Europe

[AzariLoveIran]

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things on the right track .. the cow gotta go .. Inshalah

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The Scottish National Party (SNP) is working on a detailed plan to join the Scandinavian circle of countries including Sweden, Denmark and Norway, when it achieves independency.


The independent Scotland will have its own army, navy and air force copied from its Nordic neighbors, according to the detailed plan by the SNP.

SNP leaders are seeking to look north and east in Europe for partnerships, trade and key defense relationships, rather than continuing to focus on western Europe and the Commonwealth, as the UK does now.

Senior Nationalists, including Alex Salmond, have made several trips to Scandinavia over the last couple of years, meeting ministers and officials in an attempt to pave the way for greater co-operation if Scotland becomes independent, particularly on energy.

SNP strategists insist that Scotland would continue to be extremely close to the rest of the UK, which would remain its biggest trading partner, but they also believe that Scotland has more in common with its Scandinavian neighbors than the UK does and they are keen to take this relationship to a new level.

The Scandinavian approach is being driven by Angus Robertson, the SNP's defense and foreign affairs
spokesman in Westminster.

Robertson said recently that Scotland's relationship with its Scandinavian neighbors had suffered because of a southern bias since the Act of Union in 1707.

"Our neighbors to the north and east have already made a good start and work constructively together. We need to join them and play our part. The UK has opted out of a serious approach. We should not", he said.

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[Alexis]

Everything which concerns Europe...



To start with some unusual thoughts, here is A Conversation about Europe by Dmitry Orlov, the student of parallels and differences between the Soviet collapse and what he believes is the future inevitable collapse of the US and other industial economies.

No matter whether one agrees with Orlov's premise that industrial civilization is destined to collapse in the short- to mid-term because a successor to liquid-fuel propelled economies cannot be prepared in the time that remains(*), the points he's making about differences between America and Europe pertaining to resilience to industrial collapse are an interesting read.

Extracts (short ones, the interview is long and rich):

Whatever our views on peak oil and its consequences—or our distate for scary prophecies—we can find in Dmitry Orlov fresh ideas on how to conduct our lives in a degraded economic and political environment, reasons to seek fruitful relations with people you might not normally cherry-pick, or the most effective approach to the frustrating political and media chatter and the honeyed whisper of commercial propaganda (shrug, turn around and go on with your life).
(...)
TB: Will American collapse delay European collapse or accelerate it?
DO: There are many uncertainties to how events might unfold, but Europe is at least twice as able to weather the next, predicted oil shock as the United States. Once petroleum demand in the US collapses following a hard crash, Europe will for a time, perhaps for as long as a decade, have the petroleum resources it needs, before resource depletion catches up with demand.
(...)
TB: How does Europe compare to the United States and the former Soviet Union, collapse-wise?
DO: Europe is ahead of the United States in all the key Collapse Gap categories, such as housing, transportation, food, medicine, education and security. In all these areas, there is at least some system of public support and some elements of local resilience. How the subjective experience of collapse will compare to what happened in the Soviet Union is something we will all have to think about after the fact.
(...)
It is essential to appreciate the fact that it is oil, and the transport fuels produced from it, that enables all other types of economic activity. Without diesel for locomotives, coal cannot be transported to power plants, the electric grid goes down, and all economic activity stops. It is also essential to understand that even minor shortfalls in the availability of transport fuels have severe economic knock-on effects. These effects are exacerbated by the fact that it is economic growth, not economic décroissance [Fr., "de-growth"] (which seems inevitable, given the factors described above) that forms the basis of all economic and industrial planning. Modern industrial economies, at the financial, political and technological level, are not designed for shrinkage, or even for steady state. Thus, a minor oil crisis (such as the recent steady increase in the price of oil punctuated by severe price spikes) results in a sociopolitical calamity.

(*) FWIW, my personal position is that while Orlov's premise cannot be excluded light-heartedly because it is solidly grounded in established facts, his conclusion is too extreme, because he seems to underestimate the prospects for resilience of some sources of liquid fuels. My own view is that severe energy disruptions are a given during the next decades, to include probable industrial collapses, but not universal and above all, not irreversible: I would bet for a "long crisis", which Humankind would emerge of some time during 2nd half of this century

[monster_gardener]

Everything which concerns Europe...



To start with some unusual thoughts, here is A Conversation about Europe by Dmitry Orlov, the student of parallels and differences between the Soviet collapse and what he believes is the future inevitable collapse of the US and other industial economies.

No matter whether one agrees with Orlov's premise that industrial civilization is destined to collapse in the short- to mid-term because a successor to liquid-fuel propelled economies cannot be prepared in the time that remains(*), the points he's making about differences between America and Europe pertaining to resilience to industrial collapse are an interesting read.

Extracts (short ones, the interview is long and rich):

Whatever our views on peak oil and its consequences—or our distate for scary prophecies—we can find in Dmitry Orlov fresh ideas on how to conduct our lives in a degraded economic and political environment, reasons to seek fruitful relations with people you might not normally cherry-pick, or the most effective approach to the frustrating political and media chatter and the honeyed whisper of commercial propaganda (shrug, turn around and go on with your life).
(...)
TB: Will American collapse delay European collapse or accelerate it?
DO: There are many uncertainties to how events might unfold, but Europe is at least twice as able to weather the next, predicted oil shock as the United States. Once petroleum demand in the US collapses following a hard crash, Europe will for a time, perhaps for as long as a decade, have the petroleum resources it needs, before resource depletion catches up with demand.
(...)
TB: How does Europe compare to the United States and the former Soviet Union, collapse-wise?
DO: Europe is ahead of the United States in all the key Collapse Gap categories, such as housing, transportation, food, medicine, education and security. In all these areas, there is at least some system of public support and some elements of local resilience. How the subjective experience of collapse will compare to what happened in the Soviet Union is something we will all have to think about after the fact.
(...)
It is essential to appreciate the fact that it is oil, and the transport fuels produced from it, that enables all other types of economic activity. Without diesel for locomotives, coal cannot be transported to power plants, the electric grid goes down, and all economic activity stops. It is also essential to understand that even minor shortfalls in the availability of transport fuels have severe economic knock-on effects. These effects are exacerbated by the fact that it is economic growth, not economic décroissance [Fr., "de-growth"] (which seems inevitable, given the factors described above) that forms the basis of all economic and industrial planning. Modern industrial economies, at the financial, political and technological level, are not designed for shrinkage, or even for steady state. Thus, a minor oil crisis (such as the recent steady increase in the price of oil punctuated by severe price spikes) results in a sociopolitical calamity.

(*) FWIW, my personal position is that while Orlov's premise cannot be excluded light-heartedly because it is solidly grounded in established facts, his conclusion is too extreme, because he seems to underestimate the prospects for resilience of some sources of liquid fuels. My own view is that severe energy disruptions are a given during the next decades, to include probable industrial collapses, but not universal and above all, not irreversible: I would bet for a "long crisis", which Humankind would emerge of some time during 2nd half of this century

Thank you VERY Much for your post and the link, Alexis.

Dmitry Orlov (Russian: Дмитрий Орлов born 1962) is a Russian-American engineer and a writer on subjects related to "potential economic, ecological and political decline and collapse in the United States," something he has called “permanent crisis”.[1] Orlov believes collapse will be the result of huge military budgets, government deficits, an unresponsive political system and declining oil production.[2]

Orlov was born in Leningrad (now Saint Petersburg) and moved to the United States at the age of 12. He has a BS in Computer Engineering and an MA in Applied Linguistics. He was an eyewitness to the collapse of the Soviet Union over several extended visits to his Russian homeland between the late 1980s and mid-1990s.[3]

Orlov’s book Reinventing Collapse:The Soviet Example and American Prospects, published in 2008, further details his views.[9] The New Yorker's Ben McGrath writes that Orlov describes "superpower collapse soup" common to both the U.S. and the Soviet Union: “a severe shortfall in the production of crude oil, a worsening foreign-trade deficit, an oversized military budget, and crippling foreign debt.” He believes the U.S. will fare worse because Americans have fewer backup plans. Orlov told interviewer McGrath that in recent months financial professionals have begun to make up more of his audience, joining "back-to-the-land types," "peak oilers," and those sometimes derisively called “doomers."

Author James Howard Kunstler, who has been described as “one of Orlov's greatest fans” but denies he is a “complete ‘collapsitarian’”,[7] described the book as an “exceptionally clear, authoritative, witty, and original view of our prospects.”[10]

In his review of the book, commentator Thom Hartmann writes that Orlov holds that the Soviet Union hit a “soft crash” because centralized planning, housing, agriculture, and transportation left an infrastructure private citizens could co-opt so that no one had to pay rent or go homeless and people showed up for work, even when they were not paid. He writes that Orlov believes the U.S. will have a hard crash, more like Germany’s Weimar Republic of the 1920s.[11]

http://en.wikipedia.org/wiki/Dmitry_Orlov

Hmmmmm Weimar Germany is his definition of a "hard" crash........... I was thinking of something worse............ at least Ferfal's Argentina on steroids trending toward Mad Max/Eli ................ but look what Wiemar Germany produced as its solution: Despicable Dolph............... Believe some on the Diagetics board not so long ago were discussing us/US becoming New Sparta................

[Azrael]

Lawyers call for new evaluation of Norway gunman

>> Lawyers for some of the victims of last year's shooting massacre in Norway have called for a new evaluation of the gunman, saying doctors monitoring him have seen no signs of paranoid schizophrenia and have not medicated him. <<

[AzariLoveIran]

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Scottish referendum

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Two recent polls have suggested that independence still has only minority support, though it is increasing. The Scottish Social Attitudes Survey showed that backing for a split with the rest of the UK was at a six-year high of 32%, nine points up on last year.

"The idea that we should decide the fate of the UK on the basis of the date of a medieval battle when we are in the middle of a financial crisis and youth unemployment of one in four would be laughable if it wasn't so serious."

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Let's cross finger .. for a yes vote

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[AzariLoveIran]

Las Malvinas son Argentinas.jpg (27.85 KiB) Viewed 20076 times

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On the 179 anniversary of the British occupation of the Malvinas islands, Argentina's Foreign Ministry has once again underscored the Latin American country's sovereignty over the archipelago.


“On January 1833, the Malvinas Islands were occupied by British forces that evicted the Argentine authorities and inhabitants that were legitimately living there,” Argentina's Foreign Ministry stated in a communiqué.

Following the eviction of Argentine people, British citizens were migrated to the islands.

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[Typhoon]

Real consequences of the Euro crisis

Reuters | Greek Crisis Has Pharmacists Pleading for Aspirin as Drug Supply Dries Up

For patients and pharmacists in financially stricken Greece, even finding aspirin has turned into a headache.

Mina Mavrou, who runs a pharmacy in a middle-class Athens suburb, spends hours each day pleading with drugmakers, wholesalers and colleagues to hunt down medicines for clients. Life-saving drugs such as Sanofi (SAN)’s blood-thinner Clexane and GlaxoSmithKline Plc (GSK)’s asthma inhaler Flixotide often appear as lines of crimson data on pharmacists’ computer screens, meaning the products aren’t in stock or that pharmacists can’t order as many units as they need.

“When we see red, we want to cry,” Mavrou said. “The situation is worsening day by day.”

The 12,000 pharmacies that dot almost every street corner in Greek cities are the damaged capillaries of a complex system for getting treatment to patients. The Panhellenic Association of Pharmacists reports shortages of almost half the country’s 500 most-used medicines. Even when drugs are available, pharmacists often must foot the bill up front, or patients simply do without.
The financial crisis is brewing a “Greek tragedy” of slowing access to medical care and worsening outcomes for patients, Martin McKee, a professor of European public health at the London School of Hygiene and Tropical Medicine, wrote in an October article in The Lancet.

Mafia now "Italy's No.1 bank" as crisis bites

ROME (Reuters) - Organized crime has tightened its grip on the Italian economy during the economic crisis, making the Mafia the country's biggest "bank" and squeezing the life out of thousands of small firms, according to a report on Tuesday.

Extortionate lending by criminal groups had become a "national emergency," said the report by anti-crime group SOS Impresa.

Organized crime now generated annual turnover of about 140 billion euros ($178.89 billion) and profits of more than 100 billion euros, it added.

"With 65 billion euros in liquidity, the Mafia is Italy's number one bank," said a statement from the group, which was set up in Palermo a decade ago to oppose extortion rackets against small business.
Organized crime groups like the Sicilian Cosa Nostra, the Naples Camorra or the Calabrian 'Ndrangheta have long had a stranglehold on the Italian economy, generating profits equivalent to about 7 percent of national output.

Extortionate lending had become an increasingly sophisticated and lucrative source of income, alongside drug trafficking, arms smuggling, prostitution, gambling and racketeering, the report said.
"The classic neighborhood or street loan shark is on the way out, giving way to organized loan-sharking that is well connected with professional circles and operates with the connivance of high-level professionals," the report said.

It estimated about 200,000 businesses were tied to extortionate lenders and tens of thousands of jobs had been lost as a result.

EXTORTION WITH A CLEAN FACE

Old style gangsters handing out cash in bars and pool halls had been replaced by apparently respectable bankers, lawyers or notaries, the report said.

"This is extortion with a clean face," it added. "Through their professions, they know the mechanisms of the legal credit market and they often know the financial position of their victims perfectly."
Small businesses, who have struggled to get hold of credit during the economic slowdown, may have been increasingly tempted to turn to the mafia, said the report.

Typical victims of extortionate lending were middle-aged shopkeepers and small businessmen who would struggle to find a new job and who were ready to try anything to avoid bankruptcy, it added.
"They are usually people in traditional retail sectors like food, greengrocers, clothes or shoe shops, florists or furniture shops. These are the categories which, more than any other, are paying the price of the (economic) crisis," it said.

According to a separate report this week from small business association CNA, 56 percent of companies had seen banks tighten their lending requirements in the past three months. ($1 = 0.7826 euros)

[Alexis]

Western Europe, circa 2012
Fall of market spectacle economy




Who knows why, I particularly like that picture.

[AzariLoveIran]

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Swiss bank offers trades for eurozone shorting

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Credit Suisse is offering its hedge fund clients off-the-shelf products that allow traders to replicate hypothetical gains made by betting against European stock indices that include equities covered by eurozone short selling bans.

The bank has made five shortable baskets “optimised” to track leading European indices as closely as possible, based on replacing restricted stocks – mostly banks and other financial companies – with correlated assets.

A sales document from last year says the optimised baskets at the time tracked the full indices in some cases to within fractions of a percentage point. The document highlighted that the baskets specifically excluded the restricted stocks.

Europe’s other three big hedge fund brokers, Goldman Sachs, Morgan Stanley and JP Morgan – said they regarded the practice as too sensitive to engage in.

Bans have been enacted by France, Italy, Belgium and Spain on the short-selling of financial companies if a trader is not hedging a traditional “long” investment betting on a rise in value of the shares.

Short-selling – a trade in which a speculator borrows shares, sells them, and then buys them back at a later date in the hope of a profit – was blamed by some politicans for exacerbating market volatility during the eurozone crisis. The country bans also cover ‘economic’ short selling, where a derivative is used to produce the same effect as a direct short position on a stock.

Credit Suisse said on Wednesday that it offered “client products that facilitate the management of investment strategies that comply with applicable regulations”.

Credit Suisse executives said the bank was complying with both the letter and spirit of the law. The executives added shorting indices such as those optimised by the bank to reduce the impact of short selling restrictions on their benchmarks is a practice almost always used to hedge positions or protect portfolios rather than acting as an outright speculative wager.

Such customised and optimised baskets of stocks are also a routine offering to hedge funds from most prime brokerages.

However, investment banks have had to tread extremely carefully around European regulators’ short selling restrictions.

“We have taken the view that we should be extremely conservative, for both reputational and political reasons,” said a senior executive at rival investment bank brokerage, who declined to be named.

While compliance officers from all of Europe’s biggest investment banks met last year to discuss and agree common practices in response to the August 12 short selling restrictions, grey areas still remain.

A sales note by Credit Suisse sent to its hedge fund clients last year was prominently headed with a disclaimer: “We strongly advise clients check with their own compliance department prior to trading,” one reads.

One leading executive at a rival broker to Credit Suisse said he was even wary of hedge funds who looked to buy customised “long” baskets on European indices that have been stripped of banned stocks. Such funds could be shorting futures on the the full indices, and effectively therefore going short of the restricted equities, he said.

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[Endovelico]

'I Don't Believe the Euro Should be Rescued at All Costs'

In a SPIEGEL interview, top German industrialist Wolfgang Reitzle argues that Germany should withdraw from the currency union if Europe's crisis-ridden countries fail to push through reforms. But whatever happens, Greece will have to leave the euro zone, he warns.

SPIEGEL: Mr. Reitzle, 2012 is viewed as a watershed year for the euro. Do you fear that the European common currency will break apart?

Reitzle: The euro will not break apart -- and certainly not in 2012, because all politicians are determined to keep the euro zone together. Greece, however, is a different story. The country is incapable of structuring itself in such a way that it can remain in the monetary union.

SPIEGEL: So Greece has to leave the euro zone?

Reitzle: Yes, in the medium term Greece must leave. And the country's debts will ultimately have to be written off at 100 percent, not at 50 or 70. In addition, we will have to pay even more money as long as Greece is in the euro zone, because it is not capable of making ends meet on its own. All in all, this is a €500-billion ($635-billion) problem.

SPIEGEL: And how is the country expected to get back on its feet?

Reitzle: It will take at least a generation to create the necessary conditions. Greece has very little to offer that the world needs. Even in the case of olive oil, revenues are not generated primarily by sales of the product, but by subsidies to growers, some of which have even been based on false data in the past.

SPIEGEL: But a Greek withdrawal from the euro zone would lead to new turbulence in the financial markets.

Reitzle: The capital markets moved away from the subject of Greece a long time ago. Italy will be the litmus test. If Italy makes it, Spain will have a role model, and then perhaps even France may be able to push through reforms, which doesn't seem likely at the moment. Italy now has a government containing leading experts. The question will be whether they manage to implement the necessary reforms in a way that has the desired effect.

SPIEGEL: What can the government do?

Reitzle: I see four problems that must be solved in Italy. First there is the bureaucracy, which paralyzes the entire country. Second, the labor market has to become more flexible. Together these two things create the conditions for growth. Third, tax evasion has to be fought and, fourth, the retirement age has to be raised gradually. But all of this takes time, which is why the crucial year for the euro is not 2012. It will actually come three or four years later.

SPIEGEL: In 2012, especially in Italy, debts in the triple-digit billions will have to be refinanced. Although the bond markets eased a little, late last week, the question remains whether the financial markets will be willing to underwrite bonds issued by countries saddled with this much debt.

Reitzle: It takes years to bring about reforms, whereas the financial markets expect quick successes …

SPIEGEL: … which is precisely the problem …

Reitzle: … and that means that the European Central Bank will still have to intervene if the bonds cannot be fully placed in the market. It won't work without the ECB.

SPIEGEL: So far, the German government and the Bundesbank have resisted such excessive purchases of government bonds by the ECB. Are they wrong?

Reitzle: No, and I too feel that the ECB's purchases are fundamentally wrong. But at the moment I see no other option, if we want to prevent the monetary union from breaking apart. That's why it's all the more important that the reforms be accelerated in the individual countries. Besides, the problem is much bigger than it's actually being portrayed: It's usually only the government debts that are taken into account. But the Target2 balances are still growing beneath the surface.

SPIEGEL: You're referring to the imbalances in payments by the central banks in the ECB system.

Reitzle: Basically, this means that the Bundesbank is guaranteeing the trade deficits. In other words, we are essentially the ones financing the German cars and machine tools that are shipped to Spain or Italy. These balances also include the roughly €100 billion that Italians have taken out of their country in the last few months and invested elsewhere -- in Berlin real estate, for example. These Target2 balances have already grown to €770 billion, with about €500 billion at the Bundesbank alone. In the worst case, we will be the ones paying for this.

SPIEGEL: For 27 percent of it, based on the Bundesbank's share of the ECB system.

Reitzle: I know, France has 20 percent, Italy 18, and so one. But that's a purely statistical view. In an emergency, these countries will be unable to pay, and solvent countries will have to assume the shares of insolvent countries. A development is unfolding here, invisible to the public, which is further exacerbating the crisis.

SPIEGEL: You describe the dramatic situation so impressively that we have to ask ourselves where you get the optimism to believe that eventually everything will somehow work out for the best.

Reitzle: I'm just describing realities. There is no pain-free solution. But if the Italian government manages to demonstrate this year that it is instituting reforms in the right places, interest rates for Italy could go down again. The sense of relief would be immediately apparent. Then Spain could also make it. And then the euro countries could sweat out the problem over time.

SPIEGEL: A highly optimistic scenario…

Reitzle: … and it's my favorite scenario. But even in this positive case, I don't believe that politicians can reduce the debts. Not even Germany is able to do this, despite extraordinary tax revenues, which is pathetic. For politicians, saving money now means incurring fewer debts than before -- which, for me is an odd definition.

SPIEGEL: So can debts only be reduced by inflation?

Reitzle: In the best case, debts are reduced through inflation, provided countries are able to finance their way to a lower interest rate. If not, in the worst case, there is the threat of currency devaluation.

SPIEGEL: The risks to the German taxpayer, which you have clearly outlined, are continuing to grow. Why should the euro be rescued at all costs?

Reitzle: I believe that the rescue can succeed, but I do not believe that the euro must be rescued at all costs. I fear that willingness to reform will fade if the ECB is to intervene in the end, anyway. Support for rescuing the euro will evaporate as soon as German citizens have to pay taxes of more than 50 percent to finance the other euro countries.

SPIEGEL: And then?

Reitzle: If we don't manage to discipline the debt-ridden countries, Germany will have to withdraw.

SPIEGEL: Excuse me? Germany is supposed to withdraw from the euro and introduce its own currency? The consequences would be tough: This currency would appreciate, and German industry would have trouble selling its products abroad.

Reitzle: Of course it would lead to appreciation of the deutsche mark, the northern euro or whatever currency we would then have. But it would soon be less than we fear. Although unemployment would rise in the first few years, because of declining exports, we would come under growing pressure to become even more competitive. And within only five years, Germany could be in a stronger position relative to Asian competitors.

SPIEGEL: Are you saying that withdrawing from the monetary union would be advantageous for Germany?


'The Imbalance in the Euro System Must Be Corrected in the Long Term'
Reitzle: No, but I believe that the German economy would have weathered such a shock within a few years, and would even become more competitive in the long run. To put it clearly: I don't think this scenario is desirable, but it also shouldn't be declared a taboo. And from a personal standpoint, I don't agree with a large share of my taxes ending up in countries that don't manage their economies responsibly.


SPIEGEL: At the moment, the German economy is actually benefiting from the crisis. The weak currency and low interest rates act like an economic stimulus program.

Reitzle: And we need this prosperity, because it's inevitable that we will be presented with the bill for the euro in the end. But this imbalance in the euro system must be corrected in the long term. The debt-ridden countries don't just have to reduce their debts. They also have to revamp their economies…

SPIEGEL: …which is difficult, if not impossible, because they lack their own currency to devalue.

Reitzle: And that's why the lack of competitiveness in the euro zone has become practically set in stone. If Italy still had the lira, it would have been devalued long ago to make the country competitive again, because wages there, as in Spain and France, have risen far too quickly -- in sharp contrast to Germany, by the way.

SPIEGEL: But all of this shows that the euro brought together things that don't belong together: highly developed, industrialized nations and agricultural countries…

Reitzle: …as well as different mentalities. And, most of all, countries that are dissimilar in terms of efficiency. It is evident that the euro was introduced far too soon. In retrospect, anyone can come up with the perfect explanation for why all of this couldn't possibly work. But that doesn't do us any good. Now we have to see where we stand and what steps to take so that everything doesn't fall apart. There's more to it than just muddling through. Germany is being given the leading role here, whether we like it or not. Not everyone ticks the way the Germans do, but sloppy economic management will no longer be tolerated. There will still be substantial differences, just as there are in the United States of America.

SPIEGEL: Do you see the United States of Europe as a goal?

Reitzle: Yes, in the long term. In 2050, the United States will still be a global power and China will probably be the dominant economic power. Europe will only be able to keep up if it manages to achieve a political unification process in addition to the monetary union, and if it includes Russia. However, if we even mess up the monetary union, Germany will be an attractive island, just as Switzerland is. But will we be relevant in the world anymore? Probably not. That's why it's worth doing everything we can.

SPIEGEL: Whichever scenario materializes, how are you preparing your company for this uncertain future?

Reitzle: We will have to react even more quickly and flexibly to changes, and keep our fixed costs as low as possible. We have experienced a decade in which, mainly as a result of cheap money, things went reliably upward without any significant fluctuations. But the crisis in the financial markets marked a turning point. Since then, we have seen a trend toward less growth, coupled with greater fluctuations.

SPIEGEL: Do you have a plan B on hand in case the euro collapses?

Reitzle: No, but even if all of Europe were stuck in a recession for years, it would affect only 30 percent of our revenues. If we lost those revenues completely, which is totally unrealistic, we would have revenues of €9 billion instead of €13 billion, and we would be a company that operates primarily in Asia. Linde would survive in any event.

SPIEGEL: The banks no longer trust each other and are parking their money with the ECB and restricting their lending activities. Is Linde having problems getting money?

Reitzle: Not at all. Our credit rating is better than that of most countries, except Germany. We just launched a €750-million bond, at 3.1-percent interest for seven years. The bond issue was oversubscribed by a factor of six within a few hours.

SPIEGEL: Ever since banks worldwide have had to be bailed out with taxpayer money, the public's confidence in the market economy has waned. Can you understand this?

Reitzle: Of course. I don't accept many of the things that were done. The loss of confidence that arose as a result is harmful to our society, if not dangerous. Companies should take responsibility for what they do. If we make a bad decision, we can't just shove the consequences into a bad bank, otherwise Daimler could simply have handed over Chrysler to the German taxpayer.

SPIEGEL: Under the motto "We are the 99 percent," the Occupy movement sharply criticizes growing inequality. Do you have sympathy for this, too?

Reitzle: Yes, in principle, but I fear that it will lead to the wrong conclusions. In the coming years, the West's problems will be high debt, low growth and an aging population. There will be a push to distribute existing wealth and bring about more equality, even as assets are being accumulated in Asia.

SPIEGEL: So far, however, the redistribution has tended to move in the other direction. A small number of people have profited from the excesses of the financial markets, and now the majority must pay the bill. Isn't it logical to expect the beneficiaries of the crisis to finance some of the costs?

Reitzle: I can understand this logic if profits are made at the expense of the population and the risks are socialized. I only fear that money will also be taken away from people who have earned it honestly and paid their share of taxes. This reduces the motivation for people to perform and accomplish things -- an important engine of the economy.

SPIEGEL: With an annual salary of about €7 million, you are one of the top earners among the CEOs of DAX companies, which makes you part of the 1 percent that the Occupy movement is directed against. Would you be willing to make a contribution through higher taxes?

Reitzle: I am willing to pay 50 percent. But 50.1 percent is already too much. If I had to pay more than half of what I earn in taxes, I would have a very hard time perceiving that as fair. In this respect, I'm on the same page as the Occupy movement.

SPIEGEL: Mr. Reitzle, thank you for this interview.

http://www.spiegel.de/international/bus ... 41,00.html

This interview confirms my feelings about Germans: they are very organized and hard working, but they aren't very bright. To have Germany as the European leader at this stage, is a total disaster. They have no imagination, no empathy with other peoples, and think the world of themselves. And it takes far too long for them to understand they are wrong and that they must change policies.

[YMix]

I should probably post something about the local protests. I found this article on Eastern Approaches:

"POLENTA (it's called mămăligă, fucker) doesn't explode" is the gnomic phrase Romanians use to describe the attitude of resigned acceptance typical to the country. But this weekend something snapped. Thousands of people took to the streets in Bucharest and 40 other towns, venting their anger at their leaders' perceived incompetence in dealing with Romania's economic crisis.

The centre of Bucharest was hit by violence on a scale unseen in two decades. Traian Băsescu, the centre-right president, is the main target of the protesters' ire. "Get out, you miserable dog" they chanted, as they hurled paving stones and smoke bombs at riot police. Water cannons and tear gas were used to dispel the crowds.

Sixty people, including several police officers, were injured in the clashes. The police head admitted that his officers may have been "over-zealous" at times. Earlier today Emil Boc, the prime minister, condemned the violence but conceded that his government's austerity measures had "brought hardships upon people".

The immediate trigger for the riots was the resignation of Raed Arafat, a popular official in the health ministry, who stepped down after clashing with Mr Băsescu over a set of controversial reforms to the health-care system. Mr Boc has now offered to revise the plans, and offered an olive branch to Mr Arafat.

The Palestinian-born doctor, who emigrated to Romania in the 1980s, had helped set up a professional medical emergency system. He disagreed with a government proposal to privatise it, as part of its drive to cut public spending. "Quality does not automatically arrive with privatisation. For the patient, the system will be weaker," he said announcing his resignation. A day earlier Mr Băsescu had called Mr Arafat a liar on television, adding that he had "leftist" views.

Mr Băsescu is well known for his undiplomatic, mercurial manner. On Friday, however, as peaceful pro-Arafat demonstrations spread throughout the country, the president asked the government to pull its draft health-care law. He blamed "media manipulation" and was unable to resist noting sarcastically that "the emergency system works perfectly."

The Social-Liberal opposition (USL) has called for bringing elections forward from their scheduled November date "in what seems to be a non-governed country". Its leader, Victor Ponta, has even offered Mr Arafat a job in a future USL government. But Mr Arafat says he has no ambitions to re-enter politics. He has urged protesters to refrain from violence and to resist being "manipulated" by politicians.

What next? Violent protests are inherently difficult to read. But Cristian Pârvulescu from Pro-Democratia, a respected Bucharest-based think-tank, predicts that they could bring down the government.

What the article doesn't say is that there is a second immediate reason for the strikes, aside from the privatization of the healthcare system (and the poverty brought on by the economic crisis and the austerity measures). The Government has recently implemented a new version of the car tax that would make most used cars practically unsellable. This has caused considerable anger among the people who can no longer buy or sell cheap used cars. New cars are beyond the reach of most Romanians, especially without a loan.

People gathered in Bucharest's Universitate Square and in many other cities again this evening. It will be interesting to see how this develops.

[Typhoon]

I should probably post something about the local protests. I found this article on Eastern Approaches:

"POLENTA (it's called mămăligă, fucker) doesn't explode" is the gnomic phrase Romanians use to describe the attitude of resigned acceptance typical to the country. But this weekend something snapped. Thousands of people took to the streets in Bucharest and 40 other towns, venting their anger at their leaders' perceived incompetence in dealing with Romania's economic crisis.

The centre of Bucharest was hit by violence on a scale unseen in two decades. Traian Băsescu, the centre-right president, is the main target of the protesters' ire. "Get out, you miserable dog" they chanted, as they hurled paving stones and smoke bombs at riot police. Water cannons and tear gas were used to dispel the crowds.

Sixty people, including several police officers, were injured in the clashes. The police head admitted that his officers may have been "over-zealous" at times. Earlier today Emil Boc, the prime minister, condemned the violence but conceded that his government's austerity measures had "brought hardships upon people".

The immediate trigger for the riots was the resignation of Raed Arafat, a popular official in the health ministry, who stepped down after clashing with Mr Băsescu over a set of controversial reforms to the health-care system. Mr Boc has now offered to revise the plans, and offered an olive branch to Mr Arafat.

The Palestinian-born doctor, who emigrated to Romania in the 1980s, had helped set up a professional medical emergency system. He disagreed with a government proposal to privatise it, as part of its drive to cut public spending. "Quality does not automatically arrive with privatisation. For the patient, the system will be weaker," he said announcing his resignation. A day earlier Mr Băsescu had called Mr Arafat a liar on television, adding that he had "leftist" views.

Mr Băsescu is well known for his undiplomatic, mercurial manner. On Friday, however, as peaceful pro-Arafat demonstrations spread throughout the country, the president asked the government to pull its draft health-care law. He blamed "media manipulation" and was unable to resist noting sarcastically that "the emergency system works perfectly."

The Social-Liberal opposition (USL) has called for bringing elections forward from their scheduled November date "in what seems to be a non-governed country". Its leader, Victor Ponta, has even offered Mr Arafat a job in a future USL government. But Mr Arafat says he has no ambitions to re-enter politics. He has urged protesters to refrain from violence and to resist being "manipulated" by politicians.

What next? Violent protests are inherently difficult to read. But Cristian Pârvulescu from Pro-Democratia, a respected Bucharest-based think-tank, predicts that they could bring down the government.

What the article doesn't say is that there is a second immediate reason for the strikes, aside from the privatization of the healthcare system (and the poverty brought on by the economic crisis and the austerity measures). The Government has recently implemented a new version of the car tax that would make most used cars practically unsellable. This has caused considerable anger among the people who can no longer buy or sell cheap used cars. New cars are beyond the reach of most Romanians, especially without a loan.

People gathered in Bucharest's Universitate Square and in many other cities again this evening. It will be interesting to see how this develops.

Was about to post the same from the Economist . . .

Not at all clear that healthcare privatization is good idea if people are already having trouble making ends meet. It's not a panacea.

The car tax sounds like a very dumb idea.

[YMix]

Yes, the main issue is that privatized healthcare will be far too expensive for most Romanians. The average national salary is, after all, around RON 1,400 (EUR 350) and private healthcare is already far too expensive. On the other hand, private healthcare is the next bubble in Romania.

The car tax is indeed a dumb idea. On the one hand, the European Union pushes Romania to bring its environment protection standards up to Western European levels, whether we can afford it or not. On the other hand, the state did a lot to help the local automotive industry and I think that this tax is simply an attempt to save the car plants of Mioveni and Craiova and the bottom lines of Renault and, to a lesser extent, Ford. Unfortunately, it wants to save the industry at the expense of the entire country.

[Alexis]

Portugal's debt is unsustainable. That is the only possible conclusion

A report for the Kiel Institute for the World Economy said Portugal would have to run a primary budget surplus of over 11pc of GDP a year to prevent debt dynamics spiralling out of control, even in a benign scenario of 2pc annual growth.
"Portugal's debt is unsustainable. That is the only possible conclusion,"
(...)
"It is necessary to bring out the bazooka immediately, before the gunpowder gets wet," said Mexican president Felipe Calderon.
Mr Calderon said the G20 bloc will have to chip in to ensure that the crisis does not engulf Italy and Spain. "The failure of a containment strategy will mean not only the potential implosion of the euro, but an economic crisis with devastating consequences for the rest of the world. This is a task for all of us in the G-20," he said.
(...)
The shift in stance is a recognition that it is no longer possible or fair to force all the pain on pension funds, insurers, and banks, but it is unclear whether he has the assent of Germany, Holland, Finland or Austria for such a demarche.
Chancellor Angela Merkel said Germany would not provide any further money. Any suggestion that German taxpayers would have to take a loss would cause a storm in the Bundestag.
(...)
Citigroup expects the economy to shrink 5.7pc this year. The International Monetary Fund forecasts a contraction of 3pc but is likely to revise the figure downwards after slashing estimates for Spain and Italy.
(...)
"If the ECB is not prepared to accept a haircut on Greek debt, it is not going to accept one on Portuguese debt either. This is already on people's minds," he said.
The Kiel Institute said the haircut for Portugal would need to be 56pc to put the country back on a sustainable path if long-term growth was 2pc

Portugal clearly is the Weakest Link, after Greece (*)

- Some world leaders would like the "bazooka" (massive purchases of Eurosovereigns bonds by the ECB) to protect banks and investors from any loss on their Greek, Portuguese, Italian, Spanish, etc. bonds. just like investors on US and UK bonds are protected
- Some others would prefer to present the note to taxpayers of other European countries, again so that banks and investors are protected from any loss
All are adamant that when a financial institution lends too much money to a sovereign which borrows too much, resulting hardships have to be borne by anybody and their cousins (citizens of that sovereign, citizens of other sovereigns, users of currencies pushed towards inflation by massive QEs...) except by the lenders!

However, as the sentence I put in red says, it's not clear at all whether Germany will bow to pressure to save the imprudent lenders...


(*) Bets on who will be the next after Portugal are open. Contrary to the TV game where one winner remains at the end, that real-life game may leave no sovereign without its own bankruptcy...

[AzariLoveIran]

.


Oil embargo blowback

.

. . "the structure of their [Europe's] refineries is compatible with Iran's oil", and so Europeans have no alternative as replacement; the embargo "will cause an increase in oil prices, and the Europeans will be compelled to buy oil at higher prices"; that is, Europe "will be compelled to buy Iran's oil indirectly and through intermediaries" . .

Not surprisingly, the losers lost in these Cold War tactics anachronistically applied to a global open market are the Europeans themselves. Greece - already facing the abyss - has been buying heavily discounted oil from Iran. The strong possibility remains of the oil embargo precipitating a Greek government bond default - and even a catastrophic cascade effect in the eurozone (Ireland, Portugal, Italy, Spain - and beyond).

The world needs a digital Herodotus to decode how these European poodles who claim to represent "civilization" were able, in a single stroke, to inflict simultaneous pain on Greece - the cradle of Western civilization itself - and Persia - one of the most sophisticated civilizations in history. In an astonishing historical replay of tragedy as farce, it's as if Greeks and Pomegranates were bonded together at the Thermopylae facing the onslaught of North Atlantic Treaty Organization armies.

All across Eurasia trade is fast moving away from the US dollar. The Asian Dollar Exclusion Zone, crucially, also means that Asia is slowly disengaging itself from Western banks.

The movement may be led by China - but it's irreversibly transnational. Once again, follow the money. BRICS members China and Brazil started bypassing the US dollar on trade in 2007. BRICS members Russia and China did the same in 2010. Japan and China - the top two Asian giants - did the same only last month.

Asia wants a new international system - and it's working for it. Inevitable long-term consequences; the US dollar - and, crucially, the petrodollar - slowly drifting into irrelevance. "Too Big to Fail" may turn out to be not a categorical imperative, but an epitaph.

.

This not about Iran .. this about Europe, Oil, U$ and beyond


.

[Endovelico]

From Stratfor:

Germany's Role in Europe and the European Debt Crisis
January 31, 2012 | 1217 GMT

By George Friedman

The German government proposed last week that a European commissioner be appointed to supplant the Greek government. While phrasing the German proposal this way might seem extreme, it is not unreasonable. Under the German proposal, this commissioner would hold power over the Greek national budget and taxation. Since the European Central Bank already controls the Greek currency, the euro, this would effectively transfer control of the Greek government to the European Union, since whoever controls a country's government expenditures, tax rates and monetary policy effectively controls that country. The German proposal therefore would suspend Greek sovereignty and the democratic process as the price of financial aid to Greece.

Though the European Commission rejected the proposal, the concept is far from dead, as it flows directly from the logic of the situation. The Greeks are in the midst of a financial crisis that has made Greece unable to repay money Athens borrowed. Their options are to default on the debt or to negotiate a settlement with their creditors. The International Monetary Fund (IMF) and European Union are managing these negotiations.

Any settlement will have three parts. The first is an agreement by creditors to forego repayment on part of the debt. The second is financial help from the IMF and the European Union to help pay back the remaining debt. The third is an agreement by the Greek government to curtail government spending and increase taxes so that it can avoid future sovereign debt crises and repay at least part of the debt.
Bankruptcy and the Nation State

The Germans don't trust the Greeks to keep any bargain, which is not unreasonable given that the Greeks haven't been willing to enforce past agreements. Given this lack of trust, Germany proposed suspending Greek sovereignty by transferring it to a European receiver. This would be a fairly normal process if Greece were a corporation or an individual. In such cases, someone is appointed after bankruptcy or debt restructuring to ensure that a corporation or individual will behave prudently in the future.

A nation state is different. It rests on two assumptions. The first is that the nation represents a uniquely legitimate community whose members share a range of interests and values. The second is that the state arises in some way from the popular will and that only that popular will has the right to determine the state's actions. There is no question that for Europe, the principle of national self-determination is a fundamental moral value. There is no question that Greece is a nation and that its government, according to this principle, is representative of and responsible to the Greek people.

The Germans thus are proposing that Greece, a sovereign country, transfer its right to national self-determination to an overseer. The Germans argue that given the failure of the Greek state, and by extension the Greek public, creditors have the power and moral right to suspend the principle of national self-determination. Given that this argument is being made in Europe, this is a profoundly radical concept. It is important to understand how we got here.

Germany's Part in the Debt Crisis

There were two causes. The first was that Greek democracy, like many democracies, demands benefits for the people from the state, and politicians wishing to be elected must grant these benefits. There is accordingly an inherent pressure on the system to spend excessively. The second cause relates to Germany's status as the world's second-largest exporter. About 40 percent of German gross domestic product comes from exports, much of them to the European Union. For all their discussion of fiscal prudence and care, the Germans have an interest in facilitating consumption and demand for their exports across Europe. Without these exports, Germany would plunge into depression.

Therefore, the Germans have used the institutions and practices of the European Union to maintain demand for their products. Through the currency union, Germany has enabled other eurozone states to access credit at rates their economies didn't merit in their own right. In this sense, Germany encouraged demand for its exports by facilitating irresponsible lending practices across Europe. The degree to which German actions encouraged such imprudent practices -- since German industrial production vastly outstrips its domestic market, making sustained consumption in markets outside Germany critical to German economic prosperity -- is not fully realized.

True austerity within the European Union would have been disastrous for the German economy, since declines in consumption would have come at the expense of German exports. While demand from Greece is only a small portion of these exports, Greece is part of the larger system -- and the proper functioning of that system is very much in Germany's strategic interests. The Germans claim the Greeks deceived their creditors and the European Union. A more comprehensive explanation would include the fact that the Germans willingly turned a blind eye. Though Greece is an extreme case, Germany's overall interest has been to maintain European demand -- and thus avoid prudent austerity -- as long as possible.

Germany certainly was complicit in the lending practices that led to Greece's predicament. It is possible that the Greeks kept the whole truth about the Greek economy from their creditors, but even so, the German demand for suspension of Greek national self-determination is particularly striking.

In a sense, the German proposal merely makes very public what has always been the reality. For Greece to have its debt restructured, it must impose significant austerity measures, which Athens has agreed to. The Germans now want a commissioner appointed to ensure the Greek government fulfills its promise. In the process, the debt crisis will profoundly circumscribe Greek democracy by transferring fundamental elements of Greek sovereignty into the hands of commissioners whose primary interest is the repayment of debt, not Greek national interests.

The Judgment of Athens

The Greeks have two choices. First, they can accept responsibility for the debts on the terms negotiated and accede to the constraints on their budget and tax discretion whether imposed by a commissioner or by a less formal structure. Second, they can default on all debts. As we have learned from corporate behavior, bankruptcy has become a respectable strategic option. Therefore, the Greeks must consider the consequences of simply defaulting.

Default might see them frozen out of world financial markets. But even if they don't default, they will be present in those markets only under the most constrained circumstances, and to the primary benefit of creditors at that. Moreover, as many corporations have found, borrowing becomes more attractive after default, as it clears the way to new post-default debt. It is not clear that no one would lend to Greece after a default. In fact, Greece has defaulted on its debt several times and managed to regain access to international lending.

More significantly, defaulting would allow Greece to avoid fueling its internal political crisis by forfeiting its national sovereignty. Much of the political crisis inside of Greece stems from the Greek public's antipathy to austerity. But another part, which would come to the fore under the German proposal, is that the Greeks do not want to lose national sovereignty. In their long history, the Greeks have lost their sovereignty to invaders such as the Romans, the Ottomans and, most recently, the Nazis. The brutal German occupation still lives in Greek memories. The concept of national self-determination is thus not an abstract concept to the Greeks. Its loss plus austerity imposed by foreign powers would create a domestic crisis in which the Greek state would be seen as an economic and political enemy of Greek national interests along with the commissioner or some other mechanism. The political result could be explosive.

It is unclear if the Greeks will opt not to default. The certain price of default -- being forced to use their national currency instead of the euro -- actually would increase national sovereignty. There will be economic pain if the Greeks continue with the euro, and there will be economic pain if the Greeks leave the euro; the political consequences of losing sovereignty in the face of such pain could easily be overwhelming. Default, while painful to Greece, might well be less painful than the alternative.

The German Dilemma

The Germans are caught in a dilemma. On the one hand, Germany is the last country in Europe that could afford general austerity in troubled states and the resulting decline in demand. On the other hand, it cannot simply tolerate Greek-style indifference to fiscal prudence. Germany must have a structured solution that to some degree maintains demand in countries such as Spain or Italy; Germans must show there are consequences to not complying with the orderly handling of debt without default. Above all, the Germans must preserve the European Union so they can enjoy a European free-trade zone. There is thus an inherent tension between preserving the system and imposing discipline.

Germany has decided to make an example of the Greeks. The German public largely has bought into Berlin's narrative of Greek duplicity and German innocence. German Chancellor Angela Merkel has needed to frame the discussion this way, and she has succeeded. The degree to which the German public is aware of the complexities or the consequences of a generalized austerity for Germany is less clear. Merkel must now satisfy a German public that questions bailouts and sees Greece as simply irresponsible. Capitulation from Greece is necessary for her as a matter of domestic politics.

The German move into questions of sovereignty has raised the stakes in the debt crisis dramatically. Even if the Germans simply back off this demand, the Greek public has been reminded that Greek democracy is effectively at stake. While Greece may have borrowed irresponsibly, if the price of that behavior is yielding sovereignty to an unelected commissioner, that price not only would challenge Greek principles, it would bring Europe to a new crisis.

That crisis would be political, as the ongoing crisis always has been. In the new crisis, sovereign debt issues turn into threats to national independence and sovereignty. If you owe too much money and your creditors distrust you, you lose the right to national self-determination on the most important matters. Given that Germany was the historical nightmare for most of Europe, and it is Germany that is pushing this doctrine, the outcome could well be explosive. It could also be the opposite of what Germany needs.

Germany must have a free-trade zone in Europe. Germany also needs robust demand in Europe. Germany also wants prudence in borrowing practices. And Germany must not see a return to the anti-German feeling of previous epochs. Those are several needs, and some of them are mutually exclusive. In one way, the issue is Greece. But more and more, it is the Germans that are the question mark. How far are they willing to go, and do they fully understand their national interests? Increasingly, this crisis is ceasing to be a Greek or Italian crisis. It is a crisis of the role Germany will play in Europe in the future. The Germans hold many cards, and that's their problem: With so many options, they must make hard decisions -- and that does not come easily for postwar Germany.

http://www.stratfor.com/weekly/germanys ... 782ef1016f

Anyone thinking national-socialism was an abnormal situation in Germany, better think again...

[AzariLoveIran]

.

Anyone thinking national-socialism was an abnormal situation in Germany, better think again ..

.

Germany's Power 'Is Causing Fear' in Europe


the age old story

Germans speeding ahead, others falling back .. and ? ?

well ,

that is what happened in WW I & II

Come on Endo, come on

poor Angela

Germans paying for living standard of all Europe, parasite Brits, Italians, Greek, (perpetual drunk) Ireland , Portuguese and and and

come on Endo, come on

poor Angela


.

[Endovelico]

.

Anyone thinking national-socialism was an abnormal situation in Germany, better think again ..

.

Germany's Power 'Is Causing Fear' in Europe


the age old story

Germans speeding ahead, others falling back .. and ? ?

well ,

that is what happened in WW I & II

Come on Endo, come on

poor Angela

Germans paying for living standard of all Europe, parasite Brits, Italians, Greek, (perpetual drunk) Ireland , Portuguese and and and

come on Endo, come on

poor Angela


.

Wrong. Germans are predators, taking advantage of other countries' difficulties. On its own Germany would have a stronger currency, fewer exports, higher imports, higher unemployment, lower growth. Like so many parasites, Germany will end up killing its host and dying with it.

[AzariLoveIran]

.

.

.

Anyone thinking national-socialism was an abnormal situation in Germany, better think again ..

.

Germany's Power 'Is Causing Fear' in Europe


the age old story

Germans speeding ahead, others falling back .. and ? ?

well ,

that is what happened in WW I & II

Come on Endo, come on

poor Angela

Germans paying for living standard of all Europe, parasite Brits, Italians, Greek, (perpetual drunk) Ireland , Portuguese and and and

come on Endo, come on

poor Angela


.

Wrong. Germans are predators, taking advantage of other countries' difficulties. On its own Germany would have a stronger currency, fewer exports, higher imports, higher unemployment, lower growth. Like so many parasites, Germany will end up killing its host and dying with it.

.

German exports are not to Portugal or Italy or Ireland .. they to China and America and Russia (and Iran) .. Industrial machinery and high end quality consumer products

Yes, agree, Portugal and Italy and Ireland and Greece can not have same currency as Germany

so

why

Portugal not exiting Euro ?

Germany preventing it ?

No

so,

Endo

Portugal and Greece and Ireland should exit Euro and see where things lead

Germany can wash his hand of this


.

[AzariLoveIran]

.

On the map, Caucasus is in Europe .. so, this seems belonging here


South Caucasus "A potentially explosive situation" .. Armenia, Azerbaijan and Georgia

.

Over the past several years, Iran has become an increasingly influential player in the South Caucasus as Armenia, Azerbaijan and Georgia have each sought to diversify their economic and political ties away from their traditional alliances - none more so than Armenia, which now relies on Iran as a major trading partner and investor.

[..]

Iran regularly accuses Azerbaijan of collaborating militarily with both the US and Israel.

After the nuclear scientist was killed, an intelligence official in Tehran was quoted as saying, "None of those who ordered these attacks should feel safe anywhere."

Stephen Blank, a research professor at the United States Army War College, said that the threats Iran regularly made to Azerbaijan should be taken seriously, including those saying that the country would be "targeted and destroyed" if it allowed the US or it's allies to use Azerbaijani territory or air bases for an attack against Iran.

Azerbaijani airspace is already a key link in the Northern Distribution Network supplying North Atlantic Treaty Organization (NATO) and coalition forces in Afghanistan, and Azerbaijan has signed a number of defense deals with Israel, but none of these arrangements were directed against Iran thus far, Blank said.

That may not matter, however.

"I think Iran is driven by a different calculus. I don't want to leave anyone with the impression that we are dealing with people who are deranged, because they're not. But [...] Iran is driven by this kind of obsession of anti-Semitism and anti-Sunni thinking and I think it manifests itself in their policy," Blank said. "Second, they have discovered that terrorism is an instrument that works."

Lincoln Mitchell, a professor at Columbia University's School of International and Public Affairs, said, on the contrary, that the region would stand to benefit from a US-Iranian escalation because it "puts [the South Caucasus countries] in the driver's seat, particularly Azerbaijan, with its relationship with the US".

"Azerbaijan plays a make-or-break role in this, and Azerbaijan can make any attempt by the United States to do anything in Iran extremely difficult, or it can make it considerably easier. So, the growing tension between Iran and the United States gives far more leverage - particularly to Azerbaijan - than they have now," he said.

Mitchell said that in increasing its utility to the US, Azerbaijan could alleviate Western pressure on Baku over democracy and human-rights issues.

Georgia, while it does not share a border with Iran, may also come into play.

Since coming to power in the 2003 "Rose" revolution, President Mikheil Saakashvili has placed NATO membership at the forefront of his foreign policy agenda. After Georgia's brief war with Russia in 2008, those aspirations appeared to be dashed, but Saakashvili has not given up hope, deploying as many as 1,700 soldiers in Afghanistan's most violent province as a part of the NATO war effort.

However, Georgia has also sought to strengthen its ties with Iran since the war, signing a visa-free travel agreement with the Islamic Republic and opening up greater economic, academic and commercial links in various agreements with Tehran.

Still, Mitchell, who worked as the chief of party at the National Democratic Institute's office in Georgia from 2002-2004 and has authored a book on the Saakashvili regime, said that Georgia would likely acquiesce to any requests by Washington to use Georgian territory in support of American operations against Iran.

In an election year, Georgian opposition politicians and former Georgian president Eduard Shevarnadze have publicly accused Saakashvili of potentially dragging the country into a war with neighboring Iran. But David Smith, a senior fellow at the Georgian Foundation for Strategic and International Studies in Tbilisi, said such claims "are reaching really far" and attributed the worries to political polemicists.

Blank said that while there had been very few statements made about the situation publicly, officials in all three countries were nervous about the rising tensions.

"They are clearly concerned, as are the Russians, about the fact that they're being dragged into a contingency outside their area that they don't really have anything to say about," he said.

Russia has responded to the standoff by announcing military exercises in the North and South Caucasus that are unprecedented in scale. While Russia regularly runs military drills in the North Caucasus, the "Kavkaz-2012" maneuvers will also involve Russian units in Armenia and the Georgian breakaway republic of Abkhazia. It had also reinforced its military presence throughout the North and South Caucasus for an indefinite term in response to the crisis, Blank said.

Over the past year, Russian officials have often warned that foreign intervention in either Syria or Iran could lead to a "wider conflict" in the region. Viewing both Syria and Iran as countries on the periphery of its spheres of influence, Blank said Russia was now attempting to reassert its claim over the South Caucasus, its traditional buffer zone against the Middle East.

With the baseline of regional tensions raised, Mitchell said that the rhetoric in both Russia and Georgia would likely turn increasingly more provocative, as both countries' leaders had a track record of using external distractions to boost their personal popularity.

While most of talk remains just that, he said the confluence of the regional events could lead to "a potentially explosive situation".

So far, the South Caucasus has been exempted from pressure to freeze its relations with Iran. Azerbaijan was even granted a special exemption as European officials and energy lobbyists convinced the US Congress not to include the development of Azerbaijan's Shah Deniz natural gas field in its list of forbidden economic activities with Tehran, although the Islamic Republic owns a 10% stake in the venture.

However, Blank said that the South Caucasus should not count on being able to stay neutral forever.

"I think they will come under pressure to move back from their relationship with Iran if the situation continues to remain at a high level of tension. On the other hand, I think a war would be a worse contingency for them," he said.

.

Shirvan & Arran (named by Pan-Turk Azebaijan) coming home

Best place to squeeze western balls is South Caucasus .. a wink by Ahmadinejat, and, bingo, 1.2 million barrels a day "Baku-Tbilisi-Ceyhan pipeline" stops


.

[AzariLoveIran]

.


The End of Great Britain ? .. Scottish Separatists Have High Hopes for Referendum


good news indeed


that island must be partitioned .. too much mischievous folks


.

[Endovelico]

An interesting twist to the Greek debt:

Twenty-eight MPs raise German war reparations issue
2 Feb 2012

Twenty-eight MPs tabled a proposal in parliament on Thursday requesting a debate on the so-called occupation loan paid by the collaborationist government to Germany during the Second World War as well as the issues of reparations for victims of Nazi atrocities and looted treasures.

The proposal, signed by MPs from Pasok, New Democracy (ND), the Radical Left Coalition (Syriza) and independent deputies, calls on the issues be discussed in the presence of the ministers of finance, foreign affairs, defence and justice as well as representatives of all interested parties.

The signatories also called on parliament to adopt a clear stance on what they described as a “crucial national issue”.

The 28 MPs underlined that at an Italian-German financial conference held in Rome in 1942, the Axis powers arbitrarily decided that occupied Greece, as it had fought on the side of the Allies, was obliged to fund the country’s occupation through a "loan".

The MPs stressed that the now united German state owes Greece, a Second World War victor, roughly 54bn euros before interest, underlining that Greece was the victim of unparalleled cruelty inflicted by the Nazi forces.

The signatories stressed that Greece has been the subject of an obvious injustice because it is the only country to which Germany has not paid reparations.

An online comment to this:

Germany owes Greece 575 Billion Eu's... We just pass a resolution retroactively collateralizing our loans with what Germany owes us. This practice is done all the time between governments and corporations. We just announce that we always intended to pay our national loans with what was still owed to us. Problem solved (actually once our debts were deducted we'd be 200 billion eu's richer, or where we would have been were it not for the theft of our national treasury).

Indicative of the current value of the German obligations to Greece are the following: using as interest rate the average interest rate of U.S. Treasury Bonds since 1944, which is about 6%, it is estimated that the current value of the occupation loan is $163.8 billion and that of the war reparations is $332 billion. The French economist and consultant to the French government Jacques Delpla stated on July 2, 2011, that Germany owes to Greece 575 billion euros from Second World War obligations (Les Echos, Saturday, July 2, 2011). The German economic historian Dr. Albrecht Ritschl warned Germany to take a more chaste approach in the euro crisis of 2008-2011, as it could face renewed and justified demands for WWII reparations (Der Spiegel, June 21, 2011, guardian.co.uk, June 21, 2011).

http://www.athensnews.gr/portal/8/52969#

[Parodite]

Owwww.. the Greek!

[monster_gardener]

An interesting twist to the Greek debt:

Twenty-eight MPs raise German war reparations issue
2 Feb 2012

Twenty-eight MPs tabled a proposal in parliament on Thursday requesting a debate on the so-called occupation loan paid by the collaborationist government to Germany during the Second World War as well as the issues of reparations for victims of Nazi atrocities and looted treasures.

The proposal, signed by MPs from Pasok, New Democracy (ND), the Radical Left Coalition (Syriza) and independent deputies, calls on the issues be discussed in the presence of the ministers of finance, foreign affairs, defence and justice as well as representatives of all interested parties.

The signatories also called on parliament to adopt a clear stance on what they described as a “crucial national issue”.

The 28 MPs underlined that at an Italian-German financial conference held in Rome in 1942, the Axis powers arbitrarily decided that occupied Greece, as it had fought on the side of the Allies, was obliged to fund the country’s occupation through a "loan".

The MPs stressed that the now united German state owes Greece, a Second World War victor, roughly 54bn euros before interest, underlining that Greece was the victim of unparalleled cruelty inflicted by the Nazi forces.

The signatories stressed that Greece has been the subject of an obvious injustice because it is the only country to which Germany has not paid reparations.

An online comment to this:

Germany owes Greece 575 Billion Eu's... We just pass a resolution retroactively collateralizing our loans with what Germany owes us. This practice is done all the time between governments and corporations. We just announce that we always intended to pay our national loans with what was still owed to us. Problem solved (actually once our debts were deducted we'd be 200 billion eu's richer, or where we would have been were it not for the theft of our national treasury).

Indicative of the current value of the German obligations to Greece are the following: using as interest rate the average interest rate of U.S. Treasury Bonds since 1944, which is about 6%, it is estimated that the current value of the occupation loan is $163.8 billion and that of the war reparations is $332 billion. The French economist and consultant to the French government Jacques Delpla stated on July 2, 2011, that Germany owes to Greece 575 billion euros from Second World War obligations (Les Echos, Saturday, July 2, 2011). The German economic historian Dr. Albrecht Ritschl warned Germany to take a more chaste approach in the euro crisis of 2008-2011, as it could face renewed and justified demands for WWII reparations (Der Spiegel, June 21, 2011, guardian.co.uk, June 21, 2011).

http://www.athensnews.gr/portal/8/52969#

Thank you Very Much for your post, Endo.

FWIW about 3 to 4 years ago, I read a book about the Nazi Economic system: They royally ripped off the economies of both occupied nations and alleged allies like IIRC Hungary......... This was done by both high level Nazis literally carrying off the gold from the national treasuries down to private soldiers who were enabled by currency manipulation* making it possible to buy out the local stores and carry home all the eggs, butter etc. when they went back to Germany on leave. Book claimed that when the Allies re-took Europe, the German civilians were MUCH better fed than those in occupied areas like Greece.

Was done to enrich the Nazis AND to buy the comfortable acquiescence of German population...........

Also detailed how the Jews were looted.......

Have tried to find the book again but have failed to find something that am sure is it.....

FWIW

IMVHO the Germans would NOT have gotten off as lightly as they did were it not for the US/Soviet conflict........... Each side trying to make use of Germany.........


*Wonder if history is repeating itself: QE2 and all that Bernanke Krugman crap currency............. Except that we/us/uz don't seem to be getting the benefits as directly as the Germans did..........

Also note that AIUI much of the bailout went to bail out Euro especially German banks so who is manipulating what for the benefit of whom........... IMVHO Banksters for the benefit of Banksters............

To be fair, We/US are NOT the only ones doing this........ AIUI the Chinese are manipulating their currency too....... to get/keep more job/market share

[Endovelico]

It's Time To End the Greek Rescue Farce
A Commentary By Stefan Kaiser

Whether it be an escrow account or a budget commissioner, the latest demands by Germany show just how absurd negotiations over Greece's future have become. It is high time to bring an end to this tragicomedy.

For the past two years, Greece has wrangled with the euro-zone states and the International Monetary Fund (IMF) over its so-called "rescue." Austerity measures have been agreed to, aid has been paid and private creditors have been forced to accept "voluntary" debt haircuts. Despite all this, Greece is in even worse shape today than it was then. Its economy is shrinking, the debt ratio is rising and the country and its banks have been cut off from capital markets. There isn't even the slightest sign that the situation might improve. Something has gone very wrong with this rescue.

But none of the protagonists seem to have grasped this. They continue to negotiate as if things are business as usual, they let one "final ultimatum" after the other pass and they persistently fail to realize that their discussions have started to verge on the absurd. It would be a lot better to end this farce.

For weeks now, the Greek government has been negotiating with private creditors and the troika comprised of the IMF, European Union and European Central Bank (ECB) over a second bailout package. But it is already clear that this aid package will not save the country. It appears it will only delay a Greek insolvency -- and it will serve to create new hardships for the country's population.

It is time for politicians to admit that their carrot and stick strategy has failed. The idea that the country can be freed from its debt quagmire though austerity programs and aid pledges tied to conditions just isn't going to work. It won't even work if private creditors forgive part of the country's debt.

Broken Promises

For months, Greek government politicians as well as the so-called rescuers in Berlin, Paris and Brussels have all been deceiving themselves. Each supposedly final rescue package is followed by yet another, and austerity pledges aren't being adhered to.

That has a lot to do with domestic political considerations. German Chancellor Angela Merkel and French President Nicolas Sarkozy must convey to their voters that they have the situation and, especially the Greeks, under control. Meanwhile, the government in Athens must, out of self-preservation, limit the burdens to its own people as much as possible.

That's why both sides repeatedly agree to promises that everyone knows they will not be able to keep. The current rescue package, for example, officially agreed at the euro summit at the end of October, already has to be improved because it has become too small.

The Greek economy is shrinking faster than assumed. And the austerity plan Greece approved last summer under pressure from its euro-zone partners is also failing to live up to expectations. That's no wonder, either, because €50 billion of the €78 billion in total savings pledged was tied to proceeds from privatizations that, not surprisingly, have failed to generate the profits expected.

Out of Thin Air

The truth is that it must have been obvious to all parties concerned, including the Germans, that the figures were pulled out of thin air. What kind of investor would invest so much money in a country that, for the foreseeable future, will be stuck in a serious economic depression?

The supposed rescue efforts have culminated in the latest German proposals. The German government would like to send a "budget commissioner" to Athens to keep an eye on the Greeks. If that doesn't work, then the Germans also want, at the very least, to be able to impound Greek accounts if they don't pay back their debts through an escrow account.

The suggestions have justifiably provoked outrage. Quite apart from the humiliation these measures would entail for the Greeks, Athens would almost certainly find a way to circumvent them. In the end, Germany would wind up turning an entire nation into its enemy without even gaining anything.

Greece Must Go Bankrupt

Perhaps, the Greece rescuers on both sides of the negotiating table should try being honest for a change. Here's the truth: If the country is to lastingly reduce its mountain of debt and, at some point, be able to borrow money on the capital markets again, then it needs a comprehensive debt haircut. In other words, it needs to go bankrupt.

And it's not just private creditors who will have to forego a large part of their outstanding Greek debts. It is also other European countries and the European Central Bank. That would be expensive for taxpayers across Europe, and it would also be economically risky. Indeed, no one knows what consequences a Greek bankruptcy would have for other crisis-ridden countries like Portugal, Ireland or Italy. But at least it would be an honest solution.

Of course, things wouldn't stop there. The euro-zone states would also have to build a bigger firewall around the remaining crisis countries in order to prevent contagion. They would have to help some banks that get into trouble as a result of a debt cut. And they would have to provide Greece with a real opportunity to get back on its feet and start growing under its own steam -- in other words, a kind of Marshall Plan.

All this would be very expensive, and German taxpayers would also be forced to do what they have feared from Day One -- which is to pay for Greece. But this solution has two major advantages. The payments would be limited, and they would actually help Greece.

And unlike everything that has been negotiated up until now, the solution would also be worthy of being called a rescue package.

http://www.spiegel.de/international/eur ... 19,00.html

From this article on Der Spiegel we may conclude that some Germans are actually intelligent.