Greece election: Tsipras promises ‘return to democracy’

Greek Prime Minister Antonis Samaras stepped out to vote on Sunday knowing that he is likely to be swept from power in the country’s general election.

Voters were expected to give the anti-austerity Syriza party the parliamentary majority.
The left-wing newcomers have led opinion polls for months and are committed to cancelling many of the terms of Greece’s debt bailout package.

Samaras appealed to undecided voters to keep the country on a stable path.

But the 40-year-old Syriza leader Alexis Tsipras has won over many of them.

He promised that Sunday’s vote would see democracy return and the rich pay their share of taxes.
Vowing to force international lenders to write off more of the national debt, his party’s win is likely to send shockwaves through global markets amid fears Greece could be forced to leave the euro.

It is unclear whether Syriza will be able to govern alone or will have to form a coalition with a smaller party
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Note EU-Digest: EU austerity programs have made half the Greek population unemployed - but then again the Greeks are not known to be the most industrious and innovative people in the EU. If this changeover works, however, they will have been the first EU country to dent the capitalist grip of the financial industry on the EU without totally collapsing, and more EU countries could follow. Bottom line = austerity programs are not the answer to achieve progress.People will eventually revolt. It has happened in Greece.

Read more: Greece election: Tsipras promises ‘return to democracy’ | euronews, world news

Greece prepares to vote on new austerity bill

DPA reports that Greek pharmacies remained closed across the country on Friday as lawmakers prepared to vote over the weekend on a new austerity bill, which would liberalise the sector.

Pharmacists, who have locked-up their shops until at least Monday, say the measures, which include deregulating pharmacy licenses and creating pharmacy chains and outlets in supermarkets, would put them out of business.

"What does the government want to do? Put us all out on the street begging for money," said pharmacist Giorgos Papakonstantinou, who insists the new law would wipe out independent shops such as the one he owns near Syntagma Square.

The protests come hours before the government is scheduled to submit new legislation to parliament which would scrap market trading regulations to make the economy more competitive.
Parliament will vote on the bill Sunday. It will pave the way for the release of 10 billion euros of aid from international lenders.

Unions announced they will hold protests to coincide with the vote and will hold a general strike on April 9.
Aside from liberalising retail stores, the new law also allows longer shelf-life for milk. Until now Greece is the only country in the EU that limits the shelf life of fresh milk, which the country's bailout lenders say prevents imports.

The European Commission, the European Central Bank and the International Monetary Fund agreed last week on the release of long-delayed emergency loans, after seven months of negotiations.

The next bailout tranche is due to be released "well before" Greece faces a large bond redemption in May, an EU official said in Brussels on Thursday.

Eurogroup finance ministers are expected to discuss Greece's latest reform pledges when they meet in Athens next week, with a view to formally concluding the agreement by the second half of April.

The eurozone's rescue fund still has 10.1 billion euros (13.8 billion dollars) available for Greece.

Greece has been granted 240 billion euros in bailout loans since 2010. In exchange, it is required to cut public spending and implement economic reforms.

Read more: Greece prepares to vote on new austerity bill - Finance News - London South East

European Real Estate:Netherlands real estate bubble bursts during downturn - by Nigel Cassidy

Figures have confirmed that the countries that share the Euro currency finally emerged from recession in the second quarter of 2013, with growth of 0.3%.

However, despite the cautious optimism, the economic picture remains far from rosy and not just for those in the south of Europe.

The Netherlands is struggling with the bursting of a real estate bubble, on a scale only seen in the United States and Spain.

Read more: BBC News - Netherlands real estate bubble bursts during downturn

The Netherlands: More Austerity Would Block Dutch Growth in 2014, Rabobank Says - by Corina Ruhe

The Dutch economy will not grow in 2014 if the government keeps on focusing on meeting the European Union’s budget deficit target, Rabobank Groep said in its quarterly economic report today. 

“Additional austerity measures will continue the negative spiral of low economic growth,” said Theo Smid and Tim Legierse, economists at Rabobank in Utrecht. It would be better if the government speeds up structural reforms, they said.

European Union Commissioner Olli Rehn told Dutch Finance Minster Jeroen Dijsselbloem in The Hague yesterday around 6 billion euro ($8 billion) of austerity is necessary in 2014 to get the budget deficit within the EU’s limit of 3 percent of gross domestic product.

Additional austerity would “take hostage” Dutch economic growth, trigger higher unemployment and cause an increased level of bankruptcies, Rabobank said. The Netherlands is going through its third recession in four years.

Read more: More Austerity Would Block Dutch Growth in 2014, Rabobank Says - Businessweek

Germany rejects EU hint at easing austerity drive

Germany on Tuesday defended the policy of tightening the budgets in a number of European countries despite a blunt warning from a top European Union official that the 27-nation bloc's austerity drive "has reached its limits."

"If we were to give up the policy of consolidating the budgets in Europe, if we were to fall back to the old policy of taking on new debt, then we would cement mass unemployment in Europe for many years to come," German Foreign Minister Guido Westerwelle said Tuesday in Brussels.

His warning followed an admission from the head of the EU's executive arm, Commission President Jose Manuel Barroso, that the austerity prescription of higher taxes and lower spending, though correct in principle, may have hit the limits of public acceptance and effectiveness amid rising unemployment and recession.

"Even if the policy of correction of the deficit is basically correct, we can always discuss the fine-tuning, the rhythm or the pace, but that will not be sustainable politically and socially," Barroso said Monday, according to an official speech transcript. He added the deficit reduction "has to be complemented by a stronger emphasis on growth and growth measures in the shorter term."
 
Read more: Germany rejects EU hint at easing austerity drive | Breaking Tampa Bay, Florida and national news and weather from Tampa Bay Online and The Tampa Tribune | TBO.com

The Netherlands: Battle looms over Netherlands budget cuts - by Matt Steinglass

The Dutch prime minister will have to make compromises across his political agenda to secure the €4.3bn austerity measures needed to keep the country’s 2014 budget deficit within EU limits, opposition leaders vowed.

Leaders of two opposition parties said they would demand softer immigration policy, more money for education, and other changes from prime minister Mark Rutte for their support for more austerity.

The government relies on the votes of the left-liberal D66 and left-leaning Christian Union parties to push its plans through the Dutch upper house, the senate.

Read more: Battle looms over Netherlands budget cuts - FT.com

September Offers 15 Days to Cement Europe Crisis Solutions

September offers a microcosm of three years of crisis- fighting. The next two weeks may feature fresh anti-contagion measures from the European Central Bank, a possible aid request from Spain and insight into whether creditors will ease Greece’s bailout terms. German judges and Dutch voters also get to proclaim on the euro’s future.

At stake is whether politicians and the ECB can extend a summertime shift in borrowing costs by convincing investors Spain and Italy are protected from the rot and the euro is secure. Since ECB President Mario Draghi’s July 26 vow to do “whatever it takes” to defend the currency, Spain’s 10-year bond yield has fallen about half a point to 6.52 percent, while that of Italy has declined by a quarter-point to 5.81 percent.

“The markets seem to be anticipating progress,” said Mickey Levy, chief economist at Bank of America Corp. in New York. “When you talk to European policy makers, they say we’re entering a very important stage.”.

Note EU-Digest: whatever is said today by financial speculators and their "support groups" including Bloomberg, Wall Street and others,  must all be taken with a grain of sand. What it eventually will boil down to is the outcome of the ongoing clash between two opposite "doctrines" - the Left and the Right. Dates to watch in this battle are the upcoming elections in the Netherlands on September 12 and the US Presidential election on November 6. 

If the Right prevails the middle class will continue to bare the burden of the economic austerity programs they developed. If the Left wins the more fortunate will also share in the burden of the deficit they helped create. It is as simple as that.

Read more: September Offers 15 Days to Cement Europe Crisis Solutions - Businessweek

European Commission calls on Spain to delay 'bad bank' plans

The European Commission has asked Spain to delay by another week the plans to create a "bad bank" so that experts in Brussels can review the project, the government in Madrid said.

The plan was initially scheduled to be approved at today's Cabinet meeting, but will now be cleared at the next ministers' meeting on August 31, Deputy Prime Minister Soraya Saenz de Santamaria said.

Spain must create the "bad bank" as a condition for accessing a loan of up to €100bn from the 16 other countries using the euro to fix its troubled banks.

The banks, eight of which have been nationalised, are loaded with more than €176bn in bad real estate loans and other investments following the collapse of the property market in 2008.

Read more: European Commission calls on Spain to delay 'bad bank' plans | Irish Examiner

Merkel: Europe should be more like Canada! Is that realistic? - by Brad Plumer

At a reception in Ottawa on Wednesday, German Chancellor Angela Merkel said that the euro zone should look to Canada for inspiration on how to deal with its ongoing debt crisis. According to Bloomberg, she hailed Canada’s efforts to trim its deficits and practice fiscal discipline, saying, “This is also the right solution for Europe.”

Well, who doesn’t love Canada? Yet some economists have argued that Canada’s efforts to tame its budget deficits in the 1990s don’t necessarily offer good lessons for the euro zone today. The situations are far too dissimilar.

On the surface, its easy to see what Merkel finds appealing about Canada’s experience. Back in 1993, the country had the second-highest debt-to-GDP ratio of any G7 country, behind only Italy. So the Canadian government, led by Liberal Prime Minister Jean Chrétien, embarked on a sharp program of fiscal austerity, chopping public budgets and reining in government debt. Budget surpluses were appearing by the late ’90s. Canada’s economy grew rapidly. U.S. newspapers no longer referred to Canada as a basket case. All was well in the land of Mounties and ice hockey.

Note EU-Digest: in general one could also argue that the EU should try and be a bit more like Canada, but unfortunately except for some politicians like Mrs. Merkel, who are more visionary oriented, it probably would be very difficult to materialize.

Read more: Merkel: Europe should be more like Canada! Is that realistic?

US wages and Europe's austerity: the perfect storm - by Robert Reich

What if Europe and the US converged on a set of economic policies that brought out the worst in both – European fiscal austerity combined with a declining share of total income going to workers? Given political realities on both sides of the Atlantic, it is entirely possible.

So far, the US has avoided the kind of budget cuts that have pushed much of Europe into recession. Growth on this side of the pond is expected to be around 2.4 per cent this year. And jobs are recovering, albeit painfully slowly.

But a tough bout of fiscal austerity could be coming in six months. The non-partisan Congressional Budget Office warned last week that if the Bush tax cuts expire on schedule at the start of 2013, just as $100bn of budget cuts automatically take effect under the deal to raise the debt ceiling that Democrats and Republicans agreed to last August, the US will fall into recession in the first half of next year.

Read more: US wages and Europe's austerity: the perfect storm - CSMonitor.com