By Søren Søndergaard, MEP for The Danish People’s Movement Against the EU

There is cause for anxiety as the Danish Government has already accepted the notion of the EU having new revenues from taxation.

The Government wants to use the Danish EU presidency during the first six months of 2012 to work for new EU taxes, it appears from a letter from Foreign Secretary Lene Espersen to Søren Søndergaard, MEP for the Danish People’s Movement Against the EU.

After having rejected direct EU taxation the foreign secretary’s letter says that Denmark will not reject ”the introduction of sources of income following from EU legislation”. And the letter ends with the following passage: ”As we are to hold the Presidency it will of course be our responsibility to further a compromise in the negotiations on the future financial perspectives, which will undoubtedly be very difficult, and in that connection we shall among other things have to consider various models for financing the EU budget.”

There is cause for anxiety as the Government has already accepted the notion of the EU having new revenues from taxation apart from what national parliaments approve. That will be yet another step towards making the EU system independent of the democratic decision making processes in the individual countries.

I shall urgently appeal to the Europe Committee of Folketinget, the Danish Parliament, to reject the Government’s plans for new taxes.

Søren Søndergaard, MEP, the Danish People’s Movement Against the EU

A copy of the letter (In Danish) from the Foreign Secretary to Søren Søndergaard can be order by e-mailing to soren@folkebevaegelsen.dk or ib@folkebevaegelsen.dk.

Two polls made in July show an ever increasing majority against Norwegian EU membership.

The polls made by Sentio for newspapers Nationen and Klassekampen showed these figures (per cent) for June and July:

………………….Yes……….No……..Don’t know
June 2010…….26.7……..62.5……11.8
July 2010……..25.3……..66.1……..8.6

Only one party, Høyre (Cons.) can muster a small majority for Yes (47 per cent as against 44).

Source: Nationen 19.07.2010

According to another July poll, however, the Yes majority in Høyre has also vanished. The poll made by Nordstat for NRK (the public service TV and radio) only 42 per cent are positive, while 50 per cent are negative. This is the first time ever that Høyre is unable to muster a majority for EU membership among its members.

Source: Nationen 26.07.2010

Luise Hemmer Pihl, Team Board member

Polls in UK, Germany, Denmark, Sweden and Estonia show a clear No to the Euro

21st of July 2010

In at least five EU countries there is a majority against the Euro. In referendums you can’t vote “unsure” – only Yes or No count. Therefore below “unsure” has been taken out of results.

In June 2010 polls have been carried out in Denmark, Sweden, Germany and Estonia all showing a clear No.

In Denmark, Danmarks Statistik made the poll for Danske Bank, showing that 56 per cent would vote No if there where a referendum today.
In Sweden, Statistiska centralbyrån SCB made it, showing that 68 per cent would vote No.
In Germany it was Ipsos who made it, showing that 63 per cent would vote No.
In Estonia, TNS Emor made it, showing that 56 per cent would vote No.
In the United Kingdom, the latest poll is from April 2010, made by YouGov, showed that 76 would vote No.

Out of these five EU countries only Germany has the Euro today. The German government has no intention of calling a referendum on the Euro. The EU has said finally Yes to admitting Estonia to the eurozone from January 2011, and the Estonian government has no intention of having any referendum. In Denmark, it is still the official goal of the government to call a referendum with the view of securing a Yes. The governments of the United Kingdom and Sweden have chosen the opposite position, shelving all plans of a referendum on this issue.

French think euro exacerbates crisis

So far we do not have any polls on Yes or No to the Euro from other EU countries. If anyone knows about recent polls, please send us a link about it to ib (at) folkebevaegelsen.dk. However we have found an interesting poll from France made in June 2010 by TNS Sofres for Europa 1, itélé and Le Monde. It shows that 68 per cent of the French think that euro will exacerbate the consequences of the crisis (read more in Le Figaro)

Source: Folkebevaegelsen mod EU, Denmark

EU commissioner vows to block ‘silly’ petitions

The European Commission will filter citizens’ petitions to make sure that “silly” initiatives like abolishing the EU are blocked, Maroš Šefčovič, a vice-president of the EU executive, told EurActiv in an interview ahead of talks today (6 May) on improving the transparency of EU decision-making.

The European Citizens’ Initiative (ECI), introduced by the Lisbon Treaty, allows citizens to request new EU legislation once a million signatures across at least nine member states have been collected asking the Commission to do so.

“Citizens have an instrument to set the agenda of the European Union,” said Šefčovič, responsible for inter-institutional relations and administration at the EU executive, expressing hope that grassroots organisations will use the ECI to help citizens “influence the work of the Commission” and request action on “concrete purposes”.

The Slovak commissioner predicted that the ECI would be used “in a positive manner,” but warned that “great care” would be required to ensure that it is not abused.

An “admissibility check” after 300,000 signatures have been collected should ensure that an initiative has genuine backing, Šefčovič said.

Moreover, the Commission has introduced “safeguards” on registering new initiatives, including an obligation to provide details of who is behind the petition, how they are being funded and what they are hoping to achieve before a new initiative can be registered, he explained.

Asked whether the ECI could one day oblige the Commission to draft legislation on abolishing the EU or banning the Islamic burqa, Šefčovič said “it is quite clear that if it comes to silly initiatives, there will just be an administrative procedure and the initiative will not be registered”.

“You can very easily have contradictions between freedom of expression and freedom of religion,” he warned, explaining that “political decisions” on the admissibility of controversial cases would be referred to the college of commissioners.

“Of course, these decisions will be challengeable in the European Court of Justice,” Šefčovič said.

tnx to OpenEurope and EurActiv

After so many years of non-existing public discussion people in Croatia are finding Facebook as the only viable medium to discuss their future - either within or out of the European Union.

You can join two groups for now:

ISTINA O KOJOJ SE ŠUTI U REPUBLICI HRVATSKOJ (TRUTH THAT IS SILENCED IN CROATIA)

Inicijativa za pokretanje javne rasprave o ulasku Hrvatske u EU (An initiative to launch a public debate on Croatia joining EU)

And admire a page:

Svi koji će na referendumu glasati protiv ulaska Hrvatske u EU (All those that will vote against Croatia joining the EU)

Will Facebook halt the EU enlargement? No, as always it will be the People… with some appropriate tools.

EXECUTIVE INTELLIGENCE REVIEW PRESS RELEASE:

Prof. Joachim Starbatty, one of the four German Professors who will file a constitutional complaint against the EU bailout policy, has given an exclusive interview to the Executive Intelligence Review. The interview will be immediately posted on the German EIRNA website and will appear in the coming issue of Neue Solidarität, and will also come out in the next issue of EIR.

In the interview, Starbatty says that as soon as the German government issues a bill for participation in the Greek bailout, the four professors “will proof the text and immediately act.” If the Constitutional Court supports the complaint, “this will create a dynamic situation. This means that an exit of Germany [from the Euro] is not excluded.” If this happens, other nations would follow, giving birth to “a new, stable bloc, he said. This would be less painful than it seems, and “the United States would gain an ally in any future reorganization of the world currency system and the global economy”.

The EU intention to introduce a control mechanism on national budgets amounts to “the development of the EU into a quasi-federal state through the back door. This conflicts with the ruling of the German Constitutional Court on the Lisbon Treaty,” Prof. Starbatty says. Article 136 of the Lisbon Treaty, used by EU leaders to back their intentions, “is no basis for a transfer of political competencies. The Bundestag must express its opinion on that.”

Prof. Starbatty exposes the shock therapy to be imposed on Greece as “fatal.” He added: “It is like German Chancellor Brüning’s policy in the early 1930s: in a severe recession, to cut expenditures, increase taxes, freezing and cutting wages. Brüning did that in order to gain reputation on the international capital markets. The Greeks are currently in a similar situation. No other industrial country carries out this Brüning-like policy because it leads from a recession to a depression.”

Instead, Greece should leave the European Monetary Union (EMU) and its “Euro-debts should be cut down according to the [currency] devaluation. The banks should participate in the consolidation; they consciously took a high risk.”

Another article on the technical background of the Greek crisis:

Is Titlos PLC (Special Purpose Vehicle) The Downgrade Catalyst Trigger Which Will Destroy Greece?

And and article from the Financial Times by Wolfgang Munchau:

Europe’s choice is to integrate or disintegrate

Monday, 3 May 2010

The aim of the rescue package agreed for Greece cannot conceivably have been to prevent a default. For all the daunting austerity and structural reform it requires, the numbers do not add up. The main purpose I can detect is to reverse the rise in Greek bond yields and stop contagion.

We should not knock this deal from Athens. The eurozone might not have survived otherwise. This column would have been an obituary. I am also glad to note that those in charge gave a positive answer to a question I posed last week, which was whether the authorities would ever get ahead of the situation. They did, and they deserve credit.

But in spite of the readiness to accept extreme austerity, Greece will not get by without some form of debt forgiveness. I can understand why the International Monetary Fund and the European Union did not want to open that can of worms at this point. It would have prolonged the negotiations. In the middle of an acute bond market crisis one has to manage expectations very carefully.

A debt restructuring will eventually be necessary, however, because Greece’s debt to gross domestic product ratio is going to rise from its current 125 per cent to about 140-150 per cent during the adjustment period. Without restructuring, Greece will end up austere, compliant, and crippled.

The decision to take Greece out of the capital markets for three years will prevent immediate ruin but has only a marginal impact on the country’s future solvency. The underlying assumption of the agreement is that Greece can sustain austerity beyond the time horizon of the accord, without falling into a black hole. The latter is particularly optimistic. Standard & Poor’s, the rating agency, last week estimated that Greece would not return to its 2009 level of nominal GDP until 2017.

Last week gave us an inkling of the vicious circles at play in such a crisis. First, a country’s financial situation deteriorates. Then a rating agency downgrades the debt, which in turns triggers a rise in market interest rates. That leads to a further financial deterioration.

Another such loop goes via the banking sector. If a government’s solvency is in doubt, so is the solvency of the banks, whose liabilities are guaranteed by the government. Last week, the banking sector in large parts of southern Europe was in effect cut off from the capital markets.

Angela Merkel and her inexperienced economic advisers have no idea about the dynamics of sovereign crises. They never bothered to look at the experience of other countries, notably Argentina. Waiting until the moment a country is about to fail - which is how the German chancellor interpreted the political agreement she accepted in February - constitutes an abrogation of leadership that is bound to end in financial ruin. It means that everybody, Germany especially, has to pay billions of euros more than would have been the case if the EU had sealed this in February.

On my estimate, the total size of a liquidity backstop for Greece, Portugal, Spain, Ireland and possibly Italy could add up to somewhere between EUR 500bn ($665bn, £435bn) and EUR 1,000bn. All those countries are facing increases in interest rates at a time when they are either in recession or just limping out of one. The private sector in some of those countries is simply not viable at those higher rates.

As I have argued before, three things are required if the eurozone is to survive in the medium term: a crisis resolution system, better fiscal policy co-ordination, and policies to reduce intra-eurozone imbalances. But this is only the minimum necessary to get through the next few years. Beyond that, the eurozone will almost certainly need both an embryonic fiscal union and a single European bond.

I used to think that such constructions would be desirable, albeit politically unrealistic. Now I believe they are without alternative, as the experiment of a monetary union without political union has failed. The EU is thus about to confront a historic choice between integration and disintegration.

Germany can be relied on to resist every one of those measures. In the meantime, European leaders will treat each new crisis with the only instrument they have available: an injection of borrowed liquidity. But this instrument has a finite lifespan. If it is not blocked by popular unrest, it will be blocked by constitutional lawyers.

On one level, I agree with those lawyers. There can really be no doubt about what the “no bail-out” rule was intended to mean. It meant that Greece should not be supported. The EU had to resort to some unseemly legal trickery to argue that advancing junior loans at a massive scale to an effectively insolvent country does not constitute a bail-out. The clause - Article 125 of the Lisbon treaty - is irresponsible. If you follow it, you end up breaking the eurozone. So far, the choice has been to break the clause instead, and now would be the right moment to change it.

So what is the endgame of the eurozone’s multiple crises? For Greece it will be debt restructuring, a polite term for negotiated default. The broader outcome is more difficult to predict: it will either be deep reform of the system or a break-up.

Prague, April 29 (CTK) - Most Czechs (55 percent) do not want the Czech Republic to adopt the euro, according to a poll of the firm CVVM, while in 2001, 52 percent of people would have welcomed the euro.

Now only 38 percent would be glad if the Czech Republic adopted he euro.

Between 2001 and 2010, euro preferences gradually overturned and in 2007, the euro’s opponents for the first time prevailed moderately over its advocates.

“In the latest poll, the difference has gained in importance, reaching 12 percent,” CVVM poll says.

Still last year, 47 percent of people were against the euro and 44 for the single European currency.

Among the euro’s main opponents are the voters of the Social Democrats (CSSD), Communists (KSCM), the elderly, people with apprentice training and people with low standard of living.

The euro’s advocates are people voting for the Civic Democrats (ODS), people with university education, people aged less than 30 and people with good standard of living, shows the poll.

from The Prague Daily Monitor

Spain’s economy was thrown into chaos on Thursday when its credit rating was cut, sharpening fears that Britain may suffer a similar fate.

The turmoil came just a day after Greece’s rating was cut, increasing concerns of a Europe-wide financial crisis.

The euro fell sharply and the interest rates European governments pay to borrow money jumped after Standard and Poor’s, a credit ratings agency, downgraded Spain.

Last night the government in Madrid appealed for calm, promising an “austerity programme” to cut spending.

But economists fear that events in Spain show that financial “contagion” is spreading from Greece, as investors are scared off investing in any European country with significant government deficits.

from Telegraph

by David Marsh

(The writer is senior adviser to Soditic-CBIP LLP, chairman of SCCO International and author of “The Euro - The Politics of the New Global Currency”)

Financial Times, Wednesday 27 April 2010

When Josef Joffe, then foreign editor of the German daily Süddeutsche Zeitung, wrote a 4,000-word essay in December 1997 attacking the planned formation of the European single currency, he published it first in English, in the New York Review of Books. “Never in the history of democracy have so few debated so little about so momentous a transformation in the lives of men and women,” noted Mr Joffe. As if to confirm his point, the article appeared in an abridged German translation in the Süddeutsche Zeitung more than a month later, unobtrusively buried in a weekend supplement.

The episode illustrates past barriers to plain speaking about economic and monetary union (EMU). Many ordinary Germans always feared the euro would be less stable than the D-Mark. Yet, reflecting postwar belief that German interests ineluctably overlapped with Europe’s, there was little discussion of the risks. This went beyond Germany. One senior Dutch central banker, now retired, says most European governments - including his own - agreed the Maastricht treaty 20 years ago without understanding what they had signed into law.

In April 1998, Germany’s parliament voted through the euro with only minimal opposition. Now, the German-in-the-street is making up for lost time. Popular antagonism to public funding for struggling euro members makes Chancellor Angela Merkel highly cautious on emergency aid for Greece.

There is an air of déjà vu. Wilhelm Hankel, Wilhelm Nölling, Karl Albrecht Schachtschneider and Joachim Starbatty, four German professors who launched an unsuccessful anti-euro lawsuit at the constitutional court in 1998, are preparing fresh legal action. Their claims of infringements to the EMU rules, in particular over the “no bail-out clause” preventing joint payment of weaker states’ debts, have a much greater chance of success this time.

As Greece approaches a possible debt restructuring and even a euro exit, questions are due on why warning signals went ignored that weaker eurozone countries were building up unsustainable borrowings. In technical reports during the past two years - well before the recent Greek budget deficit controversy - the European Commission voiced worries about rapidly rising short-term external debt in Greece and Portugal, caused by huge current account deficits. Yet the Commission’s widely publicised, largely laudatory report on the euro’s first decade in May 2008 devoted only three paragraphs in 328 pages to current account imbalances.

Jean-Claude Trichet, European Central Bank president, has been caught off-guard by the German backlash. When criticism of Greek accounting irregularities first erupted in 2004-05, Mr Trichet stated “we must learn from past experience” to prevent recurrence. That such efforts have failed has dented the ECB’s image.

Inadequate discussion of the eurozone’s problems has been particularly acute on the issue of whether monetary union required political union. Both the Bundesbank and Helmut Kohl, the former German chancellor, suggested in 1991 that without political union, Emu would eventually fail. In the intervening years, leading German figures softened their views. In 2006 Otmar Issing, former chief economist at the Bundesbank and then the ECB, said monetary union “can work and survive … without fully fledged political union”. Now Mr Issing says: “In the 1990s many economists - I was among them - warned that starting monetary union without having established a political union was putting the cart before the horse.”

Leading German figures never explained that large deficits in countries such as Greece would eventually impinge on Germany’s own finances. Germany, the main surplus country, has inevitably become the largest creditor of the eurozone’s heavily indebted peripheral nations. As Mr Issing said in 1999, the no bail-out clause was meant to prevent the “negative external effects of national misbehaviour” from spilling over elsewhere. In fact, German taxpayers will have to pay for Greece: directly, through emergency government loans; indirectly, through supporting German banks that will be hit by a Greek debt restructuring; or, conceivably, both.

This is one of many costly facts about monetary union now bursting disagreeably to the surface.

Comment by Anthony Coughlan:

The article from today’s Financial Times points to the lack of public debate across the EU on the real implications of the 1992 Maastricht Treaty’s proposal to abolish national currencies and replace them with the euro.

In Ireland’s 1992 referendum on the Maastricht Treaty the main thrust of public debate was on the Abortion Protocol attached to that Treaty.

There was virtually no discussion of the economics involved, apart from the fact that it would make it easier for Irish tourists to go on holiday on the continent and that it would give us permanently low German-level interest rates! The latter in due course helped impel our early-2000s borrowing binge.

The article mentions Professor Albrecht Schachtschneider and his colleagues, who launched a constitutional challenge to Germany’s ratification of the Maastricht Treaty at the time. This led to the Court’s well-known Brunner judgement, which laid down the constitutional principles governing Germany’s adherence to Economic and Monetary Union.

My colleagues and I had the pleasure of welcoming Professor Schachtschneider when he came to Ireland last September to show solidarity with those urging a No vote to the Lisbon Treaty.

We wish him and his colleagues every success if they now take action in the German Constitutional Court against the breach of the EU Treaties which a financial bail-out of Greece or any other EU State in face of the current bond-market crisis would constitute.

EUOBSERVER / BRUSSELS - Greece has formally placed a request to activate a €40-45 billion EU-IMF aid package, a day after new budget deficit figures revealed the country’s 2009 shortfall to be worse than previously forecast.

The only slight problem he has (Brits can still do understatement as well) is that Germany has refused to put in place enabling legislation that will allow Merkel to put her euros in the pot. As with all participants behind the €30bn (£26bn) of eurozone loans, they will need to pass new laws from scratch before handing over any cash.

This, we are told, stretches the timeline into the second half of May before the “colleagues” can deliver, which is going to make it a close-run thing. The Greeks have bonds worth €11.6 billion maturing at the end of that month. They are going to have to rely on the IMF to bail them out.

Fresh figures released by the EU’s statistics office, Eurostat, on Thursday revealed Greece’s 2009 deficit to be 13.6 percent of GDP, significantly higher than the previous 12.7 percent forecast.

Markets subsequently leapt on the new EU data, sending the yield on 10-year Greek bonds to 8.83 percent, the highest since 1998, and prompting credit rating agency Moody’s to cut the country’s sovereign rating from A2 to A3. On Friday, bond yields retreated marginally following the formal aid request.

From EUobserver and EU Referendum.

The Bundestag on Thursday (22 April) is set to hold a landmark vote on European affairs, with the first binding EU recommendation for its government to follow in respect to Iceland’s membership bid to join the bloc.

Although not a controversial one, the vote is a premiere in German politics, after lawmakers acquired a greater say on the government’s EU policies. These extra powers were key for the Bundestag last year to approve the Lisbon Treaty, the EU’s new legal framework, which the German constitutional court said did not provide enough parliamentary oversight.

from EUobserver

problems:

1. Icelanders don’t want to hear about EU anymore
2. Post-Lisbon Germany has a privileged status among EU members. German Parliament alone has special status among Parliaments of other EU memberstates.

Morgan Stanley fears German exit from EMU

By Ambrose Evans-Pritchard from The Telegraph
Published: 6:12PM BST 15 Apr 2010

“The backstop package for Greece and the ECB’s climb-down on its collateral rules set a bad precedent for other euro area states and make it more likely that the euro area degenerates into a zone of fiscal profligacy, currency weakness, and higher inflationary pressures over time,” said Joachim Fels, head of research, in a note to clients.

The US bank said a bail-out for Greece may be necessary to avoid a crisis for Europe’s financial system, but warned that it also “sows the seeds for potentially even bigger problems further down the road”.

Mr Fels said weak states cannot easily leave EMU because they would pay a stiff penalty in higher rates, would be stuck with euro debt contracts, and might need controls to stem capital flight. It is a different calculus for Germany, which would see lower rates and might view EMU exit as the only way to ensure monetary stability.

“Obviously, we have not reached the end game yet. However, with the latest developments, such a break-up scenario has clearly become more likely. The risk is far from negligible and the consequences for financial markets would be very severe. Investors ignore the break-up risk at their peril,” he said.

Jürgen Stark, the European Central Bank’s chief economist, vowed on Thursday to resist pressure to help spendthrift governments out of their troubles by resorting to easy money. “Let me stress that any call to reduce the real value of public debt through higher inflation will be firmly opposed by the ECB,” he said.

Dr Stark said the global credit crisis is starting to metamorphose into a deeper solvency threat to highly-indebted states. “We may already have entered into the next phase of the crisis: a sovereign debt crisis following on the financial and economic crisis. Most governments in the advanced countries will exit from recession with the highest deficit and debt-to-GDP ratios recorded in times of peace. It is essential to prevent public finances from running out of control,” he said.

Dr Stark said public debt will reach 88pc of GDP next year in the eurozone and the UK, 100pc in the US and 200pc in Japan. “There is no doubt that fiscal policies have been put on a path that is not sustainable,” he said.

He did not name the eurozone’s main sinners, but his warnings are clearly directed at Greece, Spain, Portugal, Italy, and Ireland. The refusal to let EMU-wide inflation creep up means that these countries will have to carry out “internal devaluations” - or deep wage cuts - to bring their economies back into line with North Europe. Debt costs must be serviced from a shrinking economic base. Critics - including some in IMF circles - retort that such a policy risks pushing these states into debt-deflation spiral and may not work.

April 9th 2010

Former FM: No one is fighting for EU membership in Iceland

Former Foreign Minister of Iceland, Ingibjörg Sólrún Gísladóttir, said to the German journalist Clemens Bomdorf yesterday (April 8) that no one was really fighting for membership of the European Union in Iceland any longer. Membership would probably be rejected in a referendum and it was therefore even better to postpone the EU application rather than to continue the process in total uncertainty.

Gísladóttir is one of the most outspoken supporters of EU membership in Iceland and former chairman of the Social Democratic Alliance, the only political party in Iceland that favours membership. With these comments she joins a growing number of EU supporters in Iceland that have openly aired their worries about the EU application and predicted that it will be rejected by the Icelandic people.

thanks to EU news from Iceland

source EP

The Constitutional Affairs Committee gave its support on Wednesday to a modification of the Lisbon Treaty that would allow 18 new Members of the European Parliament to take their seats during the ongoing legislature. They did not consider it necessary to call a Convention to discuss the treaty change.

The number of MEPs needs to be increased because the June European Parliament elections were held under the rules of the Nice Treaty, which sets the number of MEPs at 736, while the new Lisbon Treaty, which entered into force on 1st December 2009, allows 751 seats.

Treaty change necessary to permit 754 Members

The allocation of new seats was decided during the Lisbon treaty negotiations. Twelve countries will get to send new MEPs to Brussels and Strasbourg: Spain will get four new seats. Austria, France and Sweden will get two, while Bulgaria, Italy, Latvia, Malta, the Netherlands, Poland, Slovenia and the United Kingdom will all have one more MEP.

The only country to have fewer MEPs under the new treaty is Germany, which loses three seats, from 99 to 96. As all 99 current German Members will continue their mandate until the end of this legislature, the number of MEPs will temporarily rise to 754. In order for this to be possible, a treaty change is necessary.

Council has therefore made a proposal to amend the Lisbon Treaty and is now consulting Parliament. If Parliament approves the proposal, it will still need to be ratified by all 27 Member States. Meanwhile, the 18 new MEPs could be invited as observers, but Parliament has not yet made any decisions on when this might happen.

No Convention needed

The Constitutional Affairs Committee also agreed with Council’s recommendation not to summon a Convention to officialise the treaty change. Calling a Convention is a possibility written into the Lisbon Treaty, and Parliament’s consent is needed for any treaty changes taking place without a Convention.

The resolution on the treaty change was adopted by 16 votes in favour, 5 against and 2 abstentions. The recommendation on not convening a Convention was adopted by 17 votes in favour, 5 against and 1 abstention. Both were drafted by Íñigo Méndez De Vigo (EPP, ES). Parliament is expected to vote on these issues at the Brussels additional plenary to be held on 5 and 6 May.

Wednesday, 7 April 2010

In the chair: Carlo CASINI (EPP, IT)

by Wolfgang Münchau, Financial Times, Easter Monday 5 April 2010

I am willing to risk two predictions. The first is that Greece will not default this year. The second is that Greece will default. The Greek government has demonstrated that it can still borrow at a rate of about 6 per cent but if you do the maths on the public debt dynamics, as I did recently, it would be hard to arrive at any other scenario than an eventual default.

The adjustment effort needed to prevent a debt explosion is extremely large. The Nordic countries achieved adjustment on a similar scale during the 1980s and 1990s, but they had two advantages over Greece. They did it in a different global environment; but more crucially they were, in part, able to devalue and improve their competitiveness.

As a member of a large monetary union Greece can improve its competitiveness only through relative disinflation against the eurozone average, which in effect means through deflation. But as the French economist Jacques Delpla has pointed out, this will invariably produce a debt-deflation dynamic in the Greek private sector of the kind described by the economist Irving Fisher during the 1930s.

So Greece will not only have to make an extremely large public sector deficit reduction effort but it will also have to do this under a condition of disinflation, and possibly deflation, which would push its nominal growth rate to negative levels during the adjustment period. That, in turn, would jeopardise the debt reduction programme of both the public and private sectors. Under those circumstances, there is no way that Greece could ever stabilise its debt-to-gross domestic product ratio, no matter how hard the government of George Papandreou tries.

To get out of this mess, one of five things will have to happen. The first, and most optimistic, solution would be a significant fall in the euro’s exchange rate, say to parity with the US dollar, coupled with a strong recovery in the eurozone. This might just do the trick to sustain Greek growth as it adjusts. The second is that Greece gets access to low interest rate loans from the European Union and the International Monetary Fund. The third would be a private sector debt restructuring to prevent a Fisher-style debt-deflation dynamic. The fourth is that Greece leaves the eurozone. The fifth is default.

If you go through the options one by one, you realise that the first is improbable. The EU has in effect ruled out the second. The third would require an unlikely additional bail-out of the European banks. While option four would be most convenient for the Germans, the Greeks are not so stupid as to leave the eurozone. That leaves them with option five: to default inside the eurozone. It is the only option that is consistent with what we know.

But it would throw the eurozone into a potentially terminal crisis. Spain and Portugal have problems of a different kind but of a similar dimension. Spain will have to go through a disinflation/deflation period that will produce a formidable private sector debt-deflation spiral. Without devaluation, or the possibility of a sustained fiscal boost, the Spanish depression could last forever, or at least for as long as the country stays in the monetary union. Portugal, like Greece, suffers from a combined public and private sector debt problem.

When a country such as Greece pays 300 basis points over the yield of a supposed risk-free bond, this means, mathematically, that investors see a probability of around 17 per cent that they will lose 17 per cent of their investment. So in other words, a spread of 300 basis points is a valuation in which default is still considered improbable. If those perceptions changed from improbable to, say, moderately probable, the yield spreads between southern European countries and Germany would explode.

For the time being, Greece can get by because of its excellent debt management, which is why I am confident that Greece is not going to need an immediate bail-out. But given the political economy of the EU, this might turn out to be a disadvantage. Europe’s complacent leaders will only step in if a crisis is both imminent and visible. The really treacherous aspect about the Greek crisis is that the country’s liquidity position is better than its solvency position. Insolvency is a gradual, invisible process. The negative effects of debt-deflation dynamics have not yet begun, but will become inevitable as the Greek public and private sectors go through a simultaneous debt reduction process. In such an environment my assumption of a 2 per cent rate of nominal growth might be far too optimistic. And even with such an unrealistically optimistic assumption, default would be hard to avoid.

There have only ever been two intellectually honest views about economic and monetary union. The first is that it could not work, as it would eventually produce a situation in which a country’s national interest conflicts with the interest of the monetary union at large. The second is that it could work, but only for as long as member states are ready to co-ordinate economic policy in the short run, and move towards a minimally sufficient fiscal union in the long run. The message from the EU, and from Germany in particular, is that the latter has now been ruled out.

In the Swiss newspaper Zeit Fragen, Professor Dr. Eberhard Hamer from Germany asks, “How Sovereign is Europe?”

He examines the issue and concludes that Europe has little, if any, sovereignty.

Professor Hamer writes that the sovereign rights of Europeans as citizens of nation states were dissolved with the coming into force of the Lisbon Treaty on Dec. 1, 2009. The rights of the people have been conveyed to a political commissariat in Brussels. The French, Germans, Belgians, Spanish, British, Irish, Italians, Greeks, and so forth, now have “European citizenship whatever this may be.”

The result of aggregating nations is to reduce the political participation of people. The authority of parliaments and local councils has been impaired. Power is now concentrated in new hierarchical structures within the European Union. European citizenship means indirect and weak participation by people. Self-rule has given way to authoritarian rule from top to bottom.

Professor Hamer then examines the EU commissariat and concludes that it, too, lacks sovereignty, having submitted to the will of the United States. The problem is not only that Europeans are waging an unconstitutional war ordered by the U.S. in a region of the world where Europe has no interests. Europe’s puppet state existence goes far beyond its mercenary service to the American Empire.

The EU has given in to Washington’s demand for “free access to the banking data of the central financial service provider, Swift, in Europe. All financial flows in Europe (and between Europe and the rest of the world) will now be monitored by the CIA and other American and Israeli intelligence services.” The monitoring will include transfers within Germany, for example, and within individual cities. “The data, even data of completely innocent citizens, have to be stored for five years, of course, at the expense of the banks and their customers.”

How sovereign is the EU when it it unable to protect the financial privacy of its citizens from foreign governments?

This and more in globalresearch.ca article.

The newest opinion poll in Iceland on membership of the European Union published earlier this month suggests that about 70 percent of Icelanders would vote NO if a referendum was held now, up more than 8 percent since September 2009. Of those 51 percent were absolutely certain they would reject membership. At the same time only about 30 percent said they would vote YES.

The same poll also asked if people were in favour of EU membership with 60 percent saying they were not and only 24.4 percent saying they were. If those undecided are excluded the outcome is pretty much the same as in the referendum question mentioned above.

The vast majority in all social groups are opposed to EU membership whether with regard to sex, age, education, income, residense, or political affiliation with only one exception, the majority of the voters of the social democrats favour membership.

Source: The results of the Capacent poll

tnx to: EU News From Iceland

TEAM - The European Alliance of EU-Critical Movements

February 2010

Dear EU-critical organizations of TEAM

This is the first call for the TEAM AGM 2010, which will take place in Stockholm on May 7th-9th. Details will be forthcoming, but please reserve the weekend.

The year 2009 has been a dramatic one in the European Union, and after the ratification of the Lisbon Treaty there is more need for TEAM than ever.

The Yes to the Lisbon Treaty was a Pyrrhic victory for the EU elites. They gained the Lisbon Treaty but lost the hearts of the peoples because of the bullying that led to their victory.

With Lisbon the EU’s political centralization has reached new levels, making the struggle for democracy and true European cooperation more challenging than ever.

TEAM – our umbrella network of more than 40 EU-critical organizations in 18 countries – can challenge the new centralized EU. But only if the member organizations want to put it to use. And this is what the TEAM Board will aim to do. Four issues are high on the list of challenges to be met in the coming year:

1. Assistance to Iceland’s campaign to remain outside the EU
2. Assistance to Denmark’s campaign to keep the opt-outs from the euro, the EU military, the supranational EU justice policy and the EU citizenship.
3. Reaching out to groups that resist the adoption of the Euro in Eastern and central Europe.
4. Giving a close scrutiny to the ”citizens initiative” in the Lisbon Treaty. This institution is vaguely described as an opportunity for one million people from several countries to make a proposal to the EU Commission for a change of laws.

If your organization wants to assist TEAM in this work or has ideas for the TEAM’s Action Program 2010, please send us an e-mail to TEAM coordinator Luise Hemmer Pihl, (e-mail skrodhoj@mail.dk), or TEAM Secretary General (Blaž Babič, e-mail blaz.babic@amis.net).

Do not hesitate, we are looking forward to hearing from you!

Best,

TEAM Board members
Luise Hemmer Pihl, Lea Launokari, Eli van den Eynden, Patricia McKenna, Alain Bournazel, Stuart Coster and Urs Schürch

How hard it is to collect 1 million signatures in member countries of EU? Here comes one example how EU Commission’s decision could be changed.

But beware - opposition to GM food may slowly make you accept phrases like “Europeans” or “EU citizens” and also accept the undemocratic logic of the Lisbon Treaty.

GM FOOD: FACTS NOT CROPS

The European Commission has just approved growing genetically modified crops for the first time in 12 years, putting the GM lobby’s profits over public concerns — 60% of Europeans (read: Citizens of EU member states) feel we need more information before growing foods that could threaten our health and environment.

A new initiative allows 1 million EU citizens (read: Citizens of EU member states) a unique chance to make official requests of the European Commission. Let’s build a million voices for a ban on GM foods until the research is done. Sign the petition and spread the word.

From (Labour Movement) CAEF - Campaign against Euro-federalism (in Britain)

To our trade union colleagues in Greece. We express solidarity with the actions taken by trade unions in Greece against the draconian criteria of the EU’s Growth and Stability Pact, and the dictats of the European Central Bank.

It is clear that cuts in Public Expenditure are part of an EU wide onslaught by big capital, the European Round Table of Industrialists, European Commission and Germany in particular.

These interests want the working class to “tighten their belts” and pay for and resolve the ills of the fiscal and economic crisis. At the same time it is an attempt to hand everything to the private sector and remove democratic accountability without any regard for the social consequences.

It is clear that for Greece and other EU Member States, including Britain, in a similar situation that the only rational course is to fully recover the right to self-determination and national independence and democracy.

We wish you every strength in your actions in this crucial period.

John Boyd
Secretary

CAEF is a member of TEAM

Dear members, observers and friends of TEAM,

at the TEAM Board meeting (on 3rd of March) Board members confirmed the proposal that TEAM AGM 2010 (Annual General Meeting) is to take place in Stockholm, Sweden, on 8th and 9th of May 2010.

You may start planning your train, bus, boat or plane tickets.

For further details please turn to: Eli van der Eynden from Nei til EU, Norway and Jan-Erik Gustavsson from Nej til EU, Sweden. Program proposals, ideas, wishes are to be sent to “eli_eynden@hotmail.com” or “janerik@bahnhofbredband.se”.

Venue of the AGM will be: ABF-huset, Sveavägen 41, Stockholm.

Please use also Facebook event page.

7th May 2010
20.00_______________Unofficial get-together at Scandic Malmen Hotel (close to subway station Medborgarplatsen).

Draft programme TEAM public meeting

8th May 2010

ABF-huset, Stockholm

11.30 - 12.30_______Press conference
12.00 - 12.30_______ Registration
12.30 –13.45________The euro and the EU financial and economic crisis
Speaker one, 25 minutes (Stefan de Vylder, Sweden)
Speaker two, 25 minutes (Hallgrimur Arnasson, Isafold, Iceland)
Discussion, 25 minutes
Swedish moderator (Hans Lindqvist to confirm)

13.45 – 14.15_______coffee and small talk

14.15 – 15.00_______The Lisbon Treaty
Speaker, 25 minutes (Patricia McKenna, People’s Movement Ireland)
Discussion, 20 minutes
Swedish moderator (Jan-Erik Gustafsson, Folkrörelsen Nej till EU)

15.00 -15.15________coffee talk

15.15 – 16.30_______Alternatives to the EU
Speaker one, 25 minutes (Lee Rotherham, UK)
Speaker two, 25 minutes (Tomas Larsson, Sweden)
Discussion, 25 minutes
Swedish moderator (Max Andersson MP)

16.30 – 16.40_______Conclusion of the day

18.30_______________Gathering, Kungsgatan 84

9th May 2010

11.00 to 15.00______TEAM AGM closed session at ABF-huset, Sveavägen 41

Show larger map
Stockholm Metro (T-bana) map (nearest stops to the venue: Rädmansgarten or Hötorget, both on the Green Line)
Details in English about using the Stockholm public transport, including the Metro, plus journey planner

The euro is under attack like never before, as the promises on which it was based turn out to be lies. Hedge funds are speculating against Greek debt, while euro-zone politicians work behind the scenes to cobble together rescue packages. But fundamental flaws in the monetary union need to be fixed if Europe’s common currency is to survive…

…The notion that the European common currency is based on nothing but a series of lies is now taking its toll. All of the founders of the euro knew that the new currency could only be stable if all member states committed themselves to sound financial policy and, in the long run, spent only as much as they collected in tax revenue. But many ignored this principle right from the start.

This and more in one great article from Der Spiegel Online International.

Despite some politicians’ hopes that renegotiation of the Icesave deal would get in the way, it now seem highly likely the referendum will go ahead as planned with polls consistently suggesting the December law will be rejected by voters.

An information booklet on the referendum will be delivered to every house in Iceland and information can also be found on http://www.thjodaratkvaedi.is/ (brochure Yes or No available even in English => download .pdf here).

thanks to IceNews

Referendum date is set on Saturday, 6th of March 2010. Ides of March (15th) slightly rescheduled…