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EURO: Cock-Up or Conspiracy?

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Godfrey Bloom MEP discusses how the Euro was doomed to failure to force fiscal integration. Where is the democratic remit for fiscal integration since nobody was asked?

Karl Albrecht Schachtschneider, Professor of Law at Erlangen-Nurnberg University said of the euro:

The euro will inevitably fail. It was always clear that the euro-project would not succeed. Already in 1993 I have processed the Maastricht law suit that was mostly against the introduction of the monetary union. Without the consent of the nations comprising the EU, the euro is being used as a political lever to make the EU a super state that, for example, goes against Russia, and at the same time, serves as a counterbalance against China, the USA and other economic giants. But this lever was always economically doomed to failure.

 

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Germany To Call For Roll With Powers Over National Budgets

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Following on from Merkel’s visit to Greece last week where she was greeted with Nazi salutes and jibes of “Out with the Fourth Reich”, we now have Finance minister Wolfgang Schaeuble proposing a new roll within the EUSSR with sweeping powers. This new Commissioner role would have complete control over EU nation’s budgets. Looks like more centralizing powers for the EUSSR.

There must be an EU “currency commissioner” with sweeping powers to strike down national budgets; a “large step towards fiscal union”; and yet another EU treaty.

Finance minister Wolfgang Schaeuble dropped his bombshell in talks with German journalists on a flight from Asia, and apparently had the blessing of Angela Merkel, the chancellor. “When I put forward such proposals, you can take it as a given that the chancellor agrees,” he said.

 

Mr Schaeuble said the currency chief should have powers similar to those of the EU’s competition commissioner, a man “feared around the world”.

The competition Tsar is the arch-enforcer of the EU machine, with powers to launch dawn raids, deploy SWAT teams, and block mergers on his own authority. The job was the making of Italy’s Mario Monti a decade ago when he blocked the GE-Honeywell merger after it had been cleared by Washington.

The Schaeuble plan is highly provocative. The EU can set deficit targets but it cannot manage budgets, unless a country requests a bail-out and gives up fiscal sovereignty.

Soure: The Telegraph

Germany’s Plans For Future of EU

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German finance minister Wolfgang Schäuble gave an illuminating interview with Der Speigel on the future plans for the EU. He explains that the euro was a stepping stone to a political union along the lines of the USA, just simply waiting for the right crisis, which many economists said was always going to happen. 

The following are the main points from the interview:

    • Political union along the lines of the United States where each state has a number of representatives.
    • Directly elected President, but unelected Government (president gets to pick).
    • There is to be a full fiscal union with eurobonds. (Nation states giving up jurisdiction of Fiscal policy)
    • Finance Minister responsible for vetoing and approving member states budgets.
    • Bank Union with a European Supervisiory Authority over the banks.
    • A referendum will be needed to decide this.
    • Plans for the proposal to be presented at the EU summit this week.
    • It will happen very quickly, maybe in less the 6 months.

For the full interview check out on Der Speigel.

Eurozone Banking And Fiscal Union Or Bust

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It’s always been leading towards this. As the old saying goes “never leave a good crisis go to waste”, especially as your deliberate dithering has caused it in the first place. The EU is pushing towards a banking and fiscal union. Spain has refused a humiliating bailout and drastically looking for some alternative solution. More EU and not less is the solution proposed. 

Sources familiar with the Spanish government’s thinking said its negotiating position was that the fundamental quandary facing the eurozone was not Spain, but a European failure of leadership in persuading the financial markets that the euro would be defended at all costs.

A Brussels summit at the end of the month would have to remedy that by agreeing to establish a eurozone banking and fiscal union – major federalising steps certain to be fought over. Without that commitment, Spain fears the single currency would be finished in months.

The Spanish government believes that the eurozone’s fourth-biggest economy is too big to rescue and that the consequences of abandoning Spain to the markets without a pledge of major European reform could be so ferocious that the single currency would not survive.

The current rules governing eurozone bailouts stipulate that a government has to request help and that the money may only be channelled via governments – increasing the national debt burden.

All hopes are on the end of month meeting.

But Spain is stalling until key euro group meetings, the G20 summit and the Greek election later this month. Some analysts believe that if Spain is finally forced to request a full-scale EU/IMF bailout it is likely to come around 20 June.

Sources in Brussels confirmed that a rescue plan was being hatched for Spain – but it could be limited to desperately-needed banking aid, rather than a full national bailout.

All eyes are on Merkel to come up with a plan to save the euro.

Berlin is pushing the fiscal union, but on its own terms. It wants to force common rules and targets but avoid any early commitment to sharing liability for the debt or bank savings of individual countries. David Cameron is to go to Berlin on Thursdayto try to push Merkel into a more protective stance on the euro, which would entail German pledges to underwrite struggling countries’ debt. Following a telephone conversation with Barack Obama, the British prime minister will tell Merkel the US and the UK are insisting on “an immediate plan” on the euro, Downing Street said. The prime minister will tell Merkel the eurozone has no more than weeks to act to shore up the single currency.

She is priming the Germans for a political union and handing over more power to Europe.

Angela Merkel said Thursday she would work toward a reinforced political union in Europe “first and foremost,” saying that it cannot wait for all nations to be on the same page economically.

“We need more Europe… a budget union… and we need a political union first and foremost,” Merkel told German public television. “We must, step by step, cede responsibilities to Europe.”

“We must not remain immobile because one country or another does not want to follow yet,” She added

….

“We need not just a currency union; we also need a so-called fiscal union, more common budget policies. And we need above all a political union,” she added. “That means that we must, step by step as things go forward, give up powers to Europe as well.”

Ultimately the end game is to give up more power to the beaurocrates and cede economic sovereignty. It’s just a matter of playing this game until then.

Source: The Guardian, PressTV

David McWilliams: EU Pissing Down Our Backs, And Telling Us Its Raining

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David McWilliams explaining the “Fiscal compact” and how it can’t work.

The German Elite want a Federal Europe and to be top dog. A weak euro suits them perfectly. It gets a free lunch and don’t want to lose it.

 

 

Japan In worse Shape Than Greece

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Originally reported by Bloomberg is the admission by an official at the Ministry of Finance that Japan is in worse shape than Greece. More disturbing is the line about Japan being extremely vulnerable to energy price rises. I think we all know where they are going when you look at the prospect of war in Syria and Iran this year.

In a stunning turn of events, a Japanese Ministry of Finance official admits to Richard Koo’s worst nightmare “Japan is fiscally worse than Greece“. Bloomberg is reporting that, at a conference in Tokyo, Yasushi Kinoshita says Japan’s 2011 fiscal deficit was up to 10% of GDP and its debt-to-GDP has soared to over 230%. What is more concerning is the Kyle-Bass- / Hugh-Hendry-recognized concentration risk that Kinoshita admits to also – with a large amount of JGBs held domestically, the Japanese financial system is much more vulnerable to fiscal shocks (cough energy price cough) than Europe. Of course, the market is catatonic in its reaction to this – mesmerized by the possibility of buybacks and hypnotized at big-banks-passing-stress-tests – though we do note the small reverse stronger in USDJPY has reversed as this news broke and the USD pushes modestly higher.

Source: ZeroHedge

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