Brussels sees darker times for Spain and Europe

By LUIS MIRANDA | THE REAL AGENDA | NOVEMBER 6, 2012

Brussels sees no green grass across the fence when it comes to an economic recovery. The economic forecasts for 2013, which will be made public on Friday, will describe a dark and rainy future for Spain and most likely the rest of Europe.

Forecasts are just that, good or bad omens based on leading indicators. But it remains to be seen whether or not they are right. But if the predictions issued by Brussels become reality, that reality will mean serious trouble for Spain and the rest of Europe. The European Commission anticipates that the GDP falls 1.6% this year and 1.5% in 2013.

Spanish government forecasts were more hopeful before the statement from the EU with phrases such as “We emerge from the crisis” and “there are hopeful signs”. These phrases were issued by the Minister for Employment, Fatima Banez, who had said that Spain would see a contraction of 1.5% for this year and a decrease of 0, 5% for 2013.

Next to the real exit from the crisis, the troubling data made public by Brussels is the government’s deficit. The massive austerity measures adopted by Spain only helped reduce the deficit by a meager 0.2 %. The painful measures that combined tax increases with deep cuts in expenses related to social programs did not work; just as it was intended to. The deficit will end the year at 8%, according to the Commission, but this number does not take into account the effect of recapitalization of banks. Expect the Spanish deficit to be much larger.

For 2013, the fiscal gap is 6%, and 5.8% by 2014. These numbers again do not include the bailouts of the banking system and the possible bailout of Spain as a whole. As predicted months ago, Spain will not be able to lower its deficit to 3 % of the GDP, which is the target requested by Brussels. That leaves three possibilities. The first is to extend the deadlines to meet targets, which has been demanded by the International Monetary Fund (IMF) in Brussels. This alternative is now getting stronger and is supported by several countries that are hanging from the debt cliff.

The second is to ask Spain for additional efforts. That is, more austerity and spending cuts, which as it has been seen in Greece, would result in no solution whatsoever. Most economists expect that agreements reached during future meetings will include a combination of both austerity and an extension for Spain and the other countries to reach their deficit goals.

Spain’s Economy Minister Luis de Guindos, expected a deficit of 7.3% this year, 4.5% next year and 2.8% in 2014, far below the projections made by analysts and official data from both Brussels as the International Monetary Fund (IMF) for next year and the next.

The Commission did not comment yesterday on the data. Clearly on all forecasts, Brussels and the Spanish government, weigh several unknowns, especially those relating to the effect of the increase in VAT (a real social experiment, with the country in recession) and the tax amnesty.

However, the Vice President and Competition Commissioner Joaquin Almunia, gave some clues in Madrid yesterday about the situation: government budgets for 2013 and associated economic forecasts show the efforts being made by both sides — income and expenses — but the accompanying macroeconomic picture is “far from the consensus.”

Almunia also hinted that Brussels has the feeling that Spain has denied the complete evidence, the depth of the crisis and the need to act thoroughly. “The delayed reaction is too often associated with Spain,” he said. Speaking at the New Economy Forum, he called “giving in to defeatism” and explained that the crisis “has a solution, tha will be overcome and is beginning to be overcome.”

“Trees should not impede us all to see the forest,” said Almunia. But the trees are just too tall. Brussels projections that approximate the most to those of the Spanish government are related to public debt. And even in that section the figures speak for themselves: the debt will end this year at 83.7%, the next at 89.5% and will be at 93.9% of GDP by 2014.

One thing is for sure: there is no sign that shows when the debt will stop growing. Meanwhile, Europe continues to advance an agenda that keeps on using the same old recipe of more austerity, while government expenses continue to grow. As we have explained here in multiple occasions, both Spain and Europe are — intentionally — going through a vicious cycle that will not result in the reduction of the deficit or the rescue of the economies that are heavily burdened by debt.

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International Banking Mafia Drools over ‘Spanish Prize’

By LUIS MIRANDA | THE REAL AGENDA | SEPTEMBER 19, 2012

The global banking cartel that almost daily proposes the destruction of the nations states is working harder than ever to once and for all conquer Spain. Even before the European Central Bank issued a statement about its openness to bail out Spain, technocrats in Europe were already proposing the looting of the country. Now that the ECB agreed to print million of euros to acquire the peninsular country, they are megaphoning louder than ever that Spain must immediately accept the bailout in order to solve its debt problem.

In previous reports, The Real Agenda reported how the unelected leaders in Brussels believe that Spain will not be able to comply with the conditions imposed by the bankers should Mariano Rajoy request the money from the European Stability Mechanism, which would turn such a request into an official hand over of the nation to the European bankers and nothing else. According to sources in Brussels, Spain does not have and will not have the capacity to cut its deficit by collecting taxes or reducing government spending. What these two actions would definitely do, is to harden even more the dire situation in which millions of Spanish people are now: unemployed, having to use their savings to pay for daily expenses and while looking at an uncertain future.

Proof of the tough conditions in Spain are two reports that circulated on the Spanish press yesterday. One news article on the newspaper La Vanguardia, told about how Spanish people withdrew over 30 billion euros from their bank accounts during the month of July alone. That is how much they trust their government to solve the economic and financial crisis. Those 30 billion euros added to the amount withdrawn last year for a total of 80 billion euros. The withdrawals include individual and business accounts.

The other report published on the newspaper El País describes how the conditions imposed on Spain — after the country requests the bailout — will be the toughest so far in the region. This comment did not come from a speculator, but from the president of the Eurogroup, Jean-Claude Juncker, who said that Spain will experience deep cuts in government spending, which most likely be applied to government services, pension system and entitlement programs. Juncker’s prediction contrasts the comments made last week by the Spanish Secretary of Economy, Luis de Guindos, who assured the nation that the measures adopted along with the bailout would not mean ‘further sacrifices’ in the 2013 government budget.

In summary, Spain will not be able to meet the conditions of the bankers. Those conditions will represent more sacrifices from the Spanish people, who do not have an ounce of trust on their government to take the nation from the debt hole where it is sitting now. However, the same government led by Mariano Rajoy is still considering requesting the bailout, perhaps being influenced by the European banking sharks who are calling for the immediate request of the funds by the Spanish bureaucrats.

“The announcement of the ECB was very brave on one hand, but will not help unless Spain or Italy request the support of an economic program of the EU and the IMF,” said Charles Dallara, the Director of the International Institute of Finances (IIF), while attempting to portray the bankers as the saviors of the European region. In this regard, he said that in the absence of a government negotiating a reform program that is supported by the European Commission, the “massive potential support” by the ECB will remain only potential and will not materialize.

Spain had already requested the bailout of its “too big to fail” banks, which were instructed to hoard the money to avoid the otherwise impending hyper-inflation. The same situation occurred in other countries of the Euro zone and the United States. This explains why despite government interventions through massive fiat money printing, nations on both sides of the Atlantic haven’t generated any significant economic activity. Neither small or medium size business have been able to request loans to run their businesses. Instead, the bankers have hid the money given in bailouts, or have used it to pay fat bonuses to their board members and most influential investors.

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All Power to Brussels and the European Central Bank

By LUIS MIRANDA | THE REAL AGENDA | SEPTEMBER 12, 2012

A great complement to the decision to enable the European Stability Mechanism could materialize if the government in Brussels gets its way. The European government is now proposing that the European Central Bank should control all banking institutions in the EU. The European Commission wants the ECB to have the power to close or punish banks that do not abide by the rules issued in Brussels by the technocrats who now control the European banking system.

The European Commission proposed on Wednesday to empower the European Central Bank (ECB), that will oversee all eurozone banks beginning in 2014, to remove bank cards and punish non-compliant entities.

Brussels ignores Germany resistance to such power, which wants to limit the power of a single supervisor of larger systemic institutions. The initiative also collides with the reservations in the UK and the countries of Eastern Europe, which fear that the ECB will accumulate too much power while the nations are excluded in the decision making process.

In an attempt to allay these doubts, Brussels makes clear that the rules for the sector will be developed by the European Banking Authority, which lists the 27 member nations. In the first phase, starting in January 2013, the Central Bank will take over banks that have received state aid, thus opening the door for direct recapitalization, the EU plan says.

Then, the ECB will also monitor systemic institutions. By January 1, 2014 it will also be in charge of 6,000 entities that operate in the eurozone. The objective of this initiative, which was presented by the President of the Commission, José Manuel Barroso, in his State of the Union address in the Parliament, is to break the “vicious circle” between sovereign and financial debt and move towards a union bank. This has been the plan all along. The technocrats in Europe have always sought to erode national sovereignty — as explained in our report about the future of nation-states — so that the bankers can later consolidate power and resources, which is their ultimate goal.

“This new system, with the ECB in the center and involving national supervisors, restore confidence in the supervision of all banks in the euro zone,” said Barroso, who has called for a speedy adoption of the proposal so that it can be operational in early 2013. “In the future, the losses of bankers and debt will not become that of citizens, questioning the financial stability of entire countries,” he noted. That is difficult to believe, since the banks who are now posing as saviors were the ones who created most of the debt through fraudulent financial mechanisms.

The creation of a single banking supervisor in the EU is the condition imposed by Germany to allow the bank bailout of 100,000 million euros that the EU granted Spain. This bailout bypassed the state and was not computed as debt. Although n public Germany seems to not support more banker power grabs, in private Angela Merkel is indeed promoting the creation of a new European centralized entity.

The German finance minister, Wolfgang Schäuble, said in recent days that he wants the ECB to be limited to systemic institutions and intends to maintain control of its regional banks. However, the Commission contends that “as we have seen in recent years, even small banks can be systemic and cause financial turmoil,” as Northern Rock, Anglo Irish and Bankia.

The EU executive said his proposal is the “right balance” between the tasks of the ECB and the national supervisors. The ECB will have the final say in “key” decisions, while the daily work of supervision will remain with national authorities. This aspect is what the German minister of finance had opposed from the beginning. As proposed by Brussels, the ECB is responsible for granting new bank cards or withdrawing them if banks do not comply. Also, Brussels will evaluate major acquisitions and sales, and will require banks to increase their capital if it detects risks.

According to the proposal the EU will share power with the national authorities up until the moment when the EU’s authority for settlement is created. Then, it will be all up to the bankers. In order to perform the functions described above, Brussels will give new powers to the ECB, which may request information from entities and perform field inspections. In addition, it will be entitled to impose fines of up to 10% of its turnover. This last imposition is seen by skeptics as the mechanism for the ECB to fund its operations.

Do we or do we not work for the banks?

Merkel and Sarkozy in Talks to End Eurozone

Fears that Italy’s fall may drag the whole region down, prompted the ‘strongest’ economies to think about doing away with the current shape of the Eurozone.

Guardian.co.uk
November 10, 2011

Fears that Europe’s sovereign debt crisis was spiralling out of control have intensified as political chaos in Athens and Rome, and looming recession, created panic on world markets.

Reports emerging from Brussels said that Germany and France had begun preliminary talks on a break-up of the eurozone, amid fears that Italy would be too big to rescue.

Despite Silvio Berlusconi‘s announcement that he would step down as prime minister once austerity measures were pushed through parliament, a collapse of investor confidence in the eurozone’s third-biggest economy sent interest rates in Italy to the levels that triggered bailouts in Portugal, Greece and Ireland.

Italian bond yields surged through the critical 7% mark, at one point hitting 7.5%, amid concern that the deteriorating situation had moved the crisis into a dangerous new phase.

In Athens talks to appoint a prime minister to succeed George Papandreou were in deadlock, and will resume on Thursday morning. The Italian president, Giorgio Napolitano, sought to reassure the markets by promising that Berlusconi would be leaving office soon.

Angela Merkel, the German chancellor, said the situation had become “unpleasant”, and called for eurozone members to accelerate plans for closer political integration. “It is time for a breakthrough to a new Europe,” she said. “Because the world is changing so much, we must be prepared to answer the challenges. That will mean more Europe, not less Europe.”

The president of the European commission, José Manuel Barroso, issued a new call for the EU to “unite or face irrelevance” in the face of the mounting economic crisis in Italy. “We are witnessing fundamental changes to the economic and geopolitical order that have convinced me that Europe needs to advance now together or risk fragmentation. Europe must either transform itself or it will decline. We are in a defining moment where we either unite or face irrelevance,” he said.

Senior policymakers in Paris, Berlin and Brussels are reported to have discussed the possibility of one or more countries leaving the eurozone, while the remaining core pushes on toward deeper economic integration, including on tax and fiscal policy. “France and Germany have had intense consultations on this issue over the last months, at all levels,” a senior EU official in Brussels told Reuters, speaking on condition of anonymity because of the sensitivity of the discussions.

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European Union’s Plot: One Single Treasury to Control it All

European Union chiefs are drawing up plans for a single “Treasury” to oversee tax and spending across the 17 eurozone nations.

London Telegraph
October 23, 2011

The proposal, put forward by Herman Van Rompuy, the European Council president, would be the clearest sign yet of a new “United States of Europe” — with Britain left on the sidelines.

The plan comes as European governments desperately trying to save the euro from collapse last night faced a new bombshell, with sources at the International Monetary Fund saying it would not pay for a second Greek bail-out.

It was also disclosed last night that British businesses are turning their back on Brussels regulations to give temporary workers full employment rights, with supermarket chain Tesco leading the charge.

Meanwhile, David Cameron is attempting to face down a rebellion tomorrow by Tory MPs in a vote over staging a referendum on Britain’s membership of the EU.

Ministers expect 60 or 70 MPs to defy the party’s high command and back the call for a referendum, while some rebels claim the final toll could be up to 100 — about a third of the parliamentary party.

Downing Street has upped the stakes dramatically. Last night, No 10 sources insisted they would impose a three-line whip — effectively ordering all Tory MPs to fall in line.

Mr Cameron, who yesterday took personal charge of the effort to persuade MPs to back the Government, has come under intense pressure from Cabinet colleagues to try to defuse the revolt by offering concessions or a way out to rebels. Sources say a handful of parliamentary private secretaries — the lowest rung on the government ladder — might resign.

The single Treasury plan emerged in Brussels yesterday as Europe’s finance ministers tried to find a way out of the crisis engulfing the eurozone. A full-scale rescue plan could cost about £1.75 trillion.

British sources said Mr Van Rompuy, who is regarded as being close to the German government, suggested plans for a “finance ministry” to be based either in Frankfurt or Paris. The EU already has its own “foreign ministry”, headed by Baroness Ashton, the former British Labour minister, and based in Brussels.

A senior Coalition source told The Sunday Telegraph: “I am well aware of arguments in Brussels and elsewhere in favour of a single Treasury. You’d get any number of different versions of ‘Europe’ all running at very different speeds.”

A series of meetings are due to be held over the next few days on the eurozone crisis that will involve the leaders of EU member states.

They were overshadowed last night as senior sources at the International Monetary Fund indicated privately that it is not willing to further bail out Greece, whose economy has an outstanding debt of about £232 billion.

The IMF, with the EU and the European Central Bank, is assessing Greece’s debt crisis, and a joint report yesterday suggested lenders might have to agree losses of up to 60 per cent in a Greek default.

Any suggestion that the IMF would not be part of a new bail-out of Greece could spark panic in the markets and worsen the eurozone crisis.

Eurosceptic Tories, meanwhile, are arguing in favour of “repatriating” powers from the EU to Britain, including the Agency Workers Directive, imposed last year at an annual cost of £1.8 billion, which is putting at risk 28,000 temporary job contracts for those aged between 16 and 24. Tesco has asked one of its suppliers to take advantage of a loophole in the law which allows workers to “opt out”.

As Mr Cameron led the drive this weekend to neuter the Tory rebellion, Nigel Farage, the leader of Ukip, indicated his party might not field candidates at the next election against MPs who vote for a referendum.

However, there is no danger of Mr Cameron losing the non-binding vote. He can count on the “payroll vote” of more than 100 ministers, most if not all Lib Dams and nearly the entire bloc of 258 Labour MPs.

On Saturday Tory rebels were among speakers at a “People’s Pledge” pro-referendum rally in Westminster. They included David Davis, the former shadow home secretary, who called the EU a “nascent superstate”.