The taxman cometh: Hollande sets France's 'toughest budget in 30 years'

 

AFP Photo / Joel Saget

Source: Russia Today

http://rt.com/business/news/france-hollande-annual-budget-191/

The French cabinet has approved the “toughest budget in 30 years.” It is seen as a major political test for the president Francois Hollande, who is resorting to a standard method of shoring up the budget: Taxing the rich and cutting spending.

­France needs to make an estimated 30 billion euro in savings in its next fiscal year to reach Hollande’s ambitious target of reducing the country’s deficit from 4.5 per cent in 2012 to three per cent by 2013. The three percent figure is the EU’s mandated deficit ceiling for member-states.

Higher tax rates on business and wealthy individuals are expected to bring in revenues of 20 billion euro. Hollande outlined a plan to achieve the other 10 billion in needed savings by cutting public spending.

But experts believe the austerity measures risk further pressure on France’s stagnant economy, which has teetered on the brink of recession for the last three fiscal quarters. The country’s unemployment rate has also risen above ten percent – a 13-year high.

Francois Asselineau, veteran of several French Ministries over the last 20 years and head of the Popular Republican Union, said that Hollande may fall into the same trap as many of his predecessors.

“The past decades the governments have been cutting and cutting and cutting the state’s expenses to balance budgets, but in fact, the more they cut, the slower the economic growth,” Asselineau told RT. “It leads to recession, and an even bigger deficit, and consequently more cuts. This will be a catastrophic budget, I think.”

One of Hollande’s key promises during this year’s election was to tax France’s wealthiest at an unprecedented 75 percent for those earning more than 1 million euro a year.

Some experts warned that the higher rates may cause foreign capital to flee the country. And while France’s government claimed that austerity was not its top priority, there are no indications the sluggish economy is growing at a fast enough rate to make up for the budget shortfalls.

French publisher Alain Lefebvre believes the move is simply an empty political gesture.

“He did this to make his electorate calm down – to make an impression he’s doing something,” he told RT. “But this is all bluffing! It can't help. It's simply not enough, there’s not that many rich people in France.”

“The worst is that people who are now happy that the rich are being punished don’t understand, the government will start with rich but when [they] fail to succeed – and I’m 100 per cent certain they’ll fail – they’ll descend down the totem pole and tax the poor,” Lefebvre said.

 

S&P downgrades Greece's sovereign credit rating to selective default

Source: Press TV
http://www.presstv.ir/detail/229011.html

Standard & Poor's Ratings Services has downgraded Greece’s sovereign credit rating to 'selective default' in response to the country’s decision to involve the private sector in its comprehensive debt restructuring.

Greece’s move “constitutes the launch of what we consider to be a distressed debt restructuring,” the US ratings agency said on Monday.

Greece has become the first eurozone member in its 13-year history to be officially rated in default, down from its previous rating of ‘CC’.

However, S&P said that once the debt swap is concluded, it will likely raise Greece's sovereign credit rating to the 'CCC' category.

Greece has negotiated the biggest debt restructuring in history as it seeks to reduce national debt to 120 percent of gross domestic product by 2020, from 160 percent last year, and to meet the terms of a 130-billion-euro ($170 billion) international bailout.

The private sector involvement entails a “debt swap” which aims to slice 100 billion euros off more than 200 billion euros of privately held debt if all investors participate.

The Greek government said the move was expected and would not hurt the banking industry.

"This rating does not have any impact on the Greek banking system since any likely effect on liquidity has already been dealt with by the Bank of Greece," the Greek Finance Ministry said in a statement issued on Monday.

Greece has the highest debt burden in proportion to the size of its economy in the 17-nation eurozone. Despite austerity measures and the bailout funds, the country has been in recession since 2009.

German parliament approves second Greek bailout

German Chancellor Angela Merkel (C) casts her ballot during a session at the Bundestag in Berlin on February 27, 2012

Source: Press TV
http://www.presstv.ir/detail/228993.html

The German parliament has overwhelmingly approved the second bailout package for Greece to help the heavily indebted country stabilize and avert bankruptcy.

On Monday, German MPs voted 496 to 90, with five abstentions, to approve the 130-billion-euro (174.4-billion-dollar) rescue package.

Just before the vote, Chancellor Angela Merkel addressed the Bundestag, or lower house of parliament, warning the lawmakers of the consequences of not coming to Greece's aid.

"The risks of turning away from Greece now are incalculable," Merkel told the 591 MPs of the Bundestag.

"No one can assess what consequences would arise for the German economy, on Italy, Spain, the eurozone as a whole and finally for the whole world,” she added.

The parliament was certain to back the motion after two opposition parties -- the Social Democrats (SPD) and Greens -- said they would support the plan.

Despite the motion's approval, German skepticism about Greece remains.

"The Bundestag will in the foreseeable future be dealing with a third (rescue) package for Greece," said SPD member Peer Steinbrueck, a former finance minister, adding that only strong economic growth would stabilize Greece.

German Interior Minister Hans-Peter Friedrich has openly called for Greece to leave the eurozone, saying it would have a better chance to make its economy competitive if it was outside the monetary union.

According to an opinion poll released on Sunday, 62 percent of Germans opposed the new rescue package for Greece.

The poll was conducted by the Emnid institute for the newspaper Bild am Sonntag.

US postal service to cut 35,000 jobs as mail plants close

Source: Press TV
http://www.presstv.ir/usdetail/228318.html

The U.S. Postal Service, which predicts an annual loss of $18.2 billion by 2015, plans to eliminate 5.4 percent of its workforce by closing almost half its mail-processing facilities to decrease costs.

The service plans to shut 223 of its 461 mail-processing plants by February 2013, Postmaster General Patrick Donahoe said in a telephone interview on Thursday. The closings will cut about 35,000 jobs, said David Partenheimer, a spokesman.

The service is shutting post offices and seeking congressional approval to end Saturday mail delivery as more people use the Internet to correspond and pay bills. Mail volume fell 6 percent in the quarter ended Dec. 31 and may drop 14 percent by 2016, led by declines in first-class mail, the most profitable, the Washington-based service said this month. Bloomberg

HIGHLIGHTS

The labor cuts will occur through attrition, said David Partenheimer, a spokesman. The service will eliminate about 30,000 full-time jobs with benefits. It will cut about 5,000 temporary positions, which include contract and part-time work and don't carry full benefits. sfgate.com

The Postal Service is in debt due to declining first-class mail volumes and a congressional mandate to prefund retirement healthcare benefits. moneycnn.com

Nearly every state is impacted and would lose a mail processing plant, according to the Postal Service list, which includes 14 in California, 12 in New York and 9 in Illinois. moneycnn.com

Mail processing plants closures can yield a particularly devastating toll on communities. A plant in Tulsa, Okla., slated to be consolidated, employs nearly 600 employees. moneycnn.com

The consolidations will affect four processing centers in Maryland: Cumberland, Easton, Gaithersburg and Waldorf. The Virginia sites are Lynchburg, Norfolk and Roanoke. washingtonpost.com

The cutbacks also mean the Postal Service would no longer be able to guarantee overnight delivery of some first-class mail. washingtonpost.com

Fitch drops Greek rating by two notches

People pass a begging man holding a cardboard reding' I'm hungry' in central Athens on February 21, 2012

Source: Press TV
http://www.presstv.ir/detail/228015.html

Fitch credit rating agency has further downgraded Greece from ‘CCC’ to ‘C,’ after the country said it may force losses on private creditors who do not voluntarily sign up to a debt deal.

The international agency said Wednesday that Greece's rating would drop further to 'restricted default' after the bond swap plan is completed and will be re-rated again "at a level consistent with the agency's assessment of its post-default structure and credit profile."

"The exchange, if completed, would constitute a 'distressed debt exchange'," Fitch said.

The bond swap deal with private creditors will see EUR 107 billion of Greece's debt held by banks and other private holders of government bonds written off.

According to Fitch, private bondholders will see a 53.5 percent cut in the nominal value of their credits, thus some creditors may not accept the deal voluntarily, meaning that Greece would adopt the collective action clauses (CAC).

CAC allows a supermajority of bondholders to agree to a debt restructuring that is legally binding on all holders of the bond, including those who vote against it.

On Tuesday, Eurozone finance ministers agreed to provide Greece with a new EUR 130 billion loan to help the heavily indebted country stabilize its debt-to-GDP ratio and avert looming bankruptcy.

Greece had earlier in the month approved the austerity cuts demanded by the troika of the European Union, the European Central Bank and the International Monetary Fund, which was required in order to unlock the new bailout package.

The announcement of the austerity measures caused days of violent demonstrations in Athens that led to tens of people being injured, more than 100 shops being looted and a number of buildings set on fire.

Greece has the highest debt burden in proportion to the size of its economy in the 17-nation eurozone. Despite austerity cuts and the bailout funds, the country has been in recession since 2009.

Eurozone ministers agree on 2nd bailout package for Greece

Eurozone finance ministers talk while attending a Eurogroup meeting at the European Union council headquarters, Brussels, February 20, 2012

Source: Press TV
http://www.presstv.ir/detail/227785.html

Eurozone finance ministers have agreed to provide Greece with a new bailout package to help the heavily indebted country stabilize its debt-to-GDP ratio and avert looming bankruptcy.

The long-awaited package worth 130 billion euros was sealed in Brussels on Tuesday morning after more than 12 hours of intensive negotiations.

The rescue loan is meant to bring down Greece’s debt to 120.5 percent of its gross domestic product (GDP) by 2020.

Eurozone officials had on Monday expressed concerns over how Athens could manage to reduce its debt, while imposing harsher austerity measures.

The deal, however, was vital for Greece’s coalition government to pay off a 14.5-billion-euro bond redemption payment on March 20. Athens risked going bankrupt without the rescue package as it did not have the necessary funds to make the payment.

Greece had earlier in the month approved the austerity cuts demanded by the troika of the European Union, the European Central Bank and the International Monetary Fund, which was required in order to unlock the new bailout package.

The cuts include a 22-percent reduction in the minimum wage, 150,000 civil service layoffs, and a 15-percent cut in supplementary pensions.

The announcement of the austerity measures caused days of violent demonstrations in Athens that led to tens of people being injured, more than 100 shops being looted and a number of buildings being set on fire.

Greece also implemented harsh austerity measures in return for a first 110-billion-euro bailout package received in 2010. Greeks have been turning up on the streets for anti-government demonstrations on numerous occasions since the austerity cuts were first implemented in early 2011.

The country has been in recession since 2009, despite the austerity cuts and the bailout funds, which are meant to stimulate growth for its troubled economy.

Greece’s debt stood at 161.7 percent of the GDP in 2011, which is the highest debt ratio in the eurozone. Moreover, the country witnessed its economy contracting by 7.0 percent in the fourth quarter of 2011. Unemployment currently stands at 20.9 percent in the European state. The Standard & Poor's credit rating agency rates Greece at CC, which is almost comparable to a default.

18 statistics that prove that the economy has not improved since Barack Obama became president

Source: Press TV
http://www.presstv.ir/usdetail/227771.html

Has the economy improved since Barack Obama became the president of the United States? Of course not. Despite what you may be hearing in the mainstream media, the truth is that when you compare the U.S. economy on the day that Barack Obama was inaugurated to the U.S. economy today, there is really no comparison. The unemployment crisis is worse than it was then, home values have fallen, the cost of health insurance is up, the cost of gas is way up, the number of Americans living in poverty has soared and the size of our national debt has absolutely exploded. Anyone that believes that things are better than they were when Barack Obama was elected is simply being delusional. Yes, things have stabilized somewhat and our economy is not in free fall mode at this point. But don't be fooled. This bubble of false hope will be short-lived. The problems we are seeing develop in Europe will erupt into another full-fledged global financial crisis and economic conditions in the United States will get even worse. When that happens, what possible "economic solutions" will Barack Obama have for us? We never even came close to recovering from the last great financial crisis, and now something potentially even worse is staring us in the face. This is not a great time to have a total lack of leadership in Washington.

The following are 18 statistics that prove that the economy has not improved since Barack Obama became the president of the United States....

1] Today there are 88 million working age Americans that are not employed and that are not looking for employment. That is an all-time record high.

2] When Barack Obama was elected, the percentage of unemployed Americans that had been out of work for more than 52 weeks was less than 15%. Today, it is above 30%.

3] There are 1.2 million fewer jobs in America today than there were when Barack Obama was inaugurated.

4] When Barack Obama first took office, the number of "long-term unemployed workers" in the United States was approximately 2.6 million. Today, that number is sitting at 5.6 million.

5] The average duration of unemployment in the United States is hovering close to an all-time record high.

6] During the Obama administration, worker health insurance costs have risen by 23 percent.

7] Since Barack Obama has been president, the average price of a gallon of gasoline in the United States has increased by 90 percent.

8] Since Barack Obama has been president, home values in the United States have declined by another 13 percent.

9] Under Barack Obama, new home sales in the U.S. set a brand new all-time record low in 2009, they set a brand new all-time record low again in 2010, and they set a brand new all-time record low once again during 2011.

10] Since Barack Obama took office, the number of Americans living in poverty has risen by more than 6 million.

11] Since Barack Obama entered the White House, the number of Americans on food stamps has increased from 32 million to 46 million.

12] The amount of money that the federal government gives directly to Americans has increased by 32 percent since Barack Obama entered the White House.

13] According to the U.S. Census Bureau, the percentage of Americans living in "extreme poverty" is now sitting at an all-time high.

14] When Barack Obama first took office, an ounce of gold was going for about $850. Today an ounce of gold costs more than $1700 an ounce.

15] Since Barack Obama became president, the size of the U.S. national debt has increased by 44 percent.

16] During Barack Obama's first two years in office, the U.S. government added more to the U.S. national debt than the first 100 U.S. Congresses combined.

17] During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.

18] The U.S. national debt has been increasing by an average of more than 4 billion dollars per day since the beginning of the Obama administration.

Oh, but Barack Obama is promising that things will be much better very soon. Barack Obama is pledging that 2 million more jobs will be added to the economy in 2012.

Do you believe him?

Congress certainly seems to think that things will be getting better. Congress has reduced the maximum amount of time that the unemployed can receive unemployment benefits to 73 weeks. That change will go into effect later this year.

But there are still millions of very talented Americans that cannot find work after years of looking.

So what are they supposed to do?

A recent Business Insider article featured the story of Helen Hatat, a woman from southern California that has been unemployed since 2009....

She lost her job in public relationships in 2009 after more than 20 years of working in the entertainment industry, the Southern California resident said.

"When you don't have a job, you don't find a job, and when you don't have a job, you don't find a home," she said.

At first she tried moving into a homeless shelter, but left because they treated her "like garbage." Eventually she found a friend she could stay with, but this arrangement won't last forever.

"I've found you lose most of your friends, you know. If you have money people love you. If you don't have any money people hate you. They treat you like you are contagious."

As government finances get tight, things are going to get really tough for women like her.

When evaluating the health of the American economy, the key is not to focus on the short-term economic numbers. Sometimes they go up and sometimes they do down.

Instead, the key is to look at the long-term balance sheet numbers. When you do that, it quickly becomes apparent how appalling our economic decline has been.

The size of federal government debt is exploding, state and local governments all over the country are drowning in debt, our collective national wealth is decreasing and our ability to produce new wealth is also being reduced as our economic infrastructure is systematically gutted.

Of course all of the blame should not go to Obama. The truth is that the Federal Reserve has much more power over the economy than Obama does. But the American people are constantly told that the Federal Reserve is "not political" and that we should not criticize the Fed.

So it is kind of ridiculous that presidents are judged by the performance of the economy. Yes, Bush, Clinton, Bush and Obama have all greatly contributed to the mess that we are in, but they are not solely responsible for it.

In the end, however, the outcome of the next presidential election will probably be very heavily influenced by how the U.S. economy performs during the rest of 2012.

Sadly, as our economy declines it is bringing out the worst in many Americans. For example, "sugar daddy" websites are absolutely exploding in popularity. Young women that are hungry for cash are selling their "services" to sick older men who are willing to finance the lifestyles of these desperate young women in exchange for "companionship".

The following comes from a recent article in The Independent ....

In America's booming online dating market, few sectors are hotter than so-called "sugar daddy" sites, which help rich men to make "arrangements" with attractive and financially needy younger women. Between them, these specialist sites now account for 10 percent of the entire industry. That's no small beans, given that in the US the online dating business now generates profits estimated at $700m ($442m) per year and, according to the polling firm GlobeSpan, has helped just over one in five Americans to find their life partner.

As the economy gets even worse, millions upon millions of Americans are going to become extremely desperate and will do things for money that they never dreamed that they would do.

That is a very frightening thing.

America is changing, and not for the better.

You better get ready for what is ahead, because Barack Obama is not going to save you.

US in state of self-inflicted decline: Chomsky

legendary American academic Noam Chomsky (file photo).

Source: Press TV
http://www.presstv.ir/detail/226828.html

Renowned American academic Noam Chomsky condemns the concentration of wealth in the United States in the hands of the 1 percent, which he refers to as the “self-inflicted” American decline.

“The (US) policies are a failure for the large majority, the 99% in the imagery of the Occupy movements - and for the country, which has declined and will continue to do so under these policies,” Chomsky wrote in his article titled 'Losing' the world: American decline in perspective, part 1.”

From the 1970s, there has been a significant change in the US economy, as planners, whether private or state, shifted production off shores, partly due to the “declining rate of profit in domestic manufacturing,” then82-year-old senior academic noted.

He went on to say, “these decisions initiated a vicious cycle in which wealth became highly concentrated (dramatically so in the top 0.1% of the population), yielding concentration of political power, hence legislation to carry the cycle further: taxation and other fiscal policies, deregulation, changes in the rules of corporate governance allowing huge gains for executives, and so on.”

Whereas Chomsky maintained that “for the majority, real wages largely stagnated, and people were able to get by only by sharply increased workloads (far beyond Europe), unsustainable debt… creating paper wealth that inevitably disappeared when they burst (and the perpetrators were bailed out by the taxpayer).”

Meanwhile, the political system in the US has been increasingly torn up, he said, as “both parties are driven deeper into corporate pockets with the escalating cost of elections.”

This is “a serious problem for working people and the middle classes, and a real disaster for the most oppressed, African Americans, who have never escaped the legacy of slavery and its ugly aftermath,” Chomsky concluded.

Chomsky’s comments come against the backdrop of months of Occupy protests in the United States. The Occupy protests owe their inspiration to the Occupy Wall Street (OWS) movement, which began when a group of demonstrators gathered in New York's financial district on September 17, 2011 to protest against the excessive influence of big corporations on the US policies and the high-level corruption in the country.

Barack Obama: Let's steal 150m dollars an hour from our children

Source: Press TV (US Desk)
http://www.presstv.ir/usdetail/226583.html

Do you think that someone could steal 150 million dollars and get away with it? Well, the truth is that such a theft is taking place every single hour of every single day. The federal government is stealing 150 million dollars an hour from our children and our grandchildren and Barack Obama thinks that is a good thing. The new Obama budget projects a $1.33 trillion federal budget deficit for the 2012 fiscal year. That is significantly higher than the $1.15 trillion that the Congressional Budget Office was projecting because it includes a whole bunch of stimulus spending that the Obama administration plans to do. So let's do a little math.

When you divide $1.33 trillion by 365 days, you get 3.6438356 billion dollars. So on average, the United States will be adding more than 3.6 billion dollars to the national debt every single day during fiscal 2012. And when you divide $3.6438356 billion by 24 hours, you get 151.8 million dollars. So on average, the U.S. national debt will be going up by more than 151 million dollars every single hour during fiscal 2012 if Obama has his way. This is a theft from our children and our grandchildren that is so vast that it is almost unimaginable.

The 2012 budget deficit that the Obama administration is projecting would be equivalent to approximately 8.5 percent of GDP. We simply cannot afford to be running these kinds of outrageous budget deficits year after year.

At the moment, the U.S. national debt is sitting at a grand total of $15,355,838,921,022.16. That is an amount that is so large that it is hard to even put into words.

At this point our national debt is greater than 100% of our national GDP. We are on the road to national financial disaster and yet our politicians keep piling up debt at a rate that is absolutely mind blowing.

The Obama administration is projecting that budget deficits will go down "in the future", but that is what our politicians always do. They always promise that the budget picture will improve "down the road", but that never actually happens.

According to the Bush administration, we were supposed to be swimming in huge budget surpluses by now.

So how did that work out?

Our politicians always promise to cut spending, but it never actually comes to pass. We are always told that cutting spending would be too damaging to the economy "right now" but that they will definitely start cutting things later on.

For example, just check out this recent quote from White House Chief of Staff Jack Lew....

"The time for austerity is not today," Lew told NBC News "Meet the Press." "If we were to put in austerity measures right now, it would take the economy in the wrong way."

They always put budget cuts off for another day. They never want to do anything that could hurt the economy right now and threaten their chances in the next election.

The Republicans were the same way. Vice President Dick Cheney once famously said "deficits don't matter", and the Bush administration ran up horrific budget deficits.

Both political parties have let us down horribly.

Both political parties have voted over and over to steal gigantic mountains of money from our children and our grandchildren.

But our founders never intended for this to be the case. In fact, Thomas Jefferson once stated that if he could add just one more amendment to the U.S. Constitution it would be a complete ban on all borrowing by the federal government...

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.

Thomas Jefferson believed that it was fundamentally immoral for one generation to run up debts which must be paid back by future generations. Basically, he believed that such debts represented theft on a grand scale ....

And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

But that is what we are doing today. We are borrowing gigantic mountains of money which we expect our children and our grandchildren to pay back.

We have come to think of this as "normal", but the truth is that this theft is absolutely disgusting and if future generations get the chance they will curse us for what we have done to them.

Somewhere along the way, we seem to have lost all common sense when it comes to government spending.

The truth is that all of this does not have to be complicated. The following is what Clint Eastwood recently said about our budget problems....

"It's such a basic thing," Eastwood said. "Your parents always tell you when you don't have a dollar in your pocket, you don't spend two dollars. And that's kind of a basic philosophy of life."

Doesn't that make sense?

So why are we being so stupid?

When Ronald Reagan was elected, the U.S. national debt was less than 1 trillion dollars.

We are absolutely drowning in debt, and yet the Obama administration wants even more spending.

Some of his plans for "extra spending" during fiscal 2012 were detailed in an article posted on CNBC ....

For more immediate job programs, the White House will urge $350 billion in short-term job spending, as well as a six-year transportation and infrastructure program that would cost $476 billion. He will ask for $60 billion to refurbish at least 35,000 schools and help state and local governments hire and retain teachers, firefighters and police officers.

This is insanity.

Thanks to all of this debt, a national financial nightmare is an inevitability at this point. As I have written about previously, if the U.S. government stops spending so much money we are doomed, and if the U.S. government continues spending so much money we are doomed.

The problem that we are now facing was once beautifully described by Ludwig Von Mises when he made the following statement ....

There is no means of avoiding the final collapse of a boom brought about by credit expansion.

The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

We are rapidly reaching the "final and total catastrophe" once described by Ludwig Von Mises.

We inherited the greatest economic machine in the history of the world from our forefathers, and we will be known as the generation that totally destroyed it.

Future generations will inherit a collapsed economy and the biggest debt in the history of the world.

But we all prance around like we are the smartest people that have ever existed on the face of the earth.

The rest of the world is laughing at us.

So why don't some honest politicians step forward and tell the American people that we need to stop spending so much money?

Well, first of all there are very few honest politicians on the national level.

Secondly, most of the money that our government spends is money that is taken from the pockets of some Americans and transferred into the pockets of other Americans. Large segments of our population have become absolutely addicted to getting government checks, and it would be political suicide for any politician to propose significant cuts to those checks.

Well over 50 percent of the federal budget is spent on social programs that put dollars directly into the pockets of the American people…

…The American people tend to love politicians that feed their addiction to government money....

If we keep going into so much debt, how long can our system possibly continue functioning?

Well, as we have seen in Greece, a government debt spiral will keep on going until the day that it simply stops working anymore.

A day of reckoning is coming. We don't know if it will be this year or next year or several years from now.

But it is coming.

Our politicians should be doing something about it, but they continue to spend money like tomorrow will never come.

What we are doing to our children and our grandchildren is absolutely immoral.

How in the world can we steal 150 million dollars an hour from them?

We are literally stealing the future from those that will come after us.

Do you think that they will thank us for that?

Eurozone states must go back to national currencies: analyst

Source: Press TV
http://www.presstv.ir/detail/226277.html

European states “dump the euro system” and go back to sovereign national currency to resolve the financial crisis that has for months engulfed the eurozone, a prominent analyst tells Press TV.

“The only way out is to, for these countries to dump the euro, go back to their national currency as they had before and then adopt a two-tier credit system of productive credit for real production and a Glass Steagall standard as it was in the United States,” Edward Spannaus, editor of the Executive Intelligence Review said in an exclusive interview with Press TV on Saturday.

His remarks coincide with violent clashes and demonstrations in Greece where thousands of people have taken to the streets of Athens to protest against further austerity measures in return for a new EU bailout package for the debt-stricken country.

Hundreds of thousands of people in Portugal have also staged demonstrations in the capital city of Lisbon against the government's economic policies.

Commenting on daily protests against deep spending cuts and austerity measures across Europe, Spannaus reiterated that the “people will be destroyed” if their governments accept austerity measures.

“The bailouts are not for the countries. They are not for the people. They are for the banks, so if they continue on this course these countries and their population will be destroyed,” he added.

This is while the EU and the International Monetary Fund (IMF) say adopting austerity measures is essential to save eurozone countries from a debt default.

In order to qualify for the new bailout, eurozone finance ministers say Greece must pass the new package in parliament, and impose additional spending cuts of 325 million euros this year.

Austerity cuts have been the cause of several anti-government demonstrations in Greece since early 2011. Many of the rallies have at times turned violent, leaving scores of protesters injured.

The Greek public debt currently stands at around EUR 350 billion, more than 160 percent of its gross domestic product.

Despite the austerity cuts and the bailout funds, which have been aimed at stimulating growth for the troubled economy of Greece, the country has been in recession since 2009.

Greek parliament is to vote on new austerity measures

Riot police deploys during a 48-hour general strike in front of the Parliament in Athens on February 10, 2012.

Source: Press TV
http://www.presstv.ir/detail/226293.html

The Greek parliament is set to decide in a matter of hours whether to impose another round of austerity measures on the nation in efforts to win a new EU bailout package.

The Greek Prime Minister Lucas Papademos Cabinet approved the draft bill early on Saturday despite massive public protests and resistance by some cabinet members.

Papademos promised “to do everything necessary” to ensure parliament passes the new controversial austerity measures on Sunday.

"The Greek parliament is asked to take a historic responsibility, examine and authorize the new economic program of Greece, the pre-condition for financing the country over the coming years," he said.

The Greek premier warned of "economic and social catastrophe" if the Parliament does not pass the austerity measures.

The two parties in the ruling coalition, the conservatives and the socialists of PASOK back the measures, but two socialist junior ministers and four members of the far-right LAOS Party quit the cabinet in protest.

Following the resignation of the ministers, Papademos vowed to replace any cabinet ministers that oppose his policies.

Police scuffled with thousands of demonstrators that showed up at Syntagma Square in Athens on Saturday to protest the unpopular austerity measures demanded by the eurozone and International Monetary Fund (IMF) in return for a second bailout package worth 130 billion euros to help the country avoid bankruptcy.

Austerity cuts have been the cause of several anti-government demonstrations in Greece since early 2011. Many of the rallies have at times turned violent, leaving scores of protesters injured.

The Greek public debt currently stands at around EUR 350 billion, more than 160 percent of its gross domestic product.

Despite the austerity cuts and the bailout funds, which have been aimed at stimulating growth for the troubled Greek economy, the country has been in recession since 2009.

Clashes in Athens, PM warns of default

Greek protesters shout slogans during a demonstration in Athens on February 9, 2012

Source: Press TV
http://www.presstv.ir/detail/226043.html

Clashes between riot police and anti-austerity protesters have broken out in front of the Greek parliament as the country’s prime minister warned of “uncontrolled chaos” if Athens did not accept a new bailout.

Shortly after Friday night’s clashes, the Greek cabinet unanimously approved a EU-IMF debt deal in the early hours of Saturday morning.

“A disorderly default would plunge our country into a disastrous adventure,” Greek Prime Minister Lucas Papademos said on Friday, shortly after six members of the government announced their resignation in protest against further austerity cuts as demanded by the troika of the European Union, the European Central Bank, and the International Monetary fund.

“At this time there comes a need to do whatever is required in order for the new economic program to be approved and for the new bailout agreement to proceed. Any other development would be catastrophic,” Papademos said, adding that “whoever disagrees and does not vote for the new program cannot remain in the government.”

In the clashes in front of the parliament building in central Athens, police officers in riot gear fired tear gas at protesters, who responded with petrol bombs, bottles, and stones.

Three protesters were arrested and ten people were injured.

Amongst the cuts demanded by the troika, which sparked the recent unrest, are a 20-percent reduction in the minimum wage, 150,000 civil service redundancies, and a 15-percent cut in supplementary pensions.

The country implemented harsh austerity measures in return for the first bailout, a 110-billion-euro package it received in 2010.

Despite the austerity cuts and the bailout funds, which are meant to stimulate growth for the troubled Greek economy, the country has been in recession since 2009.

Greeks have come out onto the streets for anti-government demonstrations on numerous occasions since the austerity cuts began in early 2011. Many of the demos turned violent, leaving scores of protesters injured.

Congress OKs drone flights in US airspace

Source: Press TV
http://www.presstv.ir/detail/225756.html

US Congress has passed a bill requiring the Federal Aviation Administration (FAA) to open the country’s airspace to thousands of drone aircraft within four years, Press TV reports.

According to the plan, which is part of a $63 billion funding package for the FAA, the unmanned aerial vehicles (UAVs) will fly beyond solely military airspace and begin to flood domestic US airspace by 2015.

The legislation requires the FAA to provide military, commercial and privately-owned drones with expanded access to US airspace by September 30, 2015.

The FAA has predicted that 30,000 drones could be in US skies by 2020. The bill is the result of an enormous lobbying effort from Washington insiders and the defense industry.

Even though the legislation restricts the use of the drones over populated areas, civil liberties groups are concerned the door into a sacred Constitutional tenant will be opened even wider.

“There are serious policy questions on the horizon about privacy and surveillance, by both government agencies and commercial entities,” said Steven Aftergood of the Project on Government Secrecy at the Federation of American Scientists.

However, many members of Congress who signed the bill don’t see expanded drone use as a problem. They believe the growth of the drone industry will create more jobs for their constituents.

US youth jobless rate highest in 6 decades

Job-seekers gather around employers' tents at an outdoor job fair at the Crenshaw Christian Center in South Los Angeles, August 31, 2011.

Source: press TV
http://www.presstv.ir/detail/225765.html

A new study by the Pew Research Center shows American young adults are the hardest hit by the US economic recession as unemployment rate among them has reached a record high.

According to the survey, only 54 percent of Americans aged between 18 and 34 currently have jobs, the lowest employment rate since the US government started keeping track of the data in 1948.

"Young workers are on the bottom of the ladder, and during a recession like we've had, it's often hard for them to hold on," said Kim Parker, the associate director of Pew's Social & Demographic Trends project.

Parker noted that American youth “are clearly less satisfied with their current circumstances than they were before the recession."

"This may be where some of the anger and frustration being expressed in the Occupy movement is rooted," she added.

Pew survey also found that US young adults have suffered bigger income losses than other age groups.

The US Federal Reserve Chief Ben Bernanke has expressed concerns over the status of the country’s economy, saying the unusually high levels of long-term unemployment in the US are worrisome.

More than 40 percent of the US jobless have been out of work for at least ten months.

Fed Ben Bernanke says US economy approaching EU crisis levels

US Federal Reserve Chairman Ben Bernanke (file photo)

Source: Press TV
http://www.presstv.ir/detail/224849.html

US Federal Reserve Chairman Ben Bernanke has warned that an EU-type economic crisis is headed for the US economy if it fails to curb its debt issue, Press TV reports.

“Risks remain that developments in Europe or elsewhere may unfold and could worsen economic prospects here at home,” Bernanke said this week, a Press TV correspondent reported.

The Fed chief also suggested that eventually the government's increasing debt would inhibit the growth of the country's economy.

Experts think the US economy will dip into another recession in 2012 as the US Treasury report to congress forecasts the government's debt will rise to 19.6 trillion dollars by 2015.

The Congressional Budget Office reported that the US federal budget deficit will exceed USD 1 trillion at the same time as the US debt which is now more than USD 15 trillion and growing daily. The country's annual economic output now equals about the same as the debt level.

There are fears that more delays in resolving the eurozone debt crisis, which began in Greece in late 2009 and infected Italy, Spain and France last year, could push not only Europe but also much of the rest of the developed world back into recession.

Meanwhile, the US unemployment rate remains above 9 percent. Many economists, however, believe that the true unemployment rate is around 20 percent.

This has resulted in the Occupy protests that continue to rage across the country against the US's financial inequalities.

The Occupy Wall Street (OWS) movement first began on September 17 in the financial district of New York City to protest at a number of issues including the US financial crisis, rising poverty, soaring unemployment, and high bonuses for Wall Street executives.

Greece bailout talks impasse continues

Greek Finance Minister Evangelos Venizelos speaks to reporters in Athens after a telephone conference with eurozone ministers on February 4, 2012.

Source: Press TV
http://www.presstv.ir/detail/224900.html

Greece has once again failed to reach an agreement with its creditors on major sticking points to receive a multi-billion-dollar bailout package.

On Saturday, Greek Finance Minister Evangelos Venizelos announced that the country's negotiations with the European Union, the European Central Bank, and the International Monetary Fund (IMF) were still at an impasse.

Venizelos said the negotiations with the EU and the IMF were "on a knife edge" but insisted that a deal had to be sealed by Sunday night.

Earlier on Saturday, Venizelos stated that debt inspectors' demands for additional austerity measures were preventing a breakthrough in the talks.

Greece has to make a bond repayment of 14.4 billion euros (about $19 billion) by March 20. Athens cannot afford to make the payment, and the country will go bankrupt without more financial assistance.

Athens is under pressure to cover part of its debt as a precondition for it to receive a new aid package from EU member states and the IMF worth 130 billion euros (about $171 billion).

Meanwhile, the chief executive officer of Germany's biggest lender, Deutsche Bank, said he plans to visit Athens and observed that Europe faced a "make or break" moment on Greece.

On Saturday, Josef Ackermann stated that private investors had been "extremely generous" to Greece by offering "a loss of over 70 percent" on their bond portfolios.

"I can only ask other constituencies to do the same," he added, referring to governments and EU institutions, such as the European Central Bank, that also hold billions of euros in Greek debt.

Ackermann expressed optimism that Europe was emerging from the economic crisis but insisted that the Greek problem must be fixed.

"If we see Greece collapsing, I think we are opening a Pandora's box," he noted.

Greece strives to avoid messy default

Greek Finance Minister Evangelos Venizelos (L) and Greek Prime Minister Lucas Papademos arrive for a joint press conference following a European Union summit at the EU headquarters on January 30, 2012 in Brussels.

Source: Press TV
http://www.presstv.ir/detail/224391.html

The Greek government is frantically looking for the support of all its political leaders in order to implement more stringent austerity measures needed to avoid a disastrous default.

On Wednesday, the government spokesman said Prime Minister Lucas Papademos would meet the conservative, socialist and far-right leaders in a few days to ask them to back his government so it can clinch a deal with international creditors.

"The meeting of the political leaders is crucial," Pantelis Kapsis stated.

The International Monetary Fund (IMF) has warned that the austerity measures are necessary to secure the new bailout package that Athens needs to escape the default.

Later in the day, Athens and IMF officials said negotiations for landmark debt deals would be concluded within days.

Greece is in talks with private creditors to have them take losses on their bondholdings and with its international bailout rescuers to secure new loans.

A deal with private sector creditors to cut Greece's debts by 100 billion euros has almost been concluded, and the government is now racing to complete talks on the 130-billion-euro ($170.18 billion) bailout by the end of the week.

To achieve the bailout package, Athens must first convince the European Union and the IMF that the government will implement long-delayed reforms and make further spending cuts.

Greece's current debts stand at 340 billion euros ($440 billion) -- a sum, which equals around 31,000-euro debt per person in the country of 11 million people. The country has the highest debt burden in proportion to the size of its economy in the entire 17-nation eurozone.

Investors fear a default could mess with the international financial equation and send the global economy into recession.

Greece, creditors fail to broker deal

Greek Prime Minister Lucas Papademos (file photo)

Source: Press TV
http://www.presstv.ir/detail/222269.html

Greece and private bond holders have failed to reach an agreement over a deal that prevents the country from defaulting but lose investors up to 70 percent of the loans they have given to Athens.

Greece's Prime Minister Lucas Papademos and Finance Minister Evangelos Venizelos met with representatives from banks and financial institutions on Friday, but failed to reach an agreement necessary for the country to avoid bankruptcy.

Athens seeks to strike a deal to cut around 100 billion euros from its debt, which would put the affiliated bankers at a 50 percent loss.

The agreement includes swapping voluntary bond redemptions, equaling EUR 14.5 billion (USD 18.5 billion), which are due in late March.

The deal is needed for the country to unlock a bailout package worth approximately 130 billion euros.

Talks have been planned to resume for a fourth day on Saturday.

Greece's debt stands at EUR 340 billion (USD 440 billion), a sum, which equals around EUR 31,000 debt per person in the country of 11 million people.

The country has the highest debt burden in proportion to the size of its economy in the entire 17-nation eurozone.

Romney stripped of Iowa win after recount

Source: Press TV
http://www.presstv.ir/usdetail/222027.html

The Republican presidential frontrunner Mitt Romney has suffered a setback when the party stripped him of his victory in Iowa after a final tally of votes.

His rival, the socially conservative former senator Rick Santorum, emerged with the most votes, a majority of 34.

The party was scheduled to make an official announcement but the Des Moines Register reported its findings hours earlier.

The Register said the party was declaring the vote "unresolved" because there were "too many holes" in the certified totals to know the victor for certain, with the results from some precincts missing.

Romney said on Thursday the new tally showed it was "a virtual tie" between him and Santorum.

But it means that Romney can no longer claim to be the winner in Iowa. If another of his rivals, Newt Gingrich, wins the South Carolina primary on Saturday, this would mean they have one apiece: Romney the New Hampshire primary, held on 10 January, Gingrich South Carolina, and Santorum Iowa from 3 January. The race for the party nomination to take on Barack Obama in November would then be wide open. Guardian

Greece, creditors talk to avoid default

Greek Prime Minister Lucas Papademos (file photo). The premier joined the Wednesday talks with the international creditors in an attempt to avoid a default by the country.

Source: Press TV
http://www.presstv.ir/detail/221822.html

Greece and its international creditors have started a new round of talks to avoid a default by the country, with both sides under increasing pressure to work out their differences.

The two sides said little on Wednesday after an over-two-hour-long meeting except that they would meet again on Thursday. Greece has to strike a deal within days to avoid defaulting on the debt when bond redemptions, equaling EUR 14.5 billion (USD 18.5 billion), are due in late March.

Greece's debt stands at EUR 340 billion (USD 440 billion) -- a sum, which equals around EUR 31,000 debt per person in the country of 11 million people. The country has the highest debt burden in proportion to the size of its economy in the entire 17-nation eurozone.

Investors fear a default could mess with the international financial equation and send the global economy into recession.

Greek officials and international bankers have expressed optimism that a deal could be reached in the coming days, despite the fact that talks broke down last week over the issue of the interest rate Greece will offer on new bonds and a plan to enforce investor losses.

An agreement with banks and other institutional investors would open the door to a funding deal from the International Monetary Fund and European lenders and help stabilize the markets within the eurozone.

"They are working hard to breach differences and they will continue tomorrow," said a source close to the talks.

Greece's Prime Minister Lucas Papademos, the country's Finance Minister Evangelos Venizelos, and Charles Dallara, the head of Washington's International Institute of Finance, who is also representing private money lenders at the talks, discussed both the issues.