The arm-wrestling between the US and Switzerland over funds that US citizens have stashed away in Swiss bank accounts has been going on for years. In Germany, a similar fight has broken out, albeit with more consideration for the rich. Other governments, desperate for moolah, are also going after their own with funds in Switzerland. Now it turns out the Swiss themselves, long praised for their tax compliance, also evade taxes. But it’s “officially silenced to death.”
Europe
Letting Greece Twist In The Wind
by Wolf Richter • • 4 Comments
With impeccable timing, it seeped out that a group of experts at the German Finance Ministry is studying ways to deal with a Greek exit from the Eurozone. A spokesperson clarified helpfully on Friday, rather than denying it, that the group has been in existence for over a year. Impeccable timing because it happened as Greek Prime Minister Antonis Samaras was arriving in Berlin for his begging expedition. German Chancellor Angela Merkel must have smiled. The heat was on.
Central Banks, The Veil Of Secrecy, A Hotbed of Corruption, And Now Another One Got Ensnared
by Wolf Richter • • 3 Comments
Central banks are designed to be “independent,” and they shroud themselves in secrecy. But they have formidable and, when it comes to money, “unlimited” powers that they harness for the benefit of their clientele, banks. And hiding behind their veil of secrecy are shenanigans that rarely seep to the surface, but when they do, they just get worse and worse. The latest is a sordid bribery and kickback scandal at the Reserve Bank of Australia that appeared to be neatly contained to two subsidiaries, until now.
Euro Optimism Surges, A Greek Tax Revolt Flares Up: It’s Decision Time, Again
by Wolf Richter • • 7 Comments
Euro optimism is once again gushing through the system on the hope that the debt crisis could be wished away with a nod by German Chancellor Angela Merkel or with a wink by the Bundesbank at the European Central Bank, which is dying to print unlimited amounts of moolah to buy sovereign bonds—and old bicycles, if it has to—in order to force yields down for debt-sinner countries like the US Spain and Italy. But in Greece there has been an incident.
A Cacophony Of Discord, Default, And Visions Of Impossibility
by Wolf Richter • • 5 Comments
The Eurozone wasn’t supposed to be a house of cards. And as long as there was “confidence” that it would work, it worked: the financial markets offered cheap no-questions-asked loans to the most profligate governments that sucked up phenomenal amounts of money. But all that remains from this drunken frenzy are mountains of decomposing debt. Now taboos are violated, sacred cows are slaughtered, and the euro has been tossed on the chopping block.
The Greek Bailout Sham Is Getting Gummed Up
by Wolf Richter • • 5 Comments
“Default is not necessarily destructive,” said Panayiotis Lafazanis, a Greek politician. “It is a weapon of the weak when they reach the point of not being able to pay their debts.” Closer to the truth than anything else emanating from Greek politics. “Not necessarily destructive” for the Greeks, but highly destructive for the European Central Bank that ended up with the Greek bonds; and for banks with derivative exposure to them. Hence the bailouts. To keep the bondholders afloat, not the Greeks—no one wants to recapitalize the ECB.
German Bailout Rebellion: “We Have Euro-Anarchy”
by Wolf Richter • • 4 Comments
For German Chancellor Angela Merkel and her ilk, it’s going to be a steamy August and an even steamier September and October with political battles left and right, to be fought mano a mano, as the Eurozone debt crisis and the growing bailout rebellion in Germany are migrating from parliamentary discussions, closed-door meetings, and shaky EU summits—21 of them so far—to electoral politics. Voters may finally have a say. And it doesn’t look good for the euro.
The Political Euro Revolt Spreads To Austria: “Europe Can Only Function If Every Country Has Its Own Currency”
by Wolf Richter • • 1 Comment
Germany and Austria may have their differences, and their love for each other may not always be palpable, but when it comes to money, they’re joined at the hip. And have been for decades. The peg of the Austrian schilling to the Deutsche mark that was put in place in the early 1970s survived even external shocks, for example when Italy devalued the lira on January 6, 1990, or again on September 14, 1992. Now the euro debate took on sharp tones in Austria. With a new theme: “Insolvency Procrastination.”
Is The Greek Calamity Economy Headed For Revolt?
by Wolf Richter • • Comments Off on Is The Greek Calamity Economy Headed For Revolt?
“Dire” is no longer the right word to describe the situation in Greece. Unemployment hit 23.1% in May, according to ELSTAT, the Greek statistical agency, which released the report on August 9. That it takes over two months to do a job—producing unemployment numbers—that other countries accomplish in a couple of weeks may be symptomatic of Greece’s calamity economy. And a calamity it is.
Greece Prints Euros To Stay Afloat, The ECB Approves, The Bundesbank Nods, No One Wants To Get Blamed For Kicking Greece Out
by Wolf Richter • • 7 Comments
A lot of politicians in Germany and elsewhere issue zingers about a Greek exit from the Eurozone. Yet those with decision-making power play for time. They want someone else to do the job. Suddenly Greece is out of money again. Default date: August 20. A €3.2 billion bond matures. Europe is on vacation. It will be mayhem. And somebody will get blamed. But there’s one solution….