Timing couldn’t have been worse. Or more opportune. A “secret” report by the German version of the CIA, the Bundesnachrichtendienst, bubbled to the surface, asserting that the bailout of Cyprus would use money from taxpayers in other countries to bail out mostly rich Russians who have over the years deposited their “black money” in Cypriot banks that are now collapsing.
Europe
Nationalizing Companies Is Part Of The French DNA
by Wolf Richter • • 6 Comments
In France, socialism isn’t a political movement that swept the elections this year, and it isn’t an economic philosophy that moved once again to the forefront, but it’s part of the DNA of much of the population. And it produces classic knee-jerk reactions to the current economic morass—such as the nationalization of tottering automaker Peugeot.
Desperate French Government Threatens To “Requisition” Vacant Buildings
by Wolf Richter • • 7 Comments
Prime Minister Ayrault made it official: the government would requisition vacant buildings regardless of who owned them and make them available to the homeless and the “badly housed.” In a few weeks, “an inventory” of buildings should be on his desk so that he could requisition the first properties “in January and February 2013.” A desperate move to halt the collapse of his numbers. And a broadside at investors.
Jérôme Kerviel Gets Slammed, Megabank Always Wins: This Is How Justice Is Done
by Wolf Richter • • Comments Off on Jérôme Kerviel Gets Slammed, Megabank Always Wins: This Is How Justice Is Done
A French appeals court threw the book at Jérôme Kerviel who, in 2008, had been hung out to dry by his employer, French mega-bank Société Générale, for having—so alleged the bank—blown €4.9 billion in no time without its knowledge, using trick and device to conceal his gigantic trades for years. But now, Kerviel and his lawyer lambasted the proceedings as having been rigged from the outset.
Competitiveness Cacophony: Attack On France’s Sacred Cow
by Wolf Richter • • Comments Off on Competitiveness Cacophony: Attack On France’s Sacred Cow
The French government has been flailing about to counter economic trends that started while Nicolas Sarkozy was still president. And one of the most bandied-about catchwords these days is “competitiveness”—entailing the cherished and untouchable 35-hour workweek, equally untouchable wages, and sky-high employer-paid payroll taxes and social security charges. An explosive mix.
French Government Fires Off Protectionism, Hits Consumers
by Wolf Richter • • Comments Off on French Government Fires Off Protectionism, Hits Consumers
That France’s economy is hurting is an understatement. Manufacturing and service indices tested depths not seen since 2009 during the trough of the financial crisis. Cited reasons: “unfavorable business climate and lack of visibility.” In its desperation, the government deployed its big gun, a man with a vision: Industry Minister Arnaud Montebourg. Him, with his big foot in his mouth.
German Industrialist: Insolvency Procrastination And How To Confront The Coming Inflation
by Wolf Richter • • Comments Off on German Industrialist: Insolvency Procrastination And How To Confront The Coming Inflation
A blatant act of fear mongering: if Greece were allowed to exit the Eurozone, it could end up costing the world €17.2 trillion, the study said; it would be “incumbent upon the community of nations to prevent” that. The study was commissioned by the powerful Bertlesmann Foundation, propagating the doctrine that certain bondholders must always be bailed out to prop up confidence in the financial markets. “Insolvency procrastination” is how a quintessential German industrialist responded.
Spain Is Losing Its People, Catalonia Fights For Independence, And The EU Gets Pushed Into The Conflict
by Wolf Richter • • 6 Comments
“Do you want Catalonia to become a new state within the European Union?” That may be the question on the referendum that is causing a constitutional crisis in Spain even before the final wording has been decided. Efforts by Artur Mas, President of Catalonia, to pry his region loose from Spain are not only shaking up Spain but are pushing the European Union deeper into the conflict—just as Spain is plunging into a demographic nightmare.
What do Henry Kissinger, Le Duc Tho, Yasser Arafat, Barak Obama, And The EU Have In Common?
by Wolf Richter • • 1 Comment
Maybe the Norwegian Nobel Committee ran out of candidates for this year’s Peace Prize and didn’t want to transfer the money to the Main Fund, as they’d done in the past. So they handed it to the European Union, which triggered an avalanche of snickering and mocking. Its government is engaged in a phenomenal power grab, and its Eurozone is mired in an extraordinarily screwed-up debt crisis with bloody protests in the streets. But peace is a new phenomenon in Europe.
Gold, Molotov Cocktails, Rubber Bullets, And Teargas: A Rift In Greece
by Wolf Richter • • 2 Comments
A Greek economist’s terse sarcasm: “GDP has decreased by €47 billion in the last five years. Economy is expected to contract by 3.8% in 2013, the 6th straight year of recession! Unemployment has reached 24.7%. Youth unemployment… 55.4%! No worries though—we have the sun, the sea, our cultural background.” And GOLD.