“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.
Europe
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.
German Unemployment Obfuscation
by Wolf Richter • • Comments Off on German Unemployment Obfuscation
One of the hardest things to get in this world is a truthful, or at least a somewhat realistic, or at the very least a not totally fabricated unemployment number. Every country has its own bureaucratic madness in pursuing obfuscation. And Germany is no exception. Official unemployment dropped to a two-decade low in January, but a recreational dive into the Federal Labor Agency’s monthly report reveals another story.
Greece, “The Bottomless Barrel,” As Germans Say
by Wolf Richter • • Comments Off on Greece, “The Bottomless Barrel,” As Germans Say
In Greece, three-quarters of the independent doctors, lawyers, and engineers declare taxable income below the existential minimum. Tax fraud amounts to €20 billion per year (8.5% of GDP). And tax dodgers owe €63 billion in unpaid taxes (27% of GDP). The country is bankrupt and has been kept afloat by the Troika (EU, ECB, and IMF), of which Germany is by far the largest contributor. But there is a plan. And it’s not an endless bailout.
China Tightened The Vise On Eurozone Bailout
by Wolf Richter • • 3 Comments
The EU filed a laundry list of complaints against Chinese dumping, from shoes to fasteners. Take ceramics. Household ceramics got hit last week; in 2011, building ceramics; in 2010, ceramic tiles—led to a punitive tax of 69.7%. Now, it has another target: Chinese steel. But the industry is the bully on the block. And it flexed its pumped-up muscles—and put at stake the very manna that European officials have been praying for.