Europe greeted with excitement—or exasperation—the arrival of the “President of Growth,” François Hollande. And outgoing President Nicolas Sarkozy confirmed that he’d quit politics. He complained about journalists dogging him. “I’m spied on,” he said (ironically). “I hope they will leave me alone.” But that’s precisely what they won’t do because, on May 15, he’ll lose his immunity that has protected him against a ton of malodorous allegations.
Europe
Greece: “We Are Their Greatest Fear”
by Wolf Richter • • Comments Off on Greece: “We Are Their Greatest Fear”
“There are certain misconceptions that worry me: for instance, the misconception that whatever happens, we are not going to leave the euro,” said Evangelos Venizelos, former Finance Minister and president of the socialist Pasok party. But outraged Greeks are searching for alternatives, and on Sunday, they’ll get to vent their anger at the political elite.
David and Société Générale: Jérôme Kerviel Fights Back
by Wolf Richter • • Comments Off on David and Société Générale: Jérôme Kerviel Fights Back
Fighting back: Jérôme Kerviel, the meek-looking French guy who became famous in January 2008 as the junior trader who lost €4.9 billion at French mega-bank Société Générale. Accused of a litany of shenanigans, he was condemned to five years in prison, though he claimed that his bosses had known about and had tolerated his activities. He just couldn’t prove it…. until now.
Collapse of the EU a “Realistic Scenario”
by Wolf Richter • • Comments Off on Collapse of the EU a “Realistic Scenario”
“Over the past months, we experienced a worrisome trend toward re-nationalization and ‘summitization,’” said Martin Schulz, President of the European Parliament. Government leaders were becoming “more arrogant” and were attempting “to create a fiscal union outside the control of parliament.” His complaints went to the heart of democracy at the European level. And so, he said, the collapse of the EU was a “realistic scenario.”
“Drachma Clauses” For Greece’s Exit from the Eurozone
by Wolf Richter • • Comments Off on “Drachma Clauses” For Greece’s Exit from the Eurozone
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.