"Whiter dream of US of Europe?
One was contemplating the future of the Turkish quest for membership of Europe when one became cognizant of the fissures in the façade of the European Union itself. Despite the frenetic efforts to spruce up the image of unity, the dream of a ‘United States of Europe’ appears to be as distant as it ever was. The Turks have been overly keen to be accepted as part of Europe for as long as one can remember. Their quest gained added momentum after the fall of the Berlin Wall. But as of now a pall of gloom looms over the Turkish aspirations in this direction. In fact, a Turkish friend in a message the other day cast cynical doubts over the possibility of the very survival of the European Union itself beyond a decade or two."
The European Commission's recommendations, due to be made public on February 3, include cutting nominal wages in the public sector and setting a ceiling for high pensions, Ta Nea said.
Greece is seeking EU approval for an austerity plan it presented this month to reduce its budget deficit to below 3 percent of GDP by 2012 from 12.7 percent in 2009 and avoid a debt crisis seen as a threat to the euro zone.
For more: EU to tell Greece to do more to cut deficit - report | Top News | Reuters
This year's World Economic Forum in Davos marks a clear shift in the global power structure. "Bankers Are On Run", headlined the Wall Street Journal in its weekend edition, describing an atmosphere of, quote, "First, kill all the bankers." Its ramblings went on to forecast the worst is yet to come, elaborating on a bet that even Goldman Sachs CEO Lloyd Blankfein would be out of his job within 2 years. Witness the biggest shift in editorial sentiment ever seen when the WSJ starts comparing bankers to terrorists,
What Davos failed to address is the necessary new regulatory shape for an industry gone too wild with the utmost help from central bankers that now ends up on the wrong side of all trades. Minefields of OTC derivatives and "asset" positions saddled with high default rates need yet to be cleared as the next financial Tsunami gains speed. Seeing all asset bubbles from the FIRE (finance, insurance, real estate) economy deflate at different speeds, now again engulfing stock markets, banks worldwide have an 800-pund gorilla in their vaults that may run amok in 2010.
I am talking government bonds where prices and resulting yields will no longer be derived from ratings and macroeconomic outlooks but from market reactions to the coming flabbergasting revelations how bad the economic outlook for the Western world really is.
"As I have not yet come across the example of a major economy that really shows a will to at least consolidate its budget deficits I stay with my opinion that hyperinflation is on the way as was always the case after bubbles built on debt. Hyperinflation, the inevitable end of all fiat currencies in history, will ironically have one positive effect. According to Austrian historian Eugen Maria Schulak, co-author of a recently published (German language) book on the Austrian School of Economics, no rulers have ever survived hyperinflation, leading to many radical political changes."For more: The Coming Default Tsunami Grabs Power From Banking Industry | Benzinga.com
Climate change has become the theater of geopolitical competition and China has the upper hand (so far)
The quest for a new comparative advantage, economists say, is all the more urgent as the crisis has left the financial-services sector reeling — a sector that was long considered one of the last bastions of Western sophistication. From China’s perspective, experts say, climate change offers the opportunity to leapfrog Western competitors. “The low-carbon economy is the future,” said David Li Daokui, a professor at the Center for China in the World Economy in Beijing.
Moreover, the quest for sustainable energy and industrial processes is playing out against the backdrop of vastly different economic and political systems.
In China, the government poured an estimated euro 318 billion ($440 )into clean energy last year. It is investing heavily in renewable energy and nuclear power. It also is pursuing efforts to make extraction of its vast coal reserves cleaner. Already home to one-third of the globe’s solar-energy manufacturing capacity and 400 solar-energy companies, China is expected to surpass Spain this year as the No. 3 country in terms of wind power installations, behind Germany and the United States. William Rhodes, senior vice chairman of Citigroup and board vice chairman of the National Committee on U.S.-China relations, predicted that Beijing’s research into storing carbon emissions underground could soon lead to a major breakthrough.
Note EU-Digest: Most experts agree that the European Union and the West can not and do not want to match China's controlled and centralized economy in the area of environmental research. One of the ways to encourage the Chinese to move away from their self centered objectives on the environment is to produce a binding global agreement on carbon emissions (with or without the Chinese) as soon as possible. One does not have to be an Einstein to figure out that China's reluctance to accept such a deal at present is precisely to win time and a competitive advantage over the rest of the world. With a global deal on carbon emissions in place nothing will stop the power of innovation and the market place to become fully engaged in the process, benefiting everyone.
The Race Is on to Develop Green, Clean Technology - DealBook Blog - NYTimes.com
From the Copenhagen climate change conference to Internet freedom to China's border with India, China observers have noticed a tough tone emanating from its government, its representatives and influential analysts from its state-funded think tanks.
"There has been a change in China's attitude," said Kenneth G. Lieberthal, a former senior National Security Council official who is currently at the Brookings Institution. "The Chinese find with startling speed that people have come to view them as a major global player. And that has fed a sense of confidence." Lieberthal said another factor in China's new tone is a sense that after two centuries of exploitation by the West, China is resuming its role as one of the great nations of the world.
Two weeks ago, Mark Zuckerberg, the 24 year old billionaire founder of
On Thursday (28 January), the European Commission responded to Zuckerberg and announced plans for comprehensive new laws that have in their sights the massively popular website.
The commission is concerned that its existing rules on
Mentioning Facebook, Myspace and Twitter by name, Commissioner Ms Reding said she will start this year with a revision of the 1995 Data Protection Directive, in a speech that outlined the main principles and goals of her upcoming work as Europe's top fundamental rights watchdog. It is clear that privacy issues are at the forefront of her ambitions. "Innovation is important in today's society but should not go at the expense of people's fundamental right to privacy," she said.For more: EUobserver / New EU laws to target Facebook
Beijing has suspended military exchanges with the US and threatened sanctions over Washington's plan to sell arms to Taiwan, according to the official Xinhua news agency. The decision was announced on Saturday, just hours after China cautioned that the US's decision to sell $6.4bn worth of weapons to Taiwan would cause "serious damage" to relations and co-operation between the two nations.
He Yafei, the Chinese vice-foreign minister, told Jon Huntsman, the US ambassador to China, that the arms deal could jeopardise bonds with Washington.
However, Laura Tischler, a US
Speaking to Al Jazeera on Saturday, Christian Ford, Beijing bureau chief for the US newspaper Christian Science Monitor said, "when you look at relations between and Washington and Beijing, there are definitely some more hiccups on the horizon." Ford mentioned an expected meeting between Barack Obama, the US president, the Dalai Lama, the Tibetan spiritual leader, as a case in point. "When that happens, Beijing is bound to react," he said.For the complete report: Al Jazeera English - Asia-Pacific - China freezes US military exchanges
Paul Krugman, who has warned for months that the economic rebound is likely to fizzle without more fiscal stimulus, argues in his most recent New York Times piece that "the only thing that’s keeping the US from sliding into a second Great Depression is deficit spending."
Either way, the point is that the boost from the stimulus will start to fade out in around six months, yet we’re still facing years of mass unemployment. The latest projections from the Congressional Budget Office say that the average unemployment rate next year will be only slightly lower than the current, disastrous, 10 percent. Yet there is little sentiment in Congress for any major new job-creation efforts."
For more: Better GDP, Better Presidential Prospects? - Coop's Corner - CBS News
European insurance regulators need a little more time to thrash out a compromise on rules for annuity providers that UK insurers fear could force them to raise up to 50 billion pounds ($81 billion) of capital.
Regulators want insurers to put more cash aside to cover against any slide in the value of assets used to fund the annuities, but insurers believe the proposed rules would be unnecessarily restrictive.
A special task force at insurance watchdog CEIOPS is honing the rules in light of concerns at big annuity writers like Legal & General (LGEN.L), Prudential (PRU.L) and Aviva (AV.L), while remaining consistent with the overall insurer capital rules known as Solvency II.For the complete report: EU insurance watchdog's annuity report due mid-Feb | Reuters
10 Ways to Stop Corporate Dominance of Politics | Civil Liberties | AlterNet
Vladimir Putin praised the maiden flight of Russia’s new stealth plane as “a big step” towards giving the air force a fighter fit for the twenty first century.
The Russian prime minister told a cabinet meeting he wanted the first batch of T-50 stealth fighters to be in service by 2013, well ahead of earlier deadlines. The fighter will be the first all-new military aircraft Russia has built since the collapse of the Soviet Union nearly two decades ago. Russian aviation and air force officials lost little time in boasting that the plane would equal if not better America's
Experts believe the T-50s maiden test flight underlines the Kremlin's determination to overhaul its ageing Soviet-era military hardware even as it is locked in key nuclear arms reductions talks with the United States.For more: Vladimir Putin praises Russian stealth fighter - Telegraph
A top European official has announced plans to begin a major overhaul of
Viviane Reding, the EU's
In a statement, Reding warned of the uncertainty -- both for consumers and businesses -- that will come as technology falls out of sync with the EU's legal framework.
"EU rules are there to protect everyone's personal data," Reding said. "EU rules should allow everyone to realize their right to know when their personal data can be lawfully processed, in any area of life, whether boarding a plane, opening a bank account or surfing the Internet, and to say no to it whenever they want."For more: Europe to Begin Digital Privacy Overhaul - www.esecurityplanet.com
Speaking in Paris, Clinton said she and others who support additional sanctions on Iran over its disputed nuclear program are lobbying China to back new U.N. penalties on the Iranian government.
She said she understood China's reluctance to impose new penalties on Iran, its third-largest supplier of oil. But she stressed that a nuclear-armed Iran would destabilize the
Britain must back Obama's stand against the money bullies - who is in charge, banks or Government? - by Polly Toynbee
For more: Britain must back Obama's stand against the money bullies | Polly Toynbee | Comment is free | The Guardian
"I'm sure there's a good partnership next years between me and my new function for the issue to bring energy in a full sense to the European level," Oettinger, told journalists after his confirmation hearing at the European Parliament two weeks ago when asked about his suitability for the energy commissioner post.
In the European Commission, English is one of three official working languages, the other two being French and German. The EU also employs an army of interpreters and translators to ensure that information is correctly transmitted to its appropriate destination.
For the complete report: New German EU minister struggles with English | From the Fringe | Deutsche Welle | 28.01.2010
He said nothing new so far and held on the his belief that the war was justified. "The primary consideration for me was to send an absolutely powerful, clear and unremitting message that after September 11, if you were a regime engaged in WMD [weapons of mass destruction], you had to stop."
Mr Blair said other world leaders did not feel the same way he and Bush did. "Although the American mindset had changed dramatically [after 9/11] - and frankly, mine had as well - when I talked to other leaders, particularly in Europe, I didn't get the same impression."
For more: Blair fear: attacks deadlier than 9/11 - World - NZ Herald News
Google is committed to an open Internet because this provides the maximum leverage for its competitive advantage as the pre-eminent search engine. Google also relies on the open Internet to allow it to collect the full spectrum of data that allows it to characterize and exploit the monetary potential of its users. The one area in which Google cannot tolerate openness is in the one area the hackers targeted: the secrets of its search engine.
It is more likely that the Obama administration, with the world financial system stabilized and Chinese goodwill a less vital commodity than before, and its own political fortunes in jeopardy, has found it politically expedient and feasible to harden towards China.
The fallout will perhaps be an accelerated slide by Google - and the United States - into the Indian camp.
For more: Asia Times Online :: China News, China Business News, Taiwan and Hong Kong News and Business.
The Anglo-Saxon Conservative Badmouthing of Europe continues - "Europe Sees Dreams of Power Wane as 'G-2' Rises" - by Marcus Walkere
Many Europeans have long dreamt of a multipolar world, in which diplomacy and international law replace American dominance and military muscle-flexing. But EU-style soft power is turning out to be less useful than expected in dealing with China and other rising powers.
"China and Russia see the world in totally realist, zero-sum terms," says Mr. Grant, adding: "If we want China to take us seriously we have to have hard power," or the ability to twist arms through economic, military or other means. The EU is inherently unsuited to wielding hard power "because it is not a state," says Francois Heisbourg, special adviser at the Foundation for Strategic Research, a Paris think tank.
When India's foreign ministry commissioned Mr. Kumar and other scholars to identify India's strategic interests for coming decades, the experts concluded India could ignore the EU's pretensions to be a world player. The EU has one "silver bullet" that could boost its external influence, Mr. Kumar says: admitting Turkey. "That would change the EU's demography, make it seem like less of a Christian bloc, and raise its acceptance" in Asia and the Middle East, he says. However, Turkey's EU membership talks have stalled amid growing mistrust on both sides.
Note EU-Digest: It is amazing how vindictive Anglo-Saxon conservative forces will become when the EU, or for that matter also more liberal forces in their own countries, take a different course economically or politically.
"How America and Europe Are Alike
By Peter Baldwin | Thursday, January 28, 2010
There are huge differences between the United States of America and Europe — a tenet that is one of the few widely accepted certainties of political debates across the Atlantic. In this Globalist Bookshelf selection from “The Narcissism of Minor Differences,' USC professor Peter Baldwin tears that notion to pieces."
One year had taken him from a self-professed unifier to a historically divisive president; from the man selected to solve the country's problems to the person often disparaged as their cause. He squinted against the lights and stared hard at the audience for his first State of the Union address, looking a little grayer, a little older than when he assessed the country in the same venue last February. A circus of cameras and power brokers stirred around him, yet he stood alone at a single microphone, quieting the crowd with a series of somber nods.
It had been, Obama told the audience, "one of the most difficult years in the US history" -- and it had been one of his most difficult years, too.
But Obama's most revealing remarks came in a quieter moment, inside a Washington area church on Jan. 17. "I have a confession to make here," he said. "There are times where I'm not so calm. . . . There are times when progress seems too slow. There are times when the words that are spoken about me hurt. There are times when the barbs sting. There are times when it feels like all these efforts are for naught, and change is so painfully slow in coming, and I have to confront my own doubts."
Ten days later, as he concluded the State of the Union, Obama closed not with a confession but with a resolution: "We don't quit. I don't quit. Let's seize this moment to start anew". He stepped away from the podium, shook more of the same hands, walked back up the same aisle and exited the chamber through the same doors as a year before. But this time it was into year number two.
For more go to: Obama's State of the Union address takes a harder tone - washingtonpost.com
Click on this link for the White House release of the speech
Leading up to today's event, pricing rumors were all over the map, but most touted estimates in the range of $700 to $1000. So it was quite a shocker to learn that the iPad would start at just $499 for a 16GB Wi-Fi model. Let's put that in perspective: it's the same price as a 32GB iPod touch just two years ago, and only $200 more than the current 32GB touch, despite having a much larger screen, more powerful hardware, and more features. But perhaps the more telling comparison is that
Other advantages: Pre-paid, no-contract, unlocked 3G, External keyboard support, ePub support
For more: The IPad's Five Best Surprises - PCWorld Business Center
Seven bodies have been recovered from the rubble of an apartment block in the Belgian city of Liege which collapsed after a suspected gas explosion.At least 21 people were injured in the blast, including two in a critical condition, officials have said. A 13-year-old girl was among those pulled alive from the rubble. The bodies were all found by rescue workers several hours after the building exploded at 2am local time on Wednesday (1am UK time).
Interior Ministry spokeswoman Margaux Donckier said it was unclear if any more people were buried under the twisted metal, wood and bricks from the 100-year-old building.
Germany has raised its 2010 growth forecast to 1.4 per cent from a previous estimate of 1.2 per cent, the economy Ministry said on today, boosting hopes that recovery in Europe's largest economy is gathering pace.The government sees exports rising 5.1 per cent in 2010 and supporting the recovery in Germany, which is heavily reliant on foreign trade for economic growth and was the world's biggest exporter of goods from 2003 to 2008.
"The German economy's strength lies now as before in competitiveness,
For more: Germany raises growth forecast - The Irish Times - Wed, Jan 27, 2010
The Greek fiscal tragedy playing across the Aegean has turned into a daytime soap opera in the past couple of weeks. First, a European Commission report condemned the Greek authorities for falsifying budget data. Little surprise that Greece's Stability and Growth Program, released a couple of days after the EC condemnation, was not taken seriously by markets. The climax was reached last week, as Greek credit-default swaps, which insure against default, hit a record of 358 basis points.
Monday’s first scheduled bond issue of the year for the Greek government quelled worries a bit, as investors flocked to the generous yields of 6.2%, which is 0.3% above the country's existing debt with similar maturities.
It is these structural problems and the lack of monetary policy or exchange-rate devaluation as policy options that have left the Mediterranean quartet of Portugal,
To predict how this drama will conclude, recall how the Greeks came to this fiscal mess. Some of Greece’s woes are common to the euro zone, suffering from a currency union that has tighter monetary policy than the other major economies and a currency that is overvalued.
For the complete report: Greek Tragedy's Next Act - Forbes.com
1. Debt as currently recorded has been reduced through a number of "interest rate swaps. One such trade involves the use of Greek banks. The government owes, for example, the National Bank of Greece about 5.5 billion, which is not recorded in outstanding debt. The agreement was originally with Goldman Sachs and it was then passed to National Bank of Greece. The 5.5 billion euros involved is effectively a 30 year loan, and during this time both parties pay interest to each other, with the difference that the State pays a much higher interest to NBG than the NBG pays to the state. That is, the debt is paid off through higher interest payments rather than via the normal amortization process.
2. Credit providers: The European System of National Accounts (ESA) does not take such provision into account because government debts must normally be paid within 60 days. Greece, however, does not comply with the normal condition of early repayment, thereby releasing billions of euros in extra debt, debt which is later recognised and produces a subsequent revision of deficit and debt numbers for the year in question. The most widely quoted case of this is that of public hospitals, which by September 30, 2009 owed suppliers (for the period 2005 - September 2009) 6.3 billion euros. It was the recent addition of these obligations (21 October 2009) which led to the increase in the general government deficit for 2008 and 2009 and the corresponding increase in debt. In addition to the debts of hospital debt, the Committee estimated that there are still further outstanding government obligations of around 6.0 billion euros. Once these liabilities have been paid (or recorded in official figures) the debt will be naturally revised upwards.
3. The debt balance also includes the debt of various public bodies which are guaranteed by the state. Debt guaranteed by the Government at the end of 2009 tamounted o 26.2 billion (or 10.9% of GDP) up from 6.2% of GDP in 2002. About 40% of that debt is owed by the OSE (Greek Railways) and is body is unable to repay (shades of the Hungarian situation here).
4. Much of the above is possible due to the following practice: in order not to increase the budget deficit and debt, public bodies are encouraged to open bank loans guaranteed by the government (but not recorded as outright debt), usually with a higher rate of interest than if the government borrowed the directly and then subsidized the organisations directly. When these obligations are eventually formally assumed by the State, there is then a sudden increase in debt.
As former IMF Executive Board Member for Southern Europe said in a Bloomberg interview yesterday, “In Ireland, it was the banking sector that was the undoing of fiscal management. In Greece it’s the opposite, it’s the country’s fiscal management that is the undoing of the banking system.”
For more: Global Economy Matters: Does Anyone Really Know The Size Of The Greek 2009 Deficit?
The Financial Times and the Wall Street Journal reported that Greece was turning to China to buy up to 25 billion euros of its bonds to help it through its fiscal crisis, with U.S. investment bank Goldman Sachs promoting the deal to Beijing.
"The Finance Ministry categorically denies that there is any deal to sell Greek bonds to China," the statement said. "The Finance Ministry has not mandated Goldman Sachs to negotiate any deal with China. I have no idea as regards what is being mentioned in press reports. There are plans for a roadshow, we have said this. The when is up to the minister to decide," PDMA's Spyros Papanicolaou told Reuters.
Note EU-Digest: it is hoped Greece will find better financial partners in Europe than letting Goldman Sachs and China exploit their financial woes. It should certainly become of major concern to the EU if this would happen.
For more: UPDATE 1-Greece denies reports of bond deal with China | Reuters
Despite a crippling recession and tight credit markets, the American wind power industry grew at a rapid pace in 2009, adding 39 percent more capacity. The country is close to the point where 2 percent of its electricity will come from wind turbines.
While that is still a small share, it is up from virtually nothing a few years ago. Continued growth at such a fast pace could help the nation lower its emissions of the gases that cause global warming, The New York Times’s Jad Mouawad writes.
The American Wind Energy Association, in its annual report to be released on Tuesday, said the amount of capacity added last year, 9,900 megawatts, was the largest on record, and was 18 percent above the capacity added in 2008, also a banner year.
“2009 was a record year for the Denmark-based wind-turbine makers Siemens Wind Power and Vestas Wind Systems, which according to data released by the Danish Wind Industry Association delivered almost 90% of the wind turbines (measured on a MW basis) to the new European offshore wind farms,” said a statement from the Denmark official website.
For more: Denmark leads European offshore wind power in 2009 - People's Daily Online
The decision came in response to a request from the UN to strengthen its mission in Haiti. European ‘gendarmes’ – paramilitary police forces – are already on their way to Haiti.
The foreign ministers also agreed to create a cell (EUCO-Haiti) to coordinate and exchange information on the civil and military resources contributed by the European Union Member States.
For more: EU to Send Police Force to Haiti
Saab has applied for a 400-million-euro loan from the European Investment Bank which the Swedish government has agreed to guarantee.
The takeover deal depends on the loan going through and the sale being approved by the European Commission.
For the complete report: Dutch Spyker to take over GM subsidiary Saab | Radio Netherlands Worldwide
For more: Bulgaria: Customs Officer Spot Said to Cost EUR 30 000 in Bulgaria - Report - Novinite.com - Sofia News Agency
It also recommends that anyone showing visible signs of "radical religious practice" should be refused residence cards and citizenship. The interior ministry says just 1,900 women in France wear the full veils.
"It is the symbol of the repression of women, and... of extremist fundamentalism. This divisive approach is a denial of the equality between men and women and a rejection of co-existence side-by-side, without which our republic is nothing."
The report is expected to be followed by the drafting of a bill and a parliamentary debate on the issue.For more: BBC News - France MPs' report backs Muslim face veil ban
The oil and gas industry breaches, the mere existence of which has been a closely guarded secret of oil companies and federal authorities, were focused on one of the crown jewels of the industry: valuable “bid data” detailing the quantity, value, and location of oil discoveries worldwide, sources familiar with the attacks say and documents obtained by the Monitor show.
The companies – Marathon Oil, ExxonMobil, and ConocoPhillips – didn’t realize the full extent of the attacks, which occurred in 2008, until the FBI alerted them that year and in early 2009. Federal officials told the companies proprietary information had been flowing out, including to computers overseas, a source familiar with the attacks says and documents show.
The data included e-mail passwords, messages, and other information tied to executives with access to proprietary exploration and discovery information, the source says. While China’s involvement in the attacks is far from certain, at least some data was detected flowing from one oil company computer to a computer in China, a document indicates. Another oil company’s security personnel privately referred to the breaches in one of the documents as the “China virus.”For more: US oil industry hit by cyberattacks: Was China involved? / The Christian Science Monitor - CSMonitor.com
The five-year securities yield 6.2 percent, the Greek ministry of finance said late yesterday in an e-mailed statement. The ministry said it received 25 billion euros in orders, after offering 0.3 percentage point more yield than on the nation’s existing debt with similar maturities.Prime Minister George Papandreou’s government is struggling to reduce a budget deficit of 12.7 percent of gross domestic product and needs to sell 53 billion euros of debt this year, the equivalent of about 20 percent of GDP.
For more: Greece Raises euro 8 Billion Offering ‘Generous’ Terms (Update1) - Bloomberg.com
Also voices are now raised in the US as to this important issue of "freedom of expression" as it relates to Western companies doing business in China. See also: USA Today
For more: EU Ambassador To China: Freedom Of Information Important - WSJ.com
He said some staff are being tempted away by banks that didn't get state aid and that are therefore able to offer more lucrative pay deals.
"A number of financial companies that haven't received state aid are taking a lot of freedom in payments and are doing so very energetically," Hommen said. "From time to time we lose people." Hommen said ING is also vulnerable to staff losses because of plans to split its banking and insurance businesses. ING agreed to a drastic restructuring plan late last year in return for receiving state funds, that involves the disposal of a large portion of its assets, including its insurance business.
For more: ING CEO Says Losing Staff To Competitors Over Pay - WSJ.com
Note EU-Digest: Unfortunately Europe is also quickly joining the gluttons of this world, mainly as a result of advertising. Burger King in Europe noted they saw a considerable upswing in their sales when they started selling the heavily advertised "super burger".
Let's hope Europe won't reach the state the US is in. Maybe its time to include in advertisements for fast food, similar to what they do for tobacco and alcohol, that fast food can cause obesity, which can kill you?
Will it fly, probably not, because the food industry lobby will probably kill any action in that direction.For more: Against supersized cocktails - Rod Dreher
In an interview with the Financial Times published on its Web site, Nowotny said: "I think there is a strong need from the macroeconomic side to have changes in the exchange rate policy of China because economically it's very problematic for a country to have huge surpluses in the current account."
Referring to the comparatively high valuation of the euro, Nowotny said, "developments have not been disruptive up till now, but one has to observe this very carefully."
For more: ECB Calls For China FX Policy Change - NYTimes.com
Part of the problem, on top of a severe recession that hit government revenue, are entitlement programs like social security and Medicare, the huge public healthcare program for older Americans.
Obama wants to reduce soaring Medicare costs through an overhaul of the $2.5 trillion U.S. healthcare system, but his reforms are bogged down in Congress.For more: Obama to seek three-year freeze on domestic spending - washingtonpost.com
Herman Van Rompuy, the EU's new permanent president, has asked heads of state and government to discuss the situation at their informal summit on 11 February.
For more: EurActiv.com - EU struggles to 'fly the flag' in Haiti | EU - European Information on EU Priorities 2020
Merkel pledges support against corruption in Bulgaria : Europe World
For more: Will Davos be a damp squib? - Business Analysis & Features, Business - The Independent
The world expectantly awaits word from its most powerful man, Barack Obama who delivers his State of the Union address on January 27. On that day, France’s Nicholas Sarkozy will make a keynote speech at Europe’s most prestigious annual gathering in Davos, Switzerland, of global political, business and civil society leaders.
The only significant American personality at the World Economic Forum’s Davos meetings will be Lawrence Summers. This continues the Obama White House snub to the World Economic Forum (WEF), a Swiss body whose mission is to “improve the state of the world”. During the Bush presidency, former Vice President Dick Cheney, Secretaries of State Colin Powell and Condoleezza Rice and numerous Cabinet members, attended Davos.
Sarkozy, who has pretensions to European leadership, is the top draw at Davos this year. He has cooled to Obama in recent months despite being the most pro-American French President in half a century. Other political glitterati at Davos will include the Presidents of Brazil, South Korea and South Africa. The Prime Ministers of Canada and Spain will also attend.
Note EU-Digest: Have the Davos meetings outlived their time or have they always been a "talk fest" platform for the International financial sector to impress on the world political leadership that they know what is best for the Hlobal economy. Given what we know today this is not the case, so why don't we concentrate on the G20 meetings instead as an alternative.
For more: Toyota gas pedal recall could affect 2 million European-market vehicles - Drive On: A conversation about the cars and trucks we drive - USATODAY.com
After running successful SpeedDate events in Amsterdam, Brussels and Paris, Expatica is continuing to run this popular event for expats in Amsterdam this year. New for 2010 are SpeedDate for seniors and gay and SpeedDates in The Hague,
The idea is to give participants up to 25 dates in one evening...an attractive, safe and efficient alternative to the bar and blind date scenes.For more: What's a speed date? < Partners | Expatica The Netherlands
Censorship now also in Italy - Berlusconi vs. Google: Italy to Regulate Online Videos? - by Jeff Isrraely
The new measures, which are unprecedented among Western democracies, are expected to get final Cabinet approval on Feb. 4 unless opposition parties are able to block them in court.
The new rules would require Internet service providers to remove content the state deems is in violation of copyright law, or face a fine of up to $210,000. "We are concerned over the fact that Internet service providers, like YouTube, that simply make content available to the general public, are being bundled together with traditional television networks that actually manage content," Marco Pancini, Google's European affairs chief, told the newspaper La Stampa. "It amounts to destroying the entire Internet system."For the complete report: Berlusconi vs. Google: Italy to Regulate Online Videos? - TIME
The nonprofit US-based free speech group has petitioned US Trade Representative (USTR) Ron Kirk,
For more: AFP: US asked to drag China to WTO over Google dispute
Are they just teething problems? Or is something more serious at stake? One way or another, the first signs are emerging that the European Union’s new foreign policy structures, established under the
Let’s take the EU’s response to the
A few days later, the sleuth-like French blogger Jean Quatremer reported that
For more: Strains are showing in the EU’s new foreign policy structures | Brussels Blog | FT.com
US Financial Industry: Wall Street's $26m lobbyists gear up to fight Obama banks reform - by Andrew Clark
Banks are mobilizing a smooth-running lobbying machine in Washington to battle
Their influence on
"The power of the financial services sector in this city has not dissipated at all … they've just done things in a quieter way," said Ethan Siegel, an analyst at financial consultancy The Washington Exchange, who monitors Congress for big investors. "They haven't pulled back on their lobbying just because they've become piñata [punchbags] in the press."
For more: Wall Street's euro 18.3 m ($26m) lobbyists gear up to fight Obama banks reform | Business | The Observer
How can a nation being $12.3 trillion in debt be the richest on Earth? Is the measure based on the US trade system? The US trade deficit hit $36 billion in November. Despite economists' suggestions, it's a sign of a recovering economy. How long can the US spend more than they have and still be afloat? Could the US status as the richest maybe be based on personal wealth? Various estimates put average consumer debt in the US at $8,000 to $20,000, and that doesn't include home mortgages, which also would not be a good measure of its wealth.
When President Bush left the political scene the US had accumulated a national debt of about $10.5 trillion. It's now 20 percent higher just a year later. Of the $12.3 trillion, more than $7.5 trillion of it — representing 54 percent of the nation's GDP — was borrowed from foreign nations and private investors. And the U.S. Senate plans to raise the debt ceiling to $14.3 trillion, which essentially represents the entire U.S. economy.
Maybe the potential of its economy still makes the US feel supreme. After all a well-run government spending money wisely could do great things, are the best and the richest. Or could the question on this issue of be naïve? It doesn't seem so. While U.S. GDP may suggest the US is still No. 1, about 54 percent of the title is credited to other nations and investors.
Greece supplied incorrect financial information in order to join the European Monetary Union - by Matthew Brockett
“Let me be very clear on this: Never again will we accept budget figures that do not reflect the facts,” Trichet said in an interview with Germany’s Focus magazine, the text of which was published by the ECB today. “Appropriate auditing must always be possible. As early as next month the European Commission will make proposals that will dramatically improve the relevant framework.”
Trichet also said
Greece and other euro- area countries “must do everything they can to put their national finances in order,” he said.
For more - Trichet Says Europe Won’t Accept Greek Example Again (Update1) - BusinessWeek
Turkey's desire to become a regional power rattles some in Bosnia and Herzegovina - by Jusuf Ramadanovic
The new direction of Turkish foreign policy -- including strong efforts to boost relations with neighbours while becoming a regional power -- will have a direct influence on Bosnia and Herzegovina (BiH). Media speculation has centred on Turkey's alleged desire to become a power in the Balkans and beyond.
One thing is certain: Turkey's influence in BiH -- for better or worse -- elicits strong response from those inside the smaller nation. Some predict a positive effect, while others fear it could increase ethnic and inter-entity tensions.For more: Turkey's reach has strong implications for BiH (SETimes.com)
There has already been a short-term impact; the stock prices of both of those companies declined Thursday. Longer term, the trend toward offering free navigation tools will enhance the value of multifunction smartphones, especially for Nokia, which makes more mobile phones than any manufacturer but has performed poorly in the U.S.
The emergence of free navigation on smartphones also means that a major consolidation among smaller GPS providers is likely, Bonte predicted. And some companies will go out of business entirely. In December, for instance, TeleCommunications Systems Inc. in Annapolis, Md., bought Networks in Motion Inc., a provider of wireless navigation for GPS-enabled phones, for $110 million in cash and stock.
The future of Appello Systems, Telenav, and other smaller GPS players is in question, Bonte said. "Maybe the bigger ones will survive, but I can't see how all will survive," he added. "They may disappear or merge or be acquired by Apple maybe."
For more: Analysis: Free Nokia GPS could hurt TomTom, Garmin
The mood is different now. Inside China, America and Europe several bubbles of optimism have burst at the same time. Charles Grant of the Centre for European Reform, a London based think-tank, says he and others who felt China was about to embrace multilateralism were guilty of “wishful thinking”. A closed-door gathering of Chinese, American and European officials and analysts, known as the Stockholm China Forum, this week heard how China has been unhelpful over climate change, Iran’s nuclear programme (China is counselling patience, not sanctions), its currency (kept artificially cheap despite American and EU protests) and its cyber-attacks on Western corporate and public computer networks. Such attacks, many coming from China, have reached damaging levels of intensity, and are now “high on the radar” of leaders, it was reported.
In 2009 China jailed more dissidents, sacked reformist editors and executed a British citizen for drug smuggling, brushing aside British government appeals that he was mentally ill. China has bullied Barack Obama over arms sales to Taiwan and meeting the Dalai Lama. In private meetings with European envoys, Chinese officials have unveiled a hubristic new argument for lifting the arms embargo: unless it goes, in years from now Europe “will not be able to buy its arms from China”.
The coming year will pose some severe tests. It is in everyone’s interests to avoid a trade war. And European and American policymakers seem to understand what they share, and what China wants from the world, more clearly than before. But that is only a start.
For the complete report: Charlemagne: Europe and an inscrutable China | The Economist
Things look uncertain for the Democrats. With control of the White House and both houses of Congress, the party in power appears unprepared to lead at times, and unable to make good on its 2008 campaign promises. But there is opportunity in times of crisis, and the Obama administration just got a badly needed wake-up call, a "come to Jesus" moment, if you will. The future still looks bright for the Democrats, provided they take a number of important steps:1. Obama must take the lead and set the agenda.
2. Democrats must resist the temptation to moderate and move to the center
3. Pass real health care reform with a public option. With a sixty-seat, filibuster-proof majority in the Senate, the Democrats failed at health care reform. Now they have fifty-nine seats, which is still a majority that will allow them to pass legislation. Democrats must find a way--whether through budget reconciliation, changing the Senate filibuster rules, intestinal fortitude, or other means--to pass health care reform. If the Senate Republicans want to filibuster, and justify a broken system that allows 45,000 people to die each year for lack of health insurance, then so be it. This is President Obama's signature issue, and he has spent a great deal of political capital on it.
4)Go after the banks. Obama captured the presidency on a message of change, disrupting the status quo and challenging entrenched centers of power. In the days of the Great Recession, millions of people are suffering from chronic unemployment, home foreclosures and financial ruin. The public has properly identified the big banks as the cause of America's economic meltdown.
The 2010 elections are still far away, and a lot can happen between now and November. Ironically, the defeat in the Massachusetts U.S. Senate race was the best thing that could have happened to President Obama. Still faced with a weakened and unpopular opposition, the Democratic Party has a unique opportunity to learn from its missteps, and come back stronger than ever.
For more: USHow Obama and the Dems can make a comeback
Last month the European Court of Human Rights slammed Bosnia for barring Jews and Roma from running for high elected office and ordered that the constitution be changed.
"I cannot say what would be our reaction if the ruling is not executed but suspension is definitely one of the options" provided for in the Stabilization and Association Agreement with the EU, "but not the only one", the chief of the European Commission delegation in Bosnia, Dimitris Kourkoulas, told the Dnevni Avaz daily.
He warned that this was an urgent issue and stressed that changes to the Bosnian constitution to enable anyone regardless of religion to run for office "must be completed so that the effects of those changes can be applied already in October's elections".For more: EU envoy threatens Bosnia with sanctions over discriminatory constitution — EU Business News - EUbusiness.com
His account of the EU has little time for the standard depiction, almost as common on the left as on the right, of it as a bland, bureaucratic conspiracy. Instead Anderson provocatively describes the organisation's creation as "the last great world-historical achievement of the bourgeoisie", an unprecedented piece of international cooperation to which radicals and idealists made a substantial contribution. He cites the involvement of Altiero Spinelli, a former member of the Italian Communist party interned by Mussolini on the island of Ventotene, who during his captivity secretly co-wrote a manifesto calling for a united Europe to replace the old one of competing nation states. The document was written in 1941, with the second world war raging, and had to be smuggled off the island. Anderson notes the path its co-author subsequently followed: "Forty years later, Spinelli ended his career . . . a member of the European commission and father of the European parliament, whose principal building in Brussels bears his name."
Anderson is much less approving of how the EU has generally developed since. But his criticisms are typically counterintuitive and original: "Today's EU, with its pinched spending (just over 1% of GDP), minuscule bureaucracy (around 16,000 officials, excluding translators), absence of independent taxation, and lack of any means of administrative enforcement, could in many ways be regarded as . . . a minimal state, beyond the most drastic imaginings of classical liberalism." The EU is too pro-business, expansionist territorially and yet too vague and diffident in its underlying mission and, above all, too pro-American. During the war on terror, Anderson continues scathingly, EU countries have "surrendered" to the demands of the United States: "Ireland furnished Shannon [airport] to the CIA for so many flights that locals dubbed it Guantánamo Express . . . Italy helped a large CIA team to kidnap . . . Poland . . . [had] torture-chambers constructed for 'high value detainees' – facilities unknown in the time of [the Soviet-backed] Jaruzelski's martial law."In such passages Anderson's unusual combination of mandarin foreign affairs knowledge and leftist sympathies gives the book a fierceness and a revelatory quality comparable to the best political works of Noam Chomsky.
For more: The New Old World by Perry Anderson | Book review | Books | The Guardian
But these wide-ranging problems of big banks range across the world, and not just in the US.
European banking giants such as Credit Suisse, Deutsche Bank, BNP Paribas, Barclays, UBS, HSBC and, to some extent, Royal Bank of Scotland (RBS) are all heavily involved in these bad practices.
While proprietary trading covers a wide range of activities, the part of it that could realistically be targeted by regulation accounts for just 1%-2% of a European bank's overall revenues, says Simon Maughan, co-head of equity research at MF Global Equally, he argues, European banks have been winding down their private equity functions and trading less in hedge funds". Such reforms would be a lot less ugly for European banks than for the likes of [US banks] JP Morgan and Bank of America."
German Chancellor Angela Merkel recently talked of vindication for the social market economy in the light of the global financial crisis that many in Europe have blamed on rampant Anglo-Saxon capitalism. French President Nicolas Sarkozy has made similar noises.
If the US and the UK do go ahead with Mr Obama's proposals and Europe does not, then European banks stand to gain an enormous competitive advantage, analysts say.
For more; BBC News - Obama's banking proposals: The impact on Europe