violence, Warning Tagged With:

A Story of Death Threats and Casual Insults: Racism in Germany

November 26, 2011 By Leave a Comment

Germany was shocked to learn the extent of the crimes committed by a recently uncovered right-wing extremist group. But racism is hardly an anomaly in Germany. One family’s experience shows just how widespread prejudice and hate really is.

Four weeks. Even the timing itself seemed calculated for maximum intimidation.

Four weeks are long enough to begin forgetting, to regain a certain amount of calm. To begin thinking that maybe it was just a bad joke. But four weeks is too short to completely overcome the fear.

Four weeks was the amount of time that passed between the two death threats the Krause family (eds. note: not their real name) found in their mailbox. The first letter came in August 2011. The sender had cut letters out of a newspaper to form a message warning that Mr. Krause and his family would be killed if they didn’t leave Germany.

Why? Because Mrs. Krause and the couple’s two children have dark skin. Because Mrs. Krause comes from East Africa.

The second letter came in September, and the sender spent far less time on it. He simply drew four crosses on a sheet of white paper — one for each member of the family. For the son, for the daughter, for Mr. Krause and for Mrs. Krause.

Mr. Krause, a middle-aged professor, had long promised himself not to take occasional incidents of hostility too seriously. He wanted to avoid overreacting, to prevent those who would sow fear from feeling the satisfaction of success.

The second threat letter, however, made stoicism impossible. And since news broke of the neo-Nazi group that apparently killed nine immigrants over the course of several years, his composure has completely evaporated. The perpetrators of the killing spree purposefully chose victims who did not originally come from Germany.

“I am afraid,” says Krause. “I feel the presence of an unpredictable threat.”

Concerned about Consequences

Krause is not the kind of person who would normally shy away from openly speaking out. He embraces his civic responsibility. “I won’t accept insults,” he says. But now, Krause is extremely wary of seeing his name in print — and doesn’t even want it known where he is from. He is afraid for the lives of his wife and children, and for his own.

German authorities asked him to keep his story as quiet as possible and to only share it with his closest friends. They were concerned, they said, about the consequences should news of the threats become widespread. The letters are now in the hands of law-enforcement officials.

They have, however, refused to actively pursue the case, says Krause. No guards or police have been posted in front of his house. Krause claims the authorities made it clear to him that he simply wasn’t prominent enough for such measures. Instead, he is to follow a few simple rules: Only go to places that are well-lighted and where there is plenty of human activity. And to always monitor his rear-view mirror when driving. They also assured him that threats such as the ones he received aren’t particularly rare and that it was probably just some crank.

But Anders Behring Breivik, the man who killed almost 80 people in Norway in July, was also a crank. “The fact that someone is crazy doesn’t exclude the possibility that they are violent,” says Krause. He doesn’t believe that the neo-Nazi terror cell from Zwickau is an isolated case. “And it is wrong to think that they are just idiots,” he says. “They may be immoral, but they are intelligent.”

Krause is an economist, and he lives with his wife and children in a house located in a well-off district of a large German city. His wife, a doctor from a country in East Africa, moved to Germany to join her husband. At the time, she was pregnant with their second child. Even Krause’s manner of explaining how he met his wife in 2004 makes it clear just how often he has been confronted with prejudice. No, she wasn’t a prostitute that he met in a hotel, nor was she seeking to marry a rich German. She herself comes from a prosperous family. In reality, he explains, he met her at the university on the way to class one day.

Insulted on Account of Her Skin Color

Krause was happy to be able to bring his wife to Germany. It is safer here, the job market is better, medical care is superior — and he likes his homeland. “Germany is a great country, and it offers the opportunity to live in peace and harmony,” he says. Still, he didn’t want to be naïve. He told his wife that she might be insulted in Germany on account of her skin color.

But the reality has turned out to be much worse than he had imagined. And the death threats are only the tip of the iceberg.

The Krause family has experienced things that white-skinned Germans could never imagine. But everyone in the country who looks “foreign” has plenty of stories to tell - about not being served at the deli counter, of parents at the playground telling their children not to play with the dark-skinned child, of the Israeli’s neighbor who calls over from the neighboring balcony: “You Jews always have money.” Or even stories about open attacks, like the Asian woman who was spat on while walking on the sidewalk.

Krause has kept careful notes on many of the incidents he and his family have experienced, and he has notified the authorities. “It’s the sum total of the relatively small things,” he says. “At some point, you ask yourself if you are being overly sensitive. But the opposite of sensitive is insensitive, and that’s not how I want to be.”

His daughter, the oldest child, goes to kindergarten. “They are all very nice there, the parents and the teachers,” Krause says. But once another child told his daughter, “you are black, dirty and bad.” Where does such a thing come from? “Such a thing doesn’t kill anybody, but it is an indication of an attitude that would seem to be widespread,” Krause says.

No Public Interest

In a department store, according to Krause, one of the saleswomen said “poor Germany” when she saw his dark-skinned wife.

In a pharmacy parking lot, a car refused to stop for Krause’s wife and child, coming dangerously close to them. When Krause rushed to stand between his family and the car, the driver stepped out and called the family “monkey asses.”

Authorities rejected Mrs. Krause’s official complaint. “The accused denies having called you and your husband ‘monkey asses’,” reads the official reply. “Independently of that, such an utterance would not fulfill the legal definition of incitement. The mere incident of someone insulting a person who belongs to a particular ethnic group is not enough if the insult has no connection to that ethnic group.”

The letter also said that there was no public interest to be served in prosecuting the accused for the alleged insult.

Kind Gesture

His wife also tells the story of seeing a neighbour — a former teacher who lost his job because of right-wing extremist statements — give the Hitler salute to an acquaintance. “But maybe my wife just misinterpreted it,” Krause says.

After all, he is concerned that he has become obsessed. And he also tries to emphasize the positive situations he has encountered — like the older woman in the supermarket who gave each of his children a stuffed animal. “She simply wanted to say that we are extra-welcome here,” he says, adding that the gesture of kindness almost made him cry.

And yet, he still can’t sleep anymore. Every night between two and three in the morning, he finds himself standing at the window. Once, he saw a police car parked in front of his house for half an hour. But he doesn’t know what that might mean.

 

Source: https://www.spiegel.de/international/germany/0,1518,799987,00.html

Filed Under: European Union, Extremism, Racism, Violence Tagged With:

Bankers Have Seized Europe: Goldman Sachs Has Taken Over

November 26, 2011 By 2 Comments

On November 25, two days after a failed German government bond auction in which Germany was unable to sell 35% of its offerings of 10-year bonds, the German finance minister, Wolfgang Schaeuble said that Germany might retreat from its demands that the private banks that hold the troubled sovereign debt from Greece, Italy, and Spain must accept part of the cost of their bailout by writing off some of the debt.

The private banks want to avoid any losses either by forcing the Greek, Italian, and Spanish governments to make good on the bonds by imposing extreme austerity on their citizens, or by having the European Central Bank print euros with which to buy the sovereign debt from the private banks. Printing money to make good on debt is contrary to the ECB’s charter and especially frightens Germans, because of the Weimar experience with hyperinflation.

Obviously, the German government got the message from the orchestrated failed bond auction. As I wrote at the time, there is no reason for Germany, with its relatively low debt to GDP ratio compared to the troubled countries, not to be able to sell its bonds.

If Germany’s creditworthiness is in doubt, how can Germany be expected to bail out other countries? Evidence that Germany’s failed bond auction was orchestrated is provided by troubled Italy’s successful bond auction two days later.

Strange, isn’t it. Italy, the largest EU country that requires a bailout of its debt, can still sell its bonds, but Germany, which requires no bailout and which is expected to bear a disproportionate cost of Italy’s, Greece’s and Spain’s bailout, could not sell its bonds.

In my opinion, the failed German bond auction was orchestrated by the US Treasury, by the European Central Bank and EU authorities, and by the private banks that own the troubled sovereign debt.

My opinion is based on the following facts. Goldman Sachs and US banks have guaranteed perhaps one trillion dollars or more of European sovereign debt by selling swaps or insurance against which they have not reserved. The fees the US banks received for guaranteeing the values of European sovereign debt instruments simply went into profits and executive bonuses. This, of course, is what ruined the American insurance giant, AIG, leading to the TARP bailout at US taxpayer expense and Goldman Sachs’ enormous profits.

If any of the European sovereign debt fails, US financial institutions that issued swaps or unfunded guarantees against the debt are on the hook for large sums that they do not have. The reputation of the US financial system probably could not survive its default on the swaps it has issued. Therefore, the failure of European sovereign debt would renew the financial crisis in the US, requiring a new round of bailouts and/or a new round of Federal Reserve “quantitative easing,” that is, the printing of money in order to make good on irresponsible financial instruments, the issue of which enriched a tiny number of executives.

Certainly, President Obama does not want to go into an election year facing this prospect of high profile US financial failure. So, without any doubt, the US Treasury wants Germany out of the way of a European bailout.

The private French, German, and Dutch banks, which appear to hold most of the troubled sovereign debt, don’t want any losses. Either their balance sheets, already ruined by Wall Street’s fraudulent derivatives, cannot stand further losses or they fear the drop in their share prices from lowered earnings due to write-downs of bad sovereign debts. In other words, for these banks big money is involved, which provides an enormous incentive to get the German government out of the way of their profit statements.

The European Central Bank does not like being a lesser entity than the US Federal Reserve and the UK’s Bank of England. The ECB wants the power to be able to undertake “quantitative easing” on its own. The ECB is frustrated by the restrictions put on its powers by the conditions that Germany required in order to give up its own currency and the German central bank’s control over the country’s money supply. The EU authorities want more “unity,” by which is meant less sovereignty of the member countries of the EU. Germany, being the most powerful member of the EU, is in the way of the power that the EU authorities desire to wield.

Thus, the Germans bond auction failure, an orchestrated event to punish Germany and to warn the German government not to obstruct “unity” or loss of individual country sovereignty.

Germany, which has been browbeat since its defeat in World War II, has been made constitutionally incapable of strong leadership. Any sign of German leadership is quickly quelled by dredging up remembrances of the Third Reich. As a consequence, Germany has been pushed into an European Union that intends to destroy the political sovereignty of the member governments, just as Abe Lincoln destroyed the sovereignty of the American states.

Who will rule the New Europe? Obviously, the private European banks and Goldman Sachs.

The new president of the European Central Bank is Mario Draghi. This person was Vice Chairman and Managing Director of Goldman Sachs International and a member of Goldman Sachs’ Management Committee. Draghi was also Italian Executive Director of the World Bank, Governor of the Bank of Italy, a member of the governing council of the European Central Bank, a member of the board of directors of the Bank for International Settlements, and a member of the boards of governors of the International Bank for Reconstruction and Development and the Asian Development Bank, and Chairman of the Financial Stability Board.

Obviously, Draghi is going to protect the power of bankers.

Italy’s new prime minister, who was appointed not elected, was a member of Goldman Sachs Board of International Advisers. Mario Monti was appointed to the European Commission, one of the governing organizations of the EU. Monti is European Chairman of the Trilateral Commission, a US organization that advances American hegemony over the world. Monti is a member of the Bilderberg group and a founding member of the Spinelli group, an organization created in September 2010 to facilitate integration within the EU.

Just as an unelected banker was installed as prime minister of Italy, an unelected banker was installed as prime minister of Greece. Obviously, they are intended to produce the bankers’ solution to the sovereign debt crisis.

Greece’s new appointed prime minister, Lucas Papademos, was Governor of the Bank of Greece. From 2002-2010. He was Vice President of the European Central Bank. He, also, is a member of America’s Trilateral Commission.

Jacques Delors, a founder of the European Union, promised the British Trade Union Congress in 1988 that the European Commission would require governments to introduce pro-labor legislation. Instead, we find the banker-controlled European Commission demanding that European labor bail out the private banks by accepting lower pay, fewer social services, and a later retirement.

The European Union, just like everything else, is merely another scheme to concentrate wealth in a few hands at the expense of European citizens, who are destined, like Americans, to be the serfs of the 21st century.

 

Source: https://www.activistpost.com/2011/11/bankers-have-seized-europe-goldman.html

Filed Under: Banks, European Union, Politicians, Politics

How Germany Overlooked the Threat from the Right

November 26, 2011 By Leave a Comment

The victim had stayed out late drinking — a fatal mistake, as it turned out. On the night of Nov. 24-25, 1990, Amadeu Antonio Kiowa was sitting with friends in Hüttengasthof, a bar with an adjacent discotheque in the town of Eberswalde, in the eastern German state of Brandenburg. Shortly after midnight, the owner of the establishment received a phone call from the police saying that he should send his guests home because a group of skinheads was on its way there. But the warning came too late for the Angolan-born factory worker.

“There are the niggers,” someone yelled from the group, which had been loudly rampaging through the town since that afternoon. There were around 40 to 60 young men wearing paratrooper boots and bomber jackets, some of them armed with baseball bats and fence pickets. Kiowa was punched twice in the stomach, he fell down and struggled to get back up on his feet, but the group had already set upon him. The thugs pulled him up and tossed him back and forth, as if they were throwing around a ball. When the brutalized man fell to the ground again, they kicked him until he lay unconscious on the street. Two weeks later, the young man died of severe head injuries in the intensive care unit of the Berlin-Buch Hospital.

Turning Point

Kiowa is one of the first victims of racist violence after German reunification in 1990. His death marks a turning point where far-right terror became apparent, even if the state long refused to recognize it as such. In September 1992, the district court in Frankfurt-Oder convicted five of the men involved in the attack of committing assault and battery leading to death. The most severe sentence was four years of juvenile detention, and one man got off with a two-year suspended sentence.

The judges ruled that the “general political and social circumstances” following reunification were mitigating factors. “The state and the FDJ (the former East Germany’s communist youth organization, the Free German Youth) used to regulate everything, including recreational activities,” they wrote in their decision, “but now these young people have become disoriented as a result of the political upheaval.”

That was 20 years ago and Germany has had a great deal of time to learn from its mistakes. Now, the country annually spends €24 million ($32.5 million) on violence-prevention programs. Germany’s domestic intelligence agency, the Office for the Protection of the Constitution, which is responsible for monitoring extremism, has many informers in the far-right political milieu — so many, in fact, that an attempt to ban the far-right National Democratic Party of Germany (NPD) failed in 2003 because of the presence of informers in senior positions within the party. But right-wing terror has not ended — on the contrary, it has escalated. One could even say that it has become commonplace.

Journalists from the weekly German newspaper Die Zeit and the center-left newspaper Die Tagesspiegel carried out research into the number of victims of far-right violence. They came to a total of at least 137 deaths between 1990 and 2008 — 137 people who died because they had the wrong skin color, or had a different accent, or because they simply didn’t fit into the right-wing extremists’ view of the world. They were brutally kicked, stabbed to death or set on fire. One was trampled to death and thrown into the nearest cesspool.

Trail of Blood

A horrifying trail of blood extends across the entire country — and perhaps the most spine-chilling aspect of all is that so few people have noticed it. It’s been a long time since Germans have staged candlelight vigils in memory of the victims of far-right violence. This gives the impression that politicians and the general public were busy with more important things than this form of murderous, everyday violence. But perhaps simply no one, aside from a small circle of committed citizens, saw the connection — the hate that tied all the crimes together.

Now, Germany has been startled from its slumber. Ever since the discovery of an underground far-right terror group which apparently targeted Turkish small businessmen all across Germany for many years, the law enforcement agencies have been asking themselves how they could have overlooked something that is actually impossible to overlook.

There’s a deep sense of shock and dismay. German Chancellor Angela Merkel spoke of a “disgrace for Germany” and German Interior Minister Hans-Peter Friedrich warned of “enormous damage to the trust that people have in our law enforcement agencies” in an interview with SPIEGEL. On Tuesday, the German parliament, the Bundestag, will deal with the issue. On Friday of last week, a large crisis summit was held in Berlin. Participants discussed every option that could be quickly implemented: a new joint center to curb far-right violence, more staff members for the special units of police and the public prosecutors’ offices and a renewed attempt to ban the NPD. The government is trying to calm the public — and also itself.

Indeed, the issues that are being raised go beyond the case of the murderous trio from Jena in eastern Germany. While investigators are still focusing on who was in contact with the terror cell, what other crimes they may have committed, and which individuals helped them along the way, the politicians have already turned to the question of who is responsible for the debacle.

“The question is: Did individuals fail here or was it the entire system?” asks the governor of North Rhine-Westphalia, Hannelore Kraft, a member of the opposition center-left Social Democrats (SPD). The SPD mayor of Berlin, Klaus Wowereit, already seems to have decided that the blame cannot be placed on government agencies alone. “While conservatives immediately said that left-wing extremism was behind the series of arson attacks on cars in Berlin, they didn’t really want to recognize the threat posed by right-wing terror,” he says.

Challenging the State

There are, of course, significant differences between far-left and far-right terror. Political terror on the right in Germany has never had the logistics of the far-left Red Army Faction (RAF), which terrorized Germany in the 1970s, or its circle of supporters which, at least during the early days, extended into the homes of the educated middle classes. Many left-wing terrorists had an academic background that translated into a propensity for developing political theories, something that right-wing extremists tended to lack.

But there is more than one way to challenge the state, as both types of terror show. It’s possible to attack its representatives, which is the path that was taken by the RAF. However, it’s also possible to stake out regions in which the state loses its monopoly on the legitimate use of physical force, thereby suspending the laws that govern civil society.

Far-right terrorists rarely leave letters claiming responsibility or voluminous treatises drumming up support for the struggle against the system. Most perpetrators are barely able to justify their violent acts in coherent sentences. But there is no ignoring the fact that this terror also has a message: Anyone who is different will be struck down. And: Stay away, because we call the shots here.

No-Go Areas

The message has certainly been received. Anyone who lives in the western part of Berlin, and can be easily recognized as a foreigner, still avoids taking trips to the city’s eastern outlying districts, let alone to the states of the former East Germany. Travel guides have long warned dark-skinned Americans against visiting certain regions in the east.

Far-right terror is random but it is not indiscriminate, and in that sense it resembles leftist terror. It also seeks out its victims according to political criteria, but it doesn’t care how affluent or influential someone is. What counts is whether someone could pass as “German,” although in addition to national origin, other deadly criteria could be an individual’s sexual orientation or being a Jew.

Every society whose citizens have to fear for their lives because they belong to a certain group is affected at its core.

This raises the following question: Why has the German state so far not felt truly challenged by the far right?

Part 2: Attacks Every Week

Shivers run down the spine of anyone who takes the trouble to read the police reports. Every week, somebody in Germany is attacked by right-wing extremist thugs — and it’s often only purely by chance that they escape with their lives. Many incidents, though, do not appear in the official records.

German government statistics show that 46 homicides were committed by right-wing extremists between 1990, the year of German reunification, and 2008. This official figure remains unchanged despite the research of a team of editors from the weekly German newspaper Die Zeit and the center-left newspaper Die Tagesspiegel, which last year set out to find the “missing victims.”

Forty-six victims is already a horrific number. It is, at least, larger than the number of dead left behind by the RAF wave of terror. But the list of victims which the journalists came up with is even more terrible. It contains at least 137 dead. Now, the 10 victims of the neo-Nazi trio have to be added to this figure.

Inventory of Hate

Even this total only gives an incomplete picture. The actual extent to which radical right-wing terror has now become commonplace in certain regions of the country only becomes apparent when other offenses are included, such as illegal acts of propaganda and attacks that don’t necessarily lead to murder and manslaughter. Investigators in the eastern state of Brandenburg recently conducted an exemplary inventory for Zossen, a small town just a few kilometers south of Berlin. There, a group calling itself the “Free Forces of Teltow-Fläming” (FKTF), after the district where Zossen is located, spread fear and panic for years before it was banned this past spring.

Here is an excerpt from the first three months of last year:

  • Jan. 22, 2010. At 10:40 p.m. a 16-year-old boy set fire to the House of Democracy in Kirchstrasse. The building was completely burnt down. During a police interview, the perpetrator said his motive was that he wanted to make himself popular among the members of the FKTF.
  • Jan. 27, 2010. At an event commemorating Holocaust Memorial Day, a group of hecklers gathered near the market square. When the organizers began to read the names of the Holocaust victims, they yelled “lies, all lies!” and a number of individuals gave the Hitler salute.
  • Feb. 16, 2010. Six members of the FKTF were charged in a regional court with disseminating a flyer showing a gravestone with the inscription “Federal Republic of Germany 1949-2009. In this grave rests an absolutely pitiful, cowardly state.”
  • Feb. 28, 2010. Unknown perpetrators used light-blue paint to spray right-wing graffiti on a property wall on Thomas-Müntzer-Strasse, including two swastikas, an image of Hitler, the letters “NS” (the abbreviation for National Socialism) — with the “S” written as a rune — and the word “now!”
  • March 7, 2010. A police patrol discovered a swastika and the sentence “Hagen, you’ll die soon!” on the facade of the “Honey Store” in Berliner Strasse. One of the co-owners of the business, whose first name is Hagen, is a man who is involved in a local anti-right-wing citizens’ initiative, “Zossen Shows Its True Colors,” and publishes the group’s monthly newsletter. After the incident, he was placed under police protection.

The list goes on, and not only in Zossen. All it takes is a careful examination of the facts to recognize that these individual cases represent a pattern.

Ignoring Reality

The peculiar unwillingness to look reality in the face is also reflected in German court convictions. Word has got out that leniency is only understood as a sign of the state’s weakness, yet a number of judges still hesitate to cite the political aspects of offenses.

One of the reasons for this reluctance lies in the German legal system. The Federal Court of Justice demands an extremely thorough justification when a court passes a conviction for murder perpetrated with “particularly base motives.” This is a legal term for homicide based on political motives. In cases where this serves as a justification for a conviction, there is an increased likelihood that the defendant will win on appeal, and it appears that some judges are striving to avoid this.

It is not only the justice system’s need to take the safe route that protects extremist perpetrators from being labeled far-right. In some regions, politicians and the police have entered into a sinister alliance to play down the extent of right-wing extremism. For a long time, particularly in the eastern part of the country, a misguided sense of regional pride led authorities to look away, instead of calling a spade a spade.

Not Sufficiently Racist

In 2007, there was a scandal in the eastern state of Saxony-Anhalt, which had the highest rate of right-wing violence in the country at the time, when it emerged that the police had deliberately understated the number of far-right crimes in a bid to improve the state’s image.

Minutes from Saxony-Anhalt’s state parliamentary investigative committee into the scandal provide an insight into how right-wing offenses were downplayed all the way down the chain of command. Three police officers who were extraordinarily dedicated to pursuing Saxony-Anhalt’s right-wing offenders testified that their superior told them in 2007 that they “didn’t have to notice everything.” He said that too many registered offenses by right-wing extremists would further “damage the state’s image,” and added that political campaigns to promote civil courage were nothing more than initiatives that “play to the crowd.”

A witness said that the Saxony-Anhalt State Office of Criminal Investigation received instructions from the state Interior Ministry “to adjust the case numbers.” He said that there were disagreements over which offenses could be classified as racially motivated. The witness went on to say that they argued over whether the term “nigger slut” or the sentence “I’ll kill your nigger child” were sufficiently racist. The witness said that this made it possible to keep 135 cases out of the statistics in Saxony-Anhalt alone.

The right-wing extremist scene, which hates democracy, foreigners and everything foreign, has experienced a slow decline for years. That’s the good news. The bad news is that the proportion of radical activists has grown. In 2010, German authorities counted a total of 25,000 right-wing extremists, 9,500 of whom were categorized as violence-prone. This includes the so-called “autonomist nationalists,” who have recently increased in numbers. These are primarily young men who have copied the black clothing and symbolism of “black bloc” radical leftists.

‘We’re Thinking about Attacking the Police Station’

In addition to the everyday terrorism of right-wing extremist thugs, since 2007 militant neo-Nazis have joined forces in the so-called Free Network. All of the members agree that violence is an essential part of their political struggle. In the run-up to a neo-Nazi demonstration in Dresden, a man named “Hugo” posted in an internal forum: “We’re thinking about attacking the police station and setting it on fire!” Elsewhere a comrade asked for support in the struggle against world Jewry: “Tomorrow around 6 p.m. there is going to be a spontaneous protest in Chemnitz against Israel.” Anybody who wants to participate, he said, should bring torches and “firecrackers.”

Until now, such announcements were occasionally dismissed as typical bragging by confused individuals on the right-wing extremist scene, but the government intends to change that. German Justice Minister Sabine Leutheusser-Schnarrenberger has proposed restructuring the Office for the Protection of the Constitution and consolidating the current 16 state branches into three or four agencies. Interior Minister Friedrich is planning to set up a new joint center against right-wing extremism. And all political parties in Germany are discussing a new attempt to ban the NPD.

The plan’s proponents point to a number of advantages: They say that the NPD would have to vacate its seats in the two eastern German state parliaments where it is represented. Its bank accounts would be frozen, and its party offices would be closed. Taxpayer money would no longer be used to help fund the party’s election campaign costs.

Failed Attempt

But many German politicians still vividly recall the last failed attempt to ban the NPD. In January 2001, former Chancellor Gerhard Schröder’s center-left coalition government of the SPD and the Green Party submitted a proposal to outlaw the party, which contained some 100 pages of argumentations presented by then-German Interior Minister Otto Schily.

But before the case could be properly heard by the German Constitutional Court, Schily had to admit that important NPD functionaries had also worked for German intelligence. This derailed the application’s chances of success. Indeed, the judges in Karlsruhe asked themselves how unconstitutional a party could be that was controlled by paid informers.

It doesn’t look as if things will go better the second time around. Then, as now, there are reportedly some 100 NPD functionaries that pass on inside information to domestic intelligence agents. This practice has changed very little over the years.

Nevertheless, at least one thing was cleared up at the highest level last week: the question of how best to commemorate the victims of the neo-Nazi trio from Thuringia. It has been decided that there will be a meeting at Bellevue Palace, the official residence of the German president, followed by a photo op. German President Christian Wulff personally urged that the ceremony be held as soon as possible.

[REPORTED BY SVEN BECKER, STEFAN BERG, MARKUS DEGGERICH, JAN FLEISCHHAUER AND GUNTHER LATSCH]

 

Source: https://www.spiegel.de/international/germany/0,1518,798935-2,00.html

Filed Under: European Union, Extremism, Politics, Violence

A Philosopher’s Mission to Save the EU

November 26, 2011 By Leave a Comment

Jürgen Habermas is angry. He’s really angry. He is nothing short of furious — because he takes it all personally.

He leans forward. He leans backward. He arranges his fidgety hands to illustrate his tirades before allowing them to fall back to his lap. He bangs on the table and yells: “Enough already!” He simply has no desire to see Europe consigned to the dustbin of world history.

“I’m speaking here as a citizen,” he says. “I would rather be sitting back home at my desk, believe me. But this is too important. Everyone has to understand that we have critical decisions facing us. That’s why I’m so involved in this debate. The European project can no longer continue in elite modus.”

Enough already! Europe is his project. It is the project of his generation.

Jürgen Habermas, 82, wants to get the word out. He’s sitting on stage at the Goethe Institute in Paris. Next to him sits a good-natured professor who asks six or seven questions in just under two hours — answers that take fewer than 15 minutes are not Habermas’ style.

Usually he says clever things like: “In this crisis, functional and systematic imperatives collide” — referring to sovereign debts and the pressure of the markets.

Sometimes he shakes his head in consternation and says: “It’s simply unacceptable, simply unacceptable” — referring to the EU diktat and Greece’s loss of national sovereignty.

‘No Convictions’

And then he’s really angry again: “I condemn the political parties. Our politicians have long been incapable of aspiring to anything whatsoever other than being re-elected. They have no political substance whatsoever, no convictions.”

It’s in the nature of this crisis that philosophy and bar-room politics occasionally find themselves on an equal footing.

It’s also in the nature of this crisis that too many people say too much, and we could definitely use someone who approaches the problems systematically, as Habermas has done in his just published book.

But above all, it is in the nature of this crisis that the longer it continues, the more confusing it gets. It becomes more difficult to follow its twists and turns and to see who is responsible for what. And the whole time, alternatives are disappearing before our very eyes.

That’s why Habermas is so angry: with the politicians, the “functional elite” and the media. “Are you from the press?” he asks a man in the audience who has posed a question. “No? Too bad.”

Habermas wants to get his message out. That’s why he’s sitting here. That’s why he recently wrote an article in the Frankfurter Allgemeine newspaper, in which he accused EU politicians of cynicism and “turning their backs on the European ideals.” That’s why he has just written a book — a “booklet,” as he calls it — which the respected German weekly Die Zeit promptly compared with Immanuel Kant’s 1795 essay “Perpetual Peace: A Philosophical Sketch.”

But does he have an answer to the question of which road democracy and capitalism should take?

A Quiet Coup d’État

“Zur Verfassung Europas” (“On Europe’s Constitution”) is the name of his new book, which is basically a long essay in which he describes how the essence of our democracy has changed under the pressure of the crisis and the frenzy of the markets. Habermas says that power has slipped from the hands of the people and shifted to bodies of questionable democratic legitimacy, such as the European Council. Basically, he suggests, the technocrats have long since staged a quiet coup d’état.

“On July 22, 2011, (German Chancellor) Angela Merkel and (French President) Nicolas Sarkozy agreed to a vague compromise — which is certainly open to interpretation — between German economic liberalism and French etatism,” he writes. “All signs indicate that they would both like to transform the executive federalism enshrined in the Lisbon Treaty into an intergovernmental supremacy of the European Council that runs contrary to the spirit of the agreement.”

Habermas refers to the system that Merkel and Sarkozy have established during the crisis as a “post-democracy.” The European Parliament barely has any influence. The European Commission has “an odd, suspended position,” without really being responsible for what it does. Most importantly, however, he points to the European Council, which was given a central role in the Lisbon Treaty — one that Habermas views as an “anomaly.” He sees the Council as a “governmental body that engages in politics without being authorized to do so.”

He sees a Europe in which states are driven by the markets, in which the EU exerts massive influence on the formation of new governments in Italy and Greece, and in which what he so passionately defends and loves about Europe has been simply turned on its head.

A Rare Phenomenon

At this point, it should be mentioned that Habermas is no malcontent, no pessimist, no prophet of doom — he’s a virtually unshakable optimist, and this is what makes him such a rare phenomenon in Germany.

His problem as a philosopher has always been that he appears a bit humdrum because, despite all the big words, he is basically rather intelligible. He took his cultivated rage from Marx, his keen view of modernity from Freud and his clarity from the American pragmatists. He has always been a friendly elucidator, a rationalist and an anti-romanticist.

Nevertheless, his previous books “Structural Transformation of the Public Sphere” and “Between Facts and Norms” were of course somewhat different than the merry post-modern shadow-boxing of French philosophers like Jacques Derrida and Jean Baudrillard. What’s more, another of Habermas’ publications, “Theory of Communicative Action,” certainly has its pitfalls when it comes to his theory of “coercion-free discourse” which, even before the invention of Facebook and Twitter, were fairly bold, if not perhaps naïve.

Habermas was never a knife thrower like the Slovenian thinker Slavoj Žižek, and he was no juggler like the German philosopher Peter Sloterdijk. He never put on a circus act, and he was always a leftist (although there are those who would disagree). He was on the side of the student movement until things got too hot for him. He took delight in the constitution and procedural matters. This also basically remains his position today.

Habermas truly believes in the rationality of the people. He truly believes in the old, ordered democracy. He truly believes in a public sphere that serves to make things better.

Part 2: A Vision of Europe at the Crossroads

This also explains why he gazed happily at the audience on this mid-November evening in Paris. Habermas is a fairly tall, lanky man. As he stepped onto the stage, his relaxed gait gave him a slightly casual air. With his legs stretched out under the table, he seemed at home. Whether he’s at a desk or not, this is his profession: communicating and exchanging ideas in public.

He was always there when it was a question of putting Germany back on course, in other words, on his course — toward the West, on the path of reason: during the vitriolic debate among German historians in 1986 that focused on the country’s approach to its World War II past; following German reunification in 1990; and during the Iraq War. It’s the same story today as he sits here, at a table, in a closed room in the basement of the Goethe Institute, and speaks to an audience of 200 to 250 concerned, well-educated citizens. He says that he, the theorist of the public sphere, doesn’t have a clue about Facebook and Twitter — a statement which, of course, seems somewhat antiquated, almost even absurd. Habermas believes in the power of words and the rationality of discourse. This is philosophy unplugged.

While the activists of the Occupy movement refuse to formulate even a single clear demand, Habermas spells out precisely why he sees Europe as a project for civilization that must not be allowed to fail, and why the “global community” is not only feasible, but also necessary to reconcile democracy with capitalism. Otherwise, as he puts it, we run the risk of a kind of permanent state of emergency — otherwise the countries will simply be driven by the markets. “Italy Races to Install Monti” was a headline in last week’s Financial Times Europe.

On the other hand, they are not so far apart after all, the live-stream revolutionaries from Occupy and the book-writing philosopher. It’s basically a division of labor — between analog and digital, between debate and action. It’s a playing field where everyone has his or her place, and it’s not always clear who are the good guys and who are the bad guys. We are currently watching the rules being rewritten and the roles being redefined.

A Dismantling of Democracy

“Sometime after 2008,” says Habermas over a glass of white wine after the debate, “I understood that the process of expansion, integration and democratization doesn’t automatically move forward of its own accord, that it’s reversible, that for the first time in the history of the EU, we are actually experiencing a dismantling of democracy. I didn’t think this was possible. We’ve reached a crossroads.”

It also has to be said: For being Germany’s most important philosopher, he is a mind-bogglingly patient man. He is initially delighted that he has managed at last to find a journalist whom he can tell just how much he abhors the way certain media ingratiate themselves with Merkel — how he detests this opportunist pact with power. But then he graciously praises the media for finally waking up last year and treating Europe in a manner that clearly demonstrates the extent of the problem.

“The political elite have actually no interest in explaining to the people that important decisions are made in Strasbourg; they are only afraid of losing their own power,” he says, before being accosted by a woman who is not entirely in possession of her faculties. But that’s how it is at such events — that’s how things go with coercion-free discourse. “I don’t fully understand the normative consequences of the question,” says Habermas. The response keeps the woman halfway at a distance.

He is, after all, a gentleman from an age when having an eloquent command of the language still meant something and men carried cloth handkerchiefs. He is a child of the war and perseveres, even when it seems like he’s about to keel over. This is important to understanding why he takes the topic of Europe so personally. It has to do with the evil Germany of yesteryear and the good Europe of tomorrow, with the transformation of past to future, with a continent that was once torn apart by guilt — and is now torn apart by debt.

Without Complaint

In the past, there were enemies; today, there are markets — that’s how the historical situation could be described that Habermas sees before him. He is standing in an overcrowded, overheated auditorium of the Université Paris Descartes, two days before the evening at the Goethe Institute, and he is speaking to students who look like they would rather establish capitalism in Brussels or Beijing than spend the night in an Occupy movement tent.

After Habermas enters the hall, he immediately rearranges the seating on the stage and the nametags on the tables. Then the microphone won’t work, which seems to be an element of communicative action in practice. Next, a professor gives a windy introduction, apparently part of the academic ritual in France.

Habermas accepts all this without complaint. He steps up to the lectern and explains the mistakes that were made in constructing the EU. He speaks of a lack of political union and of “embedded capitalism,” a term he uses to describe a market economy controlled by politics. He makes the amorphous entity Brussels tangible in its contradictions, and points to the fact that the decisions of the European Council, which permeate our everyday life, basically have no legal, legitimate basis. He also speaks, though, of the opportunity that lies in the Lisbon Treaty of creating a union that is more democratic and politically effective. This can also emerge from the crisis, says Habermas. He is, after all, an optimist.

Then he’s overwhelmed by the first wave of fatigue. He has to sit down. The air is stuffy, and it briefly seems as if he won’t be able to continue with his presentation. After a glass of water, he stands up again.

He rails against “political defeatism” and begins the process of building a positive vision for Europe from the rubble of his analysis. He sketches the nation-state as a place in which the rights of the citizens are best protected, and how this notion could be implemented on a European level.

Reduced to Spectators

He says that states have no rights, “only people have rights,” and then he takes the final step and brings the peoples of Europe and the citizens of Europe into position — they are the actual historical actors in his eyes, not the states, not the governments. It is the citizens who, in the current manner that politics are done, have been reduced to spectators.

His vision is as follows: “The citizens of each individual country, who until now have had to accept how responsibilities have been reassigned across sovereign borders, could as European citizens bring their democratic influence to bear on the governments that are currently acting within a constitutional gray area.”

This is Habermas’s main point and what has been missing from the vision of Europe: a formula for what is wrong with the current construction. He doesn’t see the EU as a commonwealth of states or as a federation but, rather, as something new. It is a legal construct that the peoples of Europe have agreed upon in concert with the citizens of Europe — we with ourselves, in other words — in a dual form and omitting each respective government. This naturally removes Merkel and Sarkozy’s power base, but that’s what he’s aiming for anyway.

Then he’s overwhelmed by a second wave of fatigue. He has to sit down again, and a professor brings him some orange juice. Habermas pulls out his handkerchief. Then he stands up and continues to speak about saving the “biotope of old Europe.”

There is an alternative, he says, there is another way aside from the creeping shift in power that we are currently witnessing. The media “must” help citizens understand the enormous extent to which the EU influences their lives. The politicians “would” certainly understand the enormous pressure that would fall upon them if Europe failed. The EU “should” be democratized.

His presentation is like his book. It is not an indictment, although it certainly does at times have an aggressive tone; it is an analysis of the failure of European politics. Habermas offers no way out, no concrete answer to the question of which road democracy and capitalism should take.

A Vague Future and a Warning from the Past

All he offers is the kind of vision that a constitutional theorist is capable of formulating: The “global community” will have to sort it out. In the midst of the crisis, he still sees “the example of the European Union’s elaborated concept of a constitutional cooperation between citizens and states” as the best way to build the “global community of citizens.”

Habermas is, after all, a pragmatic optimist. He does not say what steps will take us from worse off to better off.

What he ultimately lacks is a convincing narrative. This also ties Habermas once again to the Occupy movement. But without a narrative there is no concept of change.

He receives a standing ovation at the end of his presentation.

“If the European project fails,” he says, “then there is the question of how long it will take to reach the status quo again. Remember the German Revolution of 1848: When it failed, it took us 100 years to regain the same level of democracy as before.”

A vague future and a warning from the past — that’s what Habermas offers us. The present is, at least for the time being, unattainable.

 

Source: https://www.spiegel.de/international/europe/0,1518,799237,00.html

Filed Under: Corporations, Corruption, European Union, Financial Crisis, Rights

Financial Watchdog Warns UK Banks To Brace Themselves For Impact Of Chaotic Euro Break-Up

November 26, 2011 By Leave a Comment

British banks must brace themselves for a chaotic break-up of the euro, the City watchdog has warned.

Andrew Bailey, a senior executive at the Financial Services Authority, said there was no room for ‘complacency’ as the storms over the monetary union continue to rage.

He said lenders should draw up emergency plans for the exit of stricken eurozone members from the bloc – or even a complete collapse of the single currency.

Financial fears: Andrew Bailey insists that British banks should be drawing up emergency plans

‘We must not ignore the prospect of the disorderly departure of some countries from the eurozone,’ he warned.

Although ‘unlikely’, a meltdown in the 17-member club could hit the UK financial system hard because of the ‘network’ of relationships between British and European banks, Bailey argued.

He told a conference in London yesterday: ‘There’s no road map out there that says “this is how it happens”. We have been talking to [banks] already and we will be talking to them again and asking questions.’

The stark warning came as borrowing costs for eurozone governments climbed again, amid the ongoing deadlock among their leaders over how to tackle the debt crisis.

For the first time in two-and-a half years, the yield on UK government debt fell below Germany’s in a sign that the contagion is spreading to the very heart of the union.

The turmoil is already having a substantial impact on Britain’s banks by driving up the cost of raising money from international investors.

The problems have affected UK lenders even as they charge customers rates that are ‘substantially out of line with history’ relative to the Bank of England base rate, according to Bailey. The banking supervisor painted a bleak picture of the financial sector’s prospects over the coming years, in which banks will be forced to cut back their sprawling empires.

In a bid to restore their credibility with investors, many are already withdrawing en-masse from peripheral businesses.

This will lead to a ‘sharp reduction’ in the amount of cash used for more speculative activities, Bailey said. In a clear reference to Royal Bank of Scotland, he predicted that some institutions could pull out of so-called ‘casino’ banking altogether.

‘I don’t think we should rule out that for some banks an exit from investment banking . . . is the sensible outcome,’ he said.

Regulators would be ‘watching banks carefully’ and ensure that they build up reserves to absorb future losses ‘where they can’, he added.

 

Source: https://www.thisismoney.co.uk/money/news/article-2065911/The-Financial-Services-Authority-warning-lenders-euro.html#ixzz1eoc8IcJV

Filed Under: Banks, European Union, Financial Crisis, United Kingdom

Nigel Farage- Unelected Puppets Of A German-Dominated EU

November 26, 2011 By Leave a Comment

Neil Cavuto talks to Nigel Farage MEP, UKIP, Co-President of the EFD Group in the European Parliament (Europe of Freedom and Democracy)

 

Filed Under: European Union, Globalists, Politics, Propaganda

Analyst View - Moody’s Cuts Hungary Rating To “Junk”

November 26, 2011 By Leave a Comment

BUDAPEST (Reuters) - Ratings agency Moody’s cut Hungary’s sovereign rating into junk territory late on Thursday, adding to the country’s woes despite a government move to seek IMF backing and driving its forint currency over 1 percent lower near record lows.

Following are analysts’ comments on the move.

PETER CSASZAR, KBC

“The fact that Moody’s maintained the negative outlook signals that Hungary may face further cuts in its sovereign credit rating in the absence of a U-turn in its economic policy. Indeed, with recent failures of selling bonds and the prospect for a weak economic growth (or maybe even recession), Hungary’s fiscal consolidation and the trajectory of national debt is at significant risk.

“While the downgrade was broadly expected across the market, all Hungarian asset classes are likely to be under pressure in today’s trading. Sadly, the Ministry for National Economy sees the downgrade as unfounded and regards it as part of a “series of concentrated attack” against the HUF and the country.”

SEB

“Rising uncertainty about Hungary’s ability to meet fiscal goals, high debt levels and increasingly constrained medium term growth prospects as main reasons behind the move. We highlighted in our last EMXA report that Hungary is one of the most vulnerable economy in EM and where we expected both FX and FI to be vulnerable for risk aversion pressure and pointed out as our main market short as global picture deteriorates. EUR/HUF lifted to above 315 on rating news and looks to be challenging the strong resistance at 317.90.”

EQUILOR

“The decision itself is not surprising at all, as it has been on the cards for months now. Regarding the timing, investors expected S&P’s comments earlier, but they will release it nonetheless, in our view. Fitch is also anticipated to follow Moody’s.

“The decision will weigh on OTP (Bank) and slightly FHB (Bank), other blue chips are likely to suffer today too.

“The forint has been weakening for 2 months now, but we expect more pressure. If it declines substantially today and early next week, the central bank may intervene.

“Although the market has been already reckoning with a 100+ basis point rate increase, we expect more bets for rate hikes, even though this tool would be the NBH’s last resort to utilise.

“We do not expect this to have a single-day effect. However, the cut to junk has become an overhang in HU markets, therefore we expect generous short-covering in all asset classes in December.”

SIMON QUIJANO-EVANS, ING

“The timing of the Moody’s move couldn’t have been worse, especially with the U.S. in long-weekend mode and liquidity thus that much lower, particularly on the FX side.

“A sub-investment grade does have negative implications for those funds that need investment grade as a criterion. The fact that S&P remains on hold is a positive, although we haven’t heard anything from Fitch yet.

“The market is now clearly pricing in a 50-100bp rate hike from the NBH next week, but the question is whether we see the NBH intervening on the FX market before (highly likely).

“Overnight action on the forint does show a lack of activity due to the U.S. holiday, but low liquidity means high chances of overshooting and spilling over into other regional currencies.”

TIMOTHY ASH, RBS

“An interesting ‘double act’ from S&P and Moody’s. S&P yesterday confirmed that they are giving the government until February to resolve outstanding concerns and hopefully conclude an IMF agreement. Moody’s seem to be of the view that the mood music around the IMF agreement is simply not convincing and that it is all about credibility, and that a downgrade is reasonable.

“Fitch last week seemed to remain on the fence, and perhaps could still follow either of the two main agencies. The reaction from the government seems extreme - talk of a financial attack on the country, launching an investigation into banks allegedly speculating against the HUF.

“Again the mood music is just not very convincing from the government. The message last week (and now) should have been simply we face significant challenges and we have decided to enter into negotiations with the IMF with a blank piece of paper, and are looking at a range of financing options therein. Full stop.

“Instead what we have had from the government is a “conditional” move to begin negotiations with the IMF. Hardly inspiring when the markets want clear signals at a difficult time.”

PETER ATTARD MONTALTO, NOMURA

“Slightly earlier than we and the market had been looking for though the action itself is not unexpected.

“Crucially the request for an IMF deal was seen as a sign of weakness and funding issues being present not as a backstop. The outlook is also on negative still, even despite some probability of getting support, showing that the issues here run much deeper around fiscal sustainability.

“Moody’s rightly highlighted the lack of sustainability given a weak growth outlook. With growth expectations only being revised down from here, only a total turn around in the direction of policy will be able to avert further downgrades and stabilise the rating according to Moody’s.

“This move is important given market expectations of a downgrade were more centred around S&P. This move also shows the IMF is not an obstacle to downgrades. Given the state of global risk sentiment and the euro zone crisis if we have a particularly adverse reaction in EURHUF and the bond market then the chance of a rate hike next week will become material. There are also two bill auctions on Monday and Tuesday and a bond auction on Thursday we must watch particularly closely.”

(Reporting by Gergely Szakacs; Editing by Kim Coghill)

 

Source: https://uk.news.yahoo.com/analyst-view-moodys-cuts-hungary-rating-junk-080729011.html

Filed Under: Credit Rating, Economy, European Union

Top Ten Reasons Why The Euro Was A Dumb Idea

November 25, 2011 By Leave a Comment

Op-Ed: Except for soccer and the Eurovision Song contest, there isn’t much common ground holding Europe’s diverse nations together. Then there are problems like trust, language and mobility – plenty of reasons, in other words, why the euro was a bad idea from the start.

BERLIN - We now have to rescue whatever is left to rescue of the euro, at any price. And as the crisis continues, one thing is abundantly clear: a decade ago, when the currency was introduced, we were way too gullible.

Here are 10 reason why the euro was a mistake. Some of them – superficially at least – seem fairly obvious. Some were aired, and discarded, in the various public and private debates that took place in the 1990s. Other aspects were simply overlooked at the outset, even by currency’s most ardent opponents.

1. No conflict resolution mechanism In its first decade, Europe’s economic integration was uniquely successful. At their summits, leaders divvied up profits. That dynamic changed with the euro crisis: now they had to share burdens — something no one was prepared for, either institutionally or mentally. This, in turn, has led to squabbling among nations at a level that hasn’t been seen since 1957, when the Rome Treaties were signed.

2. No rallying points With the exception of soccer and the Eurovision Song Contest, there’s nothing around which Europeans rally as a whole – no regional TV stations or newspapers, and certainly no common language. During the win-win period, this wasn’t much of a problem. But as soon as the euro crisis broke out, a bad-mouthing “us vs. them” attitude quickly took hold. Even if the crisis itself doesn’t tear the European Union apart, the basic rallying point problem remains.

3. Language barriers Why were institutions such as Germany’s central bank, or the EU Commission not made aware during the last decade of the extent of the problems in Greece and Portugal? Because experts depended on the Greek and Portuguese governments for whatever information they were getting. Not knowing the languages meant they couldn’t independently read Greek and other newspapers, which would have made the situation abundantly clear. This is an ongoing problem.

4. Trust Experiences so far are sobering. A case in point is the fudged figures on which Greece’s entry into the zone were based in the first place. And there are no signs presently of any behavior anywhere that would warrant greater trust.

5. Control It’s not just about the four big economies: Germany, France, Italy and Spain, which together represent three-fourths of the euro zone’s economic performance. The crisis has made it clear that even a country like Greece, which barely contributes 2% of the currency zone’s GDP, is “system relevant.” That means that with the possible exception of tiny Malta, any euro country has the potential to blow up the whole system. A related problem is shifting power – usually seen as German dominance, but it can also mean weaker members taking the others hostage.

6. Shared-value deficit Europe wouldn’t necessarily need many shared values to function as a free trade tone. But as a currency union, survival depends on shared economic and political values. Some northern European governments seriously thought the euro would bring a German-style “culture of stability” to southern European countries. But it’s become clear that France, Italy, Spain and Greece continue to perceive the European Central Bank as an opportunity. Seen objectively, that may not be wrong, but it contradicts the deeply-held German conviction forged out of negative experience that an independent central bank is the only guarantee against governments piling up debt that is then “inflated away” by printing more money.

7. The missing European mind Differences in mentality between nations would not pose a problem if at the very least there were people in national government and the joint institutions who had cast off national thinking. But there are no “true Europeans” either among politicians, technocrats or among the members of the supposedly independent European Central Bank.

8. Interest rates When the euro was first introduced, even skeptics thought the economic situations among currency union members would soon balance out. Not so, and that’s a problem because there’s only one key interest rate. It’s too high for some countries, too low for others. The results are unnecessarily long declines in economic activity and high rates of job loss on the one hand, and high inflation — and in some cases bubbles (think: real estate markets in Spain and Ireland) – on the other.

9. Lack of mobility People have to be mobile in a currency union – ready to move to wherever the good jobs are so that areas where jobs are plentiful balance areas where they aren’t. With time, Europeans are becoming more mobile, as the number of Spaniards migrating to Germany shows. But there’s still a long way to go.

10. No real will to enforce the rules Despite all the difficulties, the currency union could work if governments would exert “peer pressure” on each other. But the fathers of the currency union overestimated their own political caste. Greece, Italy, Germany – all have treated Maastricht Treaty rules like non-binding suggestions and no amount of EU Commission “Blue Letters” have done any good in changing that. None of the violators, in other words, have been punished.

 

Source: https://www.worldcrunch.com/top-ten-reasons-why-euro-was-dumb-idea/4139

Filed Under: Debt, European Union, Money
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