Category: Europe

Hurrray for the ……………… Swiss?

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Switzerland citizens have petitioned binding shareholder votes on executive compensation to referendum:

In February 2008, Thomas Minder, a Swiss businessman whose family-owned company is best known for its old-fashioned herbal toothpaste, attacked his banker, UBS Chairman Marcel Ospel, as if he were a form of stubborn plaque. At a shareholders’ meeting in Basel, he stormed the podium as Ospel addressed the crowd. Ospel’s bodyguards grappled with Minder and wrestled him away before he could land his symbolic blow — he was trying to hand the embattled head of Switzerland’s largest bank a bound copy of Swiss company law, which codifies corporate temperance.

 “Gentlemen, you are responsible for the biggest write-downs in Swiss corporate history,” Minder had railed just a few minutes before, referring to UBS’s loss of $50 billion during the subprime meltdown that prompted it to seek a government bailout. “Put an end to the Americanization of UBS corporate philosophy!”

 The bodyguards marched Minder out of the hall amid a chorus of boos and jeers. Two months later, Ospel was gone, taking the fall for UBS’s recklessness, but Minder’s campaign against big bonuses had only just begun; shortly after Ospel was ousted, Minder filed the 100,000 signatures needed to launch a referendum to impose some of the tightest controls on executive compensation in the world.

 Of the top 100 Swiss companies, 49 give shareholders a consulting vote on the pay of executives. A few other countries, including the United States and Germany, have introduced advisory “say on pay” votes in response to the anger over inequality and corporate excess that drove the Occupy Wall Street movement. Britain is also planning to implement rules in late 2013 that will give shareholders a binding vote on pay and “exit payments” at least every three years. Minder’s initiative goes further, forcing all listed companies to have binding votes on compensation for company managers and directors, and ban golden handshakes and parachutes. It would also ban bonus payments to managers if their companies are taken over, and impose severe penalties — including possible jail sentences and fines — for breaches of these new rules.

Honestly, I was hoping that someone would do this, but in my wildest dream, I would have not have thought that it was the Swiss who would be at the forefront of this movement.

It appears that I have some stereotypical views about the Swiss, basically as conventional banker types, which does not reflect the actual reality.  I’ve got to be more enlightened.

Iceland Wins in Court Over Icesave Deposite Guarantees

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I’m not particularly surprised:

A European court has cleared the Icelandic government of failing to guarantee minimum levels of compensation for UK and Dutch savers in the collapsed Icesave bank.

Icesave, run by the Icelandic Landsbanki, collapsed in 2008 along with all of Iceland’s banking system.

The UK and Dutch savers were bailed out completely by their governments.

The ruling may halt the UK’s attempt to get all of its money back from the Icelandic government.

………

The Icelandic government said it took “considerable satisfaction” from the ruling from the European Free Trade Agreement (EFTA) Court.

“Iceland has from the start maintained that there is legal uncertainty as to whether a state is responsible for ensuring payments of minimum guarantees to depositors using its own funds and has stressed the importance of having this issue clarified in court,” it said.

………

The EFTA judgement stated: “The Court holds that the Directive does not envisage that the defendant itself must ensure payments to depositors in the Icesave branches in the Netherlands and the United Kingdom, in accordance with Articles 7 and 10 of the Directive, in a systemic crisis of the magnitude experienced in Iceland.”

What’s the core issue here is that Iceland guaranteed these accounts up to £16,300, but the British and Dutch cover the whole account, and demanded that Iceland pay the whole amount.

This is separate from the attempts to make the bondholders whole, for which there is no legal obligation whatsoever.

More Agreement With the IMF

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They are saying that Britain should back off its austerity policies:

Britain should tone down its austerity plans to help the struggling economy, the International Monetary Fund’s chief economist has suggested.

Olivier Blanchard said the budget in March would be a good time for George Osborne to “take stock” of his plan A.

The comments, in an interview with BBC Radio 4’s Today programme, came after the IMF trimmed its forecasts for the UK and global growth. The British economy is now expected to expand by 1% rather than 1.1% this year, and 1.9% rather than 2.2% next year.

Twice in a day I agree with them.

Go figure.

Britain’s Cameron Calls for Referendum on EU Membership

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He wants to get back some of the powers that have gone to the EU, but the big story is that he is calling for a referendum on leaving the EU:

David Cameron has said the British people must “have their say” on Europe as he pledged an in/out referendum if the Conservatives win the election.

The prime minister said he wanted to renegotiate the UK’s relationship with the EU and then give people the “simple choice” between staying in under those new terms, or leaving the EU.

The news was welcomed by Eurosceptics who have long campaigned for a vote.

France and Germany both warned the UK could not “cherry pick” EU membership.

During noisy Prime Minister’s Questions exchanges in Parliament, Labour leader Ed Miliband said Mr Cameron was “running scared” of the UK Independence Party, whose poll ratings have been rising.

It’s not just the UKIP. It’s also the right wing of his own party who is Euroskeptical, though the Lib-Dems, his junior coalition partners are strongly pro-EU, so he’s got a nasty balancing act.

As to how the vote goes?  My prediction is that the vote won’t ever happen.

I think David Cameron will find a way to declare victory and so not hold the vote.

Then again, my powers of prognostication suck wet farts from dead pigeons.

The Best Reason for Scottish Independence

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This:

Earlier this month, the UK Treasury declared that, following a period of intense and prolonged analysis of the economic numbers, each of us would be £1 a year worse off in an independent Scotland. Put another way, for £1 a year you will never have to endure the economic privations of a Conservative government ever again. You will not be penalised for being poor or old and nor will you suffer the pain of watching your young boys being killed in illegal wars or occupations.

What the Hell Is Cameron Doing With the EU?

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He is due to give a speech in Brussels demanding that some powers be returned to Britain, most notably those dealing with criminal justice, immigration, and foreign workers.

Truth be told, I think that he is trying to walk a tight rope. A large majority of the Tories, and (if polls are correct) most of the rest of the country, are inclined to favor an exit from the EU, so he’s attempting a number of things:

  • He wants to take the wind out of the sails the right wing nativist UK Independence Party, which is on a path to reduce the Tories’ Liberal Democrat coalition partners to 4th place and irrelevance.
  • He wants to pacify his own right wing.
  • He wants to put Labor leader Millibrand in the position of supporting the EU which is an unpopular position.

Truth be told, with what Merkel is looking to do, I would be a Euroskeptic myself:

It is understood that Merkel, the only EU leader who has been calling for a revision of the Lisbon treaty to underpin new governance arrangements for the eurozone, has given up on the idea of a major treaty revision for the moment.

 The German chancellor is said to have decided it is fruitless to push for a treaty revision in the face of strong opposition from France and elsewhere. Instead she has decided to try to stabilise the eurozone by setting up what are described as “work streams” in three areas. These cover banking union, the subject of the last EU summit where Cameron won guarantees for Britain; greater fiscal co-ordination among eurozone members; and labour market reform across the EU.

(emphasis mine)

If I lived in the EU, the idea that the Germans, who have no statutory minimum wage,, and a long history of dubious treatment of immigrants, would be driving “labor market reforms” it would fill me with dread.  It translates into f%$#ing the ordinary working bloke.

Of course, David Cameron is a member of the Conservative party, so “f%$#ing the ordinary working bloke”, is kind of an article of faith for him.

I still maintain that the real problem with the EU is German hegemony in the EU, because they have much like the Bourbon Kings, “They had learned nothing and forgotten nothing.”

In the lame poodle category, Cameron is saying that the US has given its permission for him to ask for this.

Britain’s “special relationship” with the US looks increasingly like a relationship between a prostitute and a pimp.

When Gun Nuts Mention Switzerland, Cite This

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Yes, the Swiss do have common posession of military weapons as a part of their armed forces, but the regulatory regime is a gun control advocates wet dream. They literally count the bullets that their citizen soldiers carry (rolling the Wiki):

The Montpelier Exempted Village Schools Board of Education has approved the carrying of handguns by its custodial staff.

The 5-0 vote of the board Wednesday night to allow handgun training for four custodians to be able to tote weapons at the K-12 campus at the Williams County school came after last month’s deadly shooting rampage at Sandy Hook Elementary School in Connecticut.

School officials say that having armed personnel – believed to be the first for any school system in Ohio – is designed to thwart incidents of violence and prevent what happened in Newtown, Conn., from occurring here.

“Sitting back and doing nothing and hoping it doesn’t happen to you is just not good policy anymore. There is a need for schools to beef up their security measures,” Supertendent Jamie Grime told The Blade today. “Having guns in the hands of the right people are not a hindrance. They are a means to protect.”

Nothing that is proposed even comes close to this.

If You Want to Understand the Face of Modern Capitalism

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Just read Aviation Week‘s savaging of Angela Merkel. (Paid Subscription Required)

Seriously, this article makes me feel a modicum of respect for Angela F%$#ing Merkel.

It centers on the role of Merkel of killing the BAE/EADS merger, and Aviation Week, which is at its core a defense industry newsletter, and as suchit does not approve of government “meddling.”

The basic premise behind this is that after sucking up billions of government subsidies and contracts, they want to “unleash the free market” (Translation: move factories to China, overpay senior executives, and continue to get government money).

Nixing the terms demanded by BAE may have been the best thing that Merkel has ever done.

If there is any industry that rivals the banksters for socializing risk and privatizing profits, it is the defense industry, and to treat it as anything but a ward of the state is a profound mistake.

More Financial Fraud Enforcement Theater from the Obama Administration

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Yesterday, I heard the news that the 271 year old Swiss bank, Weglin, was shut down following a US Department of Justice investigation into their actions supporting tax evasion and money laundering.

It sounded too good to be true, and , as Yves Smith so eloquently points out, it was too good to be true.

The Nickel version is that the bank’s asserts were transferred to another entity, Raiffeisen, and the proceeds likely given to the owners in the weeks power to its being shut down.

Finally, the DoJ is saying NOTHING about whether the got information about the accounts, and the people who used them too avoid taxes.

This its a pretty good tell that they hour no data:  If they had, they would be trumpeting it to the heavens, because they would thereby induce people to turn themselves in.

Go read the while thing, including the reader comments.

Posted via mobile.

History Repeats Itself………

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They’re Back!!  Yes, the symbol looks very familiar

The Golden Dawn, the resurgent Greek Fascist party.

Rather surprisingly, their increasing popularity in Greece, along with the increasing violence associated with their actions, along with evidence that Greek police are increasingly directly colluding with them.

When you consider the fact EU measures have produced an economic collapse that has women in labor refused admission to hospital, and a descent to a barter economy, you would think that the Greek ruling elite, as well as the Eurocrats in Brussels, along with the Germans who pull their chain, would be running around like their hair was on fire about this.

It’s not happening, because the however uncomfortable the corrupt Greek elites are with Fascists, they hate the Greek left as manifested by SYRIZA, the Greek party of the left, because if they win, they threaten to undermine the kleptocratic duopoly of the PASOK New Democracy party.

On the European Union side, however uncomfortable they are with Fascism, they hate the Greek left as manifested by SYRIZA, and more generally they hate the underlying ideas that the EU bureaucracy should serve the will of the people (witness the gyrations to prevent votes on EU expansion once the referenda started to fail), and that neoliberal bank coddling policies are a bad.

So, why is there the studious ignorance regarding the rise of Fascism in Greece (and in a number of other EU nations)?

Well, when you look at the attitudes of the Eurocrats toward SYRIZA, or the Left Party in Germany, or similar, you see a hell of a lot more alarm at them, but they are not xenophobic violent antidemocratic groups.

I would argue that what we are seeing is a tacit endorsement of the rise in Fascism in Europe, because they are seen as “useful idiots” who can serve to counteract the threat of a resurgent left, either by providing an outlet for nationalist sentiments, or through violence.

Does this sound familiar to you?  It does to me.

In the late 1920s and the early 1930s, industrialists funded Fascists all over Europe, most notably in Germany, because of concerns about potential gains of leftists parties as a result of the economic collapse. (Yes, I know, Godwin’s Law)

I’m wondering when we are going to see the blond boy singing Tomorrow Belongs to Me.

My brother is pessimist.  He expects there to be a collapse the EU and war in the near future.

I am an optimist.  I expect there to be a collapse the EU and cold war in the near future.

Until the Eurocrats are put back under public control, and until Germany realizes that their morality play wet dreams do nothing but kill people, I do not see a better outcome in the next couple of decades.

Not Gonna Happen Next Year

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Not this, nor next year, will the Former Greek finance minister face criminal charges:

Greece’s coalition government called on Monday for the indictment of former Finance Minister George Papaconstantinou for allegedly removing the names of three of his relatives from a list of Swiss bank account holders whose tax records were to be re-examined.

Seventy-one deputies from the three-party coalition signed the proposal to indict Papaconstantinou for allegedly tampering with a public document and breach of duty — offenses that would carry a maximum 10-year jail term, according to legal experts.

Papaconstantinou, 51, served as finance minister between 2009 and 2011 in the previous Socialist government. But his party, which is part of the new conservative-led administration, is backing the proposed indictment.

The former minister has angrily denied the allegations, insisting the names were removed without his knowledge.

Not gonna happen.

It’s not gonna happen because if he is put in the dock, he will talk, and if he talks, he will implicate most of the corrupt Greek ruling class, as well as the German and British banksters who were complicit in the fraud.

As an aside, for next year, can we please have our newsmakers have easier to spell names next year?

Thanks Merkel

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Not only is Angela Merkel’s hard money policies impoverishing much of the Euro Zone, which might cause the currency zone to break up, but it looks like it’s going to lead to the dissolution of Spain:

The center-right Catalan nationalist bloc CiU and the Catalan Republican Left (ERC) on Wednesday reached an agreement to call for a referendum on independence for Catalonia within two years.

The deal paves the way for Artur Mas to remain premier of the region. The CiU emerged as the biggest party in regional elections held last month but fell short of the absolute majority it was seeking. ERC was the second most voted party. The two sides still have to agree on the budget for next year. The accord on the referendum states that it must be held before the end of 2014 but does not give a specific date.

In a parallel development, the CiU, the ERC and other Catalan parties — with the exception of the local branch of the ruling Popular Party — reached an agreement not to implement the reform of the education system put forward by Education Minister José Ignacio Wert, which restores Castilian Spanish to the same level in the classroom as co-official regional languages such as Basque or Catalan.

The accord says the parties will adhere to the Catalan Education Law, which promotes immersion in the Catalan language. The parties described Wert’s proposals as “unacceptable” as they “prevent linguistic immersion by segregating pupils on the basis of language.”

Seriously, the pain caucus in the Euro Zone (Angela is their most senior member) is laying waste to everything that they touch.

God Help Us, Berlusconi is Italy’s Best Hope

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I know that this sounds like a joke, but I’m as serious as a heart attack.

The Euro (as it is currently structured, it should be called the Reichsmark, because it is structured by Germany to benefit it’s position as a predatory exporter) is of no real benefit to Italy, and Berlusconi is the only credible Italian political figure who is willing to say this:

The nation is richer than Germany in per capita terms, with some €9 trillion of private wealth. It has the biggest primary budget surplus in the G7 bloc. Its combined public and private debt is 265pc of GDP, lower than in France, Holland, the UK, the US or Japan.

It scores top of the International Monetary Fund’s index for “long-term debt sustainability” among key industrial nations, precisely because it reformed the pension structure long ago under Silvio Berlusconi.

“They have a vibrant export sector, and a primary surplus. If there is any country in EMU that would benefit from leaving the euro and restoring competitiveness, it is obviously Italy,” said Andrew Roberts from RBS.

“The numbers are staring them in the face. We think the story of 2013 is not about countries being forced to leave EMU but whether they choose to leave.”

A “game theory” study by Bank of America concluded that Italy would gain more than other EMU members from breaking free and restoring sovereign control over its policy levers.

………

Rome holds a clutch of trump cards. The one great obstacle is premier Mario Monti, installed at the head of a technocrat team in the November Putsch of 2011 by German Chancellor Angela Merkel and the European Central Bank – to the applause of Europe’s media and political class.

Mr Monti may be one of Europe’s great gentlemen but he is also a high priest of the EU Project and a key author of Italy’s euro membership. The sooner he goes, the sooner Italy can halt the slide into chronic depression.

The sooner that someone who counts (not Greece, not Portugal, and probably not Spain) declares that the Euro is a failure, and that it needs to be abandoned, the better it will be for most of the people in the Euro Zone.

The Eurobanksters will lose, and Angela Merkel will lose, but the entire Euro Zone, including Germany, is now in recession because of German competitive needs, and German mythology. (it wasn’t the hyperinflation that brought the Nazis to power, it was the hard money contractionary policies, policies that the Germans are demanding for the rest of the EZ that did)

Absent Germany withdrawing from the Euro, the currency is doomed, and the sooner that it is abandoned, the better.

Damn, This is Heavy

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A man in the process of breaking up with his wife, and alleged that she was involved with laundering money transfers to Switzerland, and the bank got him committed to a mental hospital for ten years:

A German man committed to a high-security psychiatric hospital after being accused of fabricating a story of money-laundering activities at a major bank is to have his case reviewed after evidence has emerged proving the validity of his claims.

In a plot worthy of a crime blockbuster, Gustl Mollath, 56, was submitted to the secure unit of a psychiatric hospital seven years ago after court experts diagnosed him with paranoid personality disorder following his claims that staff at the Hypo Vereinsbank (HVB) – including his wife, then an assets consultant at HVB – had been illegally smuggling large sums of money into Switzerland.

Mollath was tried in 2006 after his ex-wife accused him of causing her physical harm. He denied the charges, claiming she was trying to sully his name in the light of the evidence he allegedly had against her. He was admitted to the clinic, where he has remained against his will ever since.

But recent evidence brought to the attention of state prosecutors shows that money-laundering activities were indeed practiced over several years by members of staff at the Munich-based bank, the sixth-largest private financial institute in Germany, as detailed in an internal audit report carried out by the bank in 2003. The report, which has now been posted online, detailed illegal activities including money-laundering and aiding tax evasion. A number of employees, including Mollath’s wife, were subsequently sacked following the bank’s investigation.

………

Asked why the bank kept the report to itself and did not approach the authorities, the spokeswoman added: “In 2003 HVB initiated extensive investigations via internal audits in response to information provided by Mr Mollath on transactions that had taken place a long time before … It was determined that employees had acted contrary to their instructions regarding Swiss banking transactions”.

But while the findings, it said, had resulted in sackings, the audit “did not produce sufficient evidence indicating criminal conduct … that would have made a criminal charge seem appropriate”.

If you believe that the banks had nothing to do with his commitment, you are naive.

This is Bavaria, the heart of the German right wing, and doing the banks’ bidding is pretty much a requirement for civil servants there, so I have no doubt that Hypo Vereinsbank decided to act like Stalin’s NKVD.

H/t Naked Capitalism.

The Goal is Not Recovery, It’s the Dismantling of the Social Safety State

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That’s what the right wing push for austerity is all about.

Case in point, the chancellor of the Exchequer George Osborne, who is saying that since austerity is further depressing the British economy, it has become necessary extend austerity until at least 2018:

Britons, many already weary of government austerity budgets that some economists say are impeding the country’s recovery, are going to have to wait even longer for relief.

The architect of the austerity program, George Osborne, the chancellor of the Exchequer, told Parliament on Wednesday that the government had missed one of its self-imposed debt-cutting goals and would have to extend the belt-tightening into 2018, a year longer than previously promised.

Although Mr. Osborne maintained that the debt reduction plan was still on track, his presentation drew heckling and laughter from some opposition lawmakers, particularly after he argued that new tax measures would show that “we’re all in this together.”

The next general election in Britain will take place in 2015, well before the end of austerity measures that have included cuts in welfare services and the elimination of tens of thousands of public sector jobs.

On Wednesday, the Office for Budget Responsibility, a nonpartisan body that is monitoring the economy, said it now expected full-year data to show that the economy shrank 0.1 percent this year, instead of growing 0.8 percent, as the office had previously forecast.

It also said the economy would grow 1.2 percent next year as opposed to the 2 percent predicted earlier.

“It’s a hard road but we are getting there,” Mr. Osborne told Parliament. “Britain is on the right track. Turning back now would be a disaster.”

The evidence is clear: Austerity in a depressed economy further depresses the economy, and reduces tax revenues.

Austerity is not about creating growth, nor is it about reducing deficits.  It is merely camouflage for an assault on social insurance.

A Lesson in Economic Statistics from the Shrill One

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Paul Krugman explains why Italian productivity has fallen precipitously over the past decade or so:

Dean Baker, in correspondence, makes an interesting point about the mysterious productivity collapse in Italy — namely, that a big chunk of it could be a statistical illusion. This is always something you should consider when you see something strange in economic data.

 Here’s the story: Italy, with its combination of extensive regulations and weak enforcement, used to have a lot of “black labor” — workers who weren’t on the books, so as to evade various government-imposed requirements. But then came reforms that made keeping part-time workers, etc., on the books less onerous — and the hidden labor came into the open. Measured GDP wasn’t affected, because statisticians were already making imputations for the shadow economy; so the result was a decline in measured productivity.

It’s a reasonable explanation.  It’s not like Italy has stopped being Italy since 1995.

Entering the Euro zone has brought changes, but nothing that would have their actual productivity dropping off a cliff like this graph pr0n.

EU to Spanish Consumers Defrauded by Banks: Drop Dead

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So Spanish banks lied to their customers, selling them preferred shares and telling them that they were government insured accounts, and now the EU is requiring that they get wiped out as part of a bailout:

Yves here. We’ve flagged in earlier posts how the Spanish banking crisis had the potential to become destabilizing politically, as if Spain wasn’t already at considerable risk of upheaval. Spanish depositors were pushed to convert their deposits into preference shares, which they were told were just as safe. That of course was never true.

This was a simple desperation move by the banks to save their own skins, customers be damned, by raising equity from the most unsophisticated source to which they had access. And now that that gambit failed, these shareholders are due to have those investments wiped out unless the Spanish authorities can cut a deal to spare them. The conditions of a bank rescue, which Spain did try to resist, was to have equity holders wiped out, or at least haircut. And that plan is now about to be set in motion. Having losses imposed on small savers who were in many cases conned by their own bank to buy these preference shares is going to do serious harm as well as further delegitimate the government.

Remember that quote from the Icelandic President? It’s only two posts down.

He’s right: bail out the people and jail the bankers.

It’s Jobless Thursday!

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And the number of initial claims hit an 19 month high, up 79K to 439K.

The consensus is that it was an artifact of the devastation of Frankenstorm Sandy.

In other, probably more significant news, the Euro Zone is back in recession, and ECB president  Mario Draghi is busy suggesting that it’s better to cut spending than it is to raise taxes, even though tax cuts have less stimulative effects than does government spending.

I swear, there is not a single economic “authority” in the entire Euro Zone who has any morals at all.

They have all somehow bought into the idea that creating pain for most of the members of a society is somehow an independent good.

Why Do Conservatives Keep Defending Child Rapists

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First, it was the Catholic Church, and now it’s the Conservative Party in the UK which is trying blame the victims and those reporting the abuse:

Downing Street has denounced “trial by Twitter” and a “silly stunt” by the ITV presenter Phillip Schofield who ambushed David Cameron live on air by handing him an internet-sourced list of suspected paedophiles – causing a shocked Prime Minister to complain of a “witch hunt” against gay people.

Schofield was forced to apologise after it emerged he had “misjudged the camera angle” and the names of several former senior Conservative politicians were visible on a card which he thrust into the hands of the Prime Minister before an audience of around 1.2 million. “You know the names on that piece of paper,” the This Morning presenter told the Prime Minister. “Will you be speaking to those people?”

The presenter claimed to have found the names of the Conservative Party figures in “three minutes” during a “cursory glance at the internet” for details of a scandal relating to abuse at children’s homes in north Wales during the 1970s and 1980s.

It’s been about 30 years since this all happened, so I’m not sure why they are going into full stonewall mode over this, unless a major Tory icon of that period, was somehow involved in the original abuse or the original cover up.

H/t Atrios.