Lost among the other overnight news, was the launch of “a new chapter” for the EU as termed by Germany’s troubled chancellor Merkel. After her meeting with French President Macron on Tuesday, Merkel said Germany and France have agreed to cooperate to reform the EU’s asylum system as both “understand the topic of migration is a joint task” and “our goal remains a European answer to the challenge.” What she really meant is that if her government is toppled by the collapse of the CSU-CDU coalition – recall Merkel has a 2 week ultimatum to reach a solution on Germany’s treatment of refugees by July 1 – the rest of Europe gets it too, and the grand experiment is over.
Aside from immigration, the two leaders agreed to an in principle plan to strengthen the Euro area, including setting up a euro-area budget and a crisis backstop under the ESM (European stability mechanism), although they postponed decisions on some elements which could prove consequential. Chief among them: specifics on the size and conditions of the euro-area budget. Continue reading →
The rise to government of Eurosceptic parties is the consequence of austerity policies made in the name of cleaner public finances and of the euro convergence criteria.
Two Eurosceptic forces are now governing Italy. On one hand the 5-Star Movement, the anti-system party of Luigi de Maio founded by the humorist Beppe Grillo. On the other, far-right xenophobic Liga led by Matteo Salvini. How could this have happened? How did one of the European Union’s six founding members, host of Treaty of Rome in 1957, and for a long time the EU’s most Europhile country, give a parliamentary majority to groups so hostile to European integration? Continue reading →
For years there has been a struggle in the Eurozone between those that want to transform it into a transfer union and those that who want a Europe of independent and cooperating countries. The latter including Austria, Finland, the Netherlands and Germany want strict limits for deficits and debt brakes as envisioned in the Fiscal Stability Treaty. Some, such as the European Constitutional Group, even demand a mechanism for an orderly break-up of the Eurozone. The former including Mediterranean member states led by France, do not openly call their objective a fiscal union or the creation of a “European Super State” but prefer to talk about a “deepening of the European project.” The reason for this division is straightforward: The central and northern European countries would be the contributors to a transfer union while the club Med would be on the receiving side. Continue reading →
While the majority keep bashing the Federal Reserve, other central banks seem to escape any criticism. The European Central Bank under Mario Draghi has engaged in what history will call the Great Monetary Experiment of the 21st Century – the daring experiment of negative interest rates. A look behind the scenes reveals that this experiment has been not just a failure, it has undermined the entire global economic structure.Continue reading →
As mentioned several times in the past, Germany is running the European Union and Europe once again. This time around the conquest is via subjugation of national sovereignty and economic warfare. They have their key politicians in key positions across the European board. The European Commission, European Central Bank and International Monetary fund (the Troika) are all but one example. Regardless of how everything on the EU landscape currently looks, further federalization/integration is the only solution they keep proposing to their problems, and this is ultimately leading to a United States of Europe with its own European Army, which is already beginning to supplant NATO. The Fourth Reich has landed and if you’re looking for Nazis, you’re 70 years too late.
BERLIN/BRUSSELS (Own report) – The EU finance ministers’ decision to appoint the Spaniard Luis de Guindos to be vice president of the European Central Bank (ECB), will boost the chances of German Bundesbank President Jens Weidmann to become its next president. Berlin has welcomed the decision for Spain’s current Minister of the Economy Guindos, considered to be one of the fathers of the Spanish real estate bubble. Subsequent to his designation as vice-president, a northern European is expected to be given the post of ECB president, due to the EU’s proportional regional representation. According to observers, a conceivable deal may be reached with Germany’s Weidmann at the helm of the ECB and the post of EU Commission President going to France. The current German Bundesbank president is unpopular in Southern Europe because he has been systematically trying to prevent current ECB President Mario Draghi’s bond buying programs, considered to be vital for the crisis stricken countries. With Weidmann as ECB president, Germany would further tighten its grip on the euro zone’s financial institutions.
The European Central Bank has unveiled a new set of banking plans that will allow failing banks to freeze their deposits in the event of an economic catastrophe to prevent further bank failures.
The European Central Bank has unveiled a new set of banking plans that will allow failing banks to freeze their deposits in the event of an economic catastrophe to prevent further bank failures. Continue reading →
With one foot out of the door of Germany’s finance ministry, the former head of the German economy, Wolfgang Schäuble, 75, delivered a fire and brimstone warning over the weekend, telling the FT in an interview that there was a danger of “new bubbles” forming due to the trillions of dollars that central banks have pumped into markets. Schäuble also warned of risks to stability in the eurozone, particularly those posed by bank balance sheets burdened by the post-crisis legacy of non-performing loans, something we warned about since 2012, and an issue which remains largely unresolved.
Taking a broad swipe at the current financial regime – which he helped design – Schauble warned that the world was in danger of “encouraging new bubbles to form”. Continue reading →
I’ve just wrapped up a long trip to Japan. And I’ve taken away one lesson from all of my conversations, speeches and research: The rise of nationalism in the U.S. will cause massive shifts in global trade alliances.
One of the main beneficiaries will be Japan. Now, Japan might not be on your radar, day-to-day, but it’s about to play a very important role in the world of Donald Trump.
I reported previously that the European Commission is seeking to take the clearing of the Euro derivative transactions from London and move them to Paris. The European Central Bank (ECB) is warning that it must secure strong access rights for the supervision of the cross-border settlement of financial transactions after the departure of Great Britain from the EU. About 90%+ of all euro derivatives transactions are settled via clearing houses in London such as LCH.Clearnet. In the middle of a crisis, the ECB would have no power to shut the market to protect the euro from the free market forces. Of course, what they fail to grasp here is trying to seize the euro clearing and move it by decree to Paris will only undermine the euro even more. What will they do next? Forbid the euro to trade in New York, Chicago, or Asia? Do that and the euro will become a massive short.
In the Netherlands, the Forum For Democracy leader Thierry Baudet confronted Mario Draghi of the ECB asking that since he had said anyone leaving must pay the ECB and exit fee of whatever they owe, he said the Netherlands had €100bn surplus at the ECB they should get back is. Mario Draghi stated bluntly, NO! In other words, the view at the ECB is what is yours is their’s and what is theirs is theirs. We have put together a very important report on the Euro covering all the issues and why it is really doomed. Continue reading →