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Posts tagged ‘Portugal’

The European Union Is an Evil Plan

European Union Treaty of Nice

European Union Treaty of Nice

1986 was a turning point in the history of Europe in which the  Single  European  Act  was  signed  by  EU  governments. The Act was meant for providing  for  the creation of a single market in which people, goods, capital and services can move freely around the EC. But are they the real objectives of transforming the EC to EU?

The Treaty of Nice was signed by European leaders on 26 February 2001 and came into force on 1 February 2003. It amended the Maastricht Treaty (or the Treaty on European Union) and the Treaty of Rome (or the Treaty establishing the European Community).

It was widely accepted that the Treaty of Nice has failed to deal with the basic question of wide-ranging institutional reform, the European Union institutions being widely viewed as overly complicated, and hence the establishment of the European Convention, leading to a new IGC (Intergovernmental Conference) in 2004, was agreed at Nice.

Opponents of the Treaty claimed that it was a “technocratic” rather than “democratic” treaty, which would further diminish the sovereignty of national and regional parliaments, and would further concentrate power into a centralised and unaccountable bureaucracy. They also claimed that five applicant countries could have joined the EU without changing the EU’s rules, and that others could have negotiated on an individual basis; something opponents to the treaty argued would have been to the applicants’ advantage. They also claimed that the Treaty of Nice would create a two-tier EU. Opponents pointed out that leading pro-treaty politicians had admitted if referendums had been held in countries other than Ireland, it would probably have been defeated there as well.

The Commission and the European Parliament were disappointed that the Nice IGC did not adopt many of their proposals for reform of the institutional structure or introduction of new Community powers, such as the appointment of a European Public Prosecutor. The European Parliament threatened to pass a resolution against the Treaty; although it has no formal power of veto, the Italian Parliament threatened that it would not ratify without the European Parliament’s support. However, in the end this did not come to pass and the European Parliament approved the Treaty.

Nationalism and national sovereignty have no place in the new EU which is totally different from the original Treaties  of  Rome of the EC. With such plans it is very obvious that big economies in Europe are the only masters and winners in a vast European superstate.

US Debt in Graphs and Charts

Political Party Responsibility in US Debt 1901-2009

Political Party Responsibility in US Debt 1901-2009

Composition of U.S. Long-Term Treasury Debt 2005-2010

Composition of U.S. Long-Term Treasury Debt 2005-2010

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Greece and Exiting European Hotel California

Greece Withdrawal from European Hotel California
Greece Withdrawal from European Hotel California

Hotel California the lovely top hit song from the Eagles’ album of the same name that they released as a single in February 1977. The last line sounds to be fitting to the European Union.

The lyrics describe an establishment as a luxury resort where “you can check out anytime you like, but you can never leave.” On the surface, it tells the tale of a weary traveler who becomes trapped in a nightmarish luxury hotel that at first appears inviting and tempting. The song is an allegory about hedonism, self-destruction, and greed of the late 1970s. The abstract nature of the lyrics has led listeners to their own interpretations over the years.

Enjoy the lyrics first; then proceed to the grim question of could a Member State Leave the European Union and/or Euro-zone ?

Hotel California

On a dark desert highway, cool wind in my hair
Warm smell of colitas, rising up through the air
Up ahead in the distance, I saw a shimmering light
My head grew heavy and my sight grew dim
I had to stop for the night
There she stood in the doorway;
I heard the mission bell
And I was thinking to myself,
This could be heaven or this could be hell
Then she lit up a candle and she showed me the way
There were voices down the corridor,
I thought I heard them say…

Welcome to the hotel California
Such a lovely place
Such a lovely face
Plenty of room at the hotel California
Any time of year, you can find it here

Her mind is tiffany-twisted, she got the Mercedes bends
She got a lot of pretty, pretty boys, that she calls friends
How they dance in the courtyard, sweet summer sweat.
Some dance to remember, some dance to forget

So I called up the captain,
Please bring me my wine
He said, we haven’t had that spirit here since nineteen sixty-nine
And still those voices are calling from far away,
Wake you up in the middle of the night
Just to hear them say…

Welcome to the hotel California
Such a lovely place
Such a lovely face
They living it up at the hotel California
What a nice surprise, bring your alibis

Mirrors on the ceiling,
The pink champagne on ice
And she said we are all just prisoners here, of our own device
And in the master’s chambers,
They gathered for the feast
The stab it with their steely knives,
But they just can’t kill the beast

Last thing I remember, I was
Running for the door
I had to find the passage back
To the place I was before
Relax, said the night man,
We are programmed to receive.
You can check out any time you like,
But you can never leave!

Rights of withdrawal from the European Union; Does a right of withdrawal exist?

The treaties were concluded “for an unlimited period”
● Article 53, TEU
● Article 356, TFEU
Accordingly, there is no right to withdraw from the EU unless such a right can be inferred or implied from treaty itself (Article 56, Vienna Convention on the Law of Treaties. However, Article 50 TEU (inserted by Lisbon) now allows a Member State to withdraw from the EU in accordance with its own constitutional requirements.

Provisions dealing with negotiation of withdrawal do not specifically deal with a Member State also departing from Eurozone. So there is a mechanism for withdrawal which comprises both EU and Eurozone membership under Article 50. This is followed by immediate re-application solely for EU membership under Article 49.

Rights of Withdrawal from the Eurozone

The Treaties do not create an express right of withdrawal from Eurozone. No right of withdrawal can be implied since inconsistent with Article 140(3), TFEU (which refers to the irrevocable fixing of the euro substitution rate for the acceding currency)

There is therefore no procedure available under which Member State can leave Eurozone but remain within EU. In strictly legal terms, such an outcome could only be achieved by a revision of the Treaties.

Both Member State in difficulties and all other Member States may agree that Eurozone departure would be in best interests of all. What legal avenues are open to them? Amendment/ratification of Treaties would be very time- consuming and would not answer a pressing urgency.

Suspension of treaty is allowed for a period, but merely gives time and does not affect overall legal position among the parties (Articles 60 and 72, Vienna Convention). There is therefore no treaty or legally-based mechanism allowing for a Eurozone (as opposed to an EU) exit on an urgent basis.

There is no easy way out of the Eurozone – voluntarily or compulsorily. This is to be expected given the inter-connected nature of the currency and of the European financial markets.

A Eurozone departure is not necessarily a remedy for the fiscal ills of the departing Member State and (unless a “position of strength” departure) is likely to increase its debt servicing costs, given that many external creditors will remain entitled to claim payment in Euro. Local creditors in the departing Member State itself and holders of domestic law obligations are the most likely to be disadvantaged by the withdrawal.

Assaults on Remaining Old Decency in Europe

Assaults on Remaining Old Decency in Europe

Assaults on Remaining Old Decency in Europe

The troubles of Greece, Ireland, Portugal, Spain and Italy are they really about debts and fiscal discipline? I guess not. Greece always remained the bastion of good national values and strong culture of decency. These values and principles are under assaults from the governments of big new Europa. Sovereign debts and bankruptcy are just few weapons in their arsenal for swallowing the remaining pockets of good old Europe.

Poland and few other countries, while not yet in direct firing, are very well aware of that and watching the grave developments anxiously and cautiously; and asking themselves who is next in the hit list.

The relationship between Germany and France despite being well-coordinated for now is very far from reliable and lasting. The third engine of new Europa, Britain, is discovering that its interests and relationship with France and Germany are at risk from power shifting and the EU assumption that the UK is in the periphery of Europa. The government of France is very content with role of assistant or deputy in the EU helm. Britain is definitely not.

Greece, Ireland, Portugal, Spain and Italy cannot sustain for long time the new pattern of interference, EU-appointed bureaucrat; and erosion of real democracy. The financiers’ and political conflicts in the EU are making bad economies even worse.

Will Greece, and other potential candidates, be allowed to pull out of the EU? The answer now is definitely NO; because even if Greece is not willing to accept the bailout with the attached conditions, the EU is still want to take Greece. New Europe cannot live with pain in the ***.

Economic Choices for Sensible Humans

Economic Choices for Sensible Humans

In managing the economy in any country, people and their government have to choose between four distinctly different available paths. Let us define them clearly and in simple terms:

Model A:

Maximize production & export; while maximizing consumption & imports. The results are: fast development; environmental degradation; and materialistic corporatism. (Capitalism)

Model B:

Maximize production & export; while minimizing consumption & imports. The results are: wealth accumulation; social disparities; and international hostility. (Communism)

Model C:

Low production & export; while maximizing consumption & imports. The results are: sovereign debts; loss of independence; and dysfunctional state. (Yet to know a name for this stupid system; suggestions are welcome!)

Model D:

Low production & export; while minimizing consumption & imports. The results are: slow development; low qualities; and weak defenses. (which are not bad as they may perceived). (Nationalism)

Only these models are demonstrated in all countries and the citizens can plainly know which way their country is going to, and argue with their governments the wisdom of their path.

So now what do people want? Do they want to be crazy; greedy; irresponsible; or vulnerable?

If people look deep inside their souls the answer will be definitely obvious.

The new democracy: Goldman Sachs conquers Europe

The Independent published on 18 November 2011 this revealing article written by Stephen Foley.

What price the new democracy? Goldman Sachs conquers Europe

Goldman Sachs Men in the EU

While ordinary people fret about austerity and jobs, the eurozone’s corridors of power have been undergoing a remarkable transformation

The ascension of Mario Monti to the Italian prime ministership is remarkable for more reasons than it is possible to count. By replacing the scandal-surfing Silvio Berlusconi, Italy has dislodged the undislodgeable. By imposing rule by unelected technocrats, it has suspended the normal rules of democracy, and maybe democracy itself. And by putting a senior adviser at Goldman Sachs in charge of a Western nation, it has taken to new heights the political power of an investment bank that you might have thought was prohibitively politically toxic.

This is the most remarkable thing of all: a giant leap forward for, or perhaps even the successful culmination of, the Goldman Sachs Project.

It is not just Mr Monti. The European Central Bank, another crucial player in the sovereign debt drama, is under ex-Goldman management, and the investment bank’s alumni hold sway in the corridors of power in almost every European nation, as they have done in the US throughout the financial crisis. Until Wednesday, the International Monetary Fund’s European division was also run by a Goldman man, Antonio Borges, who just resigned for personal reasons.

Even before the upheaval in Italy, there was no sign of Goldman Sachs living down its nickname as “the Vampire Squid”, and now that its tentacles reach to the top of the eurozone, sceptical voices are raising questions over its influence. The political decisions taken in the coming weeks will determine if the eurozone can and will pay its debts – and Goldman’s interests are intricately tied up with the answer to that question.

Simon Johnson, the former International Monetary Fund economist, in his book 13 Bankers, argued that Goldman Sachs and the other large banks had become so close to government in the run-up to the financial crisis that the US was effectively an oligarchy. At least European politicians aren’t “bought and paid for” by corporations, as in the US, he says. “Instead what you have in Europe is a shared world-view among the policy elite and the bankers, a shared set of goals and mutual reinforcement of illusions.”

This is The Goldman Sachs Project. Put simply, it is to hug governments close. Every business wants to advance its interests with the regulators that can stymie them and the politicians who can give them a tax break, but this is no mere lobbying effort. Goldman is there to provide advice for governments and to provide financing, to send its people into public service and to dangle lucrative jobs in front of people coming out of government. The Project is to create such a deep exchange of people and ideas and money that it is impossible to tell the difference between the public interest and the Goldman Sachs interest.

Mr Monti is one of Italy’s most eminent economists, and he spent most of his career in academia and thinktankery, but it was when Mr Berlusconi appointed him to the European Commission in 1995 that Goldman Sachs started to get interested in him. First as commissioner for the internal market, and then especially as commissioner for competition, he has made decisions that could make or break the takeover and merger deals that Goldman’s bankers were working on or providing the funding for. Mr Monti also later chaired the Italian Treasury’s committee on the banking and financial system, which set the country’s financial policies.

With these connections, it was natural for Goldman to invite him to join its board of international advisers. The bank’s two dozen-strong international advisers act as informal lobbyists for its interests with the politicians that regulate its work. Other advisers include Otmar Issing who, as a board member of the German Bundesbank and then the European Central Bank, was one of the architects of the euro.

Perhaps the most prominent ex-politician inside the bank is Peter Sutherland, Attorney General of Ireland in the 1980s and another former EU Competition Commissioner. He is now non-executive chairman of Goldman’s UK-based broker-dealer arm, Goldman Sachs International, and until its collapse and nationalisation he was also a non-executive director of Royal Bank of Scotland. He has been a prominent voice within Ireland on its bailout by the EU, arguing that the terms of emergency loans should be eased, so as not to exacerbate the country’s financial woes. The EU agreed to cut Ireland’s interest rate this summer.

Picking up well-connected policymakers on their way out of government is only one half of the Project, sending Goldman alumni into government is the other half. Like Mr Monti, Mario Draghi, who took over as President of the ECB on 1 November, has been in and out of government and in and out of Goldman. He was a member of the World Bank and managing director of the Italian Treasury before spending three years as managing director of Goldman Sachs International between 2002 and 2005 – only to return to government as president of the Italian central bank.

Mr Draghi has been dogged by controversy over the accounting tricks conducted by Italy and other nations on the eurozone periphery as they tried to squeeze into the single currency a decade ago. By using complex derivatives, Italy and Greece were able to slim down the apparent size of their government debt, which euro rules mandated shouldn’t be above 60 per cent of the size of the economy. And the brains behind several of those derivatives were the men and women of Goldman Sachs.

The bank’s traders created a number of financial deals that allowed Greece to raise money to cut its budget deficit immediately, in return for repayments over time. In one deal, Goldman channelled $1bn of funding to the Greek government in 2002 in a transaction called a cross-currency swap. On the other side of the deal, working in the National Bank of Greece, was Petros Christodoulou, who had begun his career at Goldman, and who has been promoted now to head the office managing government Greek debt. Lucas Papademos, now installed as Prime Minister in Greece’s unity government, was a technocrat running the Central Bank of Greece at the time.

Goldman says that the debt reduction achieved by the swaps was negligible in relation to euro rules, but it expressed some regrets over the deals. Gerald Corrigan, a Goldman partner who came to the bank after running the New York branch of the US Federal Reserve, told a UK parliamentary hearing last year: “It is clear with hindsight that the standards of transparency could have been and probably should have been higher.”

When the issue was raised at confirmation hearings in the European Parliament for his job at the ECB, Mr Draghi says he wasn’t involved in the swaps deals either at the Treasury or at Goldman.

It has proved impossible to hold the line on Greece, which under the latest EU proposals is effectively going to default on its debt by asking creditors to take a “voluntary” haircut of 50 per cent on its bonds, but the current consensus in the eurozone is that the creditors of bigger nations like Italy and Spain must be paid in full. These creditors, of course, are the continent’s big banks, and it is their health that is the primary concern of policymakers. The combination of austerity measures imposed by the new technocratic governments in Athens and Rome and the leaders of other eurozone countries, such as Ireland, and rescue funds from the IMF and the largely German-backed European Financial Stability Facility, can all be traced to this consensus.

“My former colleagues at the IMF are running around trying to justify bailouts of €1.5trn-€4trn, but what does that mean?” says Simon Johnson. “It means bailing out the creditors 100 per cent. It is another bank bailout, like in 2008: The mechanism is different, in that this is happening at the sovereign level not the bank level, but the rationale is the same.”

So certain is the financial elite that the banks will be bailed out, that some are placing bet-the-company wagers on just such an outcome. Jon Corzine, a former chief executive of Goldman Sachs, returned to Wall Street last year after almost a decade in politics and took control of a historic firm called MF Global. He placed a $6bn bet with the firm’s money that Italian government bonds will not default.

When the bet was revealed last month, clients and trading partners decided it was too risky to do business with MF Global and the firm collapsed within days. It was one of the ten biggest bankruptcies in US history.

The grave danger is that, if Italy stops paying its debts, creditor banks could be made insolvent.  Goldman Sachs, which has written over $2trn of insurance, including an undisclosed amount on eurozone countries’ debt, would not escape unharmed, especially if some of the $2trn of insurance it has purchased on that insurance turns out to be with a bank that has gone under. No bank – and especially not the Vampire Squid – can easily untangle its tentacles from the tentacles of its peers. This is the rationale for the bailouts and the austerity, the reason we are getting more Goldman, not less. The alternative is a second financial crisis, a second economic collapse.

Shared illusions, perhaps? Who would dare test it?