Archive for the ‘European Union’ Category
February 27, 2011
Green Ireland
All the six members (TD’s) of the Green Party in the Irish Parliament – the Dáil Éireann (House of Deputies) – have lost their seats in the General Election held on Friday. The Greens were part of the ruling coalition with Fianna Fáil and suffer in the fallout of the economic debacle. While a Fine Gael led government may well be forced to question Ireland’s participation in the Euro (and the strongest card they have against Germany and France is precisely the threat to leave the Euro), Ireland will not be chained by the regressive policies of the Greens on GM crops, on uneconomic support of renewables and the fanatic opposition to oil. Enda Kenny will be the new Prime Minister (the Taoiseach) but to begin with he is going to have little room for manouevre with regard to the financial requirements and demands being made by the European Union and the IMF.
The primary counting is over and:
Fine Gael has become the largest party in the State, and Labour the second largest, in an historic election which has seen Fianna Fáil relegated to third place, and the Green Party wiped out. …. After a long and dramatic day, the voters have taken their revenge on the most unpopular government in the history of the State.
….. Fianna Fáil saw its first preference vote more than halved, down to just 17.4% – add to that a lack of transfers, and the party was quickly in serious trouble.
Fianna Fáil has only one TD in Dublin so far, Brian Lenihan – with an outside chance of Mary Hanafin joining him when the count in Dun Laoghaire resumes. But there are no Fianna Fáil TDs in Meath, Tipperary, Sligo, Leitrim or Roscommon.
Even worse news for the Greens, as all six of the party’s TDs lost their seats. …….
The big winner, though, is Fine Gael, which is set to lead the next Government. It appears Enda Kenny won’t have the numbers for a single party government – but he won’t be far off it – and who would have predicted that a few months ago.
Tags:Dáil Éireann, Enda Kenny, Fianna Fáil, Fine Gael, Green Party, Ireland
Posted in European Union, Ireland, Politics | Comments Off on The Emerald Isle has lost its Green
January 27, 2011
And about time too.
A raft of countries (including Japan, Australia, Canada and the United States) have already shelved cap and trade schemes.
Of course the fundamental fraud that is carbon trading goes much deeper than just the recent thefts of credits. Hopefully it will never be revived!
image wattsupwiththat.com
The Guardian:
The European commission’s emergency suspension last week of trading in carbon allowances to put a halt to rampant theft of credits by hackers has been extended indefinitely until countries can prove their systems are protected from further fraud.
While the suspension had been expected to end last night, Brussels now says that the freeze in trades had been imposed to give the commission executive some breathing space to figure out what to do.
“The suspension last week was only a transitional measure to give the commission and member states the time to assess the situation and decide the way forward,” the commission’s climate spokeswoman, Maria Kokkonen, said. “Okay, this hurts, but it must hurt in order to make things more secure, more robust. Evolution through crisis.”
A total of 30 countries that participate in the Emissions Trading Scheme, Europe’s flagship climate change policy, must now send assessments of the situation performed by independent monitors. On 19 January, the commission suspended “spot” trading in allowances after up to 2m permits worth around €30m were stolen by computer hackers. Brussels said that half the participating countries were not sufficiently secure. Permits went missing in Austria, the Czech Republic and Greece.
Tags:carbon trading suspended, Emissions trading, European Commission, European Union
Posted in Alarmism, Environment, Ethics, European Union, Fraud | Comments Off on European commission extends carbon market freeze indefinitely
January 26, 2011
The Telegraph reports:
Asian and Middle-East investors have thronged to buy the first issue of AAA-rated bonds by the eurozone’s new bail-out fund, marking a key moment in the evolution of Europe’s monetary union.
The auction of €5bn (£4.3bn) of five-year bonds to fund the first stage of the Irish loan package was nine times subscribed, reflecting appetite for bonds ranked with core German or French debt but offering higher returns. The yield was 2.89pc, compared with 2.31pc for Bunds.
The outcome was not in doubt after Japan said it would buy 20pc of this month’s total issue by the European Financial Stability Facility (EFSF), and China emerged as a white knight for EMU debt. Asian investors bought 38pc of the issue.
“It is the biggest order book ever. We will check before notifying the Guinness Book of Records but nobody can remember anything like that in the world,” said Klaus Regling, head of the EFSF. Ralf Umlauf from Helaba said the auction was “a step in the direction of a eurobond”.
The demand came from over 500 investors and totalled over $ 60 billion (about €45 billion).
Tags:China, Eurobond, European Financial Stability Facility, European Union, Japan, Middle-East, record demand
Posted in Economics, Economy, European Union | Comments Off on Euro bail-out bond: Asia to the rescue with record demand
January 13, 2011
Image via Wikipedia
The countries are considered among those dragging down the Eurozone but strong demand for Portugese bonds on Wednesday was followed by solid demand for those issued by Spain and Italy today. Earlier this week both Japan and China had pledged to buy the bonds in Europe. Both countries have large cash reserves and are probably attracted by the higher yields but are also making a political statement in supporting the Eurozone. China is on a charm offensive and wishes to be seen to be reaching out to Greece and Portugal.
BBC:
Spain has raised 3bn euros ($3.9bn; £2.5bn) in an auction of five-year government bonds. The average yield on the bonds was 4.542%, which was nearly one percentage point higher than the rate reached in the last auction in November. However, analysts had feared the yield would be even higher.
The debt sale, which follows a similar auction by Portugal on Wednesday, is soothing fears over the eurozone’s ability to service its debts. Michael Lister, strategist at West LB in Dusseldorf, said: “The figures look really good, it’s the perfect sequel to the Portugal auction yesterday.”
Wall Street Journal:
The Hong Kong dollar rose against the U.S. dollar Thursday as a successful bond auction in Portugal helped ease concerns about the euro zone’s debt problems, encouraging investors to shift funds from the U.S. currency to riskier assets.
Traders said gains in the local stock market will continue to boost demand for the Hong Kong dollar. They said they expect the U.S. dollar to trade between HK$7.7720 and HK$7.7780 Friday.
“Portugal’s bond auction temporarily eased concerns over European debt. Also, the U.S. dollar isn’t likely rise sharply ahead of (Chinese) President Hu Jintao’s visit to the U.S. next week,” said a senior trader at a Chinese bank. Hu plans to meet U.S. President Barack Obama in Washington on Jan. 19.
The Portuguese government sold EUR1.25 billion worth of bonds in an auction overnight, offering good news to investors worried an unsuccessful bond sale could signal tougher austerity measures in parts of the euro zone.
Financial Times:
Spain and Italy on Thursday followed Portugal by holding successful bond auctions, providing a glimmer of optimism in the eurozone debt crisis. Italy sold €6bn of five-year and 15-year debt while Spain issued €3bn in five-year bonds, but both countries were forced to pay higher interest rates than in previous auctions.
The three successful auctions this week from peripheral eurozone countries provide a small amount of breathing room in the crisis. But the elevated yields paid by all of them and their high funding needs mean that investors are still waiting for decisive action from European policymakers.
Italy sold €3bn of 15-year bonds at a yield of 5.06 per cent, up from 4.81 per cent at a previous auction in November. Likewise, the yield on €3bn of five-year debt rose from 3.24 per cent two months ago to 3.67 per cent. Both auctions were fully covered. Spain paid almost a percentage point more than it did in November with a five-year yield of 4.54 per cent.
Tags:Bond issues, Euro, Eurozone, Italy, Portugal, Spain
Posted in Business, Economy, European Union | Comments Off on Solid demand for bond issues by Spain, Portugal and Italy boost Euro
January 12, 2011
Image via Wikipedia
Transparency International’s work and its Corruption Perception Index are both important and necessary, but they are just a small contribution to trying to restore ethics and integrity into public life. It mainly addresses the public sector and takes little account of the lack of ethics in the commercial world. Another problem with the CPI is that is skewed and as a perception index tends to be overly representative of the petty but widespread corruption (the so-called “facilitation fees”) in public services and among government employees. These are more common in developing countries and newly “democratised” countries where wage levels are low and institutional processes are still under evolution. But what the CPI does not address properly is the high level of corruption and fraud among politicians and bureaucrats in the developed world (Europe, the US, Japan, Korea for example) – which are not as numerous as in developing countries but where the monetary values involved are huge. If we distinguish between petty bribery and corruption on the one hand and “grand” fraud and corruption on the other, I have little doubt that the US, Europe and Japan continue not only to lead the “grand” fraud and corruption stakes by a long way but are also the most innovative in finding new ways of being corrupt.
Politicians in the European Parliament and bureaucrats in the European Union are particularly venal and are subject to even less scrutiny than the national parliaments of the member countries (where padding expenses, influence peddling and basic corruption are also well established). The latest example of institutionalised corruption in Europe comes from The Telegraph:
The EU’s financial watchdog has systemically “sabotaged” investigations and caved into intimidation from countries including France and Italy to cover up fraud, according to a senior official.
Maarten Engwirda, a former Dutch member of European Court of Auditors for 15 years, who retired 10 days ago, has alleged that abuse of EU funds was swept under the carpet by an auditing body that was supposed to expose wrongdoing.
“There was a practice of watering down if not completely removing criticism,” he told the Dutch Volkskrant newspaper yesterday.
Slim Kallas, the European Commission’s vice-president, who was responsible for anti-fraud measures from 2004 to 2010 and who is now the EU transport chief, is accused of putting “heavy pressure” on investigators to tone down findings of abuse.
Mr Kallas also clashed with the Court of Auditors over its use of strict accounting standards which meant that the EU’s annual accounts have embarrassingly never been given a clean bill of health. Mr Engwirda, 67, also described an endemic “cover-up culture” within the court and wider EU institutions that had prevented the true extent of fraud from being disclosed.
Marta Andreasen, a Ukip MEP and a member of the European Parliament’s budgetary control committee, that she had come under “huge pressure to conceal the truth about EU expenditure” before being sacked as the commission’s chief accountant for whistle-blowing in 2002. “I witnessed the arm twisting of the Auditors each time they attempted to reveal the failures in the EU accounting and control systems. They came under huge pressure to keep the accountancy fraud hushed up,” she said. “Sadly the auditors did not support me when I stood up in defence of European taxpayers. In my opinion the court is not an independent body.”
Pieter Cleppe, the Brussels spokesman of the Open Europe pressure group said: “This insider story should serve as a warning not to give in to EU demands for more money until the culture of financial irresponsibility is being dealt with more fundamentally.”
http://www.telegraph.co.uk/news/worldnews/europe/eu/8252958/EU-financial-watchdog-systemically-sabotaged-fraud-investigations.html
Tags:corruption, Corruption Perception Index, European Parliament, European Union, Maarten Engwirda, Slim Kallas
Posted in Behaviour, Corruption, Ethics, European Union | 1 Comment »
January 7, 2011
Transparency International in its newly published Corruption Perception Index focuses understandably on the under-developed and developing countries where the endemic petty bribery and facilitation fees to augment low wage levels are the visible and easily identifiable face of corruption. Of course grand corruption is also present in these countries but perception indices are inevitably skewed and dominated by what is visible and to the number of people affected rather than reflecting the monetary value of the corruption.
My own experience suggests – but I cannot prove – that in monetary terms the levels of corruption in the developed world are orders of magnitude larger but much more sophisticated and very well camouflaged compared to cases in the developing world. But with the much higher living standards the need for highly visible petty corruption has been largely eliminated. But the greed based cases in the developed world – when they are disclosed – are usually spectacular. As has now happened in Germany.
http://www.bloomberg.com/news/2011-01-05/ex-bayernlb-management-board-member-gribkowsky-arrested-in-bribery-probe.html
Gerhard Gribkowsky, the former chief risk officer of German state-owned bank Bayerische Landesbank, was arrested today over allegations he accepted bribes during his tenure at the lender. Munich prosecutors are investigating him on bribery, breach of trust and tax evasion allegations, Barbara Stockinger, a spokeswoman for the prosecutors, said in an e-mailed statement today. An arrest warrant was issued and executed today, she said.
The probe is reviewing the sale of a stake in Formula One motor-sports company which Gribkowsky, 52, was responsible for overseeing. BayernLB sold the stake in 2006 without it being properly evaluated, Stockinger said. “According to the current findings, the suspect in turn received $50 million in payments disguised via two consultancy agreements,” Stockinger said.
One instance with $50 million involved to one individual!!!
My $20 facilitation bribe to speed up my visa renewal in a developing country would need to be replicated 2,500,000 times for monetary equivalence with this one case. The corruption perception index would be overwhelmed.
I have the clear impression that the monetary value of corrupt and fraudulent practices in the developed world is enormous but extremely sophisticated and rarely found out. From UK MP’s cheating on their expenses, to selling Knighthoods and other Honours , to European MP’s expense and subsidy fiddles, to billions distributed in carbon trading scams and the enormous cases of corruption/fraud whether at AIG or Lehman Brothers or by Bernie Madoff.
The monetary value of fraud and corruption in the OECD countries is probably one or two orders of magnitude greater than in the developing countries but the number of cases is probably an order of magnitude less.
The CPI is perhaps a measure of visible corruption in the public sector – but does not- and can not – reflect the monetary value of sophisticated – and invisible – corrupt practices.
Tags:BayernLB, Bribery and corruption, Corruption Perception Index, Germany corruption, OECD corruption
Posted in Corruption, Ethics, European Union, Germany | 4 Comments »
December 30, 2010
50 Deutsche Mark banknote: image commons.wikimedia.org
As long as there is no economic and fiscal union in Europe, the Euro is going to be plagued by the inherent weaknesses of errant nations. The current economic weakness in Greece, Portugal, Spain and Italy and the political inability – or unwillingness – to deal with the simple financial housekeeping that any competent housewife would handle as a matter of course suggests that the fiscal union will never happen. Non-compliance with the stability rules by nations lead to few sanctions. This in turn leads to the question whether the Euro has any long term future in the absence of fiscal rectitude across all the participating nations.
100 Euro banknote from Germany
The weakness of the Euro has in fact helped to boost exports from Germany and the relatively strong growth in Germany is mainly export driven. Nevertheless many Germans are beginning to worry about the value of their Euro when this value is being diluted by the “less responsible” nations. Germans are remembering that “German” Euro notes are easily identifiable (as are the notes printed in the different countries). There are calls for the German government to maintain the value of the “German” Euro when the Euro loses value! (German Euro banknotes can be identified by their serial number, which will always start with the letter “X”.) It is already noticeable that money changers in Asia are beginning to check the country of origin of the Euro banknotes they are dealing with. I can imagine their future reluctance to deal with notes having serial numbers beggining with “Y” (which would be a note from Greece). Some are calling for the Euro to be separated into a “Northern Euro” and an “Olive Euro”. It is only a short step to different values appearing unofficially for Euros from different countries.
Der Spiegel reports on the growing calls for the return of the Deutsche Mark:
Surveys show that many Germans are worried about the future of the euro, but the country’s political parties are not taking their fears seriously. The number of grassroots initiatives against the common currency is increasing, and political observers say a Tea Party-style anti-euro movement could do well.
Rolf Hochhuth is campaigning against the euro — and his stage is Germany’s Constitutional Court. “Why should we help rescue the Greeks from their sham bankruptcy?” he asks. “Ever since Odysseus, the world has known that the Greeks are the biggest rascals of all time. How is it even possible — unless it was premeditated — for this highly popular tourist destination to go bankrupt?”In the spring, he joined a group led by Berlin-based professor Markus Kerber that has filed a constitutional complaint against the billions in aid to Greece and the establishment of the European stabilization fund, which was set up in May 2010. Hochhuth wants the deutsche mark back. “I don’t know if this is possible. I only know that Germany lived very well with the mark.”
It’s an opinion that suddenly places this nearly 80-year-old man in a rather unusual position, at least for him: on the side of the majority of Germans.
(more…)
Tags:Deutsche Mark, Euro, Germany, Northern Euro, Olive Euro
Posted in Business, Economics, Economy, European Union, Germany | 1 Comment »
November 15, 2010
The diagnosis of the problem with the Trent 900 has come in a matter of days and the solution has already been identified and is under implementation. This convinces me that the problem was already known and so was the solution.
There are at least two important ethical questions which are raised by the Trent 900 story.
1. The European Aviation Safety Agency (EASA), in August, apparently relaxed a directive regarding the frequency with which Trent 900 engines were to be inspected. The Directive had been issued originally in January. That in itself should primarily be a technical judgement call and judgements – especially in hindsight – can always be found to be faulty without raising any issues of ethics. However the ethical issue arises if – as it seems to be – the relaxation in August was initiated by representations from a party (Rolls Royce in this case) who found the original directive too onerous. The ethical standards of both the Regulator (EASA) and of the petitioner (Rolls Royce) then give cause for concern.
2. The second ethical issue arises if Rolls Royce knew in advance of the accident to the engine on QF32 that the engines in use were at risk and that the consequences could have been catastrophic. If this was just a judgement of the probability of failure and that this probability was judged insignificant then it is an issue of bad judgement but not unethical. But an insignificant probability of failure should not have initiated the programme of engine modifications that was apparently ongoing even before the accident. Therefore, if Rolls Royce, knowing full well that the risks were sufficiently high to require that the engines had necessarily to be rectified, kept quiet in the “gamble” that no accidents would occur before they had managed to modify all the “faulty” engines, then it becomes a case of low ethical standards and not just poor judgement. Reports suggest that Rolls Royce knew that the modifications were necessary more than a year ago but also that the mechanic who revealed this was forced to speak anonymously. This does not give any confidence that there is full transparency and, in fact, strengthens the view that Rolls Royce knew there was a problem. The speed (days rather than months) with which the diagnosis has been made and the solution defined also indicates that the engine failure did not come as much of a surprise and that the problem and the solution were already known.
The mainly technical issues with the engine indirectly raise a more general question for the aviation industry of whether there are conditions where competitive pressures can be damaging because they increase the risk of potential harm to the general public (who unwittingly become guinea pigs for testing new technologies).
Tags:ethics, European Aviation Safety Agency, Rolls-Royce plc, Trent 900 failures
Posted in Aviation, Engineering, Ethics, European Union, Technology | 5 Comments »
November 12, 2010
Natural gas pipelines from Russia to Europe: image via Wikipedia
“Peak gas” like “peak food” and “peak resources” and like all “peak scenarios” keeps getting postponed. The US is awash with shale gas and has started re-exporting LNG it had contracted for to Europe challenging the dominance of Russian supplies of natural gas.
Money control reports:
The United States may play a role this winter in loosening Russia’s grip on the European market for natural gas by shipping liquefied natural gas across the Atlantic. Awash with domestic shale gas and with little need to import extra fuel, the United States has started re-exporting LNG cargoes, which firms had previously imported under contract, to countries where gas prices are much higher.
Such shipments could contribute to a growing pool of cheaper LNG going to Russia’s biggest export market this winter. In the longer term, U.S. plans to build plants to liquefy shale gas could create another rival to Russian pipelines. The first re-export cargo from the United States to Britain — a key access point for LNG into northern Europe via an Interconnector pipeline to Belgium — is set to sail over the weekend. “It is a landmark shipment,” said Zach Allen at NATS LNG analysts in Raleigh North Carolina. “LNG has, through the Interconnector, played a major role in reducing intake of Russian gas into western Europe.”
U.S. shale gas has already forced many LNG producers that had hoped to supply the North American market to find alternative buyers, with many cargoes ending up in Europe and driving spot gas prices below the price of oil-indexed Russian gas.
US re-exports to Europe are the latest sign that increases in shale gas production have transformed the global gas market. The International Energy Agency said on Tuesday that a decade-long period of oversupply was likely to push oil-indexed gas sellers to accept lower prices.
In February, Russian gas export monopoly Gazprom postponed it’s Shtokman LNG project because the United States, its target market, did not need more imports. Major European pipeline gas supplier Statoil has been forced to find alternative markets for LNG it had hoped to send to the United States, often selling it into Europe. Qatar, the world’s largest producer and exporter of LNG, has also pushed into both Norwegian and Russian markets by making large deliveries of cheap LNG into Britain and Belgium. US LNG imports have fallen to contractual minimums as gas prices have sagged, forcing importers whose terminals are sitting idle to change strategy and re-export to make the most of higher prices overseas.
US gas at USD 4.1 per million British thermal units (mmbtu) was about USD 3.3/mmbtu below UK prices on Tuesday and just under half the price of Russian gas in Europe in October, according to International Monetary Fund data. About 20 billion cubic feet of gas has already been re-exported from the United States this year, with some sent to Asia, where buyers have paid nearly USD 10 per mmbtu, and some to Latin America and the Middle East.
More of those US loaded cargoes could head to Britain over coming months, given that winter price increases are sharper in northern Europe than in the United States and that imports by South American and Middle Eastern buyers are usually confined to summer.
“US exports to Europe will remain rather exotic, but they underline once again the big risks for Russia of focusing some of its future projects on US markets,” said Valery Nesterov, energy analyst at Moscow-based Troika Dialog brokerage.
Cheniere Energy, operator of the Sabine Pass import terminal in Louisiana, announced plans in June to build a liquefaction plant at the terminal. It said on Tuesday that US bank Morgan Stanley hoped to secure some of its export capacity. Pending approval, the plant would export US-produced shale gas to markets all over the globe from 2015. It would be the first US LNG export plant in 40 years — following the old Kenai facility which supplies Asia from Alaska — and would be well placed to supply Europe. “LNG supplies from the United States can help lower gas prices in Europe and Asia and ultimately help lift prices in the States,” said Mikhail Korchemkin from Pennsylvania-based East European Gas Analysis.
Tags:Europe, Gas price, Liquefied natural gas, LNG re-export, Russia, Shale gas, United States
Posted in Energy, European Union, International Trade, Investing, Technology, US | 2 Comments »
November 9, 2010
Bloomberg:
Air France-KLM Group and British Airways Plc were among 11 carriers fined a total of 799.4 million euros ($1.1 billion) by European Union regulators for coordinating fuel and security fees following the 2001 terrorist attacks.
Air France and its units got the biggest fine of 339.6 million euros. British Airways was fined 104 million euros and SAS Group AB got a 70.2 million-euros penalty, the European Commission said. Cargolux Airlines International SA, Europe’s third-biggest air-freight carrier, was fined 79.9 million euros.
“It is deplorable that so many major airlines coordinated their pricing,” EU Competition Commissioner Joaquin Almuniasaid. The extra costs in the aftermath of the attacks on Sept. 11, 2001, weren’t “an acceptable reason to stop competing,” Almunia told reporters.
U.S. authorities have already fined 18 airlines at least $1.6 billion and filed criminal charges against 14 executives for price-fixing.
Under EU rules, companies can be fined 10 percent of annual sales for antitrust violations. The commission typically opts for a penalty of from 2 percent to 3 percent of sales in cartel cases. Companies may appeal to EU courts.
The Journal of Commerce:
Air France KLM and British Airways, which were fined $350 million and $300 million respectively in the U.S., are among airlines facing substantial fines from the EU. Cathay Pacific, Japan Airlines, Alitalia and All Nippon Airways have earlier confirmed they have been investigated.
Lufthansa, Europe’s largest cargo carrier, is not facing a fine as it informed the Commission about the cartel’s activities.
The Commission’s decision will have an impact on several pending legal actions by shippers seeking damages they suffered due to the cartel’s activities. Several hundred European shippers, led by Swedish telecoms group Ericsson and Dutch electronics giant Philips, are suing Air France-KLM and its Martinair subsidiary for $560 million.
Tags:cartel, European Commissioner for Competition, European Union, freight, Price fixing
Posted in Aviation, Business, European Union, Fraud | Comments Off on EU Fines 11 Airlines for running a freight cartel
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