Brussels Warns Rescued Nations will Suffer Painful Economic Conditions

The vice president of the European Commission forecasts complete economic union by end of 2012.


The financial vice-president of the European Commission (EC), Olli Rehn, warned today that countries in the euro area that are in distress and seeking recourse to the European rescue fund to buy bad debt will be subject to “strict conditions”.

“These instruments, which allow intervention in debt markets when necessary, should follow the request of a Member State and be subject to strict conditions,” Rehn said in a newspaper column published in The Wall Street Journal, in which he presented what he called “European Monetary Union 2.0”.

The Commissioner for Economic and Monetary Affairs indicated that these conditions will be marked “through established political processes between national leaders and European authorities,” while noting that the EC is “ready to carry out strict monitoring conditions and effective as needed. ”

He argued that “to ensure that these interventions help to lower risk premiums over a period of time, they will be available only for states that implement good budgetary policies, adopt structural reforms for growth and employment and respond to macroeconomic imbalances.” These are the words of someone who seems determined to demand anything and everything from nation-states that make the mistake to request a financial rescue, such as Greece and soon to come Spain.

Rehn welcomed the availability of the President of the European Central Bank (ECB), Mario Draghi, to consider “more unconventional measures” to repair the transmission of monetary policy in the euro area, while stressing that the ECB will remain “an anchor for stability throughout the crisis. ” As the memo of understanding dictated by Brussels and written by Spain establishes, countries will surrender their economic and financial sovereignty as a primary condition for the European bankers to ”rescue” them from the debt black hole. Keep in mind that the word rescue is used loosely, and its real meaning is acquisition of nation-states by banking institutions.

“Europe is committed to creating a real economic union to complement and strengthen our existing monetary union,” defended the financial vice-president, who moved that “a roadmap” to achieve that objective will be presented “at the end of the year.” And for this economic union to take place it is needed that all countries be under one single entity that dictates all policies to be followed. This is what Mr. Rehn means when he calls for a “genuine economic union”, a bloc of countries ruled by banking elites.

He also said that the permanent rescue fund will be operational “soon”, while indicating that European leaders have agreed to “explore the conditions” which would be “rational” for the European countries. That idea must be, according to Rehn, a “guiding principle” a way of “additional financial risk pooling”, which will require time to “deepen the integration of the decision-making process,” which “will not be easy to translate into concrete action,” he acknowledged.

“The debt crisis has underlined the need and created the conditions for Europe to rebuild and strengthen its economic and monetary union. Thus the euro zone will continue to defy its critics,” said European Commissioner in the text published by the New York newspaper. In reality, what these words mean is that the purposely banker created crisis has provided them with a new opportunity to acquire more control and more power under the premise that they — the bankers — are best at “getting us out of it”. By the way, the critics of the Union are not people who don’t want Europe united, but those who reject the notion that independent nations must surrender to global banking institutions in order to exist.

Recognizing that the euro zone is at “a turning point not only in its debt crisis, which has lasted three years, but in its thirteen year history,” Rehn said. He added that in the past two years they have made “significant progress” , giving the example of Ireland and Portugal and even Greece, which “has achieved more than is generally recognized.” What Mr. Rehn means is that in the case of Greece, the bankers have been able to fully gain control of its government and its economy, much like they did in Argentina at the turn of the millennium, when the country went from having first world status to becoming a dungeon with more people than living in poverty than ever before.

Rehn defended the measures taken by the Spanish government “to create a product and services markets more competitive, reform labor laws that have hindered the creation of jobs and bring stability to public finances.” These are always the promises made by politicians: more jobs, more production, more competitiveness, but in reality all they achieve is more big government controlled by outside forces that intend to curtail development and progress and whose only intention is to starve nations to death as a policy for control.

He added that rescuing the banking system in Spain last month was a move to provide “restructured and recapitalized banks that are effectively regulated and monitored rigorously.” He forgot to add that such regulation and monitoring will be done by bigger, more powerful banks and not the states where those banks operate.

Rehn also reminded in writing that the U.S. and the EU are “in this together”, so he called for support, “instead of blaming” each other, to work “on both sides of the Atlantic to learn the lessons of the past and ensure that emerge stronger from the current crisis. ” A stronger centralized control in the hands of the bankers, that is.


Spanish People Take it to the Streets of Madrid

Citizens protesting against harsh austerity measures were met with violence from the police.

AFP | JULY 20, 2012

Spanish police fired rubber bullets and charged protestors in central Madrid early Friday at the end of a huge demonstration against economic crisis measures.

The protest was one of over 80 demonstrations called by unions across the county against civil servant pay cuts and tax hikes which drew tens of thousands of people, including police and firefighters wearing their helmets.

“Hands up, this is a robbery!” protesters bellowed as they marched through the streets of the Spanish capital.

At the end of the peaceful protest dozens of protestors lingered at the Puerta del Sol, a large square in the heart of Madrid where the demonstration wound up late on Thursday.

Some threw bottles at police and set up barriers made up of plastic bins and cardboard boxes in the middle of side streets leading to the square and set them on fire, sending plumes of thick smoke into the air.

Riot police then charged some of the protestors, striking them with batons when they tried to reach the heavily-guarded parliament building.

The approach of the riot police sent protestors running through the streets of the Spanish capital as tourists sitting on outdoor patios looked on.

A police official told AFP that officers arrested seven people while six people were injured.

The protests held Thursday were the latest and biggest in an almost daily series of demonstrations that erupted last week when Prime Minister Mariano Rajoy announced measures to save 65 billion euros ($80 billion) and slash the public deficit.

Among the steps is a cut to the Christmas bonus paid to civil servants, equivalent to a seven-percent reduction in annual pay. This came on top of a pay cut in 2010, which was followed by a salary freeze.

“There’s nothing we can do but take to the street. We have lost between 10 and 15 percent of our pay in the past four years,” said Sara Alvera, 51, a worker in the justice sector, demonstrating in Madrid.

“These measures won’t help end the crisis.”

Spain is struggling with its second recession in four years and an unemployment rate of more than 24 percent.

Under pressure from the European Union to stabilise Spain’s public finances, the conservative government also cut unemployment benefits and increased sales tax, with the upper limit rising from 18 to 21 percent.

As Rajoy’s conservative Popular Party passed the measures with its majority in parliament Thursday, Budget Minister Cristobal Montoro defended them, insisting they were needed to lower Spain’s borrowing costs.

“There is no money in the coffers to pay for public services. We are making reforms that will allow us to better finance ourselves,” he said.

Protestors angrily rejected this claim.

“There isn’t a shortage of money — there are too many thieves,” read one sign hoisted in the Madrid crowd.

Critics say the government’s new austerity measures will worsen economic conditions for ordinary people.

Cristina Blesa, a 55-year-old teacher, said she and her husband would struggle to pay their son’s university tuition fees because of the cuts and tax hikes.

“We’re earning less and less and at the same time the price of everything is going up,” she said at the Madrid protest.

“Now with the rise in VAT everything is going to be even more expensive. It’s more and more difficult at the end of the month.”

Spain is due this month to become the fourth eurozone country, after Greece, Ireland and Portugal, to get bailout funds in the current crisis, when it receives the first loan from a 100-billion-euro credit line for its banks.

Eurozone leaders were expected to finalise the deal in a telephone conference on Friday.

Spain had to offer investors sharply higher interest rates in a bond sale on Thursday, suggesting investors remain worried over the country’s ability to repay its debts.

Protestors complained that they were being made to pay for the financial crisis while banks and the rich were let off.

“We have to all come out into the street, firefighters, street-sweepers, nurses, to say: enough,” said Manuel Amaro, a 38-year-old fireman in Madrid holding his black helmet by his side.

“If we don’t, I don’t know where this is going to end.”

ACTA Rejected in European Union Vote

BBC | JULY 4, 2012

The European Parliament has voted to reject the Anti-Counterfeiting Trade Agreement (Acta).

The proposed agreement sought to curb piracy, but internet campaigners said it posed a threat to online freedoms.

The rejection vote followed a failed attempt to postpone the decision because of ongoing investigations into Acta by the European Court of Justice.

Euro MP David Martin said: “It’s time to give [Acta] its last rites.”

Twenty-two EU member states, including the UK, had signed the Acta treaty – but it had not been formally ratified.

Outside the EU, the treaty also had the support of the US, Australia, Canada, Japan, Morocco, New Zealand, Singapore and South Korea.

However, following significant protests, several countries chose not to back it.

Wednesday’s vote is seen by most observers as the final blow to the treaty in its current form. It means no member states will be able to join the agreement.

A total of 478 MEPs voted against the deal, with 39 in favour. There were 165 abstentions.

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Spain to receive up to 125 Billion Euros in Bailout

REUTERS | JUNE 10, 2012

Euro zone finance ministers agreed on Saturday to lend Spain up to 100 billion euros ($125 billion) to shore up its teetering banks and Madrid said it would specify precisely how much it needs once independent audits report in just over a week.

After a 2 1/2-hour conference call of the 17 finance ministers, which several sources described as heated, the Eurogroup and Madrid said the amount of the bailout would be sufficiently large to banish any doubts.

“The loan amount must cover estimated capital requirements with an additional safety margin, estimated as summing up to 100 billion euros in total,” a Eurogroup statement said.

Spain said it wanted aid for its banks but would not specify the precise amount until two independent consultancies – Oliver Wyman and Roland Berger – deliver their assessment of the banking sector’s capital needs some time before June 21.

“The Spanish government declares its intention to request European financing for the recapitalization of the Spanish banks that need it,” Economy Minister Luis de Guindos said at a news conference in Madrid.

He said the amounts needed would be manageable and that the funds requested would amply cover any needs.

A bailout for Spain’s banks, beset by bad debts since a property bubble burst, would make it the fourth country to seek assistance since Europe’s debt crisis began.

With the rescue of Greece, Ireland, Portugal and now Spain, the EU and IMF have now committed around 500 billion euros to finance European bailouts.

Washington, which is worried the euro zone crisis could drag the U.S. economy down in an election year, welcomed the announcement.

“These are important for the health of Spain’s economy and as concrete steps on the path to financial union, which is vital to the resilience of the euro area,” U.S. Treasury Secretary Timothy Geithner said.

Likewise, the Group of Seven developed nations – the United States, Germany, France, Britain, Italy, Japan and Canada – heralded the move as a milestone as the euro zone moves toward tighter financial and budgetary ties.

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European Union to charge Airlines for Carbon Emissions

All airlines flying to and from EU airports will buy permits under the Europe’s emissions trading scheme, from 1 January 2012.

December 21, 2011

Europe‘s highest court gave unreserved backing on Wednesday to a hotly contested EU law charging airlines for carbon emissions on flights to and from Europe, a decision likely to escalate tensions with the United States and other trading partners.

All airlines flying to and from EU airports will buy permits under the European Union‘s emissions trading scheme from 1 January 2012, the European court of justice ruled.

“The directive including aviation activities in the EU’s emissions trading scheme is valid,” the court said in a statement.

“Application of the emissions trading scheme to aviation infringes neither the principles of customary international law at issue nor the open-skies agreement.”

Wednesday’s ruling was in line with expectations after a senior adviser to the court issued a preliminary opinion in October finding the EU legislation did not infringe the sovereignty of other states and was compatible with international agreements.

The case was initially brought to the London high court of justice by the Air Transport Association of America, American Airlines and United Continental, but the London court referred it to the court in Luxembourg.

Critics of the EU rules have argued that under the 1997 Kyoto protocol, countries agreed to address emissions from aviation jointly through the UN’s aviation body, the International Civil Aviation Organisation.

More than a decade on, talks have not yielded significant progress and the European court of justice said the EU was within its rights to take unilateral action.

The EU already sets a cap on the level of emissions allowed from factories and power plants. Emitters exceeding their quotas must buy carbon permits, while those within their limits can sell any unused allowances.

While emissions from most other sectors have been falling, those from airlines have doubled since 1990 and could triple by 2020, commission figures show.

The EU carbon market pared losses immediately after the ruling, but stayed negative.

Peter Liese, a German Christian democrat who led discussions in the European parliament on the emissions law, said that including airlines was a modest proposal, which had won unanimous support from the European council of ministers.

“I cannot imagine a situation where the European parliament amends legislation just because of pressure from China or the United States,” he said. “We (in Europe) represent 500 million people and the biggest market in the world.”

But the US, where environmental legislation has become a focus of disagreement betweenDemocrats and the Republicans, has reacted angrily.

Proposed legislation in the US Congress, if passed, would make it illegal to comply with the EU law.

In a letter sent to EU officials last week, the US secretary of state, Hillary Clinton, and the US secretary of transportation, Raymond LaHood, urged the EU to reconsider and re-engage with the rest of the world.

“Absent such willingness on the part of the EU, we will be compelled to take appropriate action,” they said in the letter.

The court ruling is final, although there is some flexibility in how the regulation may be applied. Airlines initially would only be required to pay for 15% of the carbon they emit and would be allocated free allowances to cover the other 85%.

The law also allows for “equivalent measures”, meaning incoming flights to Europe would be exempt if the nation from which they came had measures in place to offset the international emissions of the route.

Depending on decisions by airlines on how much to pass on to customers, the European commission has calculated that costs per passenger could rise between €2 and €12, much less than the €100 per allowance penalty it would impose on airlines that do not comply.

Many airlines have given much higher assessments of the cost and said the EU was being unfair.

Singapore Airlines spokesman Nicholas Ionides said the EU was imposing its Emissions Trading Scheme unilaterally and called for a global solution.

“It could also cripple competitiveness as it offers carriers operating through hubs closer to Europe an unfair advantage,” Ionides said.

Qantas said the “patchwork approach” was flawed, but its policy was to comply with carbon law wherever it operated.

A spokesman said it was still finalising policy, but anticipated costs would be passed on to customers.