Greek banks just reported €28.2 billion in losses for the year 2011. Almost 13% of GDP! But no worries. €25 billion in rescue funds were lined up as part of Greece’s bailout package. The banks, not the Greeks themselves, are getting bailed out. But, “solidarity of the union has its limits,” said even soft-spoken Jens Weidmann, President of the Bundesbank. “That’s why we linked the aid to conditions….”
Pushing The Euro To The Brink
by Wolf Richter • • Comments Off on Pushing The Euro To The Brink
“There is no more risk that the euro will implode,” declared French President Sarkozy two days before the first round of the election. “The crisis is finished,” he said a few weeks ago. Thanks to his leadership. However, François Hollande, the socialist challenger and likely winner, has a prescription for fixing the very crisis Sarkozy declared finished—an ambitious plan that might lead to the break-up of the Eurozone.
But the PIIGS Get to Live Longer
by Wolf Richter • • Comments Off on But the PIIGS Get to Live Longer
Germans work longer hours and retire later than many of their brethren in Europe, and after many years of shrinking real wages, they don’t even get paid that much anymore. But it succeeded, at least temporarily, and the dour mood of yore has been superseded by exuberance about their superior economic model. And what do Germans get for their hard work? Well, probably a lot—but the one thing they’re not getting is extra time to live.
Escalation in Euro Rift: Bundesbank Gets Sued for Perfidy
by Wolf Richter • • Comments Off on Escalation in Euro Rift: Bundesbank Gets Sued for Perfidy
“Target 2” used to be a mundane part of the European System of Central Banks that people didn’t pay attention to. The ECB would borrow from the central bank of one Eurozone country and lend to the central bank of another. But in 2008, as capital flight from peripheral countries heated up, credit flows became one-sided and mushroomed with each outbreak of the crisis. And now it’s threatening Germany.
What On Earth Were They Thinking at GM?
by Wolf Richter • • Comments Off on What On Earth Were They Thinking at GM?
To save $2 billion in some distant year—at least that’s the official story—GM bought 7% of French automaker PSA Peugeot Citroën. Perhaps it hoped that the alliance would bail out its bleeding subsidiary Opel. But what GM bought into was one of the most uncompetitive automakers in one of the toughest auto markets in the world. And there is no happy end in sight.
The Big Rift Between Germany and France
by Wolf Richter • • Comments Off on The Big Rift Between Germany and France
The crowd at the Place de la Concorde in Paris on Sunday, one week before the first round of elections, had come to hear French President Nicolas Sarkozy beg for his job. And politicians were listening warily … in Germany. He’d already shocked them in March when he’d declared that he wanted to renegotiate the Schengen Treaty. Now he went after the independence of the European Central Bank. Germany’s answer was swift.
Those Scammers on Wall Street
by Wolf Richter • • Comments Off on Those Scammers on Wall Street
Tokyo, June 1996. Wouter the Dutch guy’s words course through my head like a refrain in a traveler ballad: You’ve got to go to Russia, you’ve got to go see Inga in Irkutsk. And I’m researching the first steps in that direction at the Maruzen Bookstore in Ochanomizu, which has a gaijin corner with a Lonely Planet shelf. I pull out Russia. But next to it are other evocative titles, like Vietnam, China, and Mongolia.
Suddenly A Nasty Fight over Subsidies for Nukes in Europe
by Wolf Richter • • Comments Off on Suddenly A Nasty Fight over Subsidies for Nukes in Europe
The meltdowns at Fukushima that have caused so much havoc have also paralyzed Japan’s nuclear power industry. The last of its 54 reactors will be taken off line in May. “Deindustrialization” grips power-starved Japan. TEPCO, owner of the plant, is bailed out with trillions of yen in taxpayer money. And now, halfway around the world, in the EU, nuclear power is lining up to suck at the teat of the taxpayer, but ingeniously, those in other countries.
A Greek Impossibility: 2 Millions Missing Jobs
by Wolf Richter • • Comments Off on A Greek Impossibility: 2 Millions Missing Jobs
It’s not like the hapless Greeks—and by extension their foreign sponsors—don’t already have enough problems on their hands. Now comes the Hellenic Statistical Authority with its just released Labor Survey that showcases a job market and unemployment issues that were the ugliest ever. And within this sobering picture there was one number that knocked the breath out of hope itself.
A Grimy Dipstick into France’s Gritty Economic Realty
by Wolf Richter • • Comments Off on A Grimy Dipstick into France’s Gritty Economic Realty
The first quarter of 2012 was brutal for businesses in France: 16,206 filed for bankruptcy. A trajectory that may demolish the prior annual record set in 2009 during the financial crisis when 61,595 firms went bust. Since then, bankruptcy filings eased off. Now the direction has changed—and worse, it is hitting larger companies and a lot more jobs. But the French have a solution, one that would violate fundamental rules of the EU.