Inflation pervades every aspect of our lives, from skyrocketing gasoline to rents to well, corruption. But inflation in the cost of under-the-table payments is notoriously difficult to measure, and so it’s not included in any of the indices. But in Germany, which is historically paranoid, and rightfully so, about inflation, after two wipe-outs in one generation, there’s progress: inflation in the cost of corruption can now be estimated.
Europe
The $10-Per-Gallon Gas Has Arrived, In Paris
by Wolf Richter • • 4 Comments
In early December, Christophe de Margerie, CEO of Total, the Exxon à la Française, shocked the French when he said that there was “no doubt” that a liter of gasoline would reach €2 and that the only question was when. He cited the calamities in the news at the time to justify the skyrocketing prices of oil and gasoline—source of Total’s mega profits. He was talking his book, obviously, which isn’t illegal, not even in France.
Plot Twist While French Businesses Are Dying
by Wolf Richter • • Comments Off on Plot Twist While French Businesses Are Dying
France, tangled up in a presidential election with major implications for the Eurozone, has gotten used to watching President Sarkozy getting clobbered in a historic fashion by socialist Hollande. But on Tuesday, the country woke up to the news—quelle horreur—that their presumed loser was suddenly ahead in the polls. Amidst this chaos, two fundamental cross currents in the French economy went practically unnoticed, though they should have caused an outburst of national soul searching.
“A harder Default To Come”
by Wolf Richter • • 11 Comments
“We owed it to our children and grandchildren to rid them of the burden of this debt,” said Greek Finance Minister Evangelos Venizelos about the bond swap that had just whacked private sector investors with a 74% loss. While everyone other than the bondholders was applauding, the drumbeat of Greece’s economic horror show continued in its relentless manner.
Greek Bonds, Dexia Trash, French Postal Service, & Profit
by Wolf Richter • • 5 Comments
Two freaks—Greek bonds and bailout-queen Dexia—wormed their way into an earnings announcement today, this one by the French postal service. It has its share of strategic problems and government interference, much like the United States Postal Service. But it made a profit and will pay a dividend to the French government. Only the USPS is run by 535 clueless micromanagers in Washington.
France: How to Demolish a 75% Income Tax
by Wolf Richter • • Comments Off on France: How to Demolish a 75% Income Tax
Socialist François Hollande, frontrunner in the French presidential election, tried to score some points against President Sarkozy—criticized for his cozy relationship with the rich. “I don’t like the rich,” he said and followed up on TV with two new income-tax brackets for the rich: 45% and 75%. But now a hullaballoo broke out, not among his targets, the corporate chieftains, but in the world of … soccer. And it’s killing the new tax.
Can’t Even Urinate in his own Yard Anymore
by Wolf Richter • • Comments Off on Can’t Even Urinate in his own Yard Anymore
While some people were fretting over Google’s new “privacy” policy that took effect March 1—“Calling this a ‘privacy policy’ is Orwellian doublespeak,” said John Simpson of Consumer Watchdog—others were counting Google AdSense dollars from their blogs. Ka-ching. Just then, an insidious and at once funny information-age issue erupted in France, or more precisely in a tiny village in Maine-et-Loire.
Next Phase in Merkel’s Desperate and Risky Gamble
by Wolf Richter • • Comments Off on Next Phase in Merkel’s Desperate and Risky Gamble
The conflict in the Eurozone has simmered for weeks. On one side: Chancellor Angela Merkel who is protecting her oeuvre. On the other: François Hollande who is running against President Sarkozy. But now, Merkel raised the stakes by roping in 3 powerful allies and lining them up against Hollande—a desperate and risky gamble to keep Sarkozy in power.
Deep Trouble at the Core of the Eurozone
by Wolf Richter • • Comments Off on Deep Trouble at the Core of the Eurozone
In France, new vehicle registrations are plunging: -17.8% in December, -20.7% in January, -20.2% in February. French automakers suffered the most. PSA Peugeot Citroën -29.2% and Renault -28.5%. The German auto industry is still basking in last year’s glow of record worldwide sales and profits, and record bonuses for their beaming employees. But so far this year, they have been stagnating. And it’s just the beginning.
Final Spasm: Greco-Teutonic Tax Wrestling
by Wolf Richter • • Comments Off on Final Spasm: Greco-Teutonic Tax Wrestling
In Germany, the top personal income tax rate is 45%. People in religious organizations pay an additional “church tax.” Other taxes are piled on top. And when the hapless taxpayer spends money, a 19% value added tax comes due. Hence, tax fraud is a national sport. Yet, 160 Ministry of Finance employees are supposed to fix the Greek tax collection system—which will endear the already reviled Germans even more to the Greeks.