BERLIN/KIEV/BERN (Own report) – In the aftermath of the Western-oriented putsch in Kiev, German politicians are preparing German public opinion for the disastrous deterioration of the Ukraine economic situation. Even though it was most recently suggested that the country could only expect a thriving development by linking up to the EU, it is now – truthfully – being announced that Ukraine is practically bankrupt. The CDU European parliamentarian, Elmar Brok, predicts “difficult times” ahead: “It has never rained gold coins, except in fairy tales.” In fact back in the fall, experts had already indicated that, because of its out-dated industry, the Ukraine would have to expect dramatic economic slumps if it signs the EU Association Agreements – unemployment and poverty would dramatically rise. In a position paper, the Berlin-based German Institute for International and Security Affairs (SWP) is now proposing the introduction of a special status in EU ties for the Ukraine as well as other countries, such as Turkey. This sort of EU “second ring” would also permit the economic integration of such countries as Switzerland, which politically resists joining the EU. The SWP contends that these plans could also be used for Catalonia, should it secede from Spain and Scotland, from Britain. Continue reading
The project to impose political union is bringing economic ruin, making the legitimacy of the EU project ever more vulnerable
On the face of it, they seem worlds apart. Switzerland’s referendum vote against the free movement of labour, the ruling by the German Constitutional Court on the European Central Bank’s (ECB) attempts to save the euro, and the warning to Scotland that it won’t be allowed to keep the pound if it votes for independence – these might seem unrelated, but in truth they are all part of an increasingly explosive stand-off between the forces of national sovereignty on the one hand, and political and economic integration on the other. Continue reading
Last week’s ‘thunderbolt’ ruling on eurozone rescue policies by Germany’s top court marks a serious escalation of Europe’s governance crisis and may ultimately force Germany to withdraw from the euro, the country’s most influential magazine has warned.
A sweeping report by Der Spiegel said the court ruling amounts to a full-blown showdown between Germany and the European Central Bank over the methods to shore up southern Europe’s debt markets.
“It is nothing less than a final reckoning with the crisis-management strategy pursued by the ECB. The German justices insist that the German constitution sets limits on the ECB’s crisis strategy. In a worst-case scenario, the Court could forbid Berlin from contributing to efforts to save the euro or even force Germany to leave the currency zone entirely,” it said. Continue reading
The World Bank’s former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system.
“The dominance of the greenback is the root cause of global financial and economic crises,” Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank. “The solution to this is to replace the national currency with a global currency.” Continue reading
European Central Bank head Mario Draghi says Japanese-style stagnation possible amid high unemployment and falling inflation
The European Central Bank sent the euro tumbling on world markets after it warned that the 18-member currency zone may need further support to prevent a Japanese-style period of stagnation.
The ECB president, Mario Draghi, said persistently high unemployment, falling inflation and difficult lending conditions were harming the recovery, and the ECB stood ready to use all the tools available to maintain confidence and growth. Continue reading
Berlin – While the eurozone crisis in 2013 lingered in most countries, Germany seemed to be doing better than ever.
It had low unemployment, high productivity and exports so strong that the European Commission asked it to do more to help ailing periphery countries in the single currency bloc.
Merkel’s “safe pair of hands” are appreciated by Germans. They like her cautious governing style; the fact that she rarely rushes into decisions. Continue reading
Whether it’s the renminbi/yuan or the Euro, for example, the world could indeed live on without the Dollar and has already created a way to circumvent it — just as the BRICS nations are attempting to launch their own internet system, separate from the currently U.S. dominated version. This article serves as a case-in-point.
An announcement Tuesday by the obscure-sounding Society for Worldwide Interbank Financial Telecommunication, better known as SWIFT, may not get much ink. China’s currency, it reported, was used in 8.66 percent of global trade finance transactions in October, the group said. It’s now the No. 2 most widely used currency for trade finance, supplanting the euro.
But that is a lot more important than it might sound. It gives an important window into how the global economy is changing–and why America’s long reign of economic dominance is at risk. Continue reading
The 100-year period from 1815 until World War I began in 1914 was one of Europe’s greatest periods of peace ever. But consider what happened during those years: France invaded Spain; Russia fought Turkey; various German states fought with Denmark, Austria and France; Britain and Turkey fought Russia; and Greece fought Turkey. Those are just the “highlights”—and they don’t include the numerous internal conflicts, uprisings, declarations of independence and other political unrest that occurred. Even Switzerland had a civil war.
That is what “peace” in Europe looked like before the latter half of the 20th century. Continue reading
Chancellor Angela Merkel wants the next government to be unified on its EU policy, but her sister party is resorting to populism. Bavaria’s Christian Social Union wants tougher provisions against deficit offenders and the ability to drive them out of the euro zone.
What they didn’t reveal is the fact that the 12-page paper they negotiated in a working group covering European issues also includes a short note that has been appended to the minutes. In the text, which has been seen by SPIEGEL ONLINE, the CSU, the Bavarian sister party to Merkel’s CDU, calls for repeat deficit offenders to exit the euro zone. Continue reading
China’s leadership will soon usher in bold reforms to support a domestic consumption-driven economic model, and globalizing the renminbi as an alternative store of wealth to the US dollar is at the center of the strategy.
The scathing commentary published by China’s state-owned Xinhua news agency calling for a ‘de-Americanized world’ was undoubtedly music to the ears of many in the developing world. The article – published during the recent fiscal deadlock – accused Washington of abusing its superpower status by engaging in unwarranted military conflicts, engineering regime changes with impunity, and mishandling its status as the issuer of the world reserve currency by exporting risk abroad. Xinhua’s commentary also called for drastic reforms of the IMF and World Bank to reflect the growing muscle of the developing world, and most significantly, “the introduction of a new international reserve currency that is to be created to replace the dominant US dollar.” Continue reading
China entered into a sizable currency swap deal with the eurozone this month that represents a stride toward establishing the yuan and euro as key world currencies. The agreement also means fewer U.S. dollars will be used in commerce between China and Europe.
“The agreement is one of the largest currency deals between China and a non-Asian trading partner,” Alanna Petroff wrote for CNN Money on October 10. Continue reading
LUXEMBOURG — The European Union on Tuesday took another step to shore up its battered banking sector after Britain agreed to new rules placing many of the largest lenders in the euro area under the supervision of the European Central Bank.
The British decision, which was announced at a monthly meeting of the bloc’s finance ministers here, clears the way for the E.C.B. to take over as the single supervisor late next year. Continue reading