European Union

As The Dust Settles, A Cold New Europe With Germany In Charge Will Emerge

December 9, 2011 By T Kelly Leave a Comment

By David Gow on December 9, 2011

After the EU summit, the prospect is of a joyless union of penalties, punishments, disciplines and seething resentments

As a clear damp dawn rose over Brussels on Friday morning, the tired and tetchy leaders of Europe emerged bleary-eyed from nine hours of night-time sparring over how to rescue the single currency and indeed the entire European project.

Brave faces were put on, bluffs called, counter-bluffs revealed, vetoes wielded. Histrionics from France’s Nicolas Sarkozy, poker-faced calm from Germany‘s Angela Merkel, David Cameron gambling the UK’s place in Europe by opting to battle for Britain rather than helping to save the euro. When the dust settles, Friday 9 December may be seen as a watershed, the beginning of the end for Britain in Europe. But more than that – the emergence for the first time of a cold new Europe in which Germany is the undisputed, pre-eminent power imposing a decade of austerity on the eurozone as the price for its propping up the currency.

The prospect is of a joyless union of penalties, punishments, disciplines and seething resentments, with the centrist elites who run the EU increasingly under siege from anti-EU populists on the right and on the left everywhere in Europe. “For the first time in the history of the EU, the Germans are now in charge. But they are also more isolated than before,” said Charles Grant, director of the Centre for European Reform thinktank. “The British are certainly more marginal than before. Their influence has never been lower in my lifetime.” Whether or not the summit has saved the euro remains, of course, to be seen.

At a single stroke, however, it has transformed Britain’s place in Europe. With the fate of the currency at stake in the EU’s worst ever crisis, Cameron opted for a fight and lost, placing the interests of the City of London before the European priority. Battling for Britain and wielding my veto in the Great British national interest, Cameron averred. There are senior UK officials who believe the prime minister betrayed the British national interest by picking the wrong fight at the wrong time, losing, and forfeiting Britain’s seat at the table that will determine the future shape of the EU.

“Cameron has miscalculated and performed rather badly. He didn’t do well,” said a senior EU official.

If the main summit narrative was UK v EU, the frictions, anxieties and animosities generated by Germany’s new ascendancy, however, extend much more broadly, enveloping France, Spain, Italy, Greece and others. Cameron went to Brussels saddled with backbench taunts of being the new Neville Chamberlain. The nasty references to 1938 appeasement of Hitler, however, are not only heard on the Tory backbenches and in the europhobic tabloids in Britain.

Sarkozy, too, is contending with attacks from the right and the left that he has capitulated to Berlin and is being compared with the Frenchman who was with Chamberlain in Munich in 1938 — Édouard Daladier. In Greece, Italy and Spain the talkshows and newspapers are bristling with anti-German grudges, regularly bringing up the second world war, the Nazis, the alleged “Fourth Reich”.

And in Germany itself, where its leaders are ambivalent about their new power and feel willfully misunderstood, columnists are calculating how much it is costing the country to bail out the eurozone’s feckless and comparing the figures to the colossal reparations it was forced to pay after the first world war, triggering the backlash which paved the way for Hitler. “We are going to have to put up with a bit of Germanophobia,” wrote Jakob Augstein in Der Spiegel this week. “Europe has returned to the stereotypes of the postwar years. The ugly German is back … it would be better for Germany to get things wrong together with its partners than to insist on being right alone.”

As German exports crash through the trillion euro barrier for the first time this year and arguments about surpluses and deficits are seen in Berlin as the rest of Europe wanting to penalise its industries for success, there is little sign of Merkel listening to her critics. The Germans, famously, do not read John Maynard Keynes. Presenting the case this week for a penalties-based euro regime as the response to the crisis, a senior German official said: “We have got to get away from the illusion that state spending creates growth.”

“Despite your understandable aversion to inflation, you appreciate that the danger of collapse is now a much bigger threat,” Radek Sikorski, the Polish foreign minister, countered last week in a speech in Berlin. It is not clear that the plea was appreciated. Because of the German preoccupation with saving and not spending and what is seen as monetarist fetishism, says Grant, “we face 10 years of austerity with grim German schoolmasters rapping everyone else over the knuckles”.

“When all this austerity hits the real economy, it will be bleak with unemployment going up,” adds a senior official in Brussels. “The recession we have now entered is the first ‘made in Europe’ recession since 1993,” says Jean Pisani-Ferry, head of the Brueghel thinktank in Brussels. “The euro crisis has already taken a significant toll on the European economy. If things continue to worsen the toll could be huge.”

The epochal shift in the way power is wielded in the EU has been building incrementally for 20 years, since German unification, the destruction of the Deutsche mark, the birth of the single currency, and the liberation then integration of eastern Europe redrew the map and the politics of Europe.

But the sovereign debt emergency, the financial crisis, and the response of Europe’s leaders have brought the transformation into clearer focus than ever before this year. Germany calling the shots, France playing second fiddle, Britain sidelined, the eurozone split between haves and have nots, the smaller EU states fed up being dictated to by a Franco-German “directorium”, the European commission at its lowest point in years despised and ignored by Paris and Berlin, and the traditional pro-EU governing elite on the continent (not Britain) being challenged as seldom before by a new breed of anti-EU populists.

This dismal situation is compounded by a crisis of confidence in leadership and a crisis of credibility in the markets. “A fractured Europe, inward-looking and navel-gazing,” says Grant. “Unable to be a world player, staggering from crisis summit to crisis summit.” Others are less gloomy.

“Eventually Germany too will need to spend and invest,” says the senior EU official. “You will probably have a different French leader. Merkel could lose the next election. There can be a return to Keynesian economics. This may be a moment of the domination of German orthodoxy, but things can change.” The pleas to Merkel are becoming louder and more public. “This is the scariest moment of my ministerial life,” Sikorski told the German foreign policy elite in Berlin. “The biggest threat to the security of Poland today? Not terrorism, not the Taliban, certainly not German tanks. Not even Russian missiles. The biggest threat to the security and prosperity of Poland would be the collapse of the eurozone. I demand of Germany that, for your own sake and for ours, you help it survive and prosper. You know full well that nobody else can do it.”

Merkel is in an uncomfortable position, feared if she wields her power overbearingly and criticised if she fails to lead. She seems uneasy with Berlin’s new pre-eminence. “It’s absurd to say that Germany wants to dominate Europe in any way,” she told the Bundestag last week. But if she decides to heed the pleas, change course, and help the rest of Europe, Cameron is unlikely to be among the beneficiaries.

Although the main clash in the wee hours in Brussels on Friday was between Cameron and Sarkozy, it was Merkel’s, not Sarkozy’s, blueprint that the prime minister wrecked. Merkel was alone in demanding that the route out of the euro crisis was to re-open the Lisbon treaty and for all 27 member states to facilitate her stiff new euro regime. Indeed, her demand was opposed by the European commission, by Herman Van Rompuy chairing the summit, by France, and by many others who feared that re-opening Lisbon was jerking open a can of worms. Cameron’s veto saves their blushes. But it does not save the euro and for that there is likely to be payback for the British. At least 23 EU countries will now endeavour to hammer out a new separate stability pact with teeth over the next three months.

Source: https://www.guardian.co.uk/business/2011/dec/09/dust-settles-cold-europe-germany

Filed Under: Economy, European Union Tagged With: Single Currency

Jacques Delors Says Eurozone ‘Is Flawed’

December 4, 2011 By T Kelly Leave a Comment

A key architect of the eurozone reveals it was flawed from the beginning and efforts to tackle its problems have so far been “too little, too late“.

Jacques Delors, former president of the European Commission , suggested “a fault in execution” meant the present crisis in the eurozone was inevitable.

Leaders in the 1990s chose to turn a blind eye to the economic weaknesses of some member states and the response, now the issues had surfaced, had generally been inadequate.

His comments in an interview with The Daily Telegraph came as France and Germany edged towards closer fiscal union to head off a potentially disastrous collapse of the single currency.

Mr Delors was head of the commission from 1985 to 1995 and known for his clashes with Margaret Thatcher . He became an object of ridicule in the eurosceptic press.

He has admitted that when “Anglo-Saxons” warned a single central bank and currency without a single state would be inherently unstable “they had a point”.

“The finance ministers did not want to see anything disagreeable which they would be forced to deal with,” he said.

Mr Delors insisted all European countries had to share the blame for the excessive borrowing by countries such as Italy and Greece that have brought the system to the brink of disaster.

“Everyone must examine their consciences,” he added.

However, the 86-year-old singled out Germany for its strict insistence that the European Central Bank must not support debt-stricken members for fear of fuelling inflation.

The euro’s troubles spring from “a combination of the stubbornness of the Germanic idea of monetary control and the absence of a clear vision from all the other countries”, he said.

Such is the scale of the crisis, he warned, that “even Germany” will struggle to find a solution. “Markets are markets. They are now bedevilled by uncertainty.”

Prime Minister David Cameron has vowed to protect British interests will be paramount if the European Union treaty is changed to help resolve the eurozone crisis.

But according to Mr Delors, Britain is not “sharing the burden” because it is not in the euro.

But he claimed the UK is “just as embarrassed as the Europeans by the financial crisis“, as some of the measures put in place to deal with the crisis pose a threat to British interests.

Source: https://uk.news.yahoo.com/jacques-delors-says-eurozone-flawed-050841344.html

Filed Under: Debt, European Union, Money, Politics

Germany, France Push For ‘Fiscal Union’

December 3, 2011 By T Kelly Leave a Comment

German Chancellor Angela Merkel kicked off a crunch week of talks on saving the euro by laying out a vision Friday for a “fiscal union” in Europe, ahead of a pivotal summit of EU leaders.

A day after French President Nicolas Sarkozy said that Europe needed to be “refounded” in response to a crisis that has threatened the very existence of the EU, Merkel insisted that progress had been made.

Speaking in a hotly awaited speech in the German parliament, Merkel said Europe was “on the verge” of creating what she called a “stability union” for the 17-nation eurozone, with greater budgetary discipline and control.

“Anyone who had said a few months ago that we, at the end of 2011, would be taking very serious and concrete steps toward a European stability union, a European fiscal union, toward introducing (budgetary) intervention in Europe would have been considered crazy,” she said.

She said she would be holding talks with “almost everyone” in the run-up to a summit in Brussels next Friday that many commentators have dubbed the last chance to save the single currency, introduced with such euphoria a decade ago.

And she confirmed she would be heading to Paris for talks with Sarkozy on Monday to thrash out a joint Franco-German position on changing the EU founding texts ahead of the summit.

Highlighting the challenges that face Europe’s leaders, around 17,000 people demonstrated in Athens on Thursday in a bid to force the new government to abandon austerity measures.

The sixth general strike this year in Greece shut down public services and crippled train and ferry services.

Nevertheless, European stock markets rallied at the open, following Asian gains, as traders continued to be generally bullish in the wake of joint central bank action Wednesday to ease tensions in the global financial system.

And the euro held steady against the dollar and yen in Asian trade on Friday as investors breathed a sigh of relief over European bond sales that hinted at rising confidence in the region’s public debt.

But despite a sense of optimism, EU authorities should be acutely aware that the eyes of the world will be on them next Friday, one trader in Asia said.

“Investors are monitoring the EU summit next week and the monetary policy meeting by the European Central Bank before that,” said Masatoshi Sato, strategist at Mizuho Investors Securities, referring to a rate decision next Thursday.

In a landmark speech Thursday in front of 5,000 cheering supporters, Sarkozy warned that the developed world was entering a “new economic cycle” dominated by debt reduction, heralding tough times ahead for jobs and business.

“We must confront with total solidarity those who doubt the stability of the euro and speculate on its break-up,” he declared.

“France is fighting with Germany for a new treaty. More discipline, more solidarity, more responsibility … true economic government” he said, urging members to adopt a “Golden Rule” obliging them to balance their budgets.

Merkel said she was heading to Brussels “with the aim of changing the EU treaty” to push through her goals, which she summed up as follows: “Rules must be respected. Respect for them must be supervised. Their violation must have consequences,” she said.

And she warned that the eurozone would go it alone if no agreement could be struck on EU treaty change, while stressing that the euro club was open to anyone who wanted to join.

Traders want to see more decisive action by the European Central Bank, stepping in to buy up the bonds of distressed eurozone nations, effectively acting as the lender of last resort as in Britain or the United States.

However, Merkel again dismissed this, stressing the ECB’s independence and insisting: “The mandate of the ECB is different to that of the United States Fed or of the Bank of England,” referring to the Federal Reserve Bank.

“It is written clearly in the treaties: the mandate is to guarantee price stability and that is exactly what the ECB is doing and … I am completely convinced of that,” she said.

She also reiterated that eurobonds, a pooling of the debt of eurozone nations, was not the solution to the crisis, saying that anyone who believed that to be the case “had not understood the nature of the crisis.”

Germany, Europe’s top economy, believes that both eurobonds and any compromising of the independence of the ECB would lead to inflation, which the central bank was set up to prevent.

Merkel said the stakes could hardly be higher, as Europe headed into a week that will likely define it for several years to come.

“Europe is in its most difficult existential test. As chancellor, I am going to do everything … to ensure that Europe comes stronger out of this test than when it went in,” she told MPs.

“Despite all the turbulence we have seen in recent times, the euro has proved itself. It is stable … the euro is much more than just a currency,” she added.

“The future of the euro is indivisibly linked with the unification of Europe.”

Source: https://www.rawstory.com/rs/2011/12/02/germany-france-push-for-fiscal-union/

Filed Under: Banks, Debt, European Union Tagged With: Fiscal Union, France, Germany

Europe Is Getting Ready To Throw The Book At Google

December 2, 2011 By T Kelly Leave a Comment

The European Union will serve Google with a 400-page Statement of Objections in its antitrust investigation early next year. That’s the next step in a legal action that could end with Google being fined up to 10% of its annual revenue.

The EU launched its investigation in November 2010. It’s looking into complaints from competitors that Google favors its own sites in organic search results.

The Statement of Objections is a formal document laying out the results of the investigation. (It is not usually disclosed to the public.) Next, Google could try to respond to the complaint by changing its behavior and reaching a settlement. But if it feels that the results are unfair, Google could try and fight the case.

If Google doesn’t settle, the EU can fine it up to 10% of its revenues until the violations are fixed or Google wins on appeal.

Google Chairman Eric Schmidt is reportedly flying to Brussels for a “courtesy meeting” with the head of the European Commission next week, where he’s expected to discuss Google’s acquisition of Motorola.

Filed Under: Corporations, Corruption, European Union, Law Tagged With: Anti-Trust, Google, Investigation

Fed Bailing Out The Euro

December 1, 2011 By T Kelly Leave a Comment

A surprising (if you don’t want to say secretive) meeting of the world’s most influential central bankers produced even more surprising results.

The US Central bank – the Federal Reserve – promised the cash-strained European Central bank a practically unlimited amount of American taxpayer money for cheap, effectively bailing out the Euro.

Markets are rallying, traders are full of optimism and the Euro is up. The only loser is the dollar: the good old buck has weakened compared to other currencies. The reason? An announcement from the Fed, the European Central Bank, the Bank of Canada, the Bank of Japan, the Bank of England and Swiss National Bank reveals that they are going to provide troubled European banks with massive amounts of cash – cheaper and faster than ever before. Obviously, the lion’s share of assets will be provided by the US Federal Reserve.

“The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” reads an announcement issued as a result of the meeting — and “ease strains in financial markets” is probably an understatement. For many European banks that found themselves on the brink of collapse because of the debt crisis that plagued the continent, it might have been the last chance. After Germany strongly opposed any unconditional bailouts for the Eurozone countries, many economists expected the US to interfere and do for European banks what the Fed did for American financial institutions in 2008 – bail them out. One way or another.

The Obama administration always denied such speculations. But after a Monday meeting this week with the two top European officials, European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso, US President Barack Obama said the European debt crisis is of “huge importance” to the United States, and that America is “ready to do our part” in keeping the economy overseas afloat.

No further details of what he meant by “our part” were offered — probably because any attempt by the administration to hand out taxpayers’ money to overseas banks would meet furious opposition in Congress and across the country.

But only two days later, the Fed, which is not accountable neither to Congress nor . . . basically anybody else, announced this deal.

Under the agreement, the FED lends dollars to the ECB, which has to transfer the money to European banks. Now it will be two times cheaper: the central banks must now pay the Fed a private-sector overnight lending rate plus 0.5 percentage point; they previously paid plus 1 percentage point. And there’s no doubt that European banks that lost money on junk debt obligations of European governments will line up for almost free American cash.

Welcome to the Bailout 2.0!

Source: https://rt.com/usa/news/fed-european-bank-central-605/

Filed Under: Banks, European Union, Federal Reserve, Financial Crisis, USA

UK Banks Urged To Prepare For Euro Break-Up

November 30, 2011 By T Kelly Leave a Comment

Britain’s biggest banks are being urged by the City regulator to prepare for a break-up of the eurozone.

The head of the Financial Services Authority (FSA), Hector Sants, has told financial institutions to accelerate plans for a separation of the single currency area, Sky’s City editor Mark Kleinman has learned .

Senior excutives from Barclays, HSBC, Lloyds Banking Group, RBS, Santander UK and Standard Chartered were given the warning at a private meeting with the FSA boss.

Although the meeting was not specifically set to issue the warning, Mr Sants said the banks should run a wide range of stress tests as part of their contingency planning.

However, he stopped short of prescribing specific instructions or scenarios.

People close to the FSA told Kleinman that Sants’ warning was “the kind of contingency planning expected in a situation like this”.

The impact on different banks of a eurozone break-up would vary, depending on their exposures to sovereign debt of member countries.

Whereas Barclays holds billions of pounds worth of European government bonds, Santander UK and Standard Chartered have very little direct exposure.

Source: https://uk.news.yahoo.com/uk-banks-urged-prepare-euro-break-154737202.html

Filed Under: Banks, Debt, Economy, European Union, Financial Crisis, Politics, United Kingdom

IMF Drawing Up £500bn Package To Save Italy, Spain And The Euro

November 30, 2011 By T Kelly Leave a Comment

The International Monetary Fund is being lined up potentially to help Italy and Spain amid growing fears that a European rescue scheme will not be able to prop up the countries.

Reports in Italy suggested that the IMF is drawing up plans for a €600 billion (£517 billion) assistance package for the country. Spain may be offered access to IMF credit, rather than a rescue package, to avoid it being “picked off” by the markets in the coming weeks.

Any IMF involvement in European rescue packages would be partly underwritten by British taxpayers, which could leave this country liable if Italy and Spain did not repay any international loan.

Britain provides 4.5 per cent of the IMF’s funding and would, therefore, face a potential liability to an Italian package of up to €27 billion (£23 billion).

An IMF rescue package involves a country being offered hundreds of billions of euros in return for agreeing to launch a major austerity programme to cut spending. A credit line is a more flexible arrangement which gives countries short term access to international finance.

Italy and Spain are likely to be forced to accept some international help as the cost of their debts has risen to unsustainable levels of about seven per cent.

The reports of an IMF rescue package being prepared - which was denied on Monday by an IMF spokesman who said there were “no discussions with Italian authorities” - come as European finance ministers meet tomorrow to discuss draft plans for a bail-out scheme.

Under the scheme set to be discussed, the euro area’s European Financial Stability Facility (EFSF), would have to “insure” bonds of troubled countries by covering the first 30 per cent of any unpaid debts.

To offer this guarantee, the European bail-out fund would have to be able to raise €1.4 trillion – a threefold increase compared to the current size of the scheme.

Last night, it was not clear if or how this money could be raised, although the EFSF may itself sell bonds to international investors.

At the weekend, European finance ministers from Germany and the Netherlands met and disclosed that IMF involvement was under discussion. Wolfgang Schauble, the German finance minister, said yesterday he was confident that the euro would be saved – and go on to become the most stable currency in the world.

The next fortnight is now seen as one of the final opportunities to resolve the crisis because European leaders will meet on December 9 for crunch talks on the package and changes to EU treaties.

Source: https://www.telegraph.co.uk/finance/financialcrisis/8919470/IMF-drawing-up-500bn-package-to-save-Italy-Spain-and-the-euro.html

Filed Under: Banks, European Union, Financial Crisis, Money, Politicians, Politics, United Kingdom Tagged With: IMF, Loan

US Wants Debt Action As Obama Hosts Eurozone Summit

November 29, 2011 By T Kelly 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: Banks, Economy, European Union, Financial Crisis, USA

British Foreign Office: Prepare For Riots If The Euro Collapses

November 28, 2011 By T Kelly 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 Tagged With: riots

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

November 26, 2011 By Aaron Jackson 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: Racism