EU-DIGEST

6/14/15

Europe - Greece bailout talks end without deal, says EU

Crunch bailout talks between Greece and its EU-IMF creditors ended without a deal on Sunday, with a "significant gap" still remaining, a European Commission spokesman told AFP.

"While some progress was made the talks did not succeed as there remains a significant gap between the plans of the Greek authorities and the joint requirements of the Commission, ECB and IMF," said the spokesman from the EU's executive, referring to the three institutions that oversee Greece's huge bailout.

The Greek proposal "remains incomplete", the source said, saying it fell short of providing the necessary reforms to unlock the 7.2 billion euros ($8.1 billion) still remaining in Greece's international bailout, which expires June 30.

Read more; Europe - Greece bailout talks end without deal, says EU - France 24

6/13/15

Global Warming - Denmark: Dr. Bjorn Lomborg argues the climate change fight isn't worth the cost - by Gloria Galloway

Bjorn Lomborg says he is not a climate-change denier, he is a realist who knows better ways of improving the world than a head-on assault on global warming.

It’s not easy to take a public stand against the internationally agreed upon goal of limiting the increase in average temperatures to 2 degrees Celsius above pre-industrial levels – a rise that some scientists describe as a tipping point that would be followed by the collapse of ice sheets, rising sea levels and an onslaught of dramatic weather events.

But Dr. Lomborg has, for years, been arguing that the target is simply too difficult and too expensive to achieve and the world’s development dollars would be put to better use in reducing poverty, preventing disease, educating the illiterate and feeding the hungry. And, yes, he would also protect the environment, but in smaller, more achievable ways.

Spain: Citizens take power in Spain’s largest cities as a political revolution sweeps the country

“We are servants of the people of Madrid”, said Carmena. “We are here because they have chosen us to represent them. We cannot forget it.We are at their service. Therefore I would insist and remember that we want to listen as well as govern”.

Pablo Iglesias, the leader of the anti-austerity anti-corruption Podemos party was there to the witness the event. He can claim much of the credit for the changes taking place across the country.

The victory for the left wing citizens’ alliance in the Spanish capital is the fall out from the dismal ruling right-wing Partido Popular results in the local and regional elections last month.

Similar citizen-driven left-wing alliances are now also in power in Barcelona and Valencia.
What amounts to a political revolution in Spain can be traced back to the ‘indignados’ protests against austerity measures introduced by the PP Prime Minister Mariano Rajoy in 2011.

He now has some serious thinking to do before the parliamentary elections due in November.

Read more: Citizens take power in Spain’s largest cities as a political revolution sweeps the country | euronews, world news

6/12/15

US Politics: What Every Republican Gets Wrong About Immigration

In his hot pink tie and starched white shirt, Ted Cruz strolled through the palm tree-flanked Border Patrol station of Edinburg, Texas, this week, before taking his place at a wood podium to caution his audience about the threat illegal immigrants pose to the Land of the Free .

"One hears from the ground that the security threats remain significant and that we need adequate manpower, adequate tools to secure our border and protect our nation," he told reporters who'd gathered for his visit to the small town in the Rio Grande Valley.

Standing on the glistening grassy lawn, the Texas Republican warned that cartels controlled the area, and said more "boots on the ground" were the only way to stop the flood of migrants streaming in from Latin America. "It's important for every presidential candidate to address seriously the problem of securing our border and to have a serious plan and to demonstrate a willingness to enforce the law," said Cruz, who just happens to be one of those candidates.

Read more: What Every Republican Gets Wrong About Immigration | VICE | United States

Russia: Meet Afalina: Russian manufacturer reveals the world’s cheapest helicopter

The Russian designers are about to fulfil the consumer’s dream of an affordable helicopter, with Afalina rotorcraft expected to cost about half than currently the cheapest offer on the market and run on car fuel as it goes into production in 2016.

HeliWhale, a company from the Siberian city of Kemerovo, revealed its unique helicopter at the HeliRussia 2015 exhibition, which took place in Moscow in late-May.

An ultra-light, coaxial two-seater is called Afalina, the Russian word for bottlenose dolphin, with the rotorcraft’s hull resembling the shape of the marine mammal’s body.

Afalina is designed as a multipurpose helicopter capable of performing a variety of tasks, including the training of pilots, maintenance of pipelines and power lines, aerial surveillance, police patrolling, transportation of personnel, farm work and recreational flights.

Read more: Meet Afalina: Russian manufacturer reveals the world’s cheapest helicopter (VIDEO) — RT News

European Banking Industry: European banks urged to shun virtual currencies until safeguards in place

Banks in the European Union should stop offering customer accounts in virtual currencies like bitcoins until regulatory safeguards are in place. That is the view of the European Banking Authority.

The watchdog organisation is proposing a new framework of rules and has advised banks to steer clear of virtual currencies until those rules are in place.

“This immediate response will ‘shield’ regulated financial services from virtual currency schemes, and will mitigate those risks that arise from the interaction between virtual currency schemes and regulated financial services,” the EBA said.

The planned regulations include a requirement for currency exchanges to hold reserves of cash so that if they go bankrupt – as happened with Japanese based exchange Mt. Gox – customers can be compensated.

Read more: European banks urged to shun virtual currencies until safeguards in place | euronews, corporate

6/11/15

Eurofound Publications: "Eurofound Yearbook 2014:" Living and working in Europe"

We would like to draw your attention to a new publication from Eurofound, the "Eurofound Yearbook 2014: Living and working in Europe".

Eurofound in 2014 expanded its evidence base on the repercussions of the crisis on the living and working conditions of Europeans, and offered guidance on viable options available to policymakers in their efforts to turn Europe around.

The Agency produced new knowledge in some of the areas of most immediate concern to Europeans and in fields crucial to their long-term prosperity. Its reporting of recent employment trends highlighted where in the economy most job creation and job loss has occurred and suggested where investment in future growth is best directed.

To download the report for free - click here

EU-Digest

US Oil Supplies: Oil returns to above $66 as US stocks fall and supply growth flattens

It may be time to say goodbye to cheap oil with a barrel going back over 66 dollars on Wednesday after news US stocks had a sharp weekly fall, and production growth figures there were levelling off.

The fall in stocks was much bigger than forecast, four times more in fact, and in Washington the announcement it believed domestic oil production would fall more strongly and for longer than expected also weighed heavily on the market.

Read more: Oil returns to above $66 as US stocks fall and supply growth flattens | euronews, economy

Turkey's Erdogan breaks silence to call for coalition government -

Turkish President Recep Tayyip Erdogan on Thursday called for the swift formation of a new coalition government, ending almost four days of unusual silence after legislative polls seen as a blow to his authority. Erdogan's comments added weight to expectations of a coalition government in Turkey after the ruling Justice and Development Party (AKP) he co-founded lost its majority in Sunday's dramatic polls.

"Everyone should put their egos aside and a government must be formed as soon as possible, within the constitutional process," Erdogan said in his first public comments since Sunday's vote.

In a message to investors rattled by the political uncertainty, Erdogan insisted that the election result "certainly does not mean Turkey will remain without a government."

Read more: Europe - Turkey's Erdogan breaks silence to call for coalition government - France 24

6/10/15

Britain: Cameron, the Realist: A Message to America - by Stephan Richter

David Cameron, Britain’s Prime Minister, is increasingly thought of as a wet noodle in Washington. That charge stings, especially when it is raised not just by Republican hawks, but also by the Obama Administration.

In rare bipartisan agreement, Mr. Cameron is seen in the U.S. capital as positioning his country to duck when the going gets tough.

In addition, on strategic business matters Cameron is seen by Washington as coddling up to the Chinese. He not only coldshoulders the American ally by declining to meet with the Dalai Lama, but also by choosing to join the Asian Infrastructure Investment Bank. That move occurred against explicit U.S. wishes to stay out of the Chinese-inspired (and likely Chinese-dominated) body.

A senior U.S. administration official even went as far as criticizing the British government for its “constant accommodation of China, which is not the best way to engage a rising power.” Ouch.

With all that in mind, it is high time for a reality check. Yes, some of the charges Washington levels against David Cameron and his government seem on target. By 2020, the British Army is supposed to have a headcount of no more than 82,000 – fewer people than fit into Wembley Stadium for a soccer match. Some say the troop level could go down into the 50,000 range.

His core analysis – that countries need to be more selective about when to engage and where to make a real difference – very much applies to the United States as well.

With one notable difference: That new reality has not yet entered most of the minds on Capitol Hill. And Obama himself is shackled from talking about this – for fear of being called unpatriotic, not loving America or unilaterally hollowing out its exceptionalism.

Cameron’s realization that the foreign policy establishment’s traditional appetite for global expansiveness is much larger than the people’s stomach certainly applies to the American people just as much – if they were ever faced with the real choices.

The crucial difference for now is that the U.S. Congress is one gargantuan grandstanding machine. On foreign policy matters, just about every member gets to sound off, without any concern for the consequences or the practicality or affordability of their suggestions.

Witness the Senator Tom Cotton/Iran negotiations letter affair – or the never-ending announcements by John McCain to expand the defense budget and take military action in just about any corner of the world.

Read more: Cameron, the Realist: A Message to America - The Globalist

US Political Scene: Poll shows voters say its high time for a third major political party

A sizable number of voters think it’s time for a major new political party because Republicans and Democrats aren’t getting the job done.

A new Rasmussen Reports national telephone survey finds that 38% of Likely U.S. Voters agree that Republicans and Democrats are so much alike that an entirely new party is needed to represent the American people.

That’s up six points from 32% five years ago. A plurality (47%) still disagrees, but most voters (54%) felt that way in April 2010. Fourteen percent (14%) are undecided.

EU-Digest

Fossil Fuels: G7 nations meeting in Bavaria pledged to rid the global economy of fossil fuels by end 21st Century.

The Group of 7 (G7) nations met in Bavaria on June 8, and pledged to rid the global economy of fossil fuels by the end of the 21st Century. “We are committed to the fact that during the course of the century we want to see the decarbonalization of the world economy,” German Chancellor and G7 Summit host Angela Merkel told reporters. The joint declaration has no teeth behind it, and amounts to just words on paper, but it is the first time that the industrialized world has officially called for an end of fossil fuels in their entirety. The statement also was intended to add momentum to the international climate change negotiations set to take place in Paris at the end of 2015.

While the long-term outlook for oil and gas remains strong, if uncertain, the speed with which the international community – both private and governmental – has turned away from coal is breathtaking. The global divestment campaign is picking up pace, and while the budding movement has claimed some victories against fossil fuels in general, coal has felt the damage more acutely. In a recent example on June 5, the Norwegian parliament finalized a plan to largely divest its $890 billion sovereign wealth fund from coal assets.

Even the oil majors are now trumpeting their use of natural gas as an alternative to coal. Put another way, the growing political urgency to deal with climate change has pitted disparate fossil fuel interests against each other, and coal appears almost certainly to be the loser. The jury is out on whether or not politicians will have the strength to take on oil and gas, however.

The G7 summit also renewed its sanctions on Russia over the latter’s role in fomenting violence in Ukraine. There had been questions over whether or not the European Union would have the stomach to keep up the sanctions regime on Russia. The New York Times analyzed how Russia has used political influence and financial assistance to peel off support in Europe, by injecting cash into both right and left wing parties.

Following OPEC’s decision not to cut production at its June 5, 2015 meeting in Vienna, oil prices should likely continue their descent that began in early May (Figure 1). Prices may fall into the $50+ per barrel range since there is no tangible reason for their rise from January’s $46 low.

EU-Digest

Britain: UK lawmakers back EU referendum plans but splits emerge

The House of Commons backed the European Union Referendum Bill as expected by 544 votes to 53 but the measure must now pass through several other parliamentary debates and votes before becoming law.

Six hours of speeches highlighted divisions within Cameron's centre-right Conservatives over Europe and the problems he faces en route to the referendum with a narrow 12-seat majority and dozens of MPs likely to back leaving.

The vote came the day after comments by Cameron triggered a row about whether ministers in his government would have to resign if they did not campaign for Britain to remain in Europe.

Opening proceedings, Foreign Secretary Philip Hammond said many Britons felt "the EU has come to feel like something that is done to them, not for them".

"It is time to bring Europe back to the people, ensuring decisions are made as close to them as possible and giving national parliaments a greater role in overseeing the European Union," Hammond added.
The referendum, which is due by the end of 2017 but could be held as early as next year, was triggered when the Conservatives won a majority in last month's general election.

Read more: Europe - UK lawmakers back EU referendum plans but splits emerge - France 24

6/9/15

The Middle East: A Net Assessment of the Middle East - by George Friedman

The term "Middle East" has become enormously elastic. The name originated with the British Foreign Office in the 19th century. The British divided the region into the Near East, the area closest to the United Kingdom and most of North Africa; the Far East, which was east of British India; and the Middle East, which was between British India and the Near East. It was a useful model for organizing the British Foreign Office and important for the region as well, since the British — and to a lesser extent the French — defined not only the names of the region but also the states that emerged in the Near and Far East.

Today, the term Middle East, to the extent that it means anything, refers to the Muslim-dominated countries west of Afghanistan and along the North African shore. With the exception of Turkey and Iran, the region is predominantly Arab and predominantly Muslim. Within this region, the British created political entities that were modeled on European nation-states. The British shaped the Arabian Peninsula, which had been inhabited by tribes forming complex coalitions, into Saudi Arabia, a state based on one of these tribes, the Sauds.

The British also created Iraq and crafted Egypt into a united monarchy. Quite independent of the British, Turkey and Iran shaped themselves into secular nation-states.

This defined the two fault lines of the Middle East. The first was between European secularism and Islam.

The Cold War, when the Soviets involved themselves deeply in the region, accelerated the formation of this fault line. One part of the region was secular, socialist and built around the military. Another part, particularly focused on the Arabian Peninsula, was Islamist, traditionalist and royalist.

The latter was pro-Western in general, and the former — particularly the Arab parts — was pro-Soviet. It was more complex than this, of course, but this distinction gives us a reasonable framework.

The second fault line was between the states that had been created and the underlying reality of the region.

The states in Europe generally conformed to the definition of nations in the 20th century. The states created by the Europeans in the Middle East did not. There was something at a lower level and at a higher level.

At the lower level were the tribes, clans and ethnic groups that not only made up the invented states but also were divided by the borders.

The higher level was broad religious loyalties to Islam and to the major movements of Islam, Shiism and Suniism that laid a transnational claim on loyalty. Add to this the pan-Arab movement initiated by former Egyptian President Gamal Abdel Nasser, who argued that the Arab states should be united into a single Arab nation.

For the complete report click here: A Net Assessment of the Middle East | Stratfor

Sustainable Global Development: First draft of sustainable development goals exposes gaps, warn NGOs

The new set of development goals that will address global poverty, inequality and climate change over the next 15 years are strong on vision, but weak on the methods to make them a reality, NGOs warned this week.

After months of negotiations among UN member states, the first official – “zero” – draft of the sustainable development goals (SDGs) was published on Tuesday June 9.

As widely expected, the number of goals (17) and number of targets (169) have not changed since they were first proposed by a UN open working group last year. Some of the targets have been recommended for revisions.

The SDGs will replace the current millennium development goals, which expire at the end of the year. However, concerns have been raised about how the new goals will be measured.

“WaterAid is concerned that while there is a target to reach everyone everywhere with sanitation and hygiene, there are presently no indicators to measure whether, for instance, homes or healthcare facilities have soap and water for handwashing,” said Margaret Batty, the NGO’s director of global policy and campaigns.

“Without these indicators, the sustainable development goals will not succeed in the goal of leaving no one behind.”

Helen Dennis, Christian Aid’s senior adviser on poverty and inequality, added: “We have yet to see strong enough plans for how the ambitious vision will be achieved. It is clear that the sections of the document on financing and implementation, and on follow-up and review, need to be beefed up before September. Achieving the vision will also depend on an ambitious, legally binding climate deal later this year.”

Read more: First draft of sustainable development goals exposes gaps, warn NGOs | Global development | The Guardian

Multi-National Tax Dodging: End transnationals' $212 billion tax dodge on poorest countries - by Toby Quantrill

New estimates, from International Monetary Fund researchers, suggest that developing countries lose up to $212 billion a year to multinational tax avoidance alone. The IMF researchers also reckon that corporate tax avoidance is a far worse problem for poor countries than for rich countries, relative to the size of their economies.

That's a sum that could transform the lives of untold numbers of people living in poverty. A recent study published in the medical journal The Lancet demonstrates that when governments in poor countries increase their income from tax it leads directly to greater spending on vital healthcare.

Back in the room of tax campaigners, it was also clear to us that the OECD plan to catch up with multinationals would only tackle some of the symptoms, not the causes of global tax avoidance. Furthermore, we knew the reform process would be influenced by powerful vested interests, including accountancy giants and other multinationals with huge stakes in the status quo.

A group of people representing organizations from across the globe- decided to initiate a second investigation of the same problem, but from a different perspective. We agreed to bring together a group of senior figures with a range of experience and expertise from across the globe, and especially from developing countries.
This became the Independent Commission on the Reform of International Corporate Taxation and we asked the commissioners to consider reforms of the global tax system, from the perspective of the global public interest rather than national advantage.

The Commissioners' brief was to ask the simple questions that get to the heart of how the system 'works' and to suggest fair, effective and sustainable changes to help solve the core problems.
This week the Commission launched its landmark report at an economics event in Trento, Italy, just ahead of the G7 summit in Bavaria. The document, while only 11 pages long, delivers a devastating critique of the tax system and demands sweeping changes to the existing international rules and governing institutions.

"Tax abuse by multinational corporations increases the tax burden on other taxpayers, violates the corporations' civic obligations, robs developed and developing countries of critical resources to fight poverty and fund public services, exacerbates income inequality, and increases developing country reliance on foreign assistance", it argues.

"Every individual and country is affected by corporate tax abuse, and therefore the debate over multinational corporate tax avoidance should be widened and made more accessible to the public."

Despite the painfully evident problems caused by the fiction that multinationals' subsidiaries are independent of each another, it remains an undisputed assumption at the heart of the global tax system and acts as a block to any truly effective reform.

The OECD meanwhile is already starting to claim that its tax reform project is working. But as a number of reports and analyses are showing, its work so far will have a limited impact in richer countries and simply not deal with the fundamental problem for poor countries.

Read more: End transnationals' $212 billion tax dodge on poorest countries - The Ecologist

Africa: Corporate Tax Dodging Cheats Africa Out of 6 Billion Dollars, Says Oxfam - by Sean Buchanan

G7-based companies and investors cheated Africa out of an estimated six billion dollars in a year through just one form of tax dodging, according to a new Oxfam report 'Money talks: Africa at the G7', released Jun. 2.

This is equivalent to three times the amount needed to plug the healthcare funding gap in the Ebola-affected countries of Sierra Leone, Liberia, Guinea and at-risk Guinea Bissau.

According to an Oxfam briefing paper release in April this year, an estimated 1.7 billion dollars is required to close the healthcare funding gap to improve dangerously inadequate health systems in these countries. This figure is based on raising spending to the recommendation of the World Health Organisation (WHO) that 86 dollars per capita is required to achieve the minimum package of essential services.

"Multinational companies, many with headquarters in the US United Kingdom and other G7 countries, are cheating African countries out of billions of dollars in vital tax revenues that could help vulnerable people get decent healthcare and send their children to school", saysNick Brye, Oxfam's Head of U.K. Campaigns

Read more: allAfrica.com: Africa: Corporate Tax Dodging Cheats Africa Out of 6 Billion Dollars, Says Oxfam

Banking industry: € 4.97B In Fines Against Major Banks Seems Like A Lot. Here's Why It Won't Deter Corporate Crime. - by Michael Bobelian

On April 11, 2002, the Securities and Exchange Commission announced a record-breaking settlement with Xerox stemming from the company’s alleged accounting fraud stretching back a number of years. “Such conduct calls for stiff sanctions,” announced Paul Berger, then the commission’s Associate Director of Enforcement, “including, in this case, the imposition of the largest fine ever obtained by the SEC against a public company in a financial fraud case.”

The fine, which the SEC dubbed as “unprecedented” at the time, totaled $10 million.

The € 4.97 billion settlement announced earlier today for charges related to the manipulation of currency exchanges makes the Xerox settlement seem pedestrian by comparison. The five banks included in the deal – Citicorp, JPMorgan Chase, Barclays, the Royal Bank of Scotland, and UBS – settled claims with various American and British enforcement bodies and all but UBS will plead guilty to criminal charges.

“The penalty all these banks will now pay is fitting considering the long-running and egregious nature of their anticompetitive conduct,” said Attorney General Loretta Lynch. “It is commensurate with the pervasive harm done.”

The question remains whether these "outsized" penalties will actually deter corporations from further wrongdoing or do they merely represent the cost of doing business for companies with tens of billions in annual revenues.

€ 4.97B In Fines Against Major Banks Seems Like A Lot. Here's Why It Won't Deter Corporate Crime. - Forbes

US Economy: America’s trade deficit is a big drag on the economy - but is it really?

According to the Wall Street Journal, the U.S. non-petroleum trade gap last year was the highest ever recorded — and that’s after adjusting for inflation.

It paints a depressing picture where every day Americans import over a billion dollars more in goods from other countries than they export.

The Government reported trade deficit with just China and the European Union totaled half a trillion dollars in 2014. If U.S. trade with the rest of the world were balanced, the nation’s economic growth rate last year would have been 3.6% rather than 2.6%.

It seems therefore to some that America's widening trade and current account deficits, that when it comes to selling goods and services overseas, U.S. firms are either uncompetitive or unfairly treated in various foreign markets — or both.

The Globalist notes: "Nothing could be further from the truth."

One of the most dangerous deficits today is not one of trade — but rather a deficit in understanding how U.S. firms compete and sell products in the world marketplace.

Simply put, American firms compete more through foreign direct investment — where they usually establish a local presence in international markets by operating on the ground — rather than through arm's-length trade.

Because foreign affiliate sales are not included in U.S. exports, a great deal of global commerce is missing from the officially reported trade figures.

Accordingly, while the monthly trade deficit paints a depressing picture of U.S. global commerce, investors would do well to remember that U.S. multinationals have more than 30,000 foreign affiliates strategically located around the world. And these affiliates are ringing up record earnings.

Bottom line: please take the depressing news about the US ever increasing trade deficit with a grain of salt Even though the statistical graph on the deficit seems to be going higher and higher and the global image of the United States as a savvy trader lower and lower — the global earnings of U.S. multinationals have never been higher. It is all a question of perception.

EU-Digest

The Netherlands: Largest Dutch Fed. of Labor Unions FNV tells Goverment : "stop changes to social security"

FNV chairman Ton Heerts said in a recent interview in the Dutch Financieele Dagblad that the country’s biggest trade union federation, the FNV, is calling for a moratorium on further reforms in the social security sector.

In particular,mentioned the development of a new system to cover invalidity benefits and sick pay for freelancers which he said should not go ahead.. "Such a system is unaffordable, undesirable and impossible to achieve’, said Mr. Heerts.

Employers’ organization AWVN and a number of political parties have called for change to cope with the growing number of self-employed people in the Dutch workforce.

AWVN says many of them don’t take out insurance to cover themselves in case of sickness or long-term ill health.

Heerts says "the move to create a system for both employees and the self-employed’ might sound more caring, however, in reality this is a "pipe dream" developed by ‘right-wingers and employers who don’t want to pay any premiums and want to put all the risks on workers’ shoulders,’ he told the paper.

"Instead, employers and government should focus on ensuring companies don’t ditch their permanent staff and replace them by people on flexible or freelance contracts", said Heerts.