Advertise On EU-Digest

ADVERTISE ON EU-DIGEST - Please include your URL/Logo information with payment.


EU Labour Policies: Contours of a European Minimum Wage Policy - by Thorsten Schulten

The aim of a European Wage Policy can not be the determination of a Europe-wide uniform minimum wage amount, but rather an agreement on a European Minimum Wage Norm. Such Norm could establish minimum wages as a certain percentage of national median or average wages.

A possible European Minimum Wage Norm according to which all national minimum wages should at least be equivalent to 60 per cent of national median wages would affect about 28 million workers or 16 per cent of the overall European workforce.

A European Minimum Wage Policy could also contribute to a better coordination of wages in Europe in order to stabilise domestic demand and to prevent deflationary developments.

Download the full report 11008.pdf

Energy: It's Coming: $65 Oil - by Derek Thompson

Gas prices are falling below $3 a gallon across the United States for two big reasons: (1) the world economy is growing slower than we hoped, and (2) global oil production is improving faster than we expected.

"India and China are slowing down,” said Charles K. Ebinger, director of the Energy Security Initiative at Brookings. "The IMF just downgraded Europe’s growth to less than 1 percent, and they're already quite energy efficient. Brazil’s a problem, too. All around the world there is no great growth story, and expectations are that things will stay that way or get worse."

There is also unanticipated supply. A few years ago, political turmoil was taking up to 2 million barrels a day off the market. Now production is roaring back in Libya, southern Sudan, Yemen, Nigeria, and even Iraq, and the global price of crude has fallen about 25 percent in the last five months. It's the same old story: low demand, high supply, etc.

Read more: It's Coming: $65 Oil - The Atlantic

Euro zone inflation edges up to dim chance of new ECB action - Robert-Jan Bartunek

Inflation in the 18 countries sharing the euro edged up slightly in October, reinforcing the view that the European Central Bank will hold fire on any additional policy action at its meeting next week.

A first estimate on Friday from the European Union's statistics office showed consumer prices in the euro zone rose by 0.4 percent in October, in line with market expectations. A day earlier, German data showed inflation in Europe's largest economy slowing in October to 0.7 percent, its lowest reading since May.

Nick Kounis, head of macro research at ABN AMRO, said a number of factors meant ECB action as early as next week was unlikely, but that he expected further measures by the first quarter of next year.

"We still think that the ECB is likely to further step up its monetary easing," he said "If you get any kind of economic shock with inflation this low, there is a risk, albeit a small risk, of deflation."

Read more: Euro zone inflation edges up to dim chance of new ECB action | Reuters

Euro Little Changed After Eurozone CPI, Unemployment Rate

Eurostat released Eurozone consumer price index for October and unemployment report for September at 6:00 am ET Friday. After these data, the Euro changed little against its major rivals. As of 6:01 am ET, the Euro was trading at 0.7863 against the Pound, 1.2059 against the Swiss franc, 1.2578 against the U.S. dollar and 140.43 against the Yen.

Read more:
Eurostat released Eurozone consumer price index for October and unemployment report for September at 6:00 am ET Friday. After these data, the Euro changed little against its major rivals. As of 6:01 am ET, the Euro was trading at 0.7863 against the Pound, 1.2059 against the Swiss franc, 1.2578 against the U.S. dollar and 140.43 against the Yen.

Read more:
Eurostat released Eurozone consumer price index for October and unemployment report for September at 6:00 am ET Friday.

After these data, the Euro changed little against its major rivals.

As of 6:01 am ET, the Euro was trading at 0.7863 against the Pound, 1.2059 against the Swiss franc, 1.2578 against the U.S. dollar and 140.43 against the Yen.

Read more: Euro Little Changed After Eurozone CPI, Unemployment Rate

The US Political Divide: The 10 most conservative (and liberal) cities in America - Allegra Kirkland

Americans have countless stereotypes about people from different regions of the country. There’s the polite Midwesterner, the abrasive New Yorker, the Berkeley hippy, the gun-toting Texan. There is red America and there is blue, and never the twain shall meet. But a study of conservative cities published in American Political Science Review suggests that the United States has a much more complicated political patchwork than we might expect.

In order to determine which cities are most conservative, researchers analyzed large-scale surveys that questioned residents of over 1,600 towns and cities about a range of policy areas, from education to healthcare. Study authors Chris Tausanovitch of UCLA and Christopher Warshaw of MIT created an ideological score for each city based on these responses. The final study looks at the 51 U.S. cities that have at least 250,000 residents.

Some of their findings, like the fact that the U.S.’ biggest urban centers lean toward the liberal side of the spectrum, are unsurprising. But there is a remarkable ideological range within states, and beyond the top contenders, the rankings aren’t what you might expect. Mesa, Arizona’s title as the most conservative city in the country fits in with our preconceptions about national politics, but the fact that Buffalo, New York is more liberal than Chicago or that Portland doesn’t even crack the top 10 is more of a surprise. According to their results, San Francisco is the most liberal city, followed by Washington DC and Seattle.

The most interesting takeaway of the study is that ideology has tangible effects on policy at the municipal level. Academic literature has long held that city officials are unresponsive to their constituents, thanks to the constraints placed on them by state and federal governments and the impossibility of catering to a constantly changing demography. Yet as it turns out, “the substantive impact of citizens’ preferences on policy outcomes is quite large.”

The most liberal cities have higher taxes per capita, rely on less regressive tax systems, and spend twice as much per person as their most conservative counterparts. And as Hunter Schwarz points outat the Washington Post, “even cities with governments designed to be less partisan, with institutions like nonpartisan elections and professional managers instead of elected mayors, are in line with residents’ political beliefs.”

Read more: The 10 most conservative (and liberal) cities in America -


Turkey: Not Everyone's In Awe Of The Insanely Opulent Turkish Presidential Palace - by Nick Robins-Early

"Sutan" Erdogan's new palace
Turkey's President Recep Tayyip Erdogan unveiled the new presidential palace on Wednesday, a sprawling and ornate complex that reportedly cost over $350 million to build.

Called Ak Saray, or the White Palace, the new 1,000-room-building near Ankara is drawing harsh criticism from opposition groups who suggest that spending hundreds of millions of dollars building a palace is not a sound use of government funds.

"What could have been done with that money?" a member of the CHP opposition party, Umut Oran asked before going on to ridicule the lavish complex.

The BBC reports that environmentalists, too, are unhappy with the construction, as the palace is located in an environmentally protected zone. Erdogan pressed on with construction despite court orders to halt the build.

EuroNews notes that the palace was envisioned to become the base for the prime minister's office when construction started. However, as Erdogan moved from the premier post to the presidency, the building changed purposes as well.

The building is somewhat emblematic of the kind of divisive figure Erdogan is in Turkey, whose projection of economic prosperity for the country garners support while critics warn of his rising autocratic tendencies.

This latest monument to Erdogan's rule seems to be in the latter camp, along with giant hologram projections of himself, in terms of showcasing the president's sultanic tendencies.

Read more: Not Everyone's In Awe Of The Insanely Opulent Turkish Presidential Palace

Religion - Evolution - Creation: Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand' -

The theories of evolution and the Big Bang are real and God is not “a magician with a magic wand”, Pope Francis has declared.

Speaking at the Pontifical Academy of Sciences, the Pope made comments which experts said put an end to the “pseudo theories” of creationism and intelligent design that some argue were encouraged by his predecessor, Benedict XVI. 

Francis explained that both scientific theories were not incompatible with the existence of a creator – arguing instead that they “require it”.

“When we read about Creation in Genesis, we run the risk of imagining God was a magician, with a magic wand able to do everything. But that is not so,” Francis said.

“The Big Bang, which today we hold to be the origin of the world, does not contradict the intervention of the divine creator but, rather, requires it.

“Evolution in nature is not inconsistent with the notion of creation, because evolution requires the creation of beings that evolve.”

The Catholic Church has long had a reputation for being anti-science – most famously when Galileo faced the inquisition and was forced to retract his “heretic” theory that the Earth revolved around the Sun.

But Pope Francis’s comments were more in keeping with the progressive work of Pope Pius XII, who opened the door to the idea of evolution and actively welcomed the Big Bang theory. In 1996, John Paul II went further and suggested evolution was “more than a hypothesis” and “effectively proven fact”.

Read more: Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand' - Europe - World - The Independent


US Elections: Christian Right key to Republican performance in U.S. midterms - by Alistair Bell

If Republicans win control of the Senate in the midterm elections they should say a prayer of thanks for Christian conservatives.

Although they get little attention from candidates, white evangelical Christian voters are likely to be fundamental to any Republican victories in the key Senate races, especially in the South.

Ipsos polling data shows evangelicals are more enthusiastic than the general population about the midterms.

The religious right's influence may be much reduced since the days of Moral Majority leader Jerry Falwell's alliances with Republican presidents.

But Christian conservatives will probably vote in greater numbers on Nov. 4 than others, giving them an outsized say in who runs Congress.

Forty-nine percent of evangelicals say they have a great deal of interest or quite a bit of interest in news about the elections, compared to 38 percent of non-evangelicals.

"It strongly shows that the evangelical population is very engaged, very interested in what's happening and much easier to turn out for an election than the population as a whole," said Ipsos pollster Chris Jackson.

Almost 40 percent of Republicans said they were born-again or evangelical Christians, according to the online survey.

Read more: Christian right key to Republican performance in U.S. midterms | Reuters

Quitting European Union Will Be Damaging For British Exports - by Kalyan Kumar

The rising clamour in Britain to quit the European Union will ultimately backfire the British exports. This warning has been sounded out by David Godfrey, CEO, UK Export Finance. 

Godfrey is the head of the UK's export credit agency and he has fact to argue that sustained association with the European Union is "critical" for British exporters to avoid the risk of being frozen out of the biggest overseas markets. Godfrey, in an interview with The Telegraph, said: "I personally think most business leaders gain an awful lot from being part of the EU. It is critical and important for us to continue there."
The export credit guarantee agency was set up in 1919 to support British foreign trade soon after the First World War. Funded by the Treasury, the agency has more than £20 billion exposure on its balance sheet and helps British companies to stimulate exports by way of letters of credit, payment guarantees and direct loans.

The remarks by Godfrey have come in the backdrop of Prime Minister David Cameron's statements and the soaring popularity of the Euro-sceptic UK Independence Party asking to renegotiate Britain's relationship with the EU. The prime minister even wants tightening of the UK's borders to clamp down on migrant workers from other EU states.

In a recent reaction, Jose Manuel Barroso, the outgoing president of the European Commission, also cautioned Britain against quitting EU and end up losing its global influence. The quitting process, referred  as "Brexit," will land the U.K. in distress and would find it hard to negotiate with major trading partners such as China and the US on its own account, Boroso said. 

US Fed Stops The Money Press and US Stock Market Loses a Big Crutch as Fed Ends ‘QE

The US Fed has concluded its asset-purchasing program thanks to an improving labor market. Here's what QE3 has meant to investors and the economy.

After spending trillions of dollars on bond purchases since the end of the Great Recession — to keep interest rates low to boost spending, lending, and investments — the Federal Reserve ended its stimulus program known as quantitative easing.

The central bank’s decision to stop buying billions of dollars of Treasury and mortgage-related bonds each month comes as the U.S. economy has shown signs of recent improvement.

U.S. gross domestic product grew an impressive 4.6% last quarter. And while growth dropped at the start of this year, thanks to an unusually bad winter, the economy expanded at annual pace of 4.5% and 3.5% in the second half of 2013.

Meanwhile, employers have added an average of 227,000 jobs this year and the unemployment rate rests at a post-recession low of 5.9%. It was at 7.8% in September 2012, when this round of quantitative easing, known as QE3, began.

For more click here

Immigration: EU migration is essential for a healthy economy, says CBI's John Cridland - by John Cridland

As a proud Bostonian, the change in my Lincolnshire home town over the past decade is striking. West Street is now interspersed with vibrant Polski skleps selling an array of Eastern European goods. And while it was unusual to hear so many languages spoken when I was a boy, Slav languages are now being taught in local schools.

I understand that immigration has social and cultural impacts that can’t be ignored. But as head of the UK’s biggest business group, I am concerned about where the debate on immigration is heading. I know business leaders share this unease.

Across the political spectrum, there is a mismatch between rhetoric and reality. Immigration has helped keep the wheels of this recovery turning by plugging skills shortages. This has led to more jobs for British people and driven growth. Without free movement of workers, the recovery would grind to a halt.

Our hospitals and care homes couldn’t function without overseas workers; building sites that we need to deliver more homes and big infrastructure projects, such as the roll-out of broadband, would also stall.

EU migration also has a positive impact on the UK’s fiscal position. Research from University College London shows that over the decade since 2001 EU migrants made a positive net contribution of £2,732 per person per year.

Businesses benefit too, with 63pc of CBI members saying free movement of labour has been beneficial. And that free movement cuts both ways: well over a million Britons live and work in the EU. Of course, there are concerns around immigration.

Note EU-Digest: Regardless what Eurosceptics and Nationalists, Ultra Conservatives are saying the EU needs more not less immigrants.

 Read more: EU migration is essential for a healthy economy, says CBI's John Cridland - Telegraph

Disparity: How Shadow Banking and Extreme Wealth Inequality Threaten Us - by David DeGraw

Hidden wealth estimates vary widely. Many of them only take a partial look at the most basic methods of offshoring wealth.  Given the unprecedented growth of wealth over the past generation, the secretive methods used to hide it have evolved far beyond well-known tax havens in Switzerland and small-island jurisdictions such as the Bahamas.  While estimates based on banking secrecy and tax havens help to give us a more accurate picture of overall wealth, they do not give a total view.

Research by Gabriel Zucman, which analyzed banking secrecy, estimated that “around 8% of the global financial wealth of households is held in tax havens.”  If we correlate this 8% with the $82 trillion in accounted for wealth reported by the Federal Reserve, that would be an additional $6.6 trillion for the wealthy, bringing the richest 1% up to roughly $39 trillion in overall wealth.

However, to get a more complete understanding of the reality of the situation, the most wide-ranging look into hidden wealth was done in 2012 by economist John Henry in partnership with the Tax Justice Network (TJN).  They estimated that there was $21- $32 trillion hidden globally at the end of 2010. As shocking as that sounds, that estimate still did not give a complete view of hidden wealth.  As they put it, “We consider these numbers to be conservative. This is only financial wealth and excludes a welter of real estate, yachts and other nonfinancial assets owned via offshore structures.”

We also need to consider that overall US household wealth is up 30% and has increased by $25 trillion since the end of 2010. Globally, High Net Worth Individual investible wealth has increased 19% since then, and has begun to accelerate at a record pace.  In 2013, it increased globally by 14%, with a 17% increase in North America, which is now at an all-time high.  Given these factors, and several others that will be explained below, the higher TJN estimation of $32 trillion in 2012 is conservative today.

Correlating TJN’s wealth estimates with US distribution percentages is not an exact science but it gives a much more accurate total of overall wealth than excluding it.  Based on TJN’s estimation, Ultra High Net Worth Individuals (UHNWI) accounted for 48% of hidden wealth.  If we correlate that to the overall estimate of $32 trillion, it equates to $15.4 trillion for the UHNWI population.

The US accounts for 35% of the UHNWI population, which correlates to $5.4 trillion.  In the next tier, High Net Worth Individuals (HNWI) also accounted for 48% of hidden wealth.  The US currently has 42% of the HNWI population, which correlates to $6.5 trillion.  The additional 4% of hidden wealth is estimated to be held below the economic top 1% of the US population, which correlates to roughly $538 billion.

This brings the estimated total of hidden US wealth to $12.4 trillion, with $11.9 trillion of that held within the top 1%.  We can now estimate that the top .01% has $14.5 trillion in wealth, the top .1% has $26.4 trillion and in total the top 1% has $44.5 trillion.

Read more: How Shadow Banking and Extreme Wealth Inequality Threaten Us | Alternet