May 032016
 
 May 3, 2016  Posted by at 9:14 am Finance Tagged with: , , , , , , , , , , ,  


DPC French Market, New Orleans 1910

The EU Exists Only To Become A Superstate (Lawson)
US Dollar Falls To 1-Year Low (BBG)
Yen Under Pressure to Extend World-Beating Rally Against Dollar (BBG)
Kuroda Kollapse Kontinues As USDJPY Nears 105 Handle (ZH)
BOJ Chief Kuroda Warns Current Yen Strength Risks Harming Recovery (BBG)
China Factory Activity Contracts for 14th Straight Month In April (CNBC)
Fed’s Williams Sees Big Drop In Asset Prices As Systemic Risk (R.)
Apple’s Losing Streak Is Nearing Historic Levels (BBG)
No Alternative To Low Rates For Now, Draghi Says (R.)
ECB Report Says Investors May Be Profiting From Leaked US Data (FT)
Six Counterpoints About Australian Public Debt (Stanford)
‘Bank of Mum and Dad’ Behind 25% Of British Mortgages (G.)
Dominoes: Vanishing Arctic Ice Shifts Jet Stream, Which Melts Glaciers (WaPo)
Germany Wants To Extend Border Controls For Another 6 Months (AP)
Denmark Extends Controls On German Border (EN)
EU States Face Charge For Refusing Refugees (FT)
90,000 Unaccompanied Minors Sought Asylum In EU In 2015 (R.)

I don’t think I have much in common with Nigel Lawson -aka Lord Lawson of Blaby-, but it’s important that this ‘little fact’ be known and exposed. Even a superstate needs values if it is to survive. The EU ain’t got any left. Who wants to belong to that?

The EU Exists Only To Become A Superstate (Lawson)

For Britain, the issue in the coming European referendum is not Europe, with its great history, incomparable culture, and diverse peoples, but the European Union. To confuse the two is both geographically and historically obtuse. European civilisation existed long before the coming of the EU, and will continue long after this episode in Europe’s history is, hopefully, over. On the European mainland it has always been well understood that the whole purpose of European integration was political, and that economic integration was simply a means to a political end. In Britain, and perhaps also in the US, that has been much less well understood, particularly within the business community, who sometimes find it hard to grasp that politics can trump economics. The fact that the objective has always been political does not mean that it is in any way disreputable.

Indeed, the most compelling original objective was highly commendable. It was, bluntly, to eliminate the threat to Europe and the wider world from a recrudescence of German militarism, by placing the German tiger in a European cage. Whether or not membership of the EU has had much to do with it, that objective has been achieved: there is no longer a threat from German militarism. But in the background there has always been another political objective behind European economic integration, one which is now firmly in the foreground. That is the creation of a federal European superstate, a United States of Europe. Despite the resonance of the phrase, not one of the conditions that contributed to making a success of the United States of America exists in the case of the EU. But that is what the EU is all about. That is its sole raison d’être. And, unlike the first objective, it is profoundly misguided.

For the United Kingdom to remain in the EU would be particularly perverse, since not even our political elites wish to see this country absorbed into a United States of Europe. To be part of a political project whose objective we emphatically do not share cannot possibly make sense. It is true that our present Prime Minister argues that he has secured a British “opt-out” from the political union, but this is completely meaningless. “But,” comes the inevitable question, “what is your alternative to membership of the EU?” A more absurd question it would be hard to envisage. The alternative to being in the EU is not being in the EU. And it may come as a shock to the little Europeans that most of the world is not in the EU – and that most of these countries are doing better economically than most of the EU.

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Why don’t I see nobody accuse the US of currency manipulation?! That still the Shanghi Accord legacy?

US Dollar Falls To 1-Year Low (BBG)

The dollar fell to an 18-month low against the yen and touched its weakest since August versus the euro amid speculation that the U.S. won’t raise interest rates any time soon. The U.S. currency has lost ground versus most major peers over the past month as traders lowered expectations for a rate increase by the Federal Reserve in June to 12%. The Bloomberg Dollar Spot Index headed for the lowest close in almost a year, after a report showed manufacturing in the U.S. expanded less than forecast. Persistent weakness dragged the dollar down against the euro for a third straight month in April – its longest losing streak since 2013 – amid signs U.S. policy makers aren’t convinced the global and domestic economies can withstand higher borrowing costs.

It fell on Tuesday against Australia’s currency as Chinese equities climbed by the most in nearly three weeks. The U.S. has posted disappointing growth data as nascent signs of recovery emerge in Europe and China’s growth momentum accelerates. “The Fed is completely out of the picture now for the next few weeks – even with the June meeting, there’s got to be a lot of doubt about whether the Fed can raise rates,” said Shaun Osborne at Bank of Nova Scotia in Toronto. “The dollar has just not done particularly well over the past few weeks as the Fed has moved toward delaying rate hikes, and that’s a situation that definitely will continue, certainly for the near term.”

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Abe must be going nuts.

Yen Under Pressure to Extend World-Beating Rally Against Dollar (BBG)

The yen’s world-beating rally against the dollar looks to be gathering momentum, as central bank inaction on both sides of the Pacific Ocean leaves inflation expectations to drive the exchange rate. Japan’s currency extended its climb to an 18-month high Monday after Bank of Japan Governor Haruhiko Kuroda refrained from adding to stimulus on Thursday. That took its gain this year to 13%, the most among developed-market peers. The BOJ’s decision came just hours after Federal Reserve Chair Janet Yellen frustrated dollar bulls by reiterating she’s in no rush to cool the economy by raising interest rates. JPMorgan sees further yen gains after the U.S. put Japan on a new currency watch list.

With consumer price pressures building in the U.S. and dissipating in Japan, that narrows the gap in so-called real yields – the returns an investor can expect after accounting for inflation – supporting yen strength. If both central banks stay on the sidelines, Credit Suisse projects Japan’s currency could rapidly appreciate toward 90 per dollar. “So long as the Fed signals that they are being cautious in raising rates, real yields in the U.S. will decline, leading the dollar weaker,” said Hiromichi Shirakawa, the Swiss lender’s chief Japan economist and a former BOJ official. “The currency market is in a rather dangerous zone.” The BOJ’s benchmark for measuring progress toward its 2% target showed prices retreated at an annual 0.3% pace in March, the biggest decline since April 2013, the month that Kuroda initiated his stimulus program.

It had previously hovered near zero for more than a year. By contrast, the Fed’s preferred measure of inflation, based on the prices of goods and services consumers buy, rose 0.8% in the year through March. The so-called core measure, which strips out food and energy prices, climbed 1.6%. That’s seen a Treasury market gauge of inflation expectations over the coming decade – called the break-even rate – jump to 1.7% from as low as 1.2% in February. The equivalent measure in Japan is languishing at 0.3%. Benchmark 10-year Treasury Inflation Protected Securities yield around 0.1%, compared with about minus 0.5% for equivalent Japanese notes.

Japan met two of three criteria used to judge unfair practices in the U.S. report: a trade surplus with the U.S. above $20 billion, and a current-account surplus amounting to more than 3% of gross-domestic product. The third would be a repeated depreciation of the currency by buying foreign assets equivalent to 2% of gross domestic over a year. Meeting all three would trigger action by the U.S. president to enter discussions with the country and seek potential penalties. China, Germany, South Korea and Taiwan also made the watch list.

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“..Perhaps Jack Lew’s “currency manipulation” report was enough to stall the Japanese currency war for now?..”

Kuroda Kollapse Kontinues As USDJPY Nears 105 Handle (ZH)

Either The BoJ steps in soon and intervenes (even by just “checking levels”) or Kuroda-san is truly terrified of The G-20. USDJPY has now crashed 7 handles since last Thursday’s shock BoJ disappointment crashing to within 5 pips of a 105 handle tonight for the first time in 18 months…

 

 

Erasing the entire devaluation post-Fed, post QQE2…

 

Perhaps Jack Lew’s “currency manipulation” report was enough to stall the Japanese currency war for now? Or is China greatly rotating its Yuan devaluation pressure against another member of its basket…?

 

Charts: Bloomberg

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1) What recovery? 2) Abe and Kuroda are powerless prisoners to America’s dollar manipulation

BOJ Chief Kuroda Warns Current Yen Strength Risks Harming Recovery (BBG)

Bank of Japan Governor Haruhiko Kuroda warned that the yen’s biggest rally since Abenomics began risks harming the nation’s economic recovery. Speaking to reporters in Frankfurt Monday, Kuroda also reiterated that BOJ policy makers won’t hesitate to expand monetary stimulus in order to achieve their 2% inflation target. Japanese Prime Minister Shinzo Abe said the same day in Paris that rapid movements in exchange rates are undesirable, according to national broadcaster NHK. “There is a risk that the yen’s current appreciation brings an unwelcome impact on the economy,” Kuroda said on the sidelines of an annual gathering of finance chiefs from members of the Asian Development Bank, which he used to lead.

“We will be closely monitoring the impact of financial markets on the real economy and prices.” A weaker currency has been a linchpin of Abe’s program to stoke growth and exit deflation. Japan’s economy is at risk of sliding into its second recession in two years after contracting in the final three months of 2015, while inflation remains far from the BOJ’s target. One gauge showed consumer prices retreated at an annual 0.3% pace in March, the biggest decline since April 2013, the month that Kuroda initiated his stimulus program. The yen has climbed 13% against the dollar this year, the best performance among its developed-market peers. That has chipped away at the 36% decline over the previous four years, which was triggered by Abe’s pledge of unlimited monetary easy to correct yen strength.

Kuroda and his board left policy settings unchanged at a meeting Thursday, spurring a nearly 5%, two-day surge in the yen against the dollar. It reached an 18-month high of 106.05 per greenback on Tuesday, before trading at 106.19 as of 9:54 a.m. in Singapore. Japanese markets are closed for holidays Tuesday, Wednesday and Thursday this week.

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Beyond salvation.

China Factory Activity Contracts for 14th Straight Month In April (CNBC)

Activity in China’s manufacturing sector unexpectedly declined further in April, a private survey showed Tuesday, reviving doubts over the health of the world’s second-largest economy. The Caixin Manufacturing Purchasing Managers’ Index (PMI) fell to 49.4 in April from 49.7 in March, according to Markit, which compiles the index. A reading above 50 indicates expansion; one below indicates contraction. The Caixin PMI, which focuses on smaller and medium-sized enterprises, was last in expansionary territory in February 2015. The official PMI, which targets larger companies, printed at 50.2 in April, the second successive month of expansion, figures released over the weekend showed. The survey findings follow recent economic data that appeared to suggest that China’s economy was slowly regaining its poise after a torrid 12 months.

China’s exports rose at their fastest clip in a year in March, while industrial profits also picked up in the first quarter. A flurry of rate cuts and easing of reserve requirement have helped bolster sentiment, while the capital outflows that had unnerved sentiment at the start of the year have slowed. The Caixin survey, however, cast a more somber picture. Respondents reported stagnant new orders, while new export work fell for a fifth month running. Companies shed staff as client demand was muted. “The fluctuations indicate the economy lacks a solid foundation for recovery and is still in the process of bottoming out. The government needs to keep a close watch on the risk of a further economic downturn,” said He Fan at Caixin Insight Group.

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What blows up must blow down.

Fed’s Williams Sees Big Drop In Asset Prices As Systemic Risk (R.)

San Francisco Fed President John Williams reiterated Monday his view that the U.S. economy is ready for higher interest rates, but flagged the risk of broad-based declines in asset prices as a result. “It makes sense for us to be moving interest rates gradually back to more a normal level over the next couple years,” Williams said. “I actually think that’s a sign of strength for the global economy.” Speaking at a panel on systemic risk at the Milken Institute Global Conference, Williams said the biggest systemic financial risk currently is the possibility that “broad sets of assets are going to see big movements downward” as interest rates rise. “That’s an area that I think is a potential risk.” Williams did not suggest he sees another crisis brewing, adding that U.S. regulators have made “amazing” progress in shoring up banks against potential future failure.

“What I worry a lot more about is when people forget about the financial crisis, when they forget about the terrible things that happened,” he said, suggesting that may not happen for another five or ten years. The Fed raised interest rates for the first time in nearly a decade last December, but has held off raising them any further amid global stock volatility and worries over a decline in global growth. Even after the Fed resumes raising rates, Williams said, it will not be able to lift them as high as it has in the past. Most Fed officials currently think that the rate at which the economy can sustain healthy employment and steady prices has probably fallen to about 3.25% in the long run, a full %age point lower than was the case before the crisis. But there are significant downside risks to that estimate, Williams said.

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No. 1 US stock for years.

Apple’s Losing Streak Is Nearing Historic Levels (BBG)

So far in 2016, Apple is the dog of the Dow. After an underwhelming earnings report led to the shares’ worst week since January 2013, Apple stock extended its losses to kick off May, closing down 0.18% on Monday. The benchmark index’s laggard has declined by nearly 11% so far this year heading into today’s session: Bespoke Investment Group notes that Monday’s negative close marks eight straight sessions in the red for Apple—something that last happened in July 1998, and has now happened only four times in the company’s history. More than $79 billion in Apple’s market capitalization has been erased over the past eight sessions.

The company’s heavy weighting in major sector and benchmark indexes, coupled with the stock’s terrible two-week stretch, has made $4 billion in assets of exchange-traded funds evaporate over this stretch. “Smart beta” ETFs are poised to trounce their more popular peers, Bloomberg’s Eric Balchunas observes, in the event that this span of underperformance continues. There’s a possible silver lining for Apple bulls, and investors who own those market-cap-weighted ETFs: The stock tends to bounce back in earnest following these rare stretches of rotten performance. “Two of the three eight-day streaks saw the stock fall on day nine as well, but the stock has never experienced a losing streak longer than nine trading days,” Bespoke writes. “While the next day and next week returns following eight-day losing streaks lean negative, the stock has been higher over the next month all three times for a median gain of 8.01%.”

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Well, there is, but Draghi’s masters don’t want it.

No Alternative To Low Rates For Now, Draghi Says (R.)

Low interest rates are not harmless but they are only the symptom, not the cause of an underlying problem across major economies, ECB President Mario Draghi said on Monday, arguing that there was no alternative for now. “Thus the second part of the answer to raising rates of return is clear: continued expansionary policies until excess slack in the economy has been reduced and inflation dynamics are sustainably consistent again with price stability,” Draghi told a conference. “There is simply no alternative to this today.” “The only potential margin for maneuver is in the composition of the policy mix, that is, the balance of monetary and fiscal policy,” he added.

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Corruption is not a deficiency, it’s the MO.

ECB Report Says Investors May Be Profiting From Leaked US Data (FT)

US investors may be profiting from leaked economic data releases that allow them to front-run market-moving news, according to a research paper published by the ECB. Macroeconomic news announcements can move markets, as traders watch for indications about how the economy is performing. The data are released to everyone at the same time to ensure fairness but ECB researchers said they had found evidence of “informed trading” ahead of US data releases. Of the 21 market-moving announcements analysed, seven “show evidence of substantial informed trading before the official release time”, according to the paper, including two releases from the US government. The pre-release “price drift” accounts for about half of the overall price impact from the announcement.

The researchers looked at the impact on futures tracking the S&P 500 stock index and the 10-year Treasury bond for the 30 minutes preceding the announcement. The researchers also note that the price impact has become worse since 2008, and estimate that since 2008 profits in the S&P “e-mini” futures market alone amount to about $20m per year. “These results imply that some traders have private information about macroeconomic fundamentals,” said the report. “The evidence suggests that the pre-announcement drift likely comes from a combination of information leakage and superior forecasting based on proprietary data collection and reprocessing of public information.”

The paper raises questions about the safeguards used to ensure data are protected up until scheduled release time. Important economic indicators in the US are subject to the “Principle Federal Economic Indicator” guidelines, but the report notes that many distributors of the data are not subject to the same rules. “To ensure fairness, no market participant should have access to this information until the official release time,” the report added. “Yet, in this paper we find strong evidence of informed trading before several key macroeconomic news announcements.”

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Household debt is a much bigger factor is some countries than others. In Australia, it’s far bigger than government debt. But the latter is what all political talk is about. “Pumping up fear of government debt is always an essential step in preparing the public to accept cutbacks in essential public services.”

Six Counterpoints About Australian Public Debt (Stanford)

In the lead-up to today’s pre-election Commonwealth budget, much has been written about the need to quickly eliminate the government’s deficit, and reduce its accumulated debt. The standard shibboleths are invoked liberally: government must face hard truths and learn to live within its means; government must balance its budget (just like households do); debt-raters will punish us for our profligacy; and more. Pumping up fear of government debt is always an essential step in preparing the public to accept cutbacks in essential public services. And with Australians heading to the polls, the tough-love imagery serves another function: instilling fear that a change in government, at such a fragile time, would threaten the “stability” of Australia’s economy.

However, this well-worn line of rhetoric will fit uncomfortably for the Coalition government, given its indecisive and contradictory approach to fiscal policy while in office. The deficit has gotten bigger, not smaller, on their watch, despite the destructive and unnecessary cutbacks in public services imposed in their first budget. Their response to Australia’s fiscal and economic problems has consisted mostly of floating one half-formed trial balloon after another (from raising the GST to transferring income tax powers to the states to cutting corporate taxes), with no systematic analysis or framework. And their ideological desire to invoke a phony debt “crisis” as an excuse for ratcheting down spending will conflict with another, more immediate priority: throwing around new money (or at least announcements of new money), especially in marginal electorates, in hopes of buying their way back into office.

In short, the politics of debt and deficits will be both intense and complicated in the coming weeks. To help innoculate Australians against this hysteria, here are six important facts about public debt, what it is – and what it isn’t.

1. Australia’s public debt is relatively small

3. Other sectors of society borrow much more than government

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Somone should explain to these people what’s going on. Mum and Dad will lose their shirts AND their skirts. Ironically, some insist more homes must be build. Ironoc, because that would mean even steeper losses for those buying into today’s craze.

‘Bank of Mum and Dad’ Behind 25% Of British Mortgages (G.)

The “Bank of Mum and Dad” will help finance 25% of UK mortgage transactions this year, according to research. Parents are set to lend their children £5bn to help them on to the property ladder. If the lending power was of all these parents was combined, it would be a top 10 mortgage provider. Nigel Wilson, chief executive of Legal & General, which carried out the research, said the data showed a number of issues, including house prices being “out of sync with wages”. The research estimated that the Bank of Mum and Dad will provide deposits for more than 300,000 mortgages. The homes purchased will be worth £77bn and the average contribution is £17,500 or 7% of the average purchase price.

But relying on parental support might soon be unsustainable as parents could be giving away more than they can afford. Wilson said that in London the funding method was reaching “tipping point” already as parental contributions made up more than 50% of the wealth (excluding property) of the average household in the capital. He said: “The Bank of Mum and Dad plays a vital role in helping young people to take their early steps on to the housing ladder.” Not all young people have parents who can afford to help them and some who do still do not have enough to buy a place of their own, he said. He added: “We need to fix the housing market by revolutionising the supply side – if we build more houses, demand can be met at a sensible level and prices will stabilise relative to wages.”

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Positive feedback.

Dominoes: Vanishing Arctic Ice Shifts Jet Stream, Which Melts Glaciers (WaPo)

Investigating the factors affecting ice melt in Greenland — one of the most rapidly changing places on Earth — is a major priority for climate scientists. And new research is revealing that there are a more complex set of variables affecting the ice sheet than experts had imagined. A recent set of scientific papers have proposed a critical connection between sharp declines in Arctic sea ice and changes in the atmosphere, which they say are not only affecting ice melt in Greenland, but also weather patterns all over the North Atlantic. The new studies center on an atmospheric phenomenon known as “blocking” — this is when high pressure systems remain stationary in one place for long periods of time (days or even weeks), causing weather conditions to stay relatively stable for as long as the block remains in place.

They can occur when there’s a change or disturbance in the jet stream, causing the flow of air in the atmosphere to form a kind of eddy, said Jennifer Francis, a research professor and climate expert at Rutgers University. Blocking events over Greenland are particularly interesting to climate scientists because of their potential to drive temperatures up and increase melting on the ice sheet. “When they do happen, and they kind of set up in just the right spot, they bring a lot of warm, moist air from the North Atlantic up over Greenland, and that helps contribute to increased cloudiness and warming of the surface,” Francis said. “When that happens, especially in the summer, we tend to see these melt events occur.” Now, two new studies have suggested that there’s been a recent increase in the frequency of melt-triggering blocking events over Greenland — and that it’s likely been fueled by climate change-driven losses of Arctic sea ice.

A paper set to be published Monday in the International Journal of Climatology reveals an uptick in the frequency of these blocking events over Greenland since the 1980s. A team of researchers led by the University of Sheffield’s Edward Hanna used a global meteorological dataset relying on historical records to measure the frequency and strength of high pressure systems over Greenland all the way back to the year 1851. Previous analyses had only extended the record back to 1948, so the new study is able to place recent blocking events in a much larger historical context. When the researchers analyzed the data, they found that the increase in blocking frequency over the past 30 years is particularly pronounced in the summer, the time of year when blocking events are likely to have the biggest impact on ice melt.

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Clueless, rudderless, valueless.

Germany Wants To Extend Border Controls For Another 6 Months (AP)

Germany and some other EU countries are planning to ask the European Commission for an extension of border controls within the Schengen passport-free travel zone for another six months because they fear a new wave of migrants. Interior Minister Thomas de Maizere’s spokesman says a letter is being sent Monday asking for an extension of the controls on the German-Austrian border, which were implemented last year when thousands of migrants crossed into Germany daily. De Maizere has expressed concern before that an increasing number of migrants will try to reach Europe this summer by crossing the Mediterranean Sea from lawless Libya to Italy, then travel north to Austria and Germany. Germany registered nearly 1.1 million new arrivals last year and is keen to bring the numbers down in 2016.

Germany’s defense minister, meanwhile, said it was up to Italy to protect its borders but other European countries must be ready to help if needed. Ursula von der Leyen’s comments Monday touched on the potential problems Italy could have with increased arrival of migrants looking for an alternative route into the EU now that the West Balkans route is closed and Turkey has committed to taking back those arriving illegally to Greece. She said a solution must be found “together with Italy.” Austria plans to impose border controls at its main border crossing with Italy to prevent potential attempts by migrants to enter, and with Austria bordering Germany, von der Leyen’s comments indicate her country’s concern that it also may have to deal with new waves of migrants seeking entry.

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“..We have to protect ourselves against the Islamic State group..”

Denmark Extends Controls On German Border (EN)

Denmark has extended temporary controls on its border with Germany, first imposed in January to help regulate an influx of migrants. The measures have been prolonged by another month until the beginning of June. The European Commission, struggling to prevent the collapse of the Schengen agreement, has confirmed it will soon authorise more such extensions. The Danish government says it has joined several countries in writing to the Commission asking for a two-year extension. “Together with the Germans, the French, the Austrians and the Swedes I have today sent a letter to the EU commission asking for the possibility to extend the border control for the next two years,” said Inger Støjberg, Danish minister of immigration and integration.

“I have done so because we need to look out for Denmark. We have to protect ourselves against the Islamic State group, who are trying to take advantage of the situation where there are holes in borders. But also as protection against the influx of refugees coming through Europe.” The Commission could give the green light as early as Wednesday to countries within the passport-free Schengen zone wishing to extend exceptional border controls. The five countries have taken the measures because of the influx of migrants and refugees heading north via the so-called Balkans route after entering Europe via the Greek shores. Although the crisis has eased, the governments say many migrants are still camped along the route and in Greece.

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The cattle trade continues unabated. Europeans are as immoral as their leadership.

EU States Face Charge For Refusing Refugees (FT)

European countries that refuse to share the burden of high immigration will face a financial charge of about €250,000 per refugee, according to Brussels’ plans to overhaul the bloc’s asylum rules. The punitive financial pay-off clause is one of the most contentious parts of the European Commission’s proposed revision of the so-called Dublin asylum regulation, due to be revealed on Wednesday. It represents the EU’s most concerted attempt to salvage an asylum system that collapsed under the weight of a million-strong migration to Europe last year, endangering the principle of passport-free travel in the Schengen area. In recent weeks migrant flows to Greece have fallen due to tighter controls through the western Balkans and a deal with Turkey to send-back asylum seekers arriving on Greek islands.

However, the EU remains as politically divided as ever over strengthening the bloc’s asylum rules. While acknowledging these political constraints, the commission’s reforms aim to gradually shift more responsibility away from the overwhelmed frontline states, such as Greece, in future crises, primarily through an automatic system to share refugees across Europe if a country faces a sudden influx. Crucially, this is backed by a clause that allows immigration-wary countries to pay a fee — set at a deliberately high level — if they want to avoid taking relocated asylum seekers for a temporary period. According to four people familiar with the proposal, this contribution was set at €250,000 per asylum seeker in Monday’s commission draft. But those involved in the talks say it may well be adjusted in deliberations over coming days.

“The size of the contribution may change but the idea is to make it appear like a sanction,” said one official who has seen the proposal. Another diplomat said in any event the price of refusing to host a refugee would be “hundreds of thousands of euros”. Eastern European states such as Poland and Hungary would welcome alternatives to mandatory asylum quotas but will balk at the high penalties suggested. At the commission’s recommended rate, Poland would need to pay around €1.5bn to avoid its existing 6,200 quota to relocate refugees from Italy and Greece. These financial contributions are in part designed to fix incentives around migrant quotas, which have badly failed and proved almost impossible to implement even once agreed in law. The commission proposal builds on the EU’s flagship emergency scheme to relocate 160,000 refugees, which has barely redistributed 1% of its target since it was agreed last year.

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And how many did you say are unaccounted for, Europe?

90,000 Unaccompanied Minors Sought Asylum In EU In 2015 (R.)

Some 88,300 unaccompanied minors sought asylum in the EU in 2015, 13% of them children younger than 14, crossing continents without their parents to seek a place of safety, EU data showed on Monday. More than a million people fleeing war and poverty in the Middle East and Africa reached Europe last year. While that was roughly double the 2014 figure, the number of unaccompanied minors quadrupled, statistics agency Eurostat said. Minors made up about a third of the 1.26 million first-time asylum applications filed in the EU last year. EU states disagree on how to handle Europe’s worst migration crisis since World War II and anti-immigrant sentiment has grown, even in countries that traditionally have a generous approach to helping people seeking refuge.

Four in 10 unaccompanied minors applied for asylum in Sweden, where some have called for greater checks, suspicious that adults are passing themselves off as children in order to secure protection they might otherwise be denied. Eurostat’s figures refer specifically to asylum applicants “considered to be unaccompanied minors,” meaning EU states accepted the youngsters’ declared age or established it themselves through age assessment procedures. More than 90% of the minors traveling without a parent or guardian were boys and more than half of them were between 16 and 17 years old. Half were Afghans and the second largest group were Syrians, at 16% of the total. After Sweden, Germany, Hungary and Austria followed as the main destinations for unaccompanied underage asylum seekers.

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Sep 072015
 
 September 7, 2015  Posted by at 9:29 am Finance Tagged with: , , , , , , , , ,  


Dorothea Lange Saturday afternoon, Pittsboro, North Carolina Jul 1939

Father Of The Euro Fears EU Superstate By The Back Door (AEP)
UN Agencies ‘Broke And Failing’ In Face Of Ever-Growing Refugee Crisis (Guardian)
Europe Debates Migrant Quota Buyout Plan (FT)
Get Ready For A Real Lousy Month In The Stock Market (MarketWatch)
Forex Reserves Unwind Could Reverse Global Bond Supercycle (Reuters)
Capital Flight Now The Big Concern For Slowing China (FT)
China Freezes Outbound Investment Quotas as Outflows Hurt Yuan (Bloomberg)
China Revises Down 2014 GDP To 7.3% From 7.4% (CNBC, Reuters)
As Europe Grasps for Answers, More Migrants Flood Its Borders (NY Times)
Pope Francis Calls On European Parishes To House Up To 500,000 Refugees (WaPo)
‘If This Is Your Idea Of Europe, You Can Keep It’ (CNBC)
The Refugee Crisis Isn’t a ‘European Problem’ (Michael Ignatieff)
Refugee Flow Linked To Turkish Policy Shift (Kath.)
Hungarian Official Admits Campaign To Generate Hate Against Migrants (EurActiv)
Merkel Seeks $6.7 Billion for Refugees NEXT YEAR! (Bloomberg)
Greece Asks EU For Humanitarian Aid To Cope With Refugee Crisis (Reuters)
Statement By The President Of SYRIZA On The Refugees (Alexis Tsipras)
Tsipras Vows Battle To Improve Bailout After Greek Election (Reuters)
On The State Of The European Union (Yanis Varoufakis)
Greek Crisis Prompts A Rethink On Food Waste (AFP)

No doubt the plans are being laid out in secret.

Father Of The Euro Fears EU Superstate By The Back Door (AEP)

The euro’s founding father has warned that Europe’s latest plan for an EMU-wide finance ministry is a dangerous attempt to smuggle through political union, and breaches the basic tenets of modern democracy. Professor Otmar Issing, the chief architect of monetary union through its early years, said it would be “dangerous” to transfer control over tax and spending to the EU federal level before full political union has been established first on democratic foundations. Such a quantum leap in the constitutional structure of Europe – effectively the creation of an EU superstate, with a parliament comparable in power to the US Congress – is unthinkable in the current political atmosphere. It would require referenda across Europe, and a two-thirds majority in both houses of the German parliament.

“The chances of political union are close to zero,” he said, speaking at the Ambrosetti forum of world policymakers on Lake Como. If Europe were to jump the gun and force the pace of integration, this would lead to a rogue plenipotentiary with unbridled powers over sensitive issues of national life. “It is hard to see how it could be given democratic accountability,” he said. Prof Issing, a towering figure in the pre-EMU Bundesbank and the ECB’s first chief economist, said control of budgets must for now be left to national government and sovereign parliaments that are genuinely answerable to their own peoples. “Political union cannot be obtained in the European Union by the back door. It is a violation of the principle of no taxation without representation, and represents a wrong and dangerous approach,” he said.

Prof Issing was making a clear allusion to the American Revolution and the events that led up to the English Civil War in the 1640s, two great struggles triggered by a monarchical assault on the parliamentary power of the purse. The early democracies of Europe were all rooted in legislative control over spending. The proposals for an EMU finance ministry emerged in a paper by the heads of the Commission, Council, Parliament, Eurogroup, and ECB in June, a document known as the “Five Presidents Report”. It will start with an advisory European fiscal board and a strategic investment fund with enhanced powers, clearly a finance ministry in embryo. It will graduate towards a “euro area Treasury” from 2017 onwards, anchored in the EU treaties.

The report says that the new machinery will be established on a “lasting, fair and democratically legitimate basis”, and is in many ways a soul-searching admission that the EMU project has gone badly wrong, leading to bitter divisions. Yet critics warn that the EU is once again putting the cart before the horse. They point to the same fundamental errors that have led to perma-crisis in monetary union and spawned populist revolts across much of the EU. Prof Issing has always been open to an authentic United States of Europe similar to the US federal democracy. What he objects to is a deformed halfway house where supra-national bodies take decisions behind closed doors. The euro may survive “for a period” under its current structure, but it will break apart if the principles of monetary union are permanently violated. “Pacta sunt servanda (Agreements must be kept),” said Prof Issing.

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Something tells me it’s going to take many meetings. And the outcome will be a huge disappointment. Perhaps we passed peak humanity a while ago and didn’t notice.

UN Agencies ‘Broke And Failing’ In Face Of Ever-Growing Refugee Crisis (Guardian)

The UN’s humanitarian agencies are on the verge of bankruptcy and unable to meet the basic needs of millions of people because of the size of the refugee crisis in the Middle East, Africa and Europe, senior figures within the UN have told the Guardian. The deteriorating conditions in Lebanon and Jordan, particularly the lack of food and healthcare, have become intolerable for many of the 4 million people who have fled Syria, driving fresh waves of refugees north-west towards Europe and aggravating the current crisis. Speaking to the Guardian, the UN high commissioner for refugees, António Guterres, said: “If you look at those displaced by conflict per day, in 2010 it was 11,000; last year there were 42,000.

This means a dramatic increase in need, from shelter to water and sanitation, food, medical assistance, education. “The budgets cannot be compared with the growth in need. Our income in 2015 will be around 10% less than in 2014. The global humanitarian community is not broken – as a whole they are more effective than ever before. But we are financially broke.” Recent months have seen severe cuts to food rations for Syrian refugees in Lebanon and Jordan as well as for Somali and Sudanese refugees in Kenya. Darfuris living in camps in Chad have been warned that their rations may end completely at the end of the year. UN-run healthcare services have also been closed across a large part of Iraq, leaving millions of internally displaced people without access to healthcare.

Guterres warned that the damage being done by these cuts would be impossible to reverse. “We know that we are not doing enough, we are failing the basic needs of people. “The situation is beyond irreparable. If you look at the number of children who will see their lives so dramatically impacted by malnutrition and lack of psychosocial support, you will see this is already happening.”

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Commodities trading.

Europe Debates Migrant Quota Buyout Plan (FT)

European Commission officials are debating a proposal that would allow some EU countries to pay money in order to opt out of a mandatory quota system for accepting refugees, in a plan that could ease a stand-off between eastern and western members over how to relieve Europe’s migrant crisis. Some eastern states have balked at being forced to accept mandatory numbers, under a plan to divide 160,000 migrants across the region to be announced on Wednesday by commission president Jean-Claude Juncker. They argue that voluntary targets allow member states to provide better care to people looking to settle in Europe. “We are ready to share the burden and take responsibility, but only if we have control over the situation,” said Poland’s minister for Europe, Rafal Trzaskowski.

Over the summer a harrowing exodus of people from the Middle East, Africa and Afghanistan has leapt to the top of Europe’s political agenda, and led to a quadrupling of the EU’s resettlement target from 40,000 people in July. Commission officials and eastern diplomats stressed that the plan would only allow countries to take temporary “time-outs” from any expanded quota regime, in exchange for payments to a fund supporting refugees. “It creates an opportunity for voluntary decision making,” said an eastern EU official. “If they do it with penalties, then that is a bad idea. But if there is a system where you contribute financially to helping the problem in a different way, then that is much more palatable.”EU officials stressed that any opt-out would also have to be justified by “objective reasons” — for example Poland’s desire to have contingency plans in place to accept large numbers of refugees from Ukraine if the conflict there worsens.

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Month, year, decade, you name it.

Get Ready For A Real Lousy Month In The Stock Market (MarketWatch)

Investor sentiment has suffered with the recent correction and is not likely to improve in the short term, setting stocks up for a volatile September as international concerns overshadow domestic ones. Stocks took a big hit last week with the Dow Jones dropping 3.3%, the S&P 500 shedding 3.4%, and the Nasdaq falling 3%. International factors are feeding market volatility more than any other domestic factor, according to Brad McMillan, chief investment officer at Commonwealth Financial. McMillan said that Germany’s weak manufacturing orders report likely had more to do with Friday’s selloff than the jobs report’s effect on a September rate increase from the Federal Reserve.

What could affect the Fed’s decision is a continued stock market selloff. McMillan said if investors come back from the Labor Day holiday and decide to take risk off the table, the S&P 500 could break down through 1,870 as low as 1,790. If that happens, then the likelihood for a September rate increase falls below 50%, he said. “We’ve got another month or so before confidence bounces back,” McMillan said. “A lot of damage has been done to sentiment.” Others believe the correction still has a ways to go, with one indicator showing that investor sentiment has fallen to “panic” levels. Citi Research’s Tobias Levkovich said his Panic/Euphoria model, which brings together such indicators as short-interest ratios, margin debt, compiled bullishness data, and put/call ratios, broke into “panic” territory for the first time since late 2012.

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“..the dollar value of foreign currency reserves held by all developing nations ballooned by almost $7 trillion in just one decade to a peak of some $8.05 trillion by the middle of last year.” It was $1.05 trillion 10 years ago….

Forex Reserves Unwind Could Reverse Global Bond Supercycle (Reuters)

China’s summer shock may mark the end of an era of globalization that helped define world markets for more than a decade. Investor anxiety about the consequences is well-founded. Beijing’s integration into the global economy since 2002 reshaped the financial as well as economic landscape – mainly by the way China itself and the economies it supercharged with outsize demand for raw materials banked the hard cash windfalls they earned over the following 12 years. According to the IMF, the dollar value of foreign currency reserves held by all developing nations ballooned by almost $7 trillion in just one decade to a peak of some $8.05 trillion by the middle of last year.

While China was the main driver, accounting for about half of that increase, its economic boom created a commodity supercycle that flooded the coffers of resource-rich nations from across Asia to Russia, Brazil and the Gulf. As the vast bulk of this hard cash was banked in U.S. Treasury and other low risk, rich-country bonds, they were at least one critical factor in the halving of U.S. Treasury and other Group of Seven government borrowing costs over the same period. Alongside the disinflationary impact of China’s low cost labor on western goods imports and wages, this reserve stash helped extend what has now been a 20-year bull market in bonds.

What’s more, the drop in yields, by skewing relative returns between stocks and bonds and also the relative cost of capital for companies, also at least partly underwrote a post-credit crisis surge in equity prices to successive records. Reverse that bond buying, even at the margin, and world asset markets may have a major problem. That’s especially so at a time when the big other marginal bid for bonds, the U.S. Federal Reserve’s quantitative easing program, has ended and when western recoveries are pressuring the Fed and others to normalize near zero interest rates.

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How much longer can China keep up the pretense?

Capital Flight Now The Big Concern For Slowing China (FT)

Last month, Dalian Wanda, one of the most outward facing corporates in China, bought the organiser of the Ironman triathlons from a US private equity firm for $650 million. Meanwhile, Anbang Insurance, another company with similar global aspirations, looked less likely to succeed in its courtship of the Portuguese authorities in the hope of purchasing the remnants of a troubled financial conglomerate in Lisbon — precisely because the Chinese already have purchased so many assets there. At the same time, Chinese tourists continue to flood destinations like Japan, purchasing luxury goods which have become ever more inexpensive as a result of the steady appreciation of the Chinese currency, with the intention to sell them back home for a tidy profit.

It is hard to know what represents prudent diversification and what constitutes capital flight on the part of Chinese groups and wealthy travellers. But for those who track capital outflows from China, the distinction does not much matter. In the four quarters to the end of June, such outflows, (which do not include debt repayment) have totalled more than $500 billion according to data from Citigroup. China’s mountain of foreign reserves, once around $4 trillion, are now down to less than $3.7 trillion and are expected to drop further to $3.3 trillion by the end of the year, Citi calculates. Not long ago, it seems that the world was awash in cheap dollars. Many of those cheap dollars could be traced to the generous monetary policies of the Federal Reserve.

But many of them also came from the mainland as Chinese recycled their dollar earnings from the sale of exports abroad. Chinese capital flowed into everything from farms in Africa to ports in Sri Lanka and Pakistan, to dairies in New Zealand, energy firms in Canada and Treasuries in the US. More recently China started undertaking massive new, and expensive initiatives including the Asian Infrastructure Investment Bank, the New Development Bank, its Silk Route projects and a recapitalisation of the two policy banks that help recycle its reserves.

Suddenly, though, the question has shifted from what China will do with all the capital that flowed in and its arguably excessive reserves to whether it has enough money and adequate reserves at all. “It is neither the sell-off in Chinese stocks nor weakness in the currency that matters most,” notes George Saravelos, a currency strategist in London with Deutsche Bank. “It is what is happening to China’s FX reserves and what this means for global liquidity. The People’s Bank of China’s actions are equivalent to an unwind of QE or, in other words, Quantitative Tightening.”

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Shanghai down another 2.52% today.

China Freezes Outbound Investment Quotas as Outflows Hurt Yuan (Bloomberg)

China refrained from granting new quotas for residents to invest in overseas markets for a fifth month in August, the longest halt in six years, as authorities seek to stem weakness in the yuan. The State Administration of Foreign Exchange, which has approved 132 local institutions to put as much as $89.99 billion in offshore assets via its Qualified Domestic Institutional Investor program, hasn’t granted new allocations since March. Quotas for overseas investors to access domestic capital markets rose $16.4 billion to $140.3 billion in the period, data from the regulator show. The yuan traded 1.5% weaker outside of China than inside the country on Monday, indicating depreciation pressure.

China is trying to open its capital account enough for the yuan to win reserve status from the International Monetary Fund, while trying to curb an exodus of funds from an economy expanding at the slowest pace since 1990. Chinese investors are seeking to diversify in overseas assets after the Shanghai Composite Index of shares tumbled 39% from this year’s peak on June 12. The yuan slumped 3.6% in Shanghai and 4.9% in Hong Kong in the past 12 months. “Interest is there but whether the money can leave in the short term is the problem,” said Thomas Kwan, Hong Kong-based chief investment officer at Harvest Global Investments Ltd., whose Chinese unit offers QDII funds. “To avoid triggering excessive yuan outflows, I don’t think regulators would grant additional QDII quotas in the short term.”

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Stand up act. Very funny people, the Chinese.

China Revises Down 2014 GDP To 7.3% From 7.4% (CNBC, Reuters)

China’s National Bureau of Statistics on Monday revised down 2014 gross domestic product (GDP) growth to 7.3% from a previously reported 7.4%. This growth revision comes on the back of comments by China’s Finance Minister Lou Jiwei over the weekend that GDP growth will remain around 7% in 2015, as predicted earlier in the year, and the new economic normal may last for four to five years. A lower GDP number for 2014 should also make year-on-year comparisons for economic growth in 2015 more favorable. GDP stood at 63.6 trillion yuan ($10.00 trillion) last year, down by 32.4 billion yuan from the initial estimate, Reuters reported, citing the statistics bureau.

“China revises growth data every year, but it’s usually upwards. In that regard, it is unusual that the revision was downwards,” said Dariusz Kowalczyk, senior economist and strategist at Credit Agricole. “Rationally speaking, a 0.1% revision isn’t a big deal – and it doesn’t tell us much about the Chinese economy, but when it comes to sentiment, this is a negative development,” he said. The government will not particularly care about quarterly economic fluctuations and maintain steady macro-economic policy, Lou said, according to a statement late Saturday on the People’s Bank of China website. China is headed for its slowest economic expansion in 25 years in 2015 and mainland markets have slumped 40% since mid-June, sending global financial markets skittering.

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“Like a zoo,” Mr. Hadad said. “Like we are dogs.”

As Europe Grasps for Answers, More Migrants Flood Its Borders (NY Times)

Along Hungary’s border with Serbia, the scene was anything but smooth. “While Europe rejoiced in happy images from Austria and Greece yesterday, refugees crossing into Hungary right now see a very different picture: riot police and a cold, hard ground to sleep on,” Barbora Cernusakova, an Amnesty International researcher, said in a statement released by the group. The new camp in Roszke was being called a “reception center” by Hungarian officials, though the police on the scene referred to it as an “alien holding center.” Both migrants and relief groups were reporting harsh treatment and a hostile reception from the border authorities. On the Serbian side, officials temporarily blocked at least some trains headed north, amid numerous reports of the police demanding bribes to allow the migrants to pass.

Photos on social media from the new camp showed the police with dogs guarding a desolate compound surrounded by high fences. Omar Hadad, 24, from Dara’a, Syria, had been at a nearby camp along the border before he was shifted on Sunday to one west of Budapest, in the town of Bicske. “The Hungarian police came into the camp and they beat me with batons,” he said of his time in the holding center near the Serbian border. He peeled off his socks to show a bruised foot and leg. Journalists were not allowed into the Bicske camp, but the migrants could come out or speak across the entrance gate. Several other migrants rushed toward Mr. Hadad when they saw him displaying his wounds.

“Here, here, look,” said Salam Barajakly, a student from Damascus who began counting off the wounds and scars on his arms, legs and neck that he said he had gotten on the journey to Hungary, some by accident, some from the police, some from crawling under razor-wire fences. Two men held out smartphones showing videos of the camp where they had been held near the Serbian border. Hundreds of people squatted in the dust while the police tossed sandwiches and bottles of water to them over a barbed-wire fence. “Like a zoo,” Mr. Hadad said. “Like we are dogs.”

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And that’s just the Catholics. But let’s see the response.

Pope Francis Calls On European Parishes To House Up To 500,000 Refugees (WaPo)

In a statement that could have far-reaching implications, Pope Francis called on all Catholic parishes and monasteries in Europe to each house one refugee family that has fled “death from war and hunger.” “Every parish, every religious community, every monastery, every sanctuary of Europe, take in one family,” the pope said during his customary Sunday address, the news agency Agence France-Presse reported. He also said the Vatican will welcome two families of refugees. There are about 122,000 Catholic parishes in Europe, according to a study conducted by Georgetown University and published in June. If each of them housed one refugee family consisting of three to four people, about 360,000 to 500,000 refugees could be accommodated in the coming months.

It is unclear, however, whether all parishes will accede to the pope’s wish. In addition, housing refugees in parishes would have little bearing on the strict policies in countries such as France that have left desperate refugees — fleeing conflict and persecution — with limited options when they make their way to European shores. Addressing thousands of people in St. Peter’s Square on Sunday, Francis provided few details about his call to accommodate refugees, many of whom are not Catholics. The pope called his idea a “concrete gesture” ahead of a “year of mercy” that starts in December. The announcement, nevertheless, could relieve some of the countries that have taken in a large share of the refugees who have recently arrived in Europe, such as Germany or Sweden.

If all of Germany’s 12,000 parishes responded favorably to the pope’s demand, they alone could house a total of more than 30,000 refugees, according to Reuters. However, Germany expects about 800,000 refugees to apply for asylum in the country by the end of the year. The pope’s push resembles other, smaller initiatives already popular in the country. Some Germans have invited refugees to stay in their homes for free as authorities confront increasing difficulties in their bid to provide adequate apartments and reception centers. Many refugees are still housed in tent camps, and it is unclear whether alternative housing can be provided before winter arrives, as WorldViews reported earlier.

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“They all knew about it … but they just let it go.”

‘If This Is Your Idea Of Europe, You Can Keep It’ (CNBC)

“If this is your idea of Europe, keep it for yourself.” Thus spoke an irate Matteo Renzi, Italy’s Prime Minister, during an E.U. Council meeting last June as his East European colleagues refused any obligation to accept some of the thousands of Middle Eastern and African refugees lucky enough to reach alive the Greek and the Italian shores. More than two months later, there is still no unified E.U. policy on how to resettle the growing waves of refugees overwhelming Italy, Greece, Serbia and Hungary. In the middle of all that, some European leaders say they are defending Europe’s Christian values with barbed wires and overcrowded railway cars stuffed with suffocating people – the chilling images reminiscent of the darkest chapters in European history.

Viktor Orbán, Hungary’s Prime Minister, and a self-proclaimed defender of the “Christian Europe,” is justifying such acts by saying that “Europeans are scared because they see that their leaders have completely lost control of the situation.” Along with hundreds of thousands of refugees during the recent Balkan wars, and close to a million of refugees and displaced people from Ukraine’s eastern provinces, this latest human tragedy is emblematic of E.U.’s inability to respond to any major challenges – to say nothing of its inability to anticipate such extraordinary events. And that is not for lack of institutional infrastructure. The E.U. Commission has people in charge of everything – economic, social and foreign policy issues, including even the “specialists” writing the rules and procedures for cheese manufacturing.

The refugee crisis is not a sudden emergency. It is a disaster that has brewed over the past three years. The U.N. confirmed last Friday that it repeatedly warned the E.U. Commission of the coming influx of refugees from war-torn areas of Africa and Middle-East. This horrendous case of ineptitude and mismanagement will remind some of the European “shock” at “discovering” in 2009 that many euro area countries had been violating for years the monetary union’s fiscal rules, and that some of them had totally lost control of their banking systems. How was it possible that nobody knew about that? Jean-Claude Trichet, the former President of the ECB had the answer: “They all knew about it … but they just let it go.”

Can you then blame an angry German Chancellor Angela Merkel for roiling the markets with incendiary statements and imposing debilitating austerity policies to punish the fiscal transgression and banks’ mismanagement in a number of euro area countries? Yes, you can. As a key euro area member, Germany had the responsibility to help enforce the fiscal and financial treaty obligations binding the countries where the euro serves as a legal tender. Anger and vindictiveness are no substitutes for anticipating problems and applying proper policies.

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Amen. Even a failed Canadian politician can oversee this.

The Refugee Crisis Isn’t a ‘European Problem’ (Michael Ignatieff)

Those of us outside Europe are watching the unbelievable images of the Keleti train station in Budapest, the corpse of a toddler washed up on a Turkish beach, the desperate Syrian families chancing their lives on the night trip to the Greek islands — and we keep being told this is a European problem. The Syrian civil war has created more than four million refugees. The United States has taken in about 1,500 of them. The United States and its allies are at war with the Islamic State in Syria — fine, everyone agrees they are a threat — but don’t we have some responsibility toward the refugees fleeing the combat? If we’ve been arming Syrian rebels, shouldn’t we also be helping the people trying to get out of their way? If we’ve failed to broker peace in Syria, can’t we help the people who can’t wait for peace any longer?

It’s not just the United States that keeps pretending the refugee catastrophe is a European problem. Look at countries that pride themselves on being havens for the homeless. Canada, where I come from? As few as 1,074 Syrians, as of August. Australia? No more than 2,200. Brazil? Fewer than 2,000, as of May. The worst are the petro states. As of last count by Amnesty International, how many Syrian refugees have the Gulf States and Saudi Arabia taken in? Zero. Many of them have been funneling arms into Syria for years, and what have they done to give new homes to the four million people trying to flee? Nothing. The brunt of the crisis has fallen on the Turks, the Egyptians, the Jordanians, the Iraqis and the Lebanese.

Funding appeals by the United Nations High Commissioner for Refugees have failed to meet their targets. The squalor in the refugee camps has become unendurable. Now the refugees have decided, en masse, that if the international community won’t help them, if neither Russia nor the United States is going to force the war to an end, they won’t wait any longer. They are coming our way. And we are surprised? Blaming the Europeans is an alibi and the rest of our excuses — like the refugees don’t have the right papers — are sickening. Political leadership from outside Europe could reverse the paralysis and mutual recrimination inside Europe. The United Nations system to register refugees is overwhelmed. Countries like Hungary say they can’t resettle them all on their own. The obvious solution is for Canada, Australia, the United States, Brazil and other countries to announce that they are willing to send processing teams to Budapest, Athens and the other major entry points to register refugees and process them for admission.

Countries will set their own targets, but for the United States and Canada, for example, a minimum of 25,000 Syrian refugees is a good place to start. (The United States’ recent promise to take in 5,000 to 8,000 Syrian refugees next year is still far too small.) Churches, mosques, community groups and families could agree to sponsor and resettle refugees. Most of the burdened countries — Hungary, Greece, Turkey, Italy — would accept help in a heartbeat. Once these states take a lead, other countries — including those wretched autocrats in the Gulf States — could be shamed into doing their part.

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Somewhat plausible.

Refugee Flow Linked To Turkish Policy Shift (Kath.)

A sharp increase in the influx of migrants and refugees, mostly from Syria, into Greece is due in part to a shift in Turkey’s geopolitical tactics, according to diplomatic sources. These officials link the wave of migrants into the eastern Aegean to political pressures in neighboring Turkey, which is bracing for snap elections in November, and to a recent decision by Ankara to join the US in bombing Islamic State targets in Syria. The analyses of several officials indicate that the influx from neighboring Turkey is taking place as Turkish officials look the other way or actively promote the exodus. According to one Greek official, security fears are a key reason for Turkey’s encouragement of migrant flows.

“Turkey is facilitating or at least is not hampering the movement of illegal immigrants toward Greece, thinking that in this way it will limit the risk of a possible new terrorist attack on its territory as a reprisal for the military operations it has carried out on Syrian soil,” the official said. Another diplomat said Turkey wants to create a “dead zone” on its border with Syria that would allow the Turkish military to freely move against jihadists and Syrian Kurds. “This is why it is encouraging, or at least not obstructing, the movement of refugees from camps near the Syrian border to the Aegean and Greece,” he said.

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Hungary is largely a nation of former refugees.

Hungarian Official Admits Campaign To Generate Hate Against Migrants (EurActiv)

A Hungarian official indirectly admitted that the poster campaign ordered by the government last summer to discourage immigrants from coming into the country was aimed at generating hate towards them. Anti-immigration posters put up by the Hungarian government have sparked political controversy since June, featuring slogans such as “If you come to Hungary, you cannot take away Hungarians’ jobs”, and “If you come to Hungary, you have to respect our culture!”

Strangely enough, the posters can hardly be understood by migrants, because they are written in Hungarian. The posters – widely ridiculed on social media – were part of a larger anti-immigration campaign driven by Prime Minister Viktor Orban in response to a surge in asylum seekers. The campaign included a public questionnaire linking migration to terrorism and blaming EU policies for the influx of refugees.

But now a Hungarian official has admitted that the posters were in fact aimed at instigating hate against the migrants. Gergely Prohle, substitute state secretary of EU affairs in the Ministry of Human Resources, started by saying that the radical football hooligans did not become radical due to the country’s poster campaign. Then he added that Hungarian society displayed vast solidarity with the refugees, and if the poster campaign did have the desired effects on our society this would not be so.

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Next year?!

Merkel Seeks $6.7 Billion for Refugees NEXT YEAR! (Bloomberg)

German Chancellor Angela Merkel’s government announced plans to spend an extra €6 billion on refugees next year as thousands more migrants poured into the country over the weekend. Merkel’s governing coalition said on Monday that Germany will add 3 billion euros in spending to the 2016 federal budget and provide another €3 billion to states and municipalities to tackle the region’s biggest refugee crisis since World War II. Germany and Austria plan to end emergency measures that allowed the passage of thousands of migrants over the weekend from Hungary without registering in that country. That decision came after talks between Merkel, Austrian Chancellor Werner Faymann and Hungarian Prime Minister Viktor Orban, Faymann said in a statement on Sunday.

The countries late on Friday suspended European Union rules that require migrants to register and stay in the EU country where they first enter. The refugees, many coming from war-torn Syria, traveled on trains to Munich’s main station and were then sent to shelters around the country as German citizens volunteered in mass numbers to help the newcomers. Merkel’s government is considering putting excess 2015 tax revenue in a fund that would help cover the refugee costs next year, according to a person familiar with the plans, who asked not to be identified discussing private deliberations. In her weekly podcast, Merkel said the government would stick to its balanced budget goal even as it spends more on refugees.

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Reuters said “Migration crisis”. But that sounds too nonsensical.

Greece Asks EU For Humanitarian Aid To Cope With Refugee Crisis (Reuters)

Greece asked the European Union on Monday for humanitarian aid to help it cope with what it called “a volatile situation” following the large flow of migrants and refugees from the Middle East and Africa onto its shores. It requested the EU activate its civil protection mechanism, the bloc’s crisis-response body, to provide staff, medical and pharmaceutical supplies, clothes and equipment, the Interior Ministry said. Greece is struggling to cope with the thousands of people fleeing poverty and war in countries such as Syria for Europe. Tensions have flared on eastern islands including Kos and Lesbos where most refugees land due to their proximity to Turkey.

On Monday morning, a Greek ferry unloaded 2,500 migrants at the port of Piraeus, bringing the total number of people moved to the mainland since last Monday to more than 15,000. Thousands more are waiting to be identified and ferried to Athens to continue their trip to other European countries. “The First Response Service requested that the EU civil protection mechanism is activated in order to substantially strengthen the efforts undertaken by the First Reception Service to manage a volatile situation,” the ministry said. “The satisfaction of the said request is expected to be of critical assistance to the work of the First Response System, which, under current conditions, is extremely difficult.”

The EU’s civil protection mechanism coordinates the bloc’s humanitarian aid efforts, channeling aid and sending special teams with equipment to disaster areas. It has previously helped Greece fight forest fires. European Commission First Vice President Frans Timmermans and Migration Commissioner Dimitris Avramopoulos have already promised Athens €33 million to help it tackle the crisis.

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Refugees as an election issue, Alexis? You sure?

Statement By The President Of SYRIZA On The Refugees (Alexis Tsipras)

Europe is experiencing an unprecedented humanitarian crisis as a result of the refugees that are fleeing war and violence in our region. Greece is at the forefront of this crisis. Yesterday’s picture of three-year old Ailan, dead in the Aegean Sea, on the coast of Bodrum, was a powerful punch in the gut for all of us. And particularly for Europe. A Europe that has responded with initial indifference, nonsensical repression and now awkwardness in the face of a global drama caused by erratic foreign policy and the West’s military interventions.

Yesterday’s horrific picture that shocked the world unfortunately demonstrates the tremendous irresponsibility and great shame of the political forces and especially of New Democracy, which from the outset sought to exploit the problem for petty gains; stoking the most extreme populist instincts, the very ones Golden Dawn is manipulating as well to gain more votes. For now, I will ignore New Democracy’s inability to manage this – even rudimentarily – as a government, and will concentrate on its criticism of open borders. What exactly were they demanding from the Greek government? To use Greek coast guard ships to sink the inflatable boats carrying refugees? And to turn the Aegean into a watery grave for thousands of children like Ailan? Even populism and trying to win votes must have some limits.

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Stop making sense?!

Tsipras Vows Battle To Improve Bailout After Greek Election (Reuters)

Former prime minister Alexis Tsipras promised on Sunday to fight to improve the terms of Greece’s latest bailout as he tried to shore up a rapidly collapsing lead in opinion polls, two weeks before a snap election. In a campaign speech in the northern town of Thessaloniki, Tsipras offered no new policy ideas but pledged thousands of new jobs and an attack on corruption. He defended his record of battling Greece’s creditors in his seven months in office, even though he was eventually forced to capitulate to their demands to secure the €86 billion rescue package, Greece’s third in a protracted debt crisis that at times has threatened its future in the euro.

“The battle to improve it is far from over,” Tsipras said, referring to the bailout. He said he would seek to win some form of debt relief and press Greek demands to restore collective bargaining powers for workers, a move the creditors oppose. Tsipras resigned last month to make way for the election, hoping to secure a stronger mandate. But having started out as the clear frontrunner, his leftist SYRIZA party’s poll lead has now all but disappeared, making for an unexpectedly close contest against the conservative New Democracy party. The prospect of a fractured result after the September 20 vote has stoked fears of yet more turmoil in a country hit by years of instability and recession, and raised the prospect of Greece having to go to the polls again.

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A sad state. Beyond repair.

On The State Of The European Union (Yanis Varoufakis)

In a session entitled ‘Old and New Conflicts and Challenges in the EU’, featuring also Peter Sutherland (FT), Mario Monti and Otmar Issing, I used the unwillingness of the Eurogroup, and the troika, even to consider a document prepared by my (then) ministry (entitled “A Policy Framework for Greece’s Fiscal Consolidation, Recover and Growth“) as a case in point of how Europe has lost its integrity and is in the process of losing its soul (judging by the scandalous failure to address the refugee crisis).

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Hats off to the Greek people.

Greek Crisis Prompts A Rethink On Food Waste (AFP)

With little end to their economic misery in sight, Greeks are finding inventive ways to feed the poor while also fighting waste – a movement that is chipping away at traditional attitudes to food. Three years ago, Xenia Papastavrou came up with a simple idea: take unsold food from shops and restaurants that was headed for the bin, and use it to feed the growing number of Greeks going hungry as the financial crisis took hold. “In June, they gave us 3,000 kilos of melons; in August we got 7,200 cartons of milk,” the 39-year-old told AFP at her office behind Athens’ central market. Boroume (“We Can”), the organization she founded, matches donated foodstuffs with charities in need – whether vegetables, bread or “even these 12 tiropita (cheese pies), which weren’t sold at the bakery.”

These days the food routed through Boroume provides an average of 2,500 meals a day across Greece, from Athens to Thessaloniki in the north. “Greece is a country that throws a lot away,” explained Papastavrou from behind a computer screen covered with data tables and the addresses of charities. In Greek tavernas, if the plates aren’t piled with huge pyramids of food, a meal between friends can be considered a failure, she added. “There isn’t really a mentality of paying attention to this,” she said. “Here, it’s: ‘I’ve paid for it, so I can do what I want with it.'” But years of hardship have started to change habits in a country where official figures show a quarter of the population is at risk of poverty.

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