UKIP MEPs

• 30 NOV 2011

By Adrian Lowery | This is Money, Daily Mail

George Osborne admitted today that a drastically reduced growth outlook for the UK economy has left his plan to eliminate the Government's budget deficit by 2015 in tatters.

Delivering his Autumn Statement to a lively House of Commons, the Chancellor was forced into a significant revision to his much-vaunted 'Plan A' deficit reduction plan, with borrowing set to be £112billion more over the next four years than his Budget estimate.

New forecasts from the Office for Budget Responsibility show just 0.9 per cent growth this year, compared to 1.7 per cent predicted in March, and a drastically downgraded 0.7 per cent growth for next year, for which the OBR had forecast 2.5 per cent in March.

With growth in following years also coming in lower than was forecast in March, that means tax revenues will be lower and benefits spending higher, ruining the Chancellor's plans for a zero deficit by 2015.

Read entire article

See also:
UK body warns of risk of EU defaults (Irish Times)
Crippled Britain: Country grinds to a halt as millions go in strike (Daily Express)
David Cameron labels strikes 'damp squib' (The Inependent)
The £250m in green tax breaks to protect British business from EU environmental rules (Mail Online

Still much to do on economy, warn UKIP

Wed, 30 Nov 2011 18:31:04 GMT

• 30 NOV 2011

UKIP

UKIP Leader Nigel Farage welcomed George Osborne's autumn statement but warned there was still much more to be done to rescue the ailing economy.

Nigel Farage MEP, UKIP Leader, responded to the Chancellor's Autumn Statement this afternoon:

"There are good things in this statement, and some honesty, but the Chancellor is kidding himself if he thinks he has got close to dealing with the problems that beset this country.

"The government's program to help small business is to be welcomed, but could be improved upon. It should end Employers' National Insurance, which is little more than a tax on jobs, across the lifetime of this parliament to get more people into work.

"But no matter how he cuts it, you cannot cut the deficit without cutting spending. He intends to continue the coalition’s suicidal energy policy subsidies. He accepts without apology his intention to borrow, on average more than £100 billion per annum, until 2015.

"He intends to increase the international aid budget and of course he leaves unanswered questions about the UK's liabilities to the EU direct, and indirectly through the IMF, when it comes to the eurozone bailouts.

"The Chancellor could have done much more to get this country's economy back on track."

READ MORE: Statement to face EC scrutiny

www.ukip.org

Eurozone finance ministers approve extension of EFSF: statement in full

Wed, 30 Nov 2011 18:29:06 GMT

• 30 NOV 2011

The Telegraph

Euro zone finance ministers agreed on Tuesday to increase the capacity of the European Financial Stability Facility (EFSF) bailout fund. Here is the full text of a statement from the EFSF:

Euro area finance ministers agreed on November 29 on the terms and conditions to extend EFSF's capacity by introducing sovereign bond partial risk participation and a Co-Investment approach.

Ministers also adopted amended EFSF guidelines concerning intervention in the primary and secondary debt markets and precautionary credit lines in order to use leverage.

Klaus Regling CEO of EFSF commented: 'Both options are designed to enlarge the capacity of the EFSF so that the new instruments available to the EFSF can be used efficiently.'

Under the partial risk protection, EFSF would provide a partial protection certificate to a newly issued bond of a member state.

The certificate could be detached after initial issue and could be traded separately. It would give the holder an amount of fixed credit protection of 20-30 percent of the principal amount of the sovereign bond.

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Desperate eurozone chiefs look to IMF as lender of last resort

Wed, 30 Nov 2011 18:27:46 GMT

• 30 NOV 2011

Desperate eurozone chiefs look to IMF

By Leigh Phillips | EUobserver

BRUSSELS - With little interest materialising in the private sector to boost the eurozone's rescue fund, the region may ultimately be forced to turn to the International Monetary fund (IMF), eurozone finance ministers conceded on Tuesday (29 November).

First talks on the idea looked at options on how to leverage the rescue mechanism, the European Financial Stability Fund, or possibly open new IMF credit lines.

The latter option could see the European Central Bank channelling loans to the IMF and then on to embattled eurozone states. The ECB and Germany have stubbornly resisted the idea of the Frankfurt institution to lend directly to governments, but with strong IMF conditionality attached to such cash, ministers are hoping the fudge will be sufficient to win over opponents.

"We also agreed to rapidly explore an increase of the resources of the IMF through bilateral loans, following the mandate from the G20 Cannes summit, so that the IMF could adequately match the new firepower of the EFSF and co-operate even more closely," eurogroup chairman Jean-Claude Juncker told reporters after the meeting.

The desperate turn to the international lender comes as efforts to achieve a boost in the fund’s firepower to the hoped-for €1 trillion failed.

Read entire article

See also:
Eurozone rescue plan enters endgame (EurActiv)
Eurozone may ask IMF for more help as crisis deepens (Irish Independent)
Eurozone agrees to explore ways to boost IMF bailout fund firepower (The Telegraph)

Holding the EU together by Money Printing and Force

Wed, 30 Nov 2011 18:25:48 GMT

• 30 NOV 2011

International Business Times | By Greg Hunter

The European Union is frantically trying to come up with a plan to fix the debt crisis that is threatening to cause a worldwide financial calamity. It seems every day there’s a new idea to save the union. The latest is some sort of backdoor bailout through the International Monetary Fund (IMF). Why doesn’t the European Central Bank (ECB) just take care of the bailout by itself? It legally can’t according to the treaty that formed the European Union. That hasn’t stopped the central bank from bailing out countries anyway. But now, debt levels are reaching a critical stage as in a possible default, and the biggest problem is Italy. Todayonline.com is reporting, “If Italy defaults on its debt of 1.9 trillion euros, the fallout could spell ruin for the euro zone and send shockwaves throughout the rest of the world. Yesterday, Italy’s borrowing rates skyrocketed to record highs in a 7.5 billion euro bond auction. The yield on its 3-year bonds surged to 7.89 per cent, 2.96 percentage points higher than last month, while yields on 10-year bonds spiked to 7.56 per cent, up 1.5 percentage points.”

The key to saving the euro is Germany because it is the richest of the EU countries and can use its industrial might to help support a bailout fund. But, Germany has been reluctant to bail out deeply indebted countries. Now, calls to bend to pressure to save the day and keep the union together are reaching a fevered pitch. The Guardian UK reported earlier this week, “The Polish foreign minister, Radoslaw Sikorski, urged Germany to save the EU from “a crisis of apocalyptic proportions.” The Moody’s ratings agency predicted that a euro exit by any country would trigger a cascade of sovereign defaults across the eurozone. Jean Pisani-Ferry, director of the influential Bruegel think-tank in Brussels, said that “real businesses” as well as the financial markets were now “pricing in a break-up scenario … If disaster expectations build up and a growing number of players start positioning themselves to protect themselves from it, the consequences could become overwhelming.”

Read entire article

Major Central Banks act as eurozone crisis rages

Wed, 30 Nov 2011 18:24:46 GMT

• 30 NOV 2011

* Major central banks boost dollar liquidity for banks
* Italy starts emergency liquidity tenders for banks
* Euro zone ministers agree bailout fund leveraging rules
* Dutch finmin says EFSF falling short, IMF needs to come in
* G20 source says no progress on bolstering IMF resources

By Robin Emmott and Kirsten Donovan | Reuters

BRUSSELS/LONDON, Nov 30 (Reuters) - The world's major central banks acted jointly on Wednesday to provide cheaper dollar liquidity to starved European banks facing a credit crunch as the euro zone's sovereign debt crisis threatened to bring financial disaster.

The surprise emergency move by the U.S. Federal Reserve, the European Central Bank, the Bank of Japan and the central banks of Britain, Canada and Switzerland recalled coordinated action to steady global markets in the 2008 financial crisis.

The euro and European shares surged on the news, which came after euro zone finance ministers agreed to ramp up the firepower of their bailout fund but acknowledged they may have to turn to the International Monetary Fund for more help.

In a related move, Italy's central bank started emergency cash tenders for banks which have been squeezed particularly hard in recent weeks as Rome's borrowing costs have soared towards 8 percent, a level seen as unaffordable in the long term.

"We are now entering the critical period of 10 days to complete and conclude the crisis response of the European Union," Economic and Monetary Affairs Commissioner Olli Rehn said as EU finance ministers met.

Read entire articl

Wolfgang Schauble admits what has long been known: euro bail-out fund won`t halt crisis

Wed, 30 Nov 2011 18:23:45 GMT

• 30 NOV 2011

Europe's "big bazooka" bail-out fund is not ready and won't stem the debt crisis that on Tuesday pounded Italy and the European Central Bank (ECB), admitted Wolfgang Schauble, Germany's finance minister.

By Louise Armitstead | the Telegraph

Mr Schauble said eurozone finance ministers, who are meeting in Brussels, could not agree on the terms of the European Financial Stability Facility (EFSF).

He told Germany’s Handelsblatt that although Europe needed a fund “capable of action”, plans for the EFSF were too “intricate and complex” for investors to understand.

The finance ministers, who were meeting ahead of a full Ecofin summit today, acknowledged the €440bn (£376bn) fund would not win support to leverage it up to €1 trillion. Its capacity would be between €500bn and €700bn instead – a total that is unlikely to be big enough to rescue Spain and Italy.

Eurozone finance ministers also agreed to explore ways of boosting the IMF's resources through bilateral loans so that the international lender can match the leveraged capabilities of the eurozone's bailout fund.

However, the ministers concurred that the €8bn of international aid to Greece should be disbursed before Athens runs out of cash in two weeks. Evangelos Venizelos, Greece’s finance minister, said: “In Greece we have all the necessary conditions in order to go ahead with the next disbursement.”

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Euro crisis: Italy at risk of insolvency, European finance ministers warned

Wed, 30 Nov 2011 18:22:55 GMT

• 30 NOV 2011

Mario Monti must tackle Italian tax evasion to avoid other eurozone economies being damaged, says report

By Ian Traynor | The Guardian

European finance ministers were warned on Tuesday night that Italy's liquidity crisis could leave the eurozone's third biggest economy insolvent with devastating impact on the fate of the single currency and its big core economies, Germany and France.

Eurozone finance ministers met in Brussels in their latest attempt to plot a path out of the EU's worst crisis. With Mario Monti, the new Italian prime minister and finance minister, reporting to the session on his austerity package aimed at saving Italy and shoring up the euro, a confidential report from the European commission and the European Central Bank said Monti would need to do more than already promised.

The report, obtained by the Guardian, said Monti had to go further in his promises to combat rampant tax evasion in Italy, which is estimated to amount to 20% of gross domestic product.

"The sovereign debt crisis has now moved from the periphery to Italy and other core euro area countries. Pressure on Italian sovereign bond yields is particularly acute, reflecting investors' mounting concerns with the sustainability of Italy's large public debt" – almost €2tn, (£1.7tn) – the report said.

"The risks of a full-blown sovereign liquidity crisis can increase rapidly in the absence of a determined policy response … Persistently high interest rates increase the risk of a self-fulfilling 'run' from Italy's sovereign debt. A liquidity crisis could then turn into a solvency crisis, whose repercussions for other large euro area countries would be very acute given their exposure to the Italian economy."

Italy on Tuesday easily raised €7.5bn on the bond markets, but at exorbitant rates above the 7% sustainability threshold.

Read entire article

See also:
Rome Pays High Price at Bond Sale (WSJ)
Getting Nostalgic About The Lira? (Open Europe)

Public support for EU on social policy in `dramatic` nose-dive

Wed, 30 Nov 2011 18:21:11 GMT

• 30 NOV 2011

By Leigh Phillips | EUobserver

BRUSSELS - A regular European Commission social issues survey out on Tuesday (29 November) has shown that the public’s belief that the EU is having a positive impact on employment and social policy - policies with the biggest impact on ordinary peoples' lives - has sharply declined in almost all countries.

“Compared with 2009, there has been a substantial fall in the number of people who think that the EU has a positive impact,” the survey says.

Across a series of eight questions dealing with such issues as boosting employment, fighting poverty and protecting social services, between 48 and 67 percent of respondents thought that the EU was having a positive impact.

This is down from between 62 and 78 percent for the same questions in the last such survey in 2009.

The downturn in support is a marked shift from backing for EU social policy efforts prior to the crisis. Such backing had generally remained stable for years, as the surveys note.

Read entire article

See also:
Eurobarometer Nov-2011 Survey (Employment & Social Policy) (EU Commission)

Eurozone approves 8bln euro loan instalment to be added to Greek debt

Wed, 30 Nov 2011 18:19:33 GMT

• 30 NOV 2011

Daily Express

Eurozone ministers have offered Greece an eight billion euro Christmas rescue package to stem an immediate cash crisis - yet they have failed to resolve fears that the common euro currency might be doomed.

The 17 finance ministers insisted they found a veneer of credibility to coat the euro's rescue fund with enough leverage to deal with potential financial crises much bigger than the one facing peripheral Greece.

And they called on the International Monetary Fund for resources to help further protect Europe's embattled currency.

"We made important progress on a number of fronts," said Jean-Claude Juncker, the ,eurozone chief.

After saying earlier that the eurozone's rescue fund would be able to leverage up to one trillion euro, the fund's chief remained vague on how beefed up it was after the meeting in Brussels.

Read entire article

Greece asks for support to absorb EU regional aid

Wed, 30 Nov 2011 18:18:48 GMT

• 30 NOV 2011

EurActiv

Athens will need technical assistance to ramp up its capacity to absorb EU regional funding, the Greek Minister for Development, Competition and Shipping, has told the European Parliament.

Addressing the Parliament's Regional Development Committee, Michalis Chrisochoidis stressed that Greece will be unable to solve its debt problem without investment in growth-enhancing projects.

“Our goal is to promote useful projects and infrastructures for the citizens that will initiate the development process, but will also provide relief and solutions to major problems of unemployment and especially youth unemployment," the Greek minister told MEPs on Tuesday (22 November).

€14 billion remain blocked

Chrisochoidis, who has officially announced his candidacy for president of the PASOK party, highlighted the few bright spots in Greece's economic performance such as the substantial increase in exports of manufactured goods, which rose 50% in October 2011 compared to October 2010.

If elected, Chrisochoidis would replace George Papandreou who resigned as prime minister earlier this month but remains head of PASOK.

He outlined the increased rate of absorption of EU regional funds and amendments to EU rules that allowed the European Investment Bank (EIB) to fund small businesses. A new Investment law that has already attracted projects proposals for up to €1.5 billion, he said.

Read entire article

More Violence in Kosovo: NATO Tells Troops to Use Live Ammunition

Wed, 30 Nov 2011 18:17:32 GMT

• 30 NOV 2011

RT

Youtube.com

Seriously? Senate Considering Repeal of Anti-Torture Measures

Wed, 30 Nov 2011 18:16:17 GMT

• 30 NOV 2011

American Civil Liberties Union (ACLU)

Yesterday, the ACLU and over 30 other organizations sent a letter to the Senate asking them to oppose an effort in Congress that threatens to revive the use of torture and other inhumane interrogation techniques. If passed, an amendment introduced by Sen. Kelly Ayotte (R-N.H.) to the Defense Authorization bill would roll back torture prevention measures that Congress overwhelmingly approved in the 2005 McCain Anti-Torture Amendment, as well as a 2009 Executive Order on ensuring lawful interrogations. It would also require the administration to create a secret list of approved interrogation techniques in a classified annex to the existing interrogation field manual.

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Pakistan: US Attack on Base Lasted �Almost Two Hours� as Calls to Stop Were Ignored

Wed, 30 Nov 2011 18:14:04 GMT

• 30 NOV 2011

Pakistani Military Spokesman Angrily Rejects Claim They Started It

By Jason Ditz | Antiwar.com

Questions continue to grow over the Friday night US attack on a Pakistani military base today, with new reports coming out of Pakistan saying that the air attacks against the base lasted for almost two hours.

The Army statement says that the base repeatedly broadcast calls for a ceasefire over the course of the two hours and that those calls were repeatedly ignored, with the attack, carried out by warplanes and helicopters, killing 24 soldiers

Read entire article

Second huge blast in 20 days at Iranian nuclear facility

Wed, 30 Nov 2011 18:12:16 GMT

• 30 NOV 2011

First Post

Iranians continue to pretend they are not under attack. But about those rockets landing in Galilee?

WHAT'S HAPPENED?

It has emerged that an Iranian nuclear facility in the city of Isfahan was rocked by a massive explosion on Monday afternoon, 24 hours before the British Embassy fracas in Tehran stole the headlines. The blast caused tower blocks to shake in the city and a large pall of smoke to hang over the uranium conversion facility on the outskirts of Isfahan, according to The Times.

WHAT DOES IT MEAN?

This is the second time in the space of 20 days that such a site has been hit by a mysterious blast. On November 12 a massive explosion at the Bid Ganeh missile base on the outskirts of Tehran killed up to 30 members of the Revolutionary Guard, including General Hassan Moghaddam, the architect of Iran's missile programme.

The latest incident suggests that Iran's nuclear facilities are now coming under a concerted attack. The question is whether Israeli forces had a hand in either blast.

An Israeli intelligence source has told The Times that there was "no doubt" that the plant at Isfahan was struck deliberately on Monday and that the attack had "caused damage to the facilities [there], particularly to the elements we believe were involved in the storage of raw materials". The source refused to say whether Israel had been involved.

Read entire article

See also:
Iran attack video: UK embassy stormed in Tehran (Video, RT)
Iran regrets some protesters' actions (PressTV)

More Met Office Spin About Annual Temperatures (In Time for Durban)

Wed, 30 Nov 2011 18:02:29 GMT

• 30 NOV 2011

David Whitehouse | GWGF

Once again, for political reasons, the Met Office is “jumping the gun” and drawing conclusions about the global annual temperature of 2011 before all the data has come in. It is also erroneously saying that even with a globally cooling La Nina event 2011 is a record year.

Reported in the Times today (paywall) and in the Guardian are a series of statements prepared by the UK Met Office that are a masterclass of spin in the use of statistics. The Met Office Press release is here.

The Times: World temperatures still rising (as spring daffodils flower in November). Hannah Devlin, Science Correspondent:

Temperatures across the world are continuing to rise as predicted by climate change scientists, according to the latest global figures released by the Met Office.

The figures, timed to coincide with the UN climate conference in South Africa, show that this year is likely to be the eleventh warmest on record. The average global temperature for the first ten months of 2011 was 14.36C (57.85F), 0.36C above the long-term average.

Although cooler than last year, scientists said this is explained by a weather phenomenon called La Niña, which causes a temporary cooling of the global climate.

When 2011 is compared with previous La Niña years, it ranks as the warmest since records began in 1850. Peter Stott, from the Met Office, said: “This year we have seen a very persistent and strong La Niña, which brings cooler water to the surface of the Pacific Ocean. This has a global impact on weather and temperatures, and is one of the key reasons why this year does not figure as highly as 2010 in the rankings.”

He added that the Met Office stood by a previous prediction that half the years in this decade would be warmer globally than 1998, the warmest year to date.

Phil Jones, director of the Climatic Research Unit at the University of East Anglia, which worked with the Met Office on the figures, said that the records provided “overwhelming” evidence that the climate has warmed, but that not every year would be warmer than the last.

There is a great deal of misrepresentation in this article. Somehow its twisted logic concludes that even as 2011 turns out to be a rather cool year, as it admits probably the 11th warmest on record taking us back to the temperatures in the 1990’s before the recent warmest decade on record, somehow the world’s temperature continues to rise as expected.

Read entire article

Mervyn King says eurozone crisis has cost UK up to �15bn

Tue, 29 Nov 2011 17:39:25 GMT

• 29 NOV 2011

The eurozone sovereign debt crisis has cost the UK almost £15bn in lost economic activity, according to the Governor of the Bank of England.

By Philip Aldrick | The Telegraph

Asked by the Treasury Select Committee (TSC) to estimate the damage caused to the UK by ongoing problems in the single currency area, Sir Mervyn King said the "bulk" of the Bank's growth forecast downgrade in the past three months of "over one percentage point" could be attributed to the crisis. A percentage point of growth is equivalent to about £15bn.

Andrew Tyrie, chairman of the TSC, said the Governor's comments "made clear that the bulk of loss of economic growth is attributable to eurozone instability". He added: "This reinforces the need to re-orientate exports away from a weak European market to stronger demand in emerging markets."

The Bank cut its growth forecast for 2012 from 2.2pc to 0.9pc in this month's Inflation Report.

Sir Mervyn said: "Growth has been revised down by over one percentage point. The bulk of that can be attributed directly or indirectly to the changing in perception of the circumstances in the euro area – directly through exports from the UK to the eurozone, indirectly through lower asset prices and lower wealth and funding costs to our banks."

Read entire article

See also:
Bank of England governor tells Britain to brace for devastating financial crisis as OECD warns country is facing double dip recession (Mail Online)

Mervyn King: Some painful adjustments need to be made irrespective of eurozone crisis outcome

Tue, 29 Nov 2011 17:38:02 GMT

• 29 NOV 2011

Sky News

Youtube.com

Europe`s shrinking money supply flashes slump warning

Tue, 29 Nov 2011 17:37:07 GMT

• 29 NOV 2011

All key measures of the money supply in the eurozone contracted in October with drastic falls across parts of southern Europe, raising the risk of severe recession over coming months.

By Ambrose Evans-Pritchard | The Telegraph

The three main gauges – M1, M2, and M3 – have each begun to decline in absolute terms after slowing sharply over the Autumn.

The broad M3 measure tracked closely by the European Central Bank as an early warning indicator shrank last month by €59bn to €9.78 trillion, a sign that Europe's long-feared credit squeeze is underway as banks retrench to meet tougher capital requirements.

"This is very worrying," said Tim Congdon from International Monetary Research. "What it shows is that the implosion of the banking system on the periphery is now outweighing any growth left in the core. We are seeing the destruction of money and it is a clear warning of serious trouble over the next six months."

"This is the first sign of an emerging credit crunch," said James Nixon from Societe Generale. Banks cut their balance sheets by €79bn in October, while mortage lending saw the biggest drop since December 2008.

Simon Ward from Henderson Global Investors said "narrow" M1 money – which includes cash and overnight deposits, and signals short-term spending plans – shows an alarming split between North and South.

Read entire article

OECD calls for urgent EU action, warns of credit crunch

Tue, 29 Nov 2011 17:35:57 GMT

• 29 NOV 2011

By Leigh Phillips | EUobserver

BRUSSELS - A bleak assessment from the Organisation for Economic Co-operation and Development (OECD) on Monday (28 November) warned that the eurozone crisis threatens the globe with a serious recession if left unresolved.

"The euro area crisis remains the key risk to the world economy," the Paris-based economic think-tank said in its biennial report, adding that the eurozone debt train crash could result in global liquidity seizing up.

"If not addressed, recent contagion to countries thought to have relatively solid public finances could massively escalate economic disruption. Pressures on bank funding and balance sheets increase the risk of a credit crunch." 

The body cut its projections for growth across all OECD or developed countries from 2.3 percent in its last report to 1.6 percent in 2012, while EU states dropped in its estimations from two percent to 0.2 percent for next year.

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Pressure mounts as Eurogroup gathers

Tue, 29 Nov 2011 17:35:03 GMT

• 29 NOV 2011

EurActiv

Eurozone finance ministers are to agree today (29 November) the details of bolstering their bailout fund to help prevent contagion in bond markets, under pressure from the United States and ratings agencies to staunch a two-year-old debt crisis.

Documents obtained by Reuters on Sunday showed the detailed guidelines for the European Financial Stability Facility (EFSF) were ready for approval of the Eurogroup (see background), opening the way for new operations and multiplying the fund's effective size.

The documents spell out rules for EFSF intervention on the primary and secondary bond markets, for extending precautionary credit lines to governments, leveraging its firepower and its investment and funding strategies.

"I would expect we will be in a position to approve the guidelines at a political level," a eurozone official involved in the preparations for the ministers' meeting said.

The EFSF guidelines will clear the way for the €440 billion facility to attract cash from private and public investors to its co-investment funds in coming weeks.

Read entire article

European Central Bank Keeps a Lid on Bond Buys

Tue, 29 Nov 2011 17:34:06 GMT

• 29 NOV 2011

ECB's Approach Adds to Pressure on Euro-Zone Governments

By Brian Blackstone | WSJ

FRANKFURT—The European Central Bank has showed no sign of abandoning its conservative approach to buying government bonds in recent days, keeping the pressure on euro-zone governments to take the lead in stemming the region's debt crisis.

Euro-zone governments are privately—and sometimes publicly—clamoring for the ECB to intervene massively in financial markets and stop the rise in some governments' borrowing costs to ruinous levels. But bank officials gave no hint Monday of an imminent escalation of its limited bond purchases, despite heightened fears that time is running out for the euro zone to avoid a meltdown of its sovereign debt markets that could tear Europe's single currency apart.

The central bank purchased €8.6 billion ($11.5 billion) in bonds last week, the largest amount in three weeks but well below what many policy makers say is necessary to calm markets.

"The ECB should buy bonds and set a limit to yields, or a floor to bond value, so that markets know there's a counterparty ready to trade at that level," said Pier Carlo Padoan, chief economist of the Organization for Economic Cooperation and Development.

The Paris-based OECD, a club of developed and nearly developed countries, said Monday that it expects a "mild recession" in the euro zone. It called the euro-zone debt crisis "the key risk to the world economy" that could "massively escalate economic disruption" if not resolved.

Read entire article

Markets rebound on tighter eurozone fiscal union plan

Tue, 29 Nov 2011 17:33:11 GMT

• 29 NOV 2011

Plans for greater fiscal union in the eurozone buoyed markets as investors dared to hope that leaders are nearing radical action to solve the debt crisis.

By Emma Rowley | The Telegraph

The FTSE 100 climbed 2.9pc to close at 5,312.76 on reports that Germany and France want to fast-track a "stability union", which would involve much tighter oversight of euro members' finances. France's CAC 40 gained 5.5pc and Germany's DAX 4.6pc.

Paris and Berlin are prepared to pursue a separate agreement outside the EU treaty in order to hurry attempts to enforce fiscal discipline, according to EU officials. The goal is to calm markets before hundreds of billions of euro government debt must be refinanced early next year.

However, Finland and Luxembourg spoke out against the idea of the treaty being sidelined.

Berlin denied reports it is working on issuing joint "elite" bonds with its five fellow eurozone members who share a top-notch "AAA" credit rating, in a plan to prop up debt-laden euro states.

The International Monetary Fund likewise rebuffed speculation it will offer Italy a €600bn (£516bn) lifeline, but the prospect still cheered investors. "It [the denial] hasn't dented market sentiment – no smoke without fire, hey?" said Katherine Brooks, research director at Forex.com.

Read entire article

See also:
US working to resolve euro crisis, Obama tells summit (Irish Times)

German Constitutional Court at Risk of Losing Power to Rule on EU Matters

Tue, 29 Nov 2011 17:32:00 GMT

• 29 NOV 2011

Some see Germany's Federal Constitutional Court as as a guardian of democracy in the euro crisis, others see it as an obstacle to rescuing the currency. Now members of Chancellor Merkel's ruling conservatives want to lessen its power by amending the constitution -- to remove its jurisdiction over European issues.

By Dietmar Hipp | Der Spiegel

German Federal Constitutional Court judge Udo Di Fabio only has a few weeks to go before he retires on Dec. 19. The former governor of the western state of Saarland, Peter Müller, was elected as his successor by the Bundesrat, Germany's upper legislative chamber representing the interest of states, last Friday.

But before he leaves, di Fabio, responsible for European issues at Germany's highest court, will have to finalize two sensitive rulings. His panel of judges will deliberate on Tuesday and Wednesday this week on two complaints submitted by the Bundestag, the federal parliament, affecting the relationship between the parliament and the government.
The judges must decide how heavily members of parliament are to be involved when the government once again tries to rescue Europe.

But behind the scenes, much more is at stake: the loss of power of the Constitutional Court in itself. The government and the court are locked in one of their biggest power struggles to date. One judge at the court described it as a "latent constitutional crisis." The government, he said, was trying to free itself of the restraints imposed on it by the constitution, and by the court.

The president of the court, Andreas Vosskühle expressed it a little more cautiously. The perception of his court was at present, he said "ambivalent in parts."

On the one hand, the court had been credited for ensuring that European unity remained on a secure legal and democratic footing, he said. But on the other hand, it "is seen by some as an obstacle in overcoming the current crisis."

Court May Lose Power to Rule on EU Matters

As a result, efforts underway in Berlin to change the constitution are being viewed with mixed feelings in Karlsruhe, where the court is located -- because they are aimed at opening up greater room for maneuver in future dealings with the court.

Read entire article

Belgium faces uphill task as it pays record interest rate to sell debt

Tue, 29 Nov 2011 17:30:58 GMT

• 29 NOV 2011

By Arthur Beesley | Irish Times

THE TASK facing incoming Belgian prime minister Elio Di Rupo was underlined yesterday as the country paid a record interest rate to sell debt, an auction that followed a downgrade by rating agency Standard Poor’s.

Almost 18 months after an inconclusive election, Mr Di Rupo struck a deal at the weekend on a €11.3 billion austerity budget for 2012 and other cost-saving measures to follow in 2013 and 2014.

The weekend deal, which came one day after the SP downgrade, finally clears the way for Mr Di Rupo, leader of Belgium’s French-speaking socialists in the southern part of the country, to start forming his cabinet.

At a time of tumult in the euro zone, the political stalemate in the country has undermined confidence in Belgian debt.

Read entire article

EU safety rules costly and pointless, experts tell ministers

Tue, 29 Nov 2011 17:29:58 GMT

• 29 NOV 2011

European Union health and safety laws are imposing “unnecessary costs” on British businesses “without obvious benefits,” a Government study has concluded.

By James Kirkup | The Telegraph

The review, backed by ministers, has called for the Government to lead a new drive within the EU to limit European workplace rules.

However, the study by Prof Ragnar Löfstedt, of King’s College London, also warns that ministers’ scope for changing health and safety regulation is “severely limited” by the requirement to implement EU laws.

Prof Löfstedt, an expert on risk communication and management, was commissioned by Chris Grayling, the Employment Minister, to look for ways that regulations on workplace safety could be refined to reduce the burden on employers.

His review was published yesterday and, as The Daily Telegraph revealed on Saturday, called for new limits to stop companies being held liable for accidents caused by the irresponsible action of employees.

Prof Löfstedt found that many EU rules were sensible and could be in place even if Britain was not in the union.

Read entire article

UK net migration at record heights despite government`s measures

Tue, 29 Nov 2011 17:28:52 GMT

• 29 NOV 2011

UK Visa Bureau

The UK's coalition government appears to be failing to meet their pledge to reduce net migration into Britain to "tens of thousands", as new UK immigration figures reveals migration to Britain in the 12 months to March 2011 is the highest on record

The research, conducted by the Office for National Statistics, shows that although net UK immigration fell slightly, there was also a fall in emigration, with the number of Britons departing the UK to live overseas at its lowest level in 13 years.

Figures also indicate a fall in the number of illegal entrants and failed asylum seekers who either leave voluntarily or are deported. The number was down by 13% in the third quarter of 2011 compared to the same period last year. At the same time, applications for asylum increased to the highest level in two years.

The Home Office has claimed it is too early to see the true impact of measures designed to cut migration to the UK and that more recent UK visa figures indicate the trend is beginning to reverse. However, the freedom of movement for citizens within the European Union is beyond the government’s ability to influence, causing a headache for ministers seeking to honour the pledge to drastically reduce the number of incoming migrants.

While Immigration Minister Damian Green claims the net migration figures are “encouraging”, the minister chose not to comment specifically on the overall increase. Speaking for the UK Independence Party, Gerard Batten MEP said: “The Government has to own up. It hasn't a clue how to deal with the problem, and it has to be honest that whilst our migration and asylum rules are set in Brussels it will never have the power to control it."

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