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ok ok so if we are all ruled by zionists how come stuff like this happens?
EU rejects Israeli request to blacklist Hezbollah
Eurozone crisis live: Unemployment rate hits new high of 11.1%
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ok ok so if we are all ruled by zionists how come stuff like this happens?
EU rejects Israeli request to blacklist Hezbollah
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HÖLDERLIN;3243262 said:
we are reading too many news about German unwillingness to stick with Euro. how is the environment in Germany? what opinion people have about continuing with EU or kicking it in a 'decent' way, which won't hurt others, mainly to British/US's rulers?
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Euro crisis: Eurozone unemployment at record high; hope fades for quick ECB cure
ROME/FRANKFURT: Joblessness in the euro zone hit on Tuesday its highest level since the single currency was born, a further sign of economic desperation as hopes erode that the bloc will be saved by its central bank this week.
An additional 123,000 people were out of work in the euro zone in June, figures from Eurostat showed, bringing the unemployment rate to a record high 11.2 percent across the 17 countries that use the single currency.
The rate hides wide divergences, with unemployment as low as 4.5 percent in Austria and as high as 24.8 percent in Spain, where a shrinking economy makes it ever more difficult to pay off debt.
New data showed capital fleeing Spanish banks at a growing rate. Spain has come dangerously close to losing affordable access to financial markets, raising the prospect of a bailout that would swamp the euro zone's hastily erected defences. If Spain goes, Italy, with an economy twice the size, could follow.
Euro zone leaders have spent the past week issuing statements promising to take whatever steps are necessary to rescue the currency, but none have raised expectations as much as Mario Draghi, head of the European Central Bank.
His announcement last Thursday that the ECB would do whatever within its mandate to rescue the currency raised expectations that he will deliver forceful new steps this week to lower Spanish and Italian borrowing costs. But market sentiment has since soured, showing that investors doubt whether he can deliver.
Germany, which says it is illegal for the ECB to bankroll government borrowing, squelched talk of any easing of its opposition to letting the euro zone's rescue fund borrow from the ECB so it could buy almost unlimited quantities of government bonds.
Italian Prime Minister Mario Monti, who has campaigned for concerted action by the euro zone's rescue funds and the ECB to bring down ruinous borrowing costs for Spain and Italy, struck an optimistic tone.
"It is a tunnel but ... some light is appearing at the end of the tunnel. We and the rest of Europe are approaching the end of the tunnel," he told RAI public radio before talks in Paris with French President Francois Hollande.
Monti said decisions taken at an EU summit last month were starting to bear fruit. "We are now seeing the results both in the willingness of European institutions as well as from the governments of individual countries, including Germany," he said.
After lunching with Hollande, he said there was no time to lose and they had discussed deadlines, adding: "We cannot afford even a minute of distraction."
The ECB's Draghi promise last week to act to preserve the euro raised investors' expectations of a resumption of a long-suspended government bond-buying programme. Investors are waiting to see what the ECB announces at a meeting of its policy-setting Governing Council on Thursday.
"Today will probably be a quiet last day of the month. Everybody is waiting for Thursday to see if Draghi can deliver," said Lex van Dam, hedge fund manager at Hampstead Capital, which manages $500 million of assets. "He'd better pull a big rabbit out of his hat." However, central bank sources cautioned against expecting dramatic action, saying bold moves could be at least five weeks away because other elements must first fall into place.
They said Spain would first have to formally request a euro zone assistance programme, which it has so far resisted doing, and euro zone governments would have to agree to use their rescue funds to buy bonds in tandem with the ECB.
Safe-haven German government bonds rallied on Tuesday and European shares fell as scepticism over the prospect of bold ECB action set in and Berlin repeated its opposition to a banking licence for the rescue fund.
MONEY FLEES SPAIN
Monti, who will also visit Finland and Spain, said he was confident Spanish Prime Minister Mariano Rajoy would be able to tackle the country's problems.
The scale of Rajoy's challenge was highlighted on Tuesday when figures showed that capital flight from Spain accelerated in May, the month when Madrid was forced to nationalise the fourth biggest lender, Bankia, and before euro zone countries agreed to help bail out Spanish banks.
Capital outflows in the first five months of this year totalled 163.2 billion euros - equivalent to about 16 percent of economic output. The same period last year saw a net inflow of 14.6 billion euros.
Spanish retail sales fell by 5.2 percent year-on-year on a calendar-adjusted basis in June, separate data showed, marking a 24th straight month of declines. Near-bankrupt Greece meanwhile reported that it is fast running out of cash as it awaits the next instalment of aid from international lenders.
Deputy Finance Minister Christos Staikouras said that in the absence of 3.2 billion euros needed to repay an ECB bond on Aug. 20, Athens would lack the money to pay everyday public expenses ranging from police and other public service wages to pensions and welfare benefits.
"Cash reserves are almost zero," he told state NET television. "It is risky to say until when (they will last) ... but we are certainly on the brink."
REWARD HARD CHOICES
Speaking to reporters in London on Monday evening, Hollande voiced support for Monti's campaign to persuade euro zone leaders and institutions to act to reduce Italian and Spanish borrowing costs. "European solidarity is of course about laying down discipline, but it's also about allowing countries that made hard choices to be rewarded with lower interest rates," Hollande said during a visit to the Olympic Games.
"If countries undertake austerity measures and still have very high interest rates, how can they win the trust of their people?" he said. Monti spoke by telephone over the weekend with German Chancellor Angela Merkel, who is holidaying in northern Italy.
Berlin agreed in principle at an EU summit in June that the euro zone rescue funds could buy bonds of countries that risk losing market access, but was angered when Monti said that such support should not entail any stricter economic conditions or international monitoring.
There has also been renewed pressure from France, Italy and some central bankers to give the euro zone's future permanent rescue fund a banking licence so it can borrow money from the central bank to fight bond market contagion.
The Sueddeutsche Zeitung said supporters of the idea were gaining ground in the euro zone, but the German Finance Ministry reiterated its opposition on Tuesday, sending markets down. A legal opinion commissioned by the ECB in March 2011 concluded that such a move would breach an EU treaty ban on monetary financing of governments.
Euro crisis: Eurozone unemployment at record high; hope fades for quick ECB cure - The Economic Times
ROME/FRANKFURT: Joblessness in the euro zone hit on Tuesday its highest level since the single currency was born, a further sign of economic desperation as hopes erode that the bloc will be saved by its central bank this week.
An additional 123,000 people were out of work in the euro zone in June, figures from Eurostat showed, bringing the unemployment rate to a record high 11.2 percent across the 17 countries that use the single currency.
The rate hides wide divergences, with unemployment as low as 4.5 percent in Austria and as high as 24.8 percent in Spain, where a shrinking economy makes it ever more difficult to pay off debt.
New data showed capital fleeing Spanish banks at a growing rate. Spain has come dangerously close to losing affordable access to financial markets, raising the prospect of a bailout that would swamp the euro zone's hastily erected defences. If Spain goes, Italy, with an economy twice the size, could follow.
Euro zone leaders have spent the past week issuing statements promising to take whatever steps are necessary to rescue the currency, but none have raised expectations as much as Mario Draghi, head of the European Central Bank.
His announcement last Thursday that the ECB would do whatever within its mandate to rescue the currency raised expectations that he will deliver forceful new steps this week to lower Spanish and Italian borrowing costs. But market sentiment has since soured, showing that investors doubt whether he can deliver.
Germany, which says it is illegal for the ECB to bankroll government borrowing, squelched talk of any easing of its opposition to letting the euro zone's rescue fund borrow from the ECB so it could buy almost unlimited quantities of government bonds.
Italian Prime Minister Mario Monti, who has campaigned for concerted action by the euro zone's rescue funds and the ECB to bring down ruinous borrowing costs for Spain and Italy, struck an optimistic tone.
"It is a tunnel but ... some light is appearing at the end of the tunnel. We and the rest of Europe are approaching the end of the tunnel," he told RAI public radio before talks in Paris with French President Francois Hollande.
Monti said decisions taken at an EU summit last month were starting to bear fruit. "We are now seeing the results both in the willingness of European institutions as well as from the governments of individual countries, including Germany," he said.
After lunching with Hollande, he said there was no time to lose and they had discussed deadlines, adding: "We cannot afford even a minute of distraction."
The ECB's Draghi promise last week to act to preserve the euro raised investors' expectations of a resumption of a long-suspended government bond-buying programme. Investors are waiting to see what the ECB announces at a meeting of its policy-setting Governing Council on Thursday.
"Today will probably be a quiet last day of the month. Everybody is waiting for Thursday to see if Draghi can deliver," said Lex van Dam, hedge fund manager at Hampstead Capital, which manages $500 million of assets. "He'd better pull a big rabbit out of his hat." However, central bank sources cautioned against expecting dramatic action, saying bold moves could be at least five weeks away because other elements must first fall into place.
They said Spain would first have to formally request a euro zone assistance programme, which it has so far resisted doing, and euro zone governments would have to agree to use their rescue funds to buy bonds in tandem with the ECB.
Safe-haven German government bonds rallied on Tuesday and European shares fell as scepticism over the prospect of bold ECB action set in and Berlin repeated its opposition to a banking licence for the rescue fund.
MONEY FLEES SPAIN
Monti, who will also visit Finland and Spain, said he was confident Spanish Prime Minister Mariano Rajoy would be able to tackle the country's problems.
The scale of Rajoy's challenge was highlighted on Tuesday when figures showed that capital flight from Spain accelerated in May, the month when Madrid was forced to nationalise the fourth biggest lender, Bankia, and before euro zone countries agreed to help bail out Spanish banks.
Capital outflows in the first five months of this year totalled 163.2 billion euros - equivalent to about 16 percent of economic output. The same period last year saw a net inflow of 14.6 billion euros.
Spanish retail sales fell by 5.2 percent year-on-year on a calendar-adjusted basis in June, separate data showed, marking a 24th straight month of declines. Near-bankrupt Greece meanwhile reported that it is fast running out of cash as it awaits the next instalment of aid from international lenders.
Deputy Finance Minister Christos Staikouras said that in the absence of 3.2 billion euros needed to repay an ECB bond on Aug. 20, Athens would lack the money to pay everyday public expenses ranging from police and other public service wages to pensions and welfare benefits.
"Cash reserves are almost zero," he told state NET television. "It is risky to say until when (they will last) ... but we are certainly on the brink."
REWARD HARD CHOICES
Speaking to reporters in London on Monday evening, Hollande voiced support for Monti's campaign to persuade euro zone leaders and institutions to act to reduce Italian and Spanish borrowing costs. "European solidarity is of course about laying down discipline, but it's also about allowing countries that made hard choices to be rewarded with lower interest rates," Hollande said during a visit to the Olympic Games.
"If countries undertake austerity measures and still have very high interest rates, how can they win the trust of their people?" he said. Monti spoke by telephone over the weekend with German Chancellor Angela Merkel, who is holidaying in northern Italy.
Berlin agreed in principle at an EU summit in June that the euro zone rescue funds could buy bonds of countries that risk losing market access, but was angered when Monti said that such support should not entail any stricter economic conditions or international monitoring.
There has also been renewed pressure from France, Italy and some central bankers to give the euro zone's future permanent rescue fund a banking licence so it can borrow money from the central bank to fight bond market contagion.
The Sueddeutsche Zeitung said supporters of the idea were gaining ground in the euro zone, but the German Finance Ministry reiterated its opposition on Tuesday, sending markets down. A legal opinion commissioned by the ECB in March 2011 concluded that such a move would breach an EU treaty ban on monetary financing of governments.
Euro crisis: Eurozone unemployment at record high; hope fades for quick ECB cure - The Economic Times
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Euro zone factory sector contracts for 11th month in July: PMI
LONDON: The euro zone's manufacturing sector contracted for the 11th straight month in July as output and new orders plummeted, a business survey found on Wednesday.
The data, which showed the downturn is deepening its roots in the core, will provide grim reading for policymakers who are battling to contain a debt crisis that has raged across the continent.
Markit's Eurozone Purchasing Managers' Index (PMI) for the manufacturing sector fell to 44.0, the lowest reading since June 2009 and below a flash reading of 44.1 and June's 45.1.
The output index sank to 43.4, the lowest since May 2009, under June's 44.7 and an earlier flash 43.6. Markit said it was in line with the official measure of production falling at a quarterly rate of over 1 per cent.
"The euro zone manufacturing sector's woes intensified again in July. Manufacturing therefore looks to be on course to act as a major drag on economic growth in the third quarter, as the euro zone faces a deepening slide back into recession," said Chris Williamson at Markit.
After stagnating in the first quarter, narrowly avoiding a technical recession, a raft of gloomy data pushed economists in a Reuters poll last month to predict a contraction in the second and third quarters.
In a bid to spur growth the European Central Bank cut interest rates to a record low of 0.75 per cent in June and is expected to cut them again to 0.5 per cent before the year is out.
At its policy meeting on Thursday, it is expected to restart its dormant government bond buying programme with the aim of lowering Spanish and Italian government bond yields, which have reached levels unsustainable in the long-term.
Bank President Mario Draghi vowed last week that "the ECB is ready to do whatever it takes to preserve the euro".
Core Troble
Earlier data from Germany, Europe's largest economy, showed its manufacturing sector contracted at its fastest pace in three years last month and it was a similar story in neighbouring France.
Spain, which slid deeper into recession in the second quarter, saw the 15th straight month of contraction, while Italy chalked up a year in contractionary territory.
The PMI for Greece, where the debt crisis began, has been below 50 since September 2009. Ireland was the only country to show signs of emerging from the downturn, Markit said, where its PMI was above 50 for the fifth month.
Euro zone factory sector contracts for 11th month in July: PMI - The Economic Times
LONDON: The euro zone's manufacturing sector contracted for the 11th straight month in July as output and new orders plummeted, a business survey found on Wednesday.
The data, which showed the downturn is deepening its roots in the core, will provide grim reading for policymakers who are battling to contain a debt crisis that has raged across the continent.
Markit's Eurozone Purchasing Managers' Index (PMI) for the manufacturing sector fell to 44.0, the lowest reading since June 2009 and below a flash reading of 44.1 and June's 45.1.
The output index sank to 43.4, the lowest since May 2009, under June's 44.7 and an earlier flash 43.6. Markit said it was in line with the official measure of production falling at a quarterly rate of over 1 per cent.
"The euro zone manufacturing sector's woes intensified again in July. Manufacturing therefore looks to be on course to act as a major drag on economic growth in the third quarter, as the euro zone faces a deepening slide back into recession," said Chris Williamson at Markit.
After stagnating in the first quarter, narrowly avoiding a technical recession, a raft of gloomy data pushed economists in a Reuters poll last month to predict a contraction in the second and third quarters.
In a bid to spur growth the European Central Bank cut interest rates to a record low of 0.75 per cent in June and is expected to cut them again to 0.5 per cent before the year is out.
At its policy meeting on Thursday, it is expected to restart its dormant government bond buying programme with the aim of lowering Spanish and Italian government bond yields, which have reached levels unsustainable in the long-term.
Bank President Mario Draghi vowed last week that "the ECB is ready to do whatever it takes to preserve the euro".
Core Troble
Earlier data from Germany, Europe's largest economy, showed its manufacturing sector contracted at its fastest pace in three years last month and it was a similar story in neighbouring France.
Spain, which slid deeper into recession in the second quarter, saw the 15th straight month of contraction, while Italy chalked up a year in contractionary territory.
The PMI for Greece, where the debt crisis began, has been below 50 since September 2009. Ireland was the only country to show signs of emerging from the downturn, Markit said, where its PMI was above 50 for the fifth month.
Euro zone factory sector contracts for 11th month in July: PMI - The Economic Times
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India suffer heavy Trade Deficit with EU but its still not helping EU's economies 
Free Economy Photos, Images, Market Infographics, Stocks Picture Gallery - Financial Express
Free Economy Photos, Images, Market Infographics, Stocks Picture Gallery - Financial Express
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Debt crisis: eurozone economy contracts by 0.2pc in second quarter
Official Eurostat data showed that the eurozone contracted by 0.2pc in the three months to the end of June, compared with zero growth in the first three months of the year.
A breakdown of the data confirmed a 0.4pc contraction in Spain, 0.7pc in Italy and 1.2pc in Portugal, highlighting the plight of the bloc's southern states.
Germany continued to buck the trend, posting 0.3pc growth in the second quarter, while Austria and the Netherlands grew by 0.2pc. However the northern countries were not immune to the downturn. The data showed that Finland's AAA economy contracted by 1pc in the second quarter. The EU economy as a whole also contracted by 0.2pc, Eurostat said.
Earlier, Destatis, Germany's statistics office, said that robust domestic demand and a healthy export sector helped Europe's biggest economy grow by more than expected in the second quarter.
However, more recent data have suggested that the slowdown in Germany is becoming more pronounced.
A respected survey conducted by ZEW showed on Tuesday that investor sentiment had fallen for a fourth straight month to -25.5 in August from -19.6 in July, well below the "0" neutral level., as confidence within the automobile and engineering sectors plummeted.
"The indicator's decline in August signals that financial market experts still expect the German economy to cool down throughout the next six months. Especially export-oriented sectors may be affected," ZEW said.
Carsten Brezeski at ING said: "The [German] economy remains the stronghold of the euro zone. However, another strong quarter merely glosses over the fact that even the stronghold has already caught the euro crisis virus.
"The safety net of richly filled order books and low inventories has become thinner very rapidly, not boding well for growth in the second half of the year."
Analysts have cast doubt over Germany's ability to keep the eurozone out of recession. Aline Schuiling, senior economist at ABN AMRO, said:
"We do not think that Germany on its own can keep the entire eurozone afloat.
"Despite the positive growth number for Germany, we expect total euro zone GDP to have contracted by around 0.4pc on the quarter in the second quarter, as severe fiscal austerity is pulling most economies into recession."
Debt crisis: eurozone economy contracts by 0.2pc in second quarter - Telegraph
Official Eurostat data showed that the eurozone contracted by 0.2pc in the three months to the end of June, compared with zero growth in the first three months of the year.
A breakdown of the data confirmed a 0.4pc contraction in Spain, 0.7pc in Italy and 1.2pc in Portugal, highlighting the plight of the bloc's southern states.
Germany continued to buck the trend, posting 0.3pc growth in the second quarter, while Austria and the Netherlands grew by 0.2pc. However the northern countries were not immune to the downturn. The data showed that Finland's AAA economy contracted by 1pc in the second quarter. The EU economy as a whole also contracted by 0.2pc, Eurostat said.
Earlier, Destatis, Germany's statistics office, said that robust domestic demand and a healthy export sector helped Europe's biggest economy grow by more than expected in the second quarter.
However, more recent data have suggested that the slowdown in Germany is becoming more pronounced.
A respected survey conducted by ZEW showed on Tuesday that investor sentiment had fallen for a fourth straight month to -25.5 in August from -19.6 in July, well below the "0" neutral level., as confidence within the automobile and engineering sectors plummeted.
"The indicator's decline in August signals that financial market experts still expect the German economy to cool down throughout the next six months. Especially export-oriented sectors may be affected," ZEW said.
Carsten Brezeski at ING said: "The [German] economy remains the stronghold of the euro zone. However, another strong quarter merely glosses over the fact that even the stronghold has already caught the euro crisis virus.
"The safety net of richly filled order books and low inventories has become thinner very rapidly, not boding well for growth in the second half of the year."
Analysts have cast doubt over Germany's ability to keep the eurozone out of recession. Aline Schuiling, senior economist at ABN AMRO, said:
"We do not think that Germany on its own can keep the entire eurozone afloat.
"Despite the positive growth number for Germany, we expect total euro zone GDP to have contracted by around 0.4pc on the quarter in the second quarter, as severe fiscal austerity is pulling most economies into recession."
Debt crisis: eurozone economy contracts by 0.2pc in second quarter - Telegraph
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Eurozone PMI data 'points to new recession'
23 August 2012
The eurozone's economy is set to contract by 0.5%-0.6% in the July to September quarter, tipping it into its second recession in three years, a closely-watched survey suggests.
The eurozone's economy is set to contract by 0.5%-0.6% in the July to September quarter, tipping it into its second recession in three years, a closely-watched survey suggests.
The Markit Flash Eurozone PMI Composite Output Index, which measures new orders in manufacturing and services, was 46.6 in August, compared with 46.5 in July.
A score below 50 indicates contraction.
Output declined in both the manufacturing and services sectors, Markit said in a statement.
This is the seventh consecutive month of contraction in the eurozone's private sector.
Rob Dobson, senior economist at Markit said: "The August Markit Eurozone Flash PMI reinforces the prevailing view of the economy dropping back into recession during the third quarter of 2012.
"Taken together, the July and August readings would historically be consistent with GDP falling by around 0.5%-0.6% quarter-on-quarter, so it would take a substantial bounce in September to change this outlook."
The eurozone's economy contracted by 0.2% in the second quarter of the year. A recession is generally defined as two consecutive quarters of negative growth.
Julien Manceaux, senior economist at ING, said: "The composite PMI still indicates a contraction of activity in the eurozone as a whole.
"In our view, this confirms that the decline in eurozone GDP [gross domestic product] in the second quarter is likely to be the first leg of a technical recession."
Public finances
Even Germany, the eurozone's strongest economy, showed an accelerating decline in output, with its Composite Output Index falling to a 38-month low of 47.0, down from 47.5 in July.
German blue-chip companies ThyssenKrupp and Opel are reducing working hours because of weaker demand, while Bosch has announced it is negotiating reduced working hours with its workforce.
The findings contrast with more positive news relating to Germany's public finances, which were back in the black for the first six months of the year, according to Destatis, the country's federal statistics office.
Germany's public accounts showed a surplus of 8.3bn euros (£6.6bn), about 0.6% of gross domestic product, thanks largely to record low unemployment figures.
But Germany's second quarter economic growth of 0.3%, down from 0.5% in the first quarter, could fall further if Markit's surveys prove accurate.
In France, decline in output slowed, with the composite PMI output index rising to a six-month high of 48.9.
However, some analysts saw glimmers of hope in the Markit figures.
Marie Diron, senior economic adviser to the Ernst & Young Eurozone Forecast body, said the data showed "signs of stabilisation" in the eurozone economy and "supports our view that, while probably shrinking further, the eurozone economy is not falling off a cliff".
She added: "The manufacturing surveys for both Germany and France showed better results for the manufacturing sector than last month."
US growth
Earlier, the HSBC PMI survey for manufacturing in China indicated that activity in the sector fell to a nine-month low in August.
The PMI index was 47.8 this month, compared with a final reading of 49.3 in July.
Some analysts said the data indicated that the Chinese government's efforts to boost the economy had not boosted firms' confidence.
Meanwhile, the PMI measure for US manufacturing indicated that the sector saw a slight improvement this month, with the index rising to 51.9 from 51.4 in July.
Markit said that despite the increase - the first for five months - weak export markets meant overseas demand for US goods was subdued.
BBC News - Eurozone PMI data 'points to new recession'
23 August 2012
The eurozone's economy is set to contract by 0.5%-0.6% in the July to September quarter, tipping it into its second recession in three years, a closely-watched survey suggests.
The eurozone's economy is set to contract by 0.5%-0.6% in the July to September quarter, tipping it into its second recession in three years, a closely-watched survey suggests.
The Markit Flash Eurozone PMI Composite Output Index, which measures new orders in manufacturing and services, was 46.6 in August, compared with 46.5 in July.
A score below 50 indicates contraction.
Output declined in both the manufacturing and services sectors, Markit said in a statement.
This is the seventh consecutive month of contraction in the eurozone's private sector.
Rob Dobson, senior economist at Markit said: "The August Markit Eurozone Flash PMI reinforces the prevailing view of the economy dropping back into recession during the third quarter of 2012.
"Taken together, the July and August readings would historically be consistent with GDP falling by around 0.5%-0.6% quarter-on-quarter, so it would take a substantial bounce in September to change this outlook."
The eurozone's economy contracted by 0.2% in the second quarter of the year. A recession is generally defined as two consecutive quarters of negative growth.
Julien Manceaux, senior economist at ING, said: "The composite PMI still indicates a contraction of activity in the eurozone as a whole.
"In our view, this confirms that the decline in eurozone GDP [gross domestic product] in the second quarter is likely to be the first leg of a technical recession."
Public finances
Even Germany, the eurozone's strongest economy, showed an accelerating decline in output, with its Composite Output Index falling to a 38-month low of 47.0, down from 47.5 in July.
German blue-chip companies ThyssenKrupp and Opel are reducing working hours because of weaker demand, while Bosch has announced it is negotiating reduced working hours with its workforce.
The findings contrast with more positive news relating to Germany's public finances, which were back in the black for the first six months of the year, according to Destatis, the country's federal statistics office.
Germany's public accounts showed a surplus of 8.3bn euros (£6.6bn), about 0.6% of gross domestic product, thanks largely to record low unemployment figures.
But Germany's second quarter economic growth of 0.3%, down from 0.5% in the first quarter, could fall further if Markit's surveys prove accurate.
In France, decline in output slowed, with the composite PMI output index rising to a six-month high of 48.9.
However, some analysts saw glimmers of hope in the Markit figures.
Marie Diron, senior economic adviser to the Ernst & Young Eurozone Forecast body, said the data showed "signs of stabilisation" in the eurozone economy and "supports our view that, while probably shrinking further, the eurozone economy is not falling off a cliff".
She added: "The manufacturing surveys for both Germany and France showed better results for the manufacturing sector than last month."
US growth
Earlier, the HSBC PMI survey for manufacturing in China indicated that activity in the sector fell to a nine-month low in August.
The PMI index was 47.8 this month, compared with a final reading of 49.3 in July.
Some analysts said the data indicated that the Chinese government's efforts to boost the economy had not boosted firms' confidence.
Meanwhile, the PMI measure for US manufacturing indicated that the sector saw a slight improvement this month, with the index rising to 51.9 from 51.4 in July.
Markit said that despite the increase - the first for five months - weak export markets meant overseas demand for US goods was subdued.
BBC News - Eurozone PMI data 'points to new recession'
Banglar Lathial
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Germany may be the country that brings the euro crashing down - Telegraph
Germany may be the country that brings the euro crashing down
Though largely unnoticed in Britain, a political storm is brewing in Germany
Francois Hollande and Angela Merkel have divergent views on the eurozone's future Photo: HAMILTON-POOL/SIPA/REX
While attention in this country was focused on the delights of the Olympics, almost wholly unnoticed here has been the extraordinary drama unfolding in Germany – portending a truly seismic shift in the history of the European Union. The Germans have at last peered into the abyss that opens in front of them as a result of pouring all that money into the debts of their eurozone partners. To say that they don’t like what they see is a wild understatement.
Reported daily in such papers as Die Welt, Handelsblatt and Der Spiegel, a succession of politicians, financiers and commentators have concluded that, with Greece about to go bankrupt and Spain and Italy to follow, enough is enough. Certainly, they argue, Greece must be allowed to leave the euro. But so, many add, must Spain, Italy and others. Indeed, so dire has this crisis become – with one senior politician estimating Germany’s potential liability at more than $1 trillion – that voices are now being raised to say that the only practical solution to this mess would be for Germany itself to abandon the euro. The rest of the eurozone could thus be left to sink or swim with a currency which, without Germany’s backing, would face a massive devaluation.
Anyone wanting to see the kind of headlines which have been reflecting this drama – “Greece must go bankrupt”, “Multiple countries must leave the euro”, “Germany’s trillion-dollar liability”, “The current imbalances will blow Europe apart”, “Germany must withdraw from the euro” – can find them on my colleague Richard North’s blog,
EU Referendum, where he has been reporting on it daily.
According to North (formerly a research director in the European Parliament), one of the oddest features of this crisis is how little it has been reported outside Germany. Britain is far from alone in being oblivious to the huge significance of what is happening. This is partly because so much is fogged by the public show put on by other European players, notably the Commission and the head of the European Central Bank, to promote the idea that “the euro cannot be allowed to fail”. It was always intended to be the supreme symbol of the European project’s overriding aim, to weld the countries of Europe together in full fiscal and political union. But this would now require a major new treaty, with a further massive surrender of national sovereignty.
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The likelihood of such a treaty being ratified – since it would require a slew of referendums, several of which would probably be lost – is remote. Above all, such a treaty would have to be ratified by Germany itself, and next month her constitutional court will rule on whether, a step towards this would be a breach of her Basic Law, which forbids any surrender of sovereignty to an outside power. Angela Merkel, facing an election next year, cannot afford to ignore the evidence of the polls – that a vast majority of her people say they have had enough of being expected to bail out their failing neighbours indefinitely.
Without question, this is by far the gravest crisis the “project” has ever faced, but one which it has hubristically brought on itself, with all the inevitability of a Greek tragedy, by that gamble it took in the 1990s, to impose a common currency without first creating the political union without which (as was observed at the time) it could not work. As telling as anything in this drama has been the silence of France, under its new president, François Hollande, who, if anything, sides with those who look to Germany to bail them out. The old “Franco-German motor” is dying – and with it the entire project it drove forward for 50 years.
As for us British, sitting impotently on the sidelines, we are irrelevant. But the crash, when it comes, will of course draw us down with it, as in the coming months it makes front-page news across the world.
A chair for the wind tycoon
Last week, I mentioned the curious fact that Tim Yeo MP serves as chairman of the Commons Select Committee on Energy and Climate Change while earning more than £140,000 a year working for firms that make money out of “green” energy. In the days that followed, everyone seemed to be piling in on this, with calls for Mr Yeo to resign. Perhaps they should also turn their attention to the role of John Gummer, now Lord Deben (right), nominated by David Cameron to be the new chairman of the Committee on Climate Change, set up under the Climate Change Act to advise on climate and energy policy.
The committee is described as “independent”, but it is packed with global-warming zealots, such as Lord May, the former president of the Royal Society, who turned it into a campaigning body on the issue. Lord Deben himself is chairman of Forewind, an international consortium planning to build the world’s largest offshore wind farm in the North Sea, and also president of Globe International, a body which co-ordinates responses to global warming by politicians across the world. (His predecessors in the post include Elliot Morley, before he was imprisoned for fiddling parliamentary expenses, and Stephen Byers, the former minister who was seen in a television documentary claiming that, as a lobbyist, he was now “a cab for hire”.)
Lord Deben still has to be confirmed as a suitable chairman for the Committee on Climate Change. But since the final say on this rests with Mr Yeo’s committee, one suspects that a possible conflict of interests will not prove an obstacle.
Germany may be the country that brings the euro crashing down
Though largely unnoticed in Britain, a political storm is brewing in Germany
Francois Hollande and Angela Merkel have divergent views on the eurozone's future Photo: HAMILTON-POOL/SIPA/REX
While attention in this country was focused on the delights of the Olympics, almost wholly unnoticed here has been the extraordinary drama unfolding in Germany – portending a truly seismic shift in the history of the European Union. The Germans have at last peered into the abyss that opens in front of them as a result of pouring all that money into the debts of their eurozone partners. To say that they don’t like what they see is a wild understatement.
Reported daily in such papers as Die Welt, Handelsblatt and Der Spiegel, a succession of politicians, financiers and commentators have concluded that, with Greece about to go bankrupt and Spain and Italy to follow, enough is enough. Certainly, they argue, Greece must be allowed to leave the euro. But so, many add, must Spain, Italy and others. Indeed, so dire has this crisis become – with one senior politician estimating Germany’s potential liability at more than $1 trillion – that voices are now being raised to say that the only practical solution to this mess would be for Germany itself to abandon the euro. The rest of the eurozone could thus be left to sink or swim with a currency which, without Germany’s backing, would face a massive devaluation.
Anyone wanting to see the kind of headlines which have been reflecting this drama – “Greece must go bankrupt”, “Multiple countries must leave the euro”, “Germany’s trillion-dollar liability”, “The current imbalances will blow Europe apart”, “Germany must withdraw from the euro” – can find them on my colleague Richard North’s blog,
EU Referendum, where he has been reporting on it daily.
According to North (formerly a research director in the European Parliament), one of the oddest features of this crisis is how little it has been reported outside Germany. Britain is far from alone in being oblivious to the huge significance of what is happening. This is partly because so much is fogged by the public show put on by other European players, notably the Commission and the head of the European Central Bank, to promote the idea that “the euro cannot be allowed to fail”. It was always intended to be the supreme symbol of the European project’s overriding aim, to weld the countries of Europe together in full fiscal and political union. But this would now require a major new treaty, with a further massive surrender of national sovereignty.
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The likelihood of such a treaty being ratified – since it would require a slew of referendums, several of which would probably be lost – is remote. Above all, such a treaty would have to be ratified by Germany itself, and next month her constitutional court will rule on whether, a step towards this would be a breach of her Basic Law, which forbids any surrender of sovereignty to an outside power. Angela Merkel, facing an election next year, cannot afford to ignore the evidence of the polls – that a vast majority of her people say they have had enough of being expected to bail out their failing neighbours indefinitely.
Without question, this is by far the gravest crisis the “project” has ever faced, but one which it has hubristically brought on itself, with all the inevitability of a Greek tragedy, by that gamble it took in the 1990s, to impose a common currency without first creating the political union without which (as was observed at the time) it could not work. As telling as anything in this drama has been the silence of France, under its new president, François Hollande, who, if anything, sides with those who look to Germany to bail them out. The old “Franco-German motor” is dying – and with it the entire project it drove forward for 50 years.
As for us British, sitting impotently on the sidelines, we are irrelevant. But the crash, when it comes, will of course draw us down with it, as in the coming months it makes front-page news across the world.
A chair for the wind tycoon
Last week, I mentioned the curious fact that Tim Yeo MP serves as chairman of the Commons Select Committee on Energy and Climate Change while earning more than £140,000 a year working for firms that make money out of “green” energy. In the days that followed, everyone seemed to be piling in on this, with calls for Mr Yeo to resign. Perhaps they should also turn their attention to the role of John Gummer, now Lord Deben (right), nominated by David Cameron to be the new chairman of the Committee on Climate Change, set up under the Climate Change Act to advise on climate and energy policy.
The committee is described as “independent”, but it is packed with global-warming zealots, such as Lord May, the former president of the Royal Society, who turned it into a campaigning body on the issue. Lord Deben himself is chairman of Forewind, an international consortium planning to build the world’s largest offshore wind farm in the North Sea, and also president of Globe International, a body which co-ordinates responses to global warming by politicians across the world. (His predecessors in the post include Elliot Morley, before he was imprisoned for fiddling parliamentary expenses, and Stephen Byers, the former minister who was seen in a television documentary claiming that, as a lobbyist, he was now “a cab for hire”.)
Lord Deben still has to be confirmed as a suitable chairman for the Committee on Climate Change. But since the final say on this rests with Mr Yeo’s committee, one suspects that a possible conflict of interests will not prove an obstacle.
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Euro zone factories faltering as core crumbles
Reuters / London Sep 04
The Euro zone manufacturing sector contracted faster than previously thought last month, despite factories cutting prices, as core countries failed to provide any support, a survey showed on Monday.
The downturn that began in the smaller periphery members of the 17-nation bloc is now sweeping through Germany and France and the situation remained dire in the region's third and fourth biggest economies of Italy and Spain.
"Larger nations like France and Germany remain in reverse gear... the (manufacturing) sector is on course to act as a drag on gross domestic product in the third quarter," said Rob Dobson, senior economist at data collator Markit.
Markit's final Purchasing Managers' Index (PMI) for the manufacturing sector fell from an earlier flash reading of 45.3 to 45.1, above July's three-year low of 44.0, but notching its 13th month below the 50 mark separating growth from contraction. "The rate of decline was a little slower than in July, providing some heart that the manufacturing downturn may be easing, but the sector is on course to act as a drag on gross domestic product in the third quarter," Dobson said.
Having contracted 0.2 per cent in the three months to June the bloc's economy is seen posting similar results in the current quarter, with no growth expected until the start of next year.
In its battle to support an economy ravaged by a two-and-a-half-year-old debt crisis, the European Central Bank is now widely seen cutting interest rates to a new record low of 0.5 per cent — either on Thursday or next month. Inflation jumped more than expected in August, data showed on Friday, a factor that may discourage the ECB from acting this week, but the PMI survey showed factories had cut the prices of their products for the third straight month.
The output prices index fell from the flash reading of 48.9 to 48.6, above July's 48.3. The input costs paid by factories also fell for the third month.
Factories in Germany, Europe's largest economy, and France — the second biggest — saw activity fall for the sixth consecutive month although both saw an easing in the decline.
In Italy the main index (43.6) has now been below the break-even point for over a year and was worse than economists had predicted while in Spain it has been sub-50 since May last year.
The latter two countries are deep into austerity programmes which are aimed at bringing their debt piles under control but also keep their economies stuck in recession.
They are looking for the European Central Bank help them escape this vicious circle by buying debt issued by their governments to bring down borrowing costs.
"The national picture remains one of widespread contraction, only Ireland saw manufacturing output rise. The situation in Italy is also becoming more of a cause for concern, as it falls further down the PMI league table," Dobson said.
The output index for the sector, which drove a large part of the bloc's recovery from the last recession came in at 44.4, below a flash 44.6 but above July's 43.4.
With the situation still gloomy factories reduced their headcount for the seventh month running. Official data released on Friday showed unemployment across the bloc in July held steady at June's record high of 11.3 per cent.
General Motors Co's ailing German unit, Opel, has said it will cut the hours of several thousand workers at two of its four plants and France's struggling carmaker PSA Peugeot Citroen is cutting over 10,000 jobs.
Euro zone factories faltering as core crumbles
Reuters / London Sep 04
The Euro zone manufacturing sector contracted faster than previously thought last month, despite factories cutting prices, as core countries failed to provide any support, a survey showed on Monday.
The downturn that began in the smaller periphery members of the 17-nation bloc is now sweeping through Germany and France and the situation remained dire in the region's third and fourth biggest economies of Italy and Spain.
"Larger nations like France and Germany remain in reverse gear... the (manufacturing) sector is on course to act as a drag on gross domestic product in the third quarter," said Rob Dobson, senior economist at data collator Markit.
Markit's final Purchasing Managers' Index (PMI) for the manufacturing sector fell from an earlier flash reading of 45.3 to 45.1, above July's three-year low of 44.0, but notching its 13th month below the 50 mark separating growth from contraction. "The rate of decline was a little slower than in July, providing some heart that the manufacturing downturn may be easing, but the sector is on course to act as a drag on gross domestic product in the third quarter," Dobson said.
Having contracted 0.2 per cent in the three months to June the bloc's economy is seen posting similar results in the current quarter, with no growth expected until the start of next year.
In its battle to support an economy ravaged by a two-and-a-half-year-old debt crisis, the European Central Bank is now widely seen cutting interest rates to a new record low of 0.5 per cent — either on Thursday or next month. Inflation jumped more than expected in August, data showed on Friday, a factor that may discourage the ECB from acting this week, but the PMI survey showed factories had cut the prices of their products for the third straight month.
The output prices index fell from the flash reading of 48.9 to 48.6, above July's 48.3. The input costs paid by factories also fell for the third month.
Factories in Germany, Europe's largest economy, and France — the second biggest — saw activity fall for the sixth consecutive month although both saw an easing in the decline.
In Italy the main index (43.6) has now been below the break-even point for over a year and was worse than economists had predicted while in Spain it has been sub-50 since May last year.
The latter two countries are deep into austerity programmes which are aimed at bringing their debt piles under control but also keep their economies stuck in recession.
They are looking for the European Central Bank help them escape this vicious circle by buying debt issued by their governments to bring down borrowing costs.
"The national picture remains one of widespread contraction, only Ireland saw manufacturing output rise. The situation in Italy is also becoming more of a cause for concern, as it falls further down the PMI league table," Dobson said.
The output index for the sector, which drove a large part of the bloc's recovery from the last recession came in at 44.4, below a flash 44.6 but above July's 43.4.
With the situation still gloomy factories reduced their headcount for the seventh month running. Official data released on Friday showed unemployment across the bloc in July held steady at June's record high of 11.3 per cent.
General Motors Co's ailing German unit, Opel, has said it will cut the hours of several thousand workers at two of its four plants and France's struggling carmaker PSA Peugeot Citroen is cutting over 10,000 jobs.
Euro zone factories faltering as core crumbles
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lol, still so butthurt.
Schaeuble: Portugal shows euro rescue is working
For all you constipated Indian/whatever flag illwishers and haters.
We will be stronger then ever when we get through this, a prospect you all possibly(?) fear based on the frequency and content of your posts.
No other explanation explains it other then that, its not simple "im bringing the news" but agenda type drivel. Yes Hello_Dumbass_10, i meant you too.
ECB faces moment of truth on bond-buying plan
Schaeuble: Portugal shows euro rescue is working
For all you constipated Indian/whatever flag illwishers and haters.
We will be stronger then ever when we get through this, a prospect you all possibly(?) fear based on the frequency and content of your posts.
No other explanation explains it other then that, its not simple "im bringing the news" but agenda type drivel. Yes Hello_Dumbass_10, i meant you too.
ECB faces moment of truth on bond-buying plan
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Eurozone jobless hit record 18 million
JOBLESS numbers across the eurozone hit a record 18 million in July, the grim new high announced as recession takes grip across the debt-stricken 17-nation currency area.
The 18,002,000 headline jobless figure released by Eurostat was the highest since records began in 1995, the European Union data agency confirmed.
An additional 88,000 people joined the ranks of the unemployed throughout July, although upwardly-revised June data meant that the unemployment rate was unchanged at 11.3 per cent, it said.
With an estimated 25.254 million unemployed across the full European Union, which also includes non-euro heavyweights Britain and Poland, and annualised inflation also rising to 2.6 per cent in August according to a separate Eurostat release, the figures had analysts warning of ever-tighter household spending acting as a further drag on governments' hopes of recovery.
The stark jump in dole queues added to fuel-price rises at the root of the renewed climb for inflation "supports the view that the downturn in household spending will intensify in the second half of this year", said London-based Capital Economics' Ben May.
The news emerged as the International Labour Organisation warned of a "catastrophic" rise in unemployment, especially among the young, if debt-racked Greece were to leave the eurozone or if the bloc were to split.
"It would be a catastrophe for the European youth," Ekkehard Ernst, a senior economist at the UN body, told a German daily, warning that close to one in 10 would be without a job even in powerhouse Germany by 2014.
At 5.5 per cent, the unemployment rate was much lower in Europe's leading economy, likewise neighbouring Austria and The Netherlands, but more than one in four are still out of work in Spain.
According to Christian Schulz of Berenberg bank, German jobs growth over recent months was already "past its peak".
Annual unemployment increases in Spain and Greece were easily the highest, and both countries, labouring under sovereign and banking debt crises, logged jobless rates among the key under-25s age-group of more than 50 per cent.
In a note released ahead of the data's publication, analyst Patrick Arbus of France's Natixis warned that rising unemployment coupled with austerity was leading directly to "destruction of growth potential."
The EU announced earlier in August that eurozone growth slipped back into reverse over the second quarter of 2012, with a 0.2-per cent contraction.
Subsequent commercial surveys of private business activity also showed a seventh monthly decline in a row in August marked
by the rate of contraction gathering pace in Germany.
According to research firm Markit, the eurozone is facing a 0.5-0.6 per cent drop in gross domestic product (GDP) for the third quarter, which would meet the widely accepted definition of recession, two successive quarters of economic contraction.
Focused on the desperate youth unemployment particularly in Spain and Greece, the spokesman said governments had to do everything possible to avoid a "lost generation." The eurozone is faring far worse than its main international economic rivals. Japan's unemployment rate was flat at 4.3 percent in July even as the US rate rose to 8.3 percent.
Cookies must be enabled. | The Australian
Eurozone jobless numbers hit record 18 million - Economic Times
JOBLESS numbers across the eurozone hit a record 18 million in July, the grim new high announced as recession takes grip across the debt-stricken 17-nation currency area.
The 18,002,000 headline jobless figure released by Eurostat was the highest since records began in 1995, the European Union data agency confirmed.
An additional 88,000 people joined the ranks of the unemployed throughout July, although upwardly-revised June data meant that the unemployment rate was unchanged at 11.3 per cent, it said.
With an estimated 25.254 million unemployed across the full European Union, which also includes non-euro heavyweights Britain and Poland, and annualised inflation also rising to 2.6 per cent in August according to a separate Eurostat release, the figures had analysts warning of ever-tighter household spending acting as a further drag on governments' hopes of recovery.
The stark jump in dole queues added to fuel-price rises at the root of the renewed climb for inflation "supports the view that the downturn in household spending will intensify in the second half of this year", said London-based Capital Economics' Ben May.
The news emerged as the International Labour Organisation warned of a "catastrophic" rise in unemployment, especially among the young, if debt-racked Greece were to leave the eurozone or if the bloc were to split.
"It would be a catastrophe for the European youth," Ekkehard Ernst, a senior economist at the UN body, told a German daily, warning that close to one in 10 would be without a job even in powerhouse Germany by 2014.
At 5.5 per cent, the unemployment rate was much lower in Europe's leading economy, likewise neighbouring Austria and The Netherlands, but more than one in four are still out of work in Spain.
According to Christian Schulz of Berenberg bank, German jobs growth over recent months was already "past its peak".
Annual unemployment increases in Spain and Greece were easily the highest, and both countries, labouring under sovereign and banking debt crises, logged jobless rates among the key under-25s age-group of more than 50 per cent.
In a note released ahead of the data's publication, analyst Patrick Arbus of France's Natixis warned that rising unemployment coupled with austerity was leading directly to "destruction of growth potential."
The EU announced earlier in August that eurozone growth slipped back into reverse over the second quarter of 2012, with a 0.2-per cent contraction.
Subsequent commercial surveys of private business activity also showed a seventh monthly decline in a row in August marked
by the rate of contraction gathering pace in Germany.
According to research firm Markit, the eurozone is facing a 0.5-0.6 per cent drop in gross domestic product (GDP) for the third quarter, which would meet the widely accepted definition of recession, two successive quarters of economic contraction.
Focused on the desperate youth unemployment particularly in Spain and Greece, the spokesman said governments had to do everything possible to avoid a "lost generation." The eurozone is faring far worse than its main international economic rivals. Japan's unemployment rate was flat at 4.3 percent in July even as the US rate rose to 8.3 percent.
Cookies must be enabled. | The Australian
Eurozone jobless numbers hit record 18 million - Economic Times
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The Purchasing Managers' Index (PMI), published by Markit, showed the economic rot that began in smaller periphery members of the 17-nation bloc is now taking hold even in Germany, the region's largest and strongest economy.
August's composite PMI, which measures manufacturing and services together, fell to 46.3, revised down from a flash reading of 46.6 and below July's 46.5.
Germany's composite PMI fell to 47.0, chalking up its lowest reading since June 2009 when the euro zone was in the middle of the worst recession since World War Two.
A Reuters poll published last month predicted the bloc would contract 0.2 percent in the three months to September but Dobson said the PMIs suggested the downturn could be far worse and that the economy would contract 0.5-0.6 percent.
Euro zone likely back in recession as PMIs slump: Survey - The Economic Times
August's composite PMI, which measures manufacturing and services together, fell to 46.3, revised down from a flash reading of 46.6 and below July's 46.5.
Germany's composite PMI fell to 47.0, chalking up its lowest reading since June 2009 when the euro zone was in the middle of the worst recession since World War Two.
A Reuters poll published last month predicted the bloc would contract 0.2 percent in the three months to September but Dobson said the PMIs suggested the downturn could be far worse and that the economy would contract 0.5-0.6 percent.
Euro zone likely back in recession as PMIs slump: Survey - The Economic Times
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Gexit Is Better Than Grexit
August 21, 2012
There would be no domino effect if Germany leaves. Remaining in the euro entails Germany's paying indefinitely for debts made by others.
Any reasonable person would assume it highly unlikely that Europe's leaders would have adopted the euro as their common currency if they had known 10 years ago what a mess they would be in today. The euro project, however, was not a project of reason but of political correctness. Ten years ago many economists warned that adopting a common currency for countries with such divergent economies as divergent as Germany and Spain (not to mention Finland and Greece) could not work. In spite of this, Europe's unelected political class pushed through the euro.
Today it is clear as well that the euro in its present form cannot survive without bankrupting all the economies of Europe. Yet the Europe Union's political class still persists in its vain and costly attempts to save the common European currency -- simply because giving up on the euro would mean admitting they were wrong from the start. What's more, the EU ideology that Europe is to develop into a genuine federal state does not allow its leaders to admit that Europe is a cluster of distinctly different nation states with different interests, cultures, languages and traditions.
The people of Europe were cheated from the start. They outspokenly did not want their nations to be submerged into a "United States of Europe." That is why, when the euro was instituted, the political class promised that no country would ever have to foot the bill of another country. However, in 2009, when Greece needed its first bailout to avoid bankruptcy, Europe's leaders at once violated the EU rules which forbid the member states to bail out other members. If the EU had played by its own book as it should have done Greece would have gone bankrupt and left the euro two years ago.
Sticking to the rules, however, was out of the question: neither France nor Germany was prepared to drop Greece. France sees itself as the leader and patron of the bloc of southern EU countries; Germany fears that if it insisted on pushing a country out of the eurozone it would be accused of immoral selfishness and all the goodwill it had acquired since the Second World War would be lost. As the two major EU countries were prepared to bail out Greece, the smaller member states all went along, assuming that only one bailout (and just for Greece) would be needed.
Meanwhile, the EU has been forced to bail out Ireland and Portugal, as well, and Greece for a second time, while Greece is now clamoring for a third bailout and Spain also needs to be bailed out.
The EU's fatal decision to bail out Greece in early 2010 indicates that in an ideologically driven political environment such as the EU, it is easier for the political class to break the formal rules and ignore objective facts than to depart from the unwritten ideological imperative.
Today, despite the worsened situation, it seems to be ever more difficult for the EU's political class to change course. Doing so would imply that all the money spent on bailouts so far is lost
squandered on the fatal conceit of an ideological dream which is slowly turning out to be a nightmare. 
One day soon, however, Europe will have to face reality. Either the EU is turned into a fiscal and political union, a genuine superstate where national debts are shared. Or the euro and possibly the EU disintegrate. The former option is what the political class wants, but what the European people loathe. Hence, the growing rift between the people and their political leaders everywhere in Europe, but especially in Germany which is acting as the paymaster for the whole EU. This course is the more dangerous as it will lead to enormous political resentment in Germany. Eighty years ago, we saw what that can lead to.
The alternative is a disintegration of the eurozone. Here there are several scenarios. Greece may be forced to leave the euro, followed by Portugal, Ireland, Cyprus and Spain. According to last week's Economist, this will be a costly process. A Greek exit (Grexit) might cost 323 billion; an exit of Greece plus the four above mentioned countries might cost a staggering 1,155 billion.
A more likely scenario is for Germany to leave. A recent poll indicated that 51 percent of Germans think it is time to resurrect the Deutschmark. British journalist and economist Anatole Kaletsky thinks that a German exit from the euro could be relatively easy. According to Kaletsky, German departure would be less disruptive than Grexit for three reasons.
First, a Greek exit would lead to a domino effect with capital fleeing the next weakest country in the eurozone. There would be no domino effect if Germany leaves. Second, the eurozone would become more coherent without Germany and the remaining countries could use quantitative easing to bring down interest rates, issue jointly guaranteed Eurobonds and form a genuine fiscal union, with a public deficit of 5.3 percent of GDP and a gross debt of 90.4 percent of GDP all comparing favorably to the deficit and debt levels in Britain, the U.S. and Japan. Third, a break-up caused by Germany withdrawing would be far less chaotic from a legal standpoint than a break-down in which the euro disintegrates as weak countries are pushed out. The euro without Germany would remain a legal currency, governed by the same treaties as before. Obviously, there would be costs for German companies, German banks and the Bundesbank, but these would all constitute local difficulties for Germany.
The benefits of a German exit (Gexit) are clear for Germany as well. It would incur costs, but these are one-time costs, while remaining in the euro entails Germany's paying indefinitely for debts made by others. Better a miserable end than endless misery.
A German exit would also be better for the American economy than the current situation, in which pressure is increasing on a country such as Spain. An economic collapse of Spain would inflict a severe blow to the U.S. stock exchanges. Rather than exerting pressure on German Chancellor Angela Merkel to accept a European fiscal union, which would mean political suicide for her, the United States might try to persuade her to leave the eurozone.
Gexit Is Better Than Grexit :: Gatestone Institute
August 21, 2012
There would be no domino effect if Germany leaves. Remaining in the euro entails Germany's paying indefinitely for debts made by others.
Any reasonable person would assume it highly unlikely that Europe's leaders would have adopted the euro as their common currency if they had known 10 years ago what a mess they would be in today. The euro project, however, was not a project of reason but of political correctness. Ten years ago many economists warned that adopting a common currency for countries with such divergent economies as divergent as Germany and Spain (not to mention Finland and Greece) could not work. In spite of this, Europe's unelected political class pushed through the euro.
Today it is clear as well that the euro in its present form cannot survive without bankrupting all the economies of Europe. Yet the Europe Union's political class still persists in its vain and costly attempts to save the common European currency -- simply because giving up on the euro would mean admitting they were wrong from the start. What's more, the EU ideology that Europe is to develop into a genuine federal state does not allow its leaders to admit that Europe is a cluster of distinctly different nation states with different interests, cultures, languages and traditions.
The people of Europe were cheated from the start. They outspokenly did not want their nations to be submerged into a "United States of Europe." That is why, when the euro was instituted, the political class promised that no country would ever have to foot the bill of another country. However, in 2009, when Greece needed its first bailout to avoid bankruptcy, Europe's leaders at once violated the EU rules which forbid the member states to bail out other members. If the EU had played by its own book as it should have done Greece would have gone bankrupt and left the euro two years ago.
Sticking to the rules, however, was out of the question: neither France nor Germany was prepared to drop Greece. France sees itself as the leader and patron of the bloc of southern EU countries; Germany fears that if it insisted on pushing a country out of the eurozone it would be accused of immoral selfishness and all the goodwill it had acquired since the Second World War would be lost. As the two major EU countries were prepared to bail out Greece, the smaller member states all went along, assuming that only one bailout (and just for Greece) would be needed.
Meanwhile, the EU has been forced to bail out Ireland and Portugal, as well, and Greece for a second time, while Greece is now clamoring for a third bailout and Spain also needs to be bailed out.
The EU's fatal decision to bail out Greece in early 2010 indicates that in an ideologically driven political environment such as the EU, it is easier for the political class to break the formal rules and ignore objective facts than to depart from the unwritten ideological imperative.
Today, despite the worsened situation, it seems to be ever more difficult for the EU's political class to change course. Doing so would imply that all the money spent on bailouts so far is lost
squandered on the fatal conceit of an ideological dream which is slowly turning out to be a nightmare. One day soon, however, Europe will have to face reality. Either the EU is turned into a fiscal and political union, a genuine superstate where national debts are shared. Or the euro and possibly the EU disintegrate.
The former option is what the political class wants, but what the European people loathe. Hence, the growing rift between the people and their political leaders everywhere in Europe, but especially in Germany which is acting as the paymaster for the whole EU. This course is the more dangerous as it will lead to enormous political resentment in Germany. Eighty years ago, we saw what that can lead to.The alternative is a disintegration of the eurozone. Here there are several scenarios. Greece may be forced to leave the euro, followed by Portugal, Ireland, Cyprus and Spain. According to last week's Economist, this will be a costly process. A Greek exit (Grexit) might cost 323 billion; an exit of Greece plus the four above mentioned countries might cost a staggering 1,155 billion.
A more likely scenario is for Germany to leave. A recent poll indicated that 51 percent of Germans think it is time to resurrect the Deutschmark. British journalist and economist Anatole Kaletsky thinks that a German exit from the euro could be relatively easy. According to Kaletsky, German departure would be less disruptive than Grexit for three reasons.
First, a Greek exit would lead to a domino effect with capital fleeing the next weakest country in the eurozone. There would be no domino effect if Germany leaves. Second, the eurozone would become more coherent without Germany and the remaining countries could use quantitative easing to bring down interest rates, issue jointly guaranteed Eurobonds and form a genuine fiscal union, with a public deficit of 5.3 percent of GDP and a gross debt of 90.4 percent of GDP all comparing favorably to the deficit and debt levels in Britain, the U.S. and Japan. Third, a break-up caused by Germany withdrawing would be far less chaotic from a legal standpoint than a break-down in which the euro disintegrates as weak countries are pushed out. The euro without Germany would remain a legal currency, governed by the same treaties as before. Obviously, there would be costs for German companies, German banks and the Bundesbank, but these would all constitute local difficulties for Germany.
The benefits of a German exit (Gexit) are clear for Germany as well. It would incur costs, but these are one-time costs, while remaining in the euro entails Germany's paying indefinitely for debts made by others. Better a miserable end than endless misery.
A German exit would also be better for the American economy than the current situation, in which pressure is increasing on a country such as Spain. An economic collapse of Spain would inflict a severe blow to the U.S. stock exchanges. Rather than exerting pressure on German Chancellor Angela Merkel to accept a European fiscal union, which would mean political suicide for her, the United States might try to persuade her to leave the eurozone.
Gexit Is Better Than Grexit :: Gatestone Institute
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