BRICS will create a bank to end hegemony of Europe and the U.S.

The bank will be the headquarters for trade in multiple currencies which do not include the dollar or the euro as references.

By LUIS MIRANDA | THE REAL AGENDA | MARCH 27, 2013

The first day of the fifth annual summit of BRICS (Brazil, Russia, India, China and South Africa) was dedicated to the bilateral relations of its members, and it served to meet the intent of the five members on Wednesday who issued a joint statement on the commissioning of a bank, which would serve as a counterweight to the World Bank and the International Monetary Fund. The BRICS consider both institutions excessively controlled by Europe and the United States.

Issues such as decision-making or the contribution of each member are yet to be decided, which will likely prevent the release of the specific plans for the bank today, ahead of the meeting of Finance Ministers.

The creation of a joint fund of foreign exchange reserves will be another issue on the table, and the establishment of a self-study center and a business council of the BRICS.

Furthermore, the investments that BRICS make in Africa will be one of the key issues to be addressed at the summit today. “The association of the BRICS and Africa for the development, integration and industrialization” will be the slogan used to bring everyone together during the discussion.

The South African Minister of Trade and Industry, Rob Davies, stressed the importance of economic relations between the five and the mainland during his speech to businessmen from all members in the Business Forum of the BRICS.

“The African continent is recognized as the second fastest growing after Asia,” Davies recalled, citing the need for infrastructure as one of the attractions for investing in Africa at this time of economic crisis in Europe and the U.S..

A study by the Standard Bank, the BRICS trade with Africa rose last year to 340,000 million dollars, far exceeding the number of exchanges between the five economies of the group.

Moreover, the currency swap agreement reached by Brazil and China has a value of 30,000 million dollars, said the president of the Brazilian Central Bank, Alexandre Tombini, in the South African city of Durban. “The objective is to facilitate trade between the two countries regardless of international financial conditions,” said Tombini.

The agreement is valid for three years and protects trade between the two economies against dollar fluctuations and international financial turmoil.

The Brazilian Finance Minister Guido Mantega told reporters that, along with their counterparts from the BRICS, he proposed to the presidents of their countries to create an agreement of the same type in a multilateral way among all partners.

In the intense round of bilateral meetings which marked the first day of the summit, South African President and summit host, Jacob Zuma, met with colleagues from China, Xi Jinping, Russia, Vladimir Putin, and Brazil, Dilma Rousseff. For his part, the president of Brazil did the same with Prime Minister Manmohan Singh.

Rousseff meets today with the president of China, the largest trading partner of Brazil, according to Brazilian sources who are part of the  country’s delegation in South Africa.

Moreover, the human rights organization Human Rights Watch (HRW) today took an opportunity to urge the BRICS to stop the Syrian conflict and to require an “immediate cessation” of “indiscriminate” violence against civilians. In a statement, HRW called for India, Brazil and South Africa to “pressure” to Russia and China, which have good relations with Damascus to “suspend weapons sales and assisting the Syrian government.”

BRICS countries account for about 42 percent of the world’s population and nearly 45 percent of the labor force on the planet, according to the group’s own figures. In 2012, Brazil, Russia, India, China and South Africa accounted for 21 percent of world’s GDP and trade between them reached a total of 282,000 million.

Argentina freezes food prices to avoid higher inflation and mass hunger

By ALMUDENA CALATRAVA | AP | FEBRUARY 5, 2013

Argentina announced a two-month price freeze on supermarket products Monday in an effort to break spiraling inflation.

The price freeze applies to every product in all of the nation’s largest supermarkets — a group including Walmart, Carrefour, Coto, Jumbo, Disco and other large chains. The companies’ trade group, representing 70 percent of the Argentine market, reached the accord with Commerce Secretary Guillermo Moreno, the government’s news agency Telam reported.

The commerce ministry wants consumers to keep receipts and complain to a hotline about any price hikes they see before April 1.

Polls show Argentines worry most about inflation, which private economists estimate could reach 30 percent this year. The government says it’s trying to hold the next union wage hikes to 20 percent, a figure that suggests how little anyone believes the official index that pegs annual inflation at just 10 percent.

The government announced the price freeze on the first business day after the International Monetary Fund formally censured Argentina for putting out inaccurate economic data. The IMF has given Argentina until September to bring its statistics up to international standards, or face expulsion from the world body in November.

President Cristina Fernandez and her economy minister, Hernan Lorenzino, responded over the weekend with a flurry of attacks on the IMF, saying the agency’s data-gathering efforts had lost credibility in the lead-up to Argentina’s historic 2001 debt default. They said IMF advice is leading Europeans astray by favoring big banks over measures that can grow economies out of crisis.

However, Lorenzino also said that the government will begin using a new inflation index starting in fourth-quarter 2013 — just in time for the IMF’s decision.

IMF issues plan to starve Portuguese people even further in 2013

By LUIS MIRANDA | THE REAL AGENDA | JANUARY 10, 2013

Portuguese Prime Minister Pedro Passos Coelho warned a month ago: The Portuguese, that bears a progressive and growing cut in services for the last year and a half, intends to save another 4,000 million euros a year starting now. For ideas on where to do it, the Portuguese Executive requested a report to the International Monetary Fund (IMF). The report was released on Thursday and immediately sparked controversy (and fear) in the Portuguese population, as cuts and adjustments will be constant and repetitive in the months to come.

Technicians at the Washington-based institution advised Portugal to, among other measures, fire workers, increase working hours for government employees, reduce (more) unemployment benefits and cut (even more) pensions. Only then, they say, will the country reach 4,000 million euros in savings that the Liberal government of Passos Coelho considers necessary to reform the state so that, in his opinion, the Portuguese nation becomes efficient and competitive.

To begin, the IMF experts say the Portuguese system of social protection “is directed disproportionately towards the wealthier and the older.” It adds that the system “pushes out younger workers while keeping the older inside.” To solve that problem, the IMF suggests that unemployment insurance, which now provides subsidies for 26 months and that has already been cut, should be cut even further, and that once it gets to  ten months, it is reduced further to become simply a payment of social allowance of just over 400 euros.

The IMF also recommends reducing the wages of civil servants in an amount which can range between 3% and 7%, and get rid of up to 120,000 public employees (from 10% to 20%), focusing mainly on teachers , health professionals and low-skilled employees. In addition, Fund staff recommend ending the discrimination suffered by other employees, who work 40 hours a week, with respect to staff, whose working week is 35.

According to the IMF, the payment for doctor visits (already implemented in Portugal) could be increased up to a third of the expense involved in supplying such service. Right now, going to the emergency room in a hospital in Lisbon costs 20 euros. If the government accepted the IMF’s recommendation, the same visit would cost 50 euros. A mammogram can cost 15 euros and a GP consultation would cost around ten euros.

Pensioners, whose payments have been greatly cut, will experience even more cuts. According to the IMF, for starters, Portugal should raise the retirement age from 65 to 66 years, reduce the amount received by pensioners by 20% so that all payments are equally low.

The report has raised considerable media dust. The left accuses the government of Passos Coelho of thoroughly dismantling the country piece by piece, and establishing a process that will cost more than a mere private insurance scheme. Portuguese State Secretary, Carlos Moedas, has clarified that the report is “very good”  and that it will be considered by the Government.

The Portuguese government plans to present in February its own savings plan, which is why it requested the report from the IMF. Now, Portugal plans to include almost all of the recommendations in the report as its own since the IMF itself has now called for such measures.

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Santa gets early to Egypt as U.S. gives Morsi’s Military 20 new F-16s

AP | DECEMBER 11, 2012

The Egyptian military on Monday assumed joint responsibility with the police for security and protecting state institutions until the results of a Dec. 15 constitutional referendum are announced.

The army took up the task in line with a decree issued Sunday by President Mohammed Morsi. The Islamist leader on Monday also suspended a series of tax hikes announced the previous day on alcohol, cigarettes and other items.

The presidential edict orders the military and police to jointly maintain security in the run-up to Saturday’s vote on the disputed charter, which was hurriedly approved last month by a panel dominated by the president’s Islamist allies despite a boycott of the committee’s liberal, secular and Christian members.

The decree also grants the military the right to arrest civilians, but presidential spokesman Yasser Ali said it was nowhere near a declaration of martial law.

“It is merely a measure to extend legal cover for the armed forces while they are used to maintain security,” Ali told The Associated Press.

There were no signs of a beefed up military presence outside the presidential palace, the site of fierce street clashes last week, or elsewhere in the capital on Monday.

Still, Morsi’s decision to lean on the military to safeguard the vote is widely seen as evidence of just how jittery the government is about the referendum on the draft constitution, which has been at the heart of days of dueling protests by the opposition and Morsi’s Muslim Brotherhood backers. The two sides clashed in Cairo last week, leaving at least six people dead and hundreds wounded in the worst violence of the crisis.

Both the opposition and Morsi’s supporters have called for mass rallies on Tuesday.

The opposition has rejected the referendum, but has yet to call for a boycott or instead a “no” vote at the polls.

“A decision on whether we call for a boycott of the referendum or campaign for a `no’ vote remains under discussion,” Hossam Moanis, a spokesman for the National Salvation Front grouping opposition parties and groups told the AP on Monday. “For now, we reject the referendum as part of our rejection of the draft constitution.”

The military last week sent out several tanks and armored vehicles in the vicinity of the presidential palace in Cairo following protests there by tens of thousands of Morsi’s critics. It was the first high-profile deployment by the military since it handed power in June to Morsi, Egypt’s first freely elected president.

Morsi on Saturday rescinded decrees issued Nov. 22 granting him near absolute powers and placing him above any oversight, including by the courts. He has, however, insisted that the referendum will go ahead on schedule.

Judges have gone on strike to protest Morsi’s perceived “assault” on the judiciary and have said they would not oversee the Dec. 15 vote as is customary for judges in Egypt. Judges of the nation’s administrative courts announced Monday they were conditionally lifting their boycott of the vote, but they said their supervision of the process was conditional on bringing an end to the siege of the Supreme Constitutional Court by Morsi’s supporters.

In exchange for their supervision, they also demanded assurances that authorities would crack down on vote canvassing outside polling stations and offer life insurance policies to the judges.

Morsi’s deputy, Mahmoud Mekki, has said the vote could be staggered over several days if there were not enough judges to oversee the referendum.

The court was widely expected to dissolve the panel that drafted the constitution in a session scheduled for Dec. 2. The siege of the Nile-side building in Cairo’s Maadi district began Dec. 1.

In a surprise move, Morsi on Monday rescinded a series of decrees issued the previous day to raise taxes on a wide range of items and services, including alcohol, cigarettes, mobile phones, services offered by hotels and bank loans.

The state-owned daily Al-Ahram said the Sunday decrees to raise taxes were issued by Morsi. On Monday, the official MENA news agency carried a statement from Morsi’s office saying the president has decided to “suspend” the tax increases.

“The president does accept that citizens shoulder any additional burdens except by choice,” the statement said. Morsi, it added, has ordered a public debate on the increases to gauge popular reaction.

“The people will always have the loudest voice and final decision,” it added.

It was not immediately clear why Morsi changed his mind about the tax hikes in a matter of hours, but the about-face appeared to have more to do with inexperience rather than a bid by the president to appear sympathetic with the majority of Egyptians who struggle daily to make end meet as the economy’s woes deepen. A popular backlash against tax hikes could hurt the chances of the Morsi-backed draft constitution being ratified in the referendum.

Egypt and the IMF last month have reached an initial agreement for a $4.8 billion loan to revive the country’s ailing economy. The deal, agreed after nearly three weeks of negotiations in Cairo, will support the government’s economic program for 22 months, the IMF said in a statement.

Egyptian authorities said at the time that it intended to raise revenues through tax reform, using the resources generated from new taxes to boost social spending and investment in new infrastructure.

 

IMF presses Euro countries to hand over Sovereignty

By LUIS MIRANDA | THE REAL AGENDA | NOVEMBER 9, 2012

The International Monetary Fund (IMF) has urged countries that are under pressure from markets and high financing costs, including Spain, to seek the help of the European bailout funds to enable the debt purchase program created by the European Central Bank (ECB) to be initiated.

“Countries should implement plans to adjust and, if necessary, seek appropriate support from the EFSF / ESM. This would allow the ECB to intervene using the recently established program,” said an IMF document prepared for the meeting of Finance ministers and central bank governors of the G20 for the past 4 and 5 November.

In this regard, the organization stresses that although the ECB’s decision has removed some of the main risks for the eurozone, political and economic factors can cause these countries to not seek help from European partners and the ECB at the right time.

The institution led by Christine Lagarde said that although progress has been made, the resolution of the eurozone crisis will require “timely and decisive” policy implementation.

The IMF warns that access to finance at a reasonable cost is “essential to enable successful economies to adjust. While the economies of the periphery must continue to adjust their fiscal balances at a rate that they can afford in the current fragile environment, they should also adopt the right policies.” The document warned that changes that do not include a so-called rescue may not be sufficient to fully recover the confidence of the markets, especially risk implementation.

So, the supposed solution provided by the bankers is not only not effective, but also a double whammy. On top of keeping countries in debt, the bankers also want to deepen the crisis by issuing more debt so that more risk can be created and nothing will ever change. That is why the banks want to take complete control, micromanaging every single country’s fiscal and monetary policies, so that they can risk as much as they want with other people’s money without having to be accountable to anyone.

The IMF disingenuously stresses that measures adopted because of the crisis should be accompanied by a roadmap towards creating a banking union and greater fiscal integration to strengthen the monetary union. That is exactly the mechanism that would, once and for all, given them the complete control of all financial decisions in Europe. They also intend to export this to the rest of the world once the EU nations are fully absorbed.

In the opinion of the IMF, the union should be based on a unique mechanism of supervision — controlled by the banks who created the crisis –, a resolution mechanism at the level of the Euro zone, with support from all members and a scheme where all countries pitch in to have a deposit guarantee scheme for the entire currency union. That money will also be spent at the banker’s discretion and countries or banking institutions will be ‘rescued’ only if they agree to all terms in the contracts.

The IMF also stresses that continued implementation of financial, fiscal and structural reforms is “essential”, while acknowledging that several years will pass before all policies are fully implemented. This means that bankers, at least for now, do not intend to collapse the European financial system at once, as long as they can continue to postpone it by creating more debt and adding sovereign nations to their portfolio of debt slaves.

The bankers have smartly warned about using austerity as a way to curb out of control spending, and instead advocate for perpetual indebtedness. That is because this is the most efficient mechanism for them to get to control nations directly from the inside. The truth is however, that the IMF is one of the main pushers of austerity as a first step in the acquisition of indebted nations. Once government bureaucrats are no longer able to cut anything else, the bankers pose as saviors by lending fake money so the countries can begin another cycle of debt-based ‘development’.

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