Christopher Helin Fisk Service garage, San Francisco 1934
Basically, these firms give up on their own future.
• Corporate America Cannibalizes Itself With Stock Buybacks (Reuters)
When Carly Fiorina started at Hewlett-Packard Co in July 1999, one of her first acts as chief executive officer was to start buying back the company’s shares. By the time she was ousted in 2005, HP had snapped up $14 billion of its stock, more than its $12 billion in profits during that time. Her successor, Mark Hurd, spent even more on buybacks during his five years in charge – $43 billion, compared to profits of $36 billion. Following him, Leo Apotheker bought back $10 billion in shares before his 11-month tenure ended in 2011. The three CEOs, over the span of a dozen years, followed a strategy that has become the norm for many big companies during the past two decades: large stock buybacks to make use of cash, coupled with acquisitions to lift revenue.
All those buybacks put lots of money in the hands of shareholders. How well they served HP in the long term isn’t clear. HP hasn’t had a blockbuster product in years. It has been slow to make a mark in more profitable software and services businesses. In its core businesses, revenue and margins have been contracting. HP’s troubles reflect rapid shifts in the global marketplace that pressure most large companies. But six years into the current expansion, a growing chorus of critics argues that the ability of HP and companies like it to respond to those shifts is being hindered by billions of dollars in buybacks. These financial maneuvers, they argue, cannibalize innovation, slow growth, worsen income inequality and harm U.S. competitiveness. [..]
A Reuters analysis shows that many companies are barreling down the same road, spending on share repurchases at a far faster pace than they are investing in long-term growth through research and development and other forms of capital spending. Almost 60% of the 3,297 publicly traded non-financial U.S. companies Reuters examined have bought back their shares since 2010. In fiscal 2014, spending on buybacks and dividends surpassed the companies’ combined net income for the first time outside of a recessionary period, and continued to climb for the 613 companies that have already reported for fiscal 2015.
In the most recent reporting year, share purchases reached a record $520 billion. Throw in the most recent year’s $365 billion in dividends, and the total amount returned to shareholders reaches $885 billion, more than the companies’ combined net income of $847 billion. The analysis shows that spending on buybacks and dividends has surged relative to investment in the business. Among the 1,900 companies that have repurchased their shares since 2010, buybacks and dividends amounted to 113% of their capital spending, compared with 60% in 2000 and 38% in 1990.
Shorts are allowed only if they make Xi look good.
• Fear Spreads as China’s Finance Firms Face Arrests (Bloomberg)
The high-drama highway arrest of a prominent hedge fund manager. Seizures of computers and phones at Chinese mutual funds. The investigations of the president of Citic Securities Co. and at least six other employees. Now, add the probe of China’s former gatekeeper of the IPO process himself. The arrests or investigations targeting the finance industry in the aftermath of China’s summer market crash have intensified in recent weeks, creating a climate of fear among China’s finance firms and chilling their investment strategies. At least 16 people have been arrested, are being investigated or have been taken away from their job duties to assist authorities, according to statements and announcements compiled by Bloomberg News.
The authorities’ goal is to root out practices such as insider trading as part of China’s anti-corruption campaign, and a desire by “some in the political leadership to find scapegoats to blame” for the market crash, according to Barry Naughton, a professor of Chinese economy at the University of California in San Diego. “Together these are creating uncertainty and anxiety that can only undermine the effort to make these markets work better,” he said by e-mail. Chinese authorities have long encouraged funds and brokerages to create new investment products to keep the finance industry along a development path. Now that’s been halted by regulators’ raids, arrests by police and anti-corruption investigations of even regulators themselves by the Communist Party’s disciplinary committee.
JPMorgan and Credit Suisse have scaled back products that allowed foreign investors to bet on stock declines. At least one Chinese research firm has withdrawn information it used to provide to the market, calling it “too sensitive.” The government’s response to the market crash was intervention: state-directed purchases of shares, a ban on initial public offerings and restrictions on previously allowed practices, such as short selling and trading in stock-index futures. Next, high-ranking industry figures came under scrutiny as officials investigated trading strategies, decried “malicious short sellers” and vowed to “purify” the market.
Policy makers say “now we’re innovating, so you can all come in – using high-frequency trading, hedging, whatever – to play in our markets,” Gao Xiqing, a former vice chairman of the China Securities Regulatory Commission, told a forum in Beijing on Nov. 6. “A few days later, you say no, the rules we made are not right, there are problems with your trading, and we’re putting you in jail for a while first.”
But of course. 6.5% growth for 5 years running. Because he says so.
• Xi Says China’s Economy Resilient, Ample Room For Manoeuvring (AP)
Chinese President Xi Jinping on Wednesday sought to reassure regional economic and political leaders that his government will keep the world’s No. 2 economy growing. In a speech to a business conference on the sidelines of the Asia-Pacific Economic Cooperation summit, Mr. Xi said China is committed to overhauling its economy and raising the living standards of its people. China’s growth fell to a six-year low of 6.8% in the latest quarter as Beijing tries to shift the economy away from reliance on trade and investment. The slowdown, which has been unfolding for several years, has rippled around the world, crimping growth in countries such as South Korea and Australia that were big exporters to China. “The Chinese economy is a concern for everyone, and against the background of a changing world must cope with all sorts of difficulties and challenges,” Mr. Xi said. But China would “preserve stability and accelerate its development,” he said. “We will work hard to shift our growth model from just expanding scale to improving its structure.”
And not just behind the scenes.
• Wall Street Is Running the World’s Central Banks (Bloomberg)
Wall Street is again leading to the corridors of central banks. From Minneapolis to Paris, investors and financiers are increasingly being hired to help set monetary policy less than a decade since the banking crisis roiled the world economy and chilled their public-sector employment prospects. Academic studies of historical voting records at central banks suggest the new trend may mean an increased bias towards tighter monetary policy. Last week’s appointment of Neel Kashkari to run the Federal Reserve Bank of Minneapolis as of January means a third of the Fed’s 12 district banks will soon be run by officials with past ties to Goldman Sachs. Kashkari also worked for Pimco and managed the U.S. Treasury’s $700 billion rescue of banks during the financial crisis.
The New York Fed’s William Dudley was Goldman’s chief U.S. economist for almost a decade before joining the central bank in 2007, while recently appointed Dallas Fed President Robert Steven Kaplan spent 22 years at Goldman and rose to become its vice chairman of investment banking. Although Patrick Harker joined the Philadelphia Fed from the University of Delaware he also served as an independent trustee of Goldman Sachs Trust. Fed Vice Chairman Stanley Fischer and Atlanta Fed President Dennis Lockhart both spent time working for Citigroup Inc. Fed Governor Jerome Powell worked as an investment banker early in his career for Dillon, Read & Co., which eventually became part of Switzerland’s UBS.
It’s not just the Fed. Bank of England Governor Mark Carney and European Central Bank President Mario Draghi both famously worked for Goldman before entering central banking, yet they have recently been joined by others with financial backgrounds. The new head of the Bank of France, Francois Villeroy de Galhau, spent 12 years at BNP Paribas SA, becoming its chief operating officer in 2011. Meanwhile, in September, Gertjan Vlieghe joined the BOE’s Monetary Policy Committee from hedge fund Brevan Howard having also previously worked for Deutsche Bank. So what does the re-emergence of financiers in the halls of central banks mean for monetary policy at a time when it’s set to diverge internationally?
I’ll go with ultra-slim.
• What Are The Economic Possibilities For Our Grandchildren? (Pettifor)
The world desperately needs to recover Keynes, but to do so it also needs to confront some deeply uncomfortable truths about the nature of power and the acceptance or otherwise of ideas. In his 1902 Imperialism, John Hobson observed: “No one can follow the history of political and economic theory during the last century without recognizing that the selection and rejection of ideas, hypothesis, and formulae, the moulding of them into schools or tendencies of thought, and the propagation of them in the intellectual world, have been plainly directed by the pressure of class interests. In political economy…….we find the most incontestable example.” (Hobson, 1902, pp. 218-19)
Given the pressure of class interests on today’s economic ideas and on the economics profession, the long-standing neglect of Keynes’s ideas, most significantly here in Cambridge, comes as no surprise. The “moulds of schools of thought” now dominant in both economics, but also wider society, have led to a vast and prolonged failure of the global economy. A failure to provide people with work, stability, a decent standard of living – and in the light of this weekend’s events in Paris – security. According to the ILO around 200 million people are now unemployed. The Middle East and North Africa has the highest rate of youth unemployment in the world. Even before 2008, 170 million people had no work.
Today most economists regard unemployment as a non-event; not worthy of consideration as a major indicator of economic health. Instead the economics profession seeks only to impose the consequent failure of economic activity as the new norm – “Secular Stagnation”. The appalling conditions of the world today – in Europe, high levels of unemployment, the dominance of liberal, unfettered finance, an ‘independent’ central bank, political tensions and divisions and the rise of right-wing and even fascist parties – are precisely the conditions that Keynes sought to eradicate. From the time of his rejection of the gold standard, Keynes was concerned with the prevention of economic crises.
In the wake of the great depression, he wanted to establish conditions for the restoration of prosperity and to prevent such events ever recurring again. In this Keynes clearly failed. But this failure was through no fault of his own. For the Keynes that survived into conventional wisdom and most importantly, the Keynes that has survived into the lecture theatre – if he is mentioned at all – is a gravely distorted and diminished figure.
They’re sending in soldiers to combat their own weapons. Quite the business model. Very profitable.
• Arms Sales Becoming France’s New El Dorado, But At What Cost? (France24)
When Qatar agreed to buy 24 French Rafale fighter jets in a €6.3 billion contract at the end of April, it represented yet another major success for France’s arms industry, coming hot on the heels of further multi-billion euro sales of Rafales to Egypt and India. The deals have been hailed by Hollande and his government. According to France’s Minister of Defence Jean-Yves Le Drian, in comments made to the Journal du Dimanche newspaper Sunday, the Qatar contract brought the value of the country’s arms exports to more than €15 billion this year so far. That sum is already more than the €8.06 billion for the whole of 2014, which itself was the highest level seen since 2009 – suggesting a continued upward trajectory for the French arms trade and one that is providing a much-needed salve to the country’s economic woes.
But some of these deals have raised more than a few eyebrows, with anti-arms trade campaigners critical of France’s willingness to sell weapons to countries with less than stellar human rights records. These concerns are only set to rise when Hollande heads first to Doha on Monday and then Saudi Arabia’s capital of Riyadh the day after, where furthering the recent success of the French arms industry is likely to be one of his top priorities. Saudi Arabia has already proved a lucrative trading partner for French arms manufacturers, most recently in a deal signed in November that saw the kingdom buy €2.7 billion of French weapons and military equipment to supply the Lebanese army. The oil-rich country is currently on something of an arms spending spree.
Last year, the Saudis surpassed India to become the world’s biggest arms importer, upping its spending by 54% to €5.8 billion, according to a report by industry analyst IHS. France, thanks to some adept diplomatic manoeuvering in recent years, is well placed to take advantage of the Saudi cash cow. Paris has been an increasingly close ally of Riyadh ever since it was among the most vocal in backing military intervention against Syria’s President Bashar al-Assad, a key ally of Shiite Iran – one of Sunni Saudi Arabia’s main regional rivals. The strategic alliance has been boosted by France’s tougher stance on a nuclear deal with Iran than the Saudi’s traditional western partner, the US.
Furthermore, French Foreign Minister Laurent Fabius visited the kingdom in April to show France’s support for the Saudi-led military intervention in Yemen. If Hollande can help secure new arms deals with the Saudis, then he could make the sums involved in this year’s earlier successes look like small change. He may have to overlook certain moral issues to do so, however. The kingdom, where the ultra-conservative Wahhabi form of Islam dominates, is one of the world’s most restrictive and repressive states, where public executions are common practise, women are forbidden from obtaining a passport and blasphemers are punished with whippings.
Very good from Frances. “We have a “single currency” in name, but not in reality.”
The present situation is untenable. We have a “single currency” in name, but not in reality. The price of money in the Eurozone depends not on the creditworthiness of businesses and households, but on the creditworthiness of the sovereign in the country in which they happen to be located. So businesses and households in Germany can obtain finance at lower rates than businesses and households in Italy. This gives Germany an enduring credit advantage over weaker countries, making it all but impossible for weaker countries to close the competitiveness gap. The Eurozone monetary system is a simply massive “postcode lottery”.
Despite their fine words about breaking the toxic link between sovereigns and banks, the Eurozone authorities have abjectly failed to do this. Indeed, at times the actions of Eurozone institutions have actually strengthened this link, rather than resolving it: the ECB’s LTROs, for example, were openly used to finance bank lending to governments in Spain and Italy. The failure to mutualise the costs of resolving failed banks leaves individual sovereigns on the hook for Europe-wide, and even global, financial disasters: while the principle of creditor bail-in simply exposes sovereigns in a different way. In 2012, the Greek PSI blew large holes in the balance sheets of Greek banks and pension funds, holes which were plugged by the Greek sovereign at a cost of yet more unsustainable borrowing, because the welfare costs to the Greek population of allowing the banks and pension funds to fail were far too great.
It is an insult to genuine monetary unions, such as those in the US, Canada, the UK and Switzerland, to call this a “monetary union”. The Euro is a common name for member state currencies, not a common currency. Politicians pay lip service to the idea of a common currency, insisting on independence of monetary policy and free flows of capital – when it suits them. But when it no longer suits them, they impose capital controls and pressure the ECB into doing their bidding. Successive crises have demonstrated that the coherence of the union comes a very poor second to national interests – along with notions of fairness, justice and social cohesion.
Cameron knows no shame. Mind you, if coal prices keep sinking, it’s going to be too cheap to ignore.
• UK Plans to Prioritise Nuclear, Gas Over Renewables to Cut CO2 (Bloomberg)
The U.K. plans to develop new nuclear reactors and gas-fired power plants to cut carbon emissions and limit costs to consumers. Gas and nuclear are both “central to our energy secure future,” Energy Secretary Amber Rudd will say in a speech Wednesday, according to prepared remarks e-mailed by her office. She’ll say they’re both needed to replace ageing coal-fired power stations, which are “not the future.” “In the next 10 years, it’s imperative that we get new gas-fired power stations built,” Rudd will say. “There are plans for a new fleet of nuclear power stations, including at Wylfa and Moorside. This huge investment could provide up to 30% of the low carbon electricity which we’re likely to need through the 2030s.”
The emphasis on nuclear and gas signals a further retreat from renewable energy after Rudd slashed several subsidy programs, arguing they risk exceeding Treasury spending limits. Renewables have taken a battering since Prime Minister David Cameron’s Conservatives came to power in May, with ministers announcing planned cuts to programs subsidizing solar power, onshore wind, biomass and energy efficiency. Rudd’s comments will come in a speech that her office has trailed for months as one that will “reset” energy policy in this country. She is expected to say that the new approach “means controlling subsidies and balancing the need to decarbonize with the need to keep bills as low as possible,” according to her department.
The future knocks on the door. The El Niño may bring CA the rain relief it needs, though.
• El Nino Is Causing California Power Prices to Spike (Bloomberg)
California has yet to see the full force of El Nino, and it’s already tripping up the state’s power-demand forecasters. The state saw “significant” electricity price spikes in the third quarter as El Nino made it difficult to predict how much power would be needed on hot summer and fall days, the California Independent System Operator Corp. said Monday in a report. Record rainfall and regional cloud cover in Southern California also perplexed forecasters, the grid operator said. “With El Nino, California and the Southwest tends to get more storminess and that is inherently more challenging to forecast,” Matt Rogers, president of Commodity Weather Group, said. “The extra cloudiness and sporadic storminess this autumn as well as some heat spikes early in the third quarter can be attributed to El Nino influences.”
El Nino describes the warming of the equatorial Pacific caused by weakening trade winds that normally push sun-warmed waters to the west. It is expected to bring higher-than-average rainfall to California, which is in the midst of a four-year drought. The weather phenomenon has already contributed to Pacific typhoons and drought concerns in parts of Southeast Asia. In California power markets, the odd weather led to “load forecast errors on several days with particularly high loads,” according to the report. In September, there was a “relatively high percentage of intervals” when prices spiked above $1,000 a megawatt-hour in the 5-minute market.
“TIAA-CREF prides itself on upholding socially responsible values..”
• US Pension Investment Giant TIAA-CREF Accused of Brazil Land Grabs (NY Times)
As an American investment giant that manages the retirement savings of millions of university administrators, public school teachers and others, TIAA-CREF prides itself on upholding socially responsible values, even celebrating its role in drafting United Nations principles for buying farmland that promote transparency, environmental sustainability and respect for land rights. But documents show that TIAA-CREF’s forays into the Brazilian agricultural frontier may have gone in another direction. The American financial giant and its Brazilian partners have plowed hundreds of millions of dollars into farmland deals in the cerrado, a huge region on the edge of the Amazon rain forest where wooded savannas are being razed to make way for agricultural expansion, fueling environmental concerns.
In a labyrinthine endeavor, the American financial group and its partners amassed vast new holdings of farmland despite a move by Brazil’s government in 2010 to effectively ban such large-scale deals by foreigners. While the measure thwarted the ambitions of other foreign investors, TIAA-CREF pressed ahead in a part of Brazil rife with land conflicts, exposing the company and its partners to claims that they acquired farms from a shadowy land speculator accused of employing gunmen to snatch land from poor farmers by force. The documents offer a glimpse into how one of America’s largest financial groups took part in what some in the developing world condemn as land grabs. Responding in 2010 to surging international interest in the country’s land, Brazil’s attorney general significantly limited foreigners from carrying out large-scale farmland acquisitions.
Investors sometimes view such deals as a way to diversify their portfolios. But some government officials and activists contend that they uproot poor farmers, transfer the control of vital food-producing resources to a global elite and destroy farming traditions in exchange for industrial-scale plantations producing food for export. “I had heard of foreign funds trying to get around Brazilian legislation, but something on this scale is astonishing,” said Gerson Teixeira, the president of the Brazilian Association for Agrarian Reform and an adviser to members of Congress, referring to the documents about TIAA-CREF’s farmland deals in Brazil.
Hard to believe?
• Police Civil Asset Forfeitures Exceed All Burglaries in 2014 (Martin Armstrong)
Between 1989 and 2010, U.S. attorneys seized an estimated $12.6 billion in asset forfeiture cases. The growth rate during that time averaged +19.4% annually. In 2010 alone, the value of assets seized grew by +52.8% from 2009 and was six times greater than the total for 1989. Then by 2014, that number had ballooned to roughly $4.5 billion for the year, making this 35% of the entire number of assets collected from 1989 to 2010 in a single year. Now, according to the FBI, the total amount of goods stolen by criminals in 2014 burglary offenses suffered an estimated $3.9 billion in property losses.
This means that the police are now taking more assets than the criminals. The police have been violating the laws to confiscate assets all over the country. A scathing report on California warns of pervasive abuse by police to rob the people without proving that any crime occurred. Even Eric Holder came out in January suggesting reform because of the widespread abuse of the civil asset forfeiture laws by police. Bloomberg News has reported now that Stop-and-Seize authority is turning the Police Into Self-Funding Gangs. They are simply confiscating money all under the abuse of this civil asset forfeiture where they do not have to prove you did anything.:
…in the U.S., I see some troubling signs of a shift toward low-end institutions. Bounty hunting was a recent example (now happily going out of style). Another example is the use of private individuals or businesses to collect taxes, a practice known as tax farming. A third has been the extensive use of mercenaries in lieu of U.S. military personnel in Iraq and elsewhere. Practices such as these can save money for the government, but they encourage abuses by reducing oversight. I’ve recently been reading about an even more worrying example of low-end statecraft: Stop-and-seize.
This term refers to a practice, increasingly common since the turn of the century, of police confiscating people’s property without making an arrest or obtaining a warrant. That may not sound legal, but it is! The police simply pull you over and take your money. A Washington Post investigative report from a year ago explains: “[A]n aggressive brand of policing [is spreading] that has spurred the seizure of hundreds of millions of dollars in cash from motorists and others not charged with crimes…Thousands of people have been forced to fight legal battles that can last more than a year to get their money back. Behind the rise in seizures is a little-known cottage industry of private police-training firms…
A thriving subculture of road officers…now competes to see who can seize the most cash and contraband, describing their exploits in the network’s chat rooms and sharing “trophy shots” of money and drugs. Some police advocate highway interdiction as a way of raising revenue for cash-strapped municipalities. “All of our home towns are sitting on a tax-liberating gold mine,” Deputy Ron Hain of Kane County, Ill., wrote in a self-published book under a pseudonym…Hain’s book calls for “turning our police forces into present-day Robin Hoods.” With government unable to pay police as much as they need or would like, police are confiscating their revenue directly from the populace.
Russia targets the Middle East financiers that the west has never touched.
• Putin Sets Up Commission To Combat Terrorism Financing (Reuters)
President Vladimir Putin on Wednesday set up a commission to combat terrorism financing, the Kremlin said, in another sign of the Russian leader’s heightened focus on what he says is a fight against Islamic State militants. After attacks in Paris killed 129 people on Friday, security dominated the G20 summit at the weekend, where the group’s leaders, in a rare departure from their usual focus on the global economy, agreed to step up border controls and aviation security and crack down on terrorist financing.
In a decree, effective immediately, Putin ordered the prosecutor general’s office, the central bank and regional authorities to submit any information they may have on suspicious activities to the commission. On Tuesday, the Kremlin said a bomb brought down the Russian passenger plane that crashed in the Sinai Peninsula in Egypt last month, killing all 224 people on board. The decree orders submission to the commission of any information on suspicious activities of organisations and individuals who are not on a list of those against whom there is sound information about their involvement in extremist activities or terrorism, in order to freeze their assets.
America’s dark side.
• White House Rejects State Demands For Information On Syrian Refugees (Bloomberg)
In a call with senior Obama administration officials Tuesday evening, several governors demanded they be given access to information about Syrian refugees about to be resettled by the federal government in their states. Top White House officials refused. Over a dozen governors from both parties joined the conference call, which was initiated by the White House after 27 governors vowed not to cooperate with further resettlement of Syrian refugees in their states. The outrage among governors came after European officials revealed that one of the Paris attackers may have entered Europe in October through the refugee process using a fake Syrian passport. (The details of the attacker’s travels are still murky.)
The administration officials on the call included White House Chief of Staff Denis McDonough, Deputy Secretary of Homeland Security Alejandro Mayorkas, State Department official Simon Henshaw, FBI official John Giacalone, and the deputy director of the National Counterterrorism Center John Mulligan. On the call several Republican governors and two Democrats – New Hampshire’s Maggie Hassan and California’s Jerry Brown – repeatedly pressed administration officials to share more information about Syrian refugees entering the United States. The governors wanted notifications whenever refugees were resettled in their states, as well as access to classified information collected when the refugees were vetted. “There was a real sense of frustration from all the governors that there is just a complete lack of transparency and communication coming from the federal government,” said one GOP state official who was on the call.
And Europe’s dark side.
• Paris Terror Unites East Europe Against Merkel’s Refugee Plan (Bloomberg)
Eastern European nations are toughening their opposition to German Chancellor Angela Merkel’s plan to force them to take in refugees, arguing that the EU’s immigration policies may have aided last week’s terrorist attacks in Paris. Bulgarian Foreign Minister Daniel Mitov on Tuesday called discussions on quotas for migrants “absurd” following the events in Paris, while Poland’s incoming Prime Minister Beata Szydlo said a day earlier the EU should review its stance on immigration, pledging to accept refugees only if they don’t endanger security. At least 129 people were killed in Paris on Friday, with a Syrian passport found next to the body of one of the suicide bombers registered on the Greek island of Leros, suggesting the holder may have come into Europe claiming to be a political refugee.
The EU is increasingly split along east-west lines over how to deal with the immigration crisis as the European Commission estimates 3 million asylum seekers may be heading toward the bloc by 2017. A group of formerly communist countries led by Hungary, one of the nations most affected by the flood of migrants, have opposed German-led efforts to introduce a quota system to settle them, drawing criticism that the recipients of billions of euros in aid from western Europe aren’t willing to help their richer neighbors. “The opposition to the quotas has already been there before the attacks,” said Otilia Dhand, an analyst at political-risk consultancy Teneo Intelligence in Brussels. “The attacks are now being used as an additional argument.”
Merkel, who allowed an estimated 1 million asylum seekers into Germany this year, seeks to relocate those fleeing war and civil strife in the Middle East and North Africa across the 28-nation EU. The plan is straining her ties with countries such as Poland and the Baltic nations, which count on German backing for continued sanctions on Russia following President Vladimir Putin’s annexation of Ukraine’s Crimean peninsula in 2014. Asked whether Syrian refugees can be successfully integrated into society, Merkel told reporters on Tuesday the answer is a “clear yes.” Integration means following the rules and laws of the host country, getting a chance to “participate in society” and being placed into a community prepared to be tolerant and more multi-ethnic, she said.
Such sentiment isn’t widely shared by eastern European politicians, who remain wary of opening their societies to foreigners, including those with different religious beliefs. “Discussing quotas at this point has become absurd,” top Bulgarian diplomat Mitov said in an interview with public radio on Tuesday. “This isn’t the way to solve the problem and to approach it.” Hungary plans to challenge the plan in EU courts, Justice Minister Laszlo Troscsanyi told reporters the same day.
“We can see the trauma [terrorist attacks] create in the west, but think how much trauma they create in all these other countries in the world..”
• Flow Of Refugees Fueled by 80% Rise in Terrorist Killings in 2014 (Guardian)
A surge in activity from Nigeria’s Islamist insurgency Boko Haram – now the world’s deadliest terrorist group – and Islamic State in Iraq and Syria has driven an 80% increase in the number of people killed by terrorists in 2014, this year’s Global Terrorism Index showed. In total, 32,658 people were killed in terrorist attacks in 67 countries last year, according to the index, released on Tuesday by the Institute for Economics and Peace (IEP). The world is reeling from the terrorist attacks in Paris last Friday, which killed at least 129 people. But the index showed that 80% of last year’s terrorist killings were carried out in just five countries: Iraq, Nigeria, Afghanistan, Pakistan and Syria. “We can see the trauma [terrorist attacks] create in the west, but think how much trauma they create in all these other countries in the world,” said Steve Killelea, executive chairman of the IEP.
The index showed a close link between terrorism and people being forced to flee. Of 11 countries with more than 500 deaths from terrorism, 10 had “the highest levels of refugees and [internal] migration in the world”, the index said. The sharp rise in terrorist activity noted in the report is fuelling migration out of areas controlled by Isis and into neighbouring countries. According to figures from the UN’s High Commissioner for Refugees, 369,904 people have fled Iraq and and 4.29 million have fled Syria. “There’s a strong relationship between terrorism and ongoing conflict. What we’re seeing is people are fleeing the conflicts, and so actually tackling the conflicts and terrorism are one and the same,” Killelea said.
Refugees are still being used as a measure to pressure Greece. Disgrace squared.
• EU Says Nations May Get Budget Reprieve on Refugee Spending (Bloomberg)
Refugee spending by European Union nations may receive some reprieve from the bloc’s budget rules if the governments can show proof that outlays are linked to extraordinary circumstances, the European Commission said. None of the draft budget plans submitted to the EU ran the risk of “particularly serious non-compliance” with debt and spending rules, the Brussels-based commission said on Tuesday. France’s budget plan suggests it won’t meet a 2017 deadline – already extended in a move to avoid unprecedented fines – to correct its deficit, it said. Italy, Austria and Lithuania were found to be at risk of not meeting their 2016 budget targets.
The EU executive said that when countries are faced with “unusual events outside the control of the government,” nations can increase spending without drawing budget-related sanctions. The commission said it is “willing to use these provisions” for 2015 and 2016 budget requirements, as long as countries can provide “observed data” to show they’re following the rules. “This means that deviations deriving only and directly from the net extra costs of the refugee crisis will not lead to any stepping up in the procedures,” the commission said. It also promised not to open new deficit-related proceedings if countries keep their deficit “close to” the 3% limit, even if refugee spending causes a breach.
In the wake of terrorist attacks that devastated Paris, French President Francois Hollande said extra spending to ensure France’s security is more important than European budget rules. “The security pact is more important than the stability pact,” he told lawmakers on Monday in Versailles. Debt is starting to fall across the EU for the first time since the beginning of the euro area’s debt and financial crisis, Commission Vice President Valdis Dombrovskis said in a statement. At the same time, he said, progress across Europe is uneven. “The problem of high debt is still holding back a faster recovery,” Dombrovskis said. “It is important for governments to continue implementing responsible fiscal policies and for others to continue cleaning up their public finances.”
Greece has become a country run by overwhelmed volunteers.
• Volunteers At Greek Refugee Relief Facilities Brace For Bad Weather (Kath.)
“The temperature inside the Olympic hockey stadium near the old Athens airport at Elliniko, which houses refugees, had started to drop. There was no hot water in the shower. I saw a newborn baby. Its Afghan mother had been gripped by labor pains on board the boat and she gave birth on a Lesvos beach. It was not possible for the baby to take a bath there because it would freeze, so I took it home along with its parents. We gave it a warm bath and something to eat before putting it down to sleep. When the family left the island two days later, we felt like relatives saying goodbye.” The stories shared by volunteers helping the thousands of migrants and refugees arriving in the country, such as this relayed to Kathimerini by George Vichas, a cardiologist and director of the Metropolitan Community Clinic at Elliniko, are deeply moving.
But they are also highly revealing of the huge challenges facing refugees as weather conditions worsen and state support remains sorely lacking. “The Elliniko venue is expected to house refugees and migrants also in the coming months. A few days ago, some 500 people were temporarily sheltered here. But how are they expected to stay here if the place is not heated?” Vichas says. At the reception center of the Metropolitan Community Clinic, Vichas has set up a second clinic. “On a daily basis, we receive help from one or two pediatricians, two to three pathologists, a cardiologist, an orthopedic surgeon and a pulmonologist,” Vichas says. Their work is aided by six to seven volunteers from the Fair Planet nonprofit organization. “They are very experienced in dealing with refugees as many of them have worked abroad,” he says.
As winter sets in, the clinic is trying to collect sleeping bags and thermal clothes and blankets. “We need people’s support, things will be pretty tough. The state is regrettably absent from all this,” Vichas says, adding that doctors from the Hellenic Center for Disease Control and Prevention (KEELPNO) only drop by the center for two hours between Monday and Friday. “When 500 refugees arrived here on a Saturday evening, they were examined by volunteer doctors,” he says. Nikitas Kanakis, president of Doctors of the World Greece, says the organization is concerned that, as the weather worsens, up to 200,000 refugees could find themselves trapped in Greece. “We are trying to prepare ourselves also for that scenario and have asked for help from branches in other countries,” he says.
Swiss volunteers are helping in Idomeni, near Greece’s northern border with the Former Yugoslav Republic of Macedonia (FYROM), while volunteers from the Netherlands and France are helping out on Chios and Lesvos. On an operational level, Doctors of the World is preparing small flexible groups that can reach more refugee facilities. “Our doctors are at the end of their tether. Over the past months they have been examining about 200 people per day. State care is nowhere to be seen. Greek society is providing clothes, food and care for refugees. How is the state helping?” says Kanakis, who is also critical of the European Union’s failure to deal with the mounting crisis. “Why does the EU not create a safe passage for refugees instead of leaving them at the mercy of traffickers and the Aegean Sea?”
Home › Forums › Debt Rattle November 18 2015