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The EU has launched an Excessive Debt Proceeding against France. It won’t stop there.

Debt Proceedings

Please note the EU Rebukes France, Italy and Others Over Excessive Debt.

The assessments of the 27 EU states’ budgets and economies will be published by the European Commission on Wednesday, with France, Italy and Belgium among the member states to be reprimanded over their accumulated excessive new debt.

The Commission said it was satisfied that “the opening of a deficit-based excessive deficit procedure is warranted” in the case of seven countries. The group also included Hungary, Malta, Poland and Slovakia.

The EU suspended debt and deficit regulations to help countries cope with the economic fallout of the COVID-19 pandemic and Russia’s invasion of Ukraine.

The rules are now back in place and now any EU country going over debt and deficit limits run the risk of legal action.

EU’s Golden Rules

According to the reformed rules, an EU member state’s debt may not exceed 60% of gross domestic product (GDP).

Highly indebted EU countries with debt levels over 90% of GDP have to reduce their debt ratio by one percentage point annually, countries

Additionally, the general government deficit — the shortfall between government revenue and spending — must be kept below 3%.

According to the commission’s economic forecast, France is at -5.5%, Italy is at -4.4% and Belgium is at -4.4% and will breach this deficit limit in 2024.

Austria, Finland, Estonia, Hungary, Malta, Poland, Romania, and Slovakia also have deficits that are too high according to the rules. Spain is at exactly -3.0%.

Snap Elections

French President Emmanuel Macron was hammered in the European Parliamentary elections as expected in this corner, and generally elsewhere.

Winners: The Far Right

Losers: Renew Europe (Macron), and the Greens.

The response by Macron caught everyone off guard. He dissolved parliament and called for snap elections.

…click on the above to read the rest of the article…

EU Investigates Meta in Crackdown on Alleged “Rabbit Hole” Effects, Wants It To Push Digital ID

May 19, 2024

EU Investigates Meta in Crackdown on Alleged “Rabbit Hole” Effects, Wants It To Push Digital ID

There was a lot of talk about the EU’s Digital Services Act (DSA) while it was drafted and during the typical-of-the-bloc tortuous process of adoption, but now that it’s been here for a while, we’ve been getting a sense of how it is being put to use.

Utilizing the European digital ID wallet to carry out age verification is just one of the fever pitch ideas here. And EU bureaucrats are trying to make sure that these controversial policies are presented as perfectly in line with how DSA was originally pitched.

The regulation was slammed by opponents as in reality a sweeping online censorship law hiding behind focused, and noble, declarations that its goal was to protect children’s well-being, fight disinformation, etc.

The cold hard reality is that trying to (further) turn the screw – any which way they can – on platforms with the most reach and most influence ahead of an election is simply something that those in power, whether it’s the US or the EU, don’t seem to be able to resist.

Here’s the European Commission (who’s current president is actively campaigning to get reappointed in the wake of next month’s European Parliament elections) opening an investigation into Meta on suspicion its flagship platforms, Facebook and Instagram, create “addictive behavior among children and damage mental health.”

After all, exerting a bit more pressure on social media just before an election never hurt anybody. /s

Thierry Breton, an EU commissioner who made a name for himself as a proponent of all sorts of online speech restrictions during the current, soon to expire European Commission mandate, reared his head again here:

…click on the above link to read the rest of the article…

EU Prepares to Tighten Screws on Russian LNG Imports

April 26, 2024

EU Prepares to Tighten Screws on Russian LNG Imports

In a move that could reshape Europe’s energy landscape, the European Commission is poised to propose new sanctions targeting Russian liquefied natural gas (LNG) imports. According to Reuters sources close to the matter, the proposed measures will include a ban on shipments within the EU and sanctions on three Russian LNG projects.

The European Commission’s decision comes amid growing concerns over Europe’s reliance on Russian energy, particularly in the wake of the ongoing conflict in Ukraine. While the EU imposed a ban on Russian seaborne oil imports earlier this year, it has thus far refrained from taking similar action against LNG imports. However, with imports of Russian LNG surging since the start of the war, accounting for around 15% of EU gas supply, pressure has been mounting on Brussels to act.

The proposed ban on trans-shipments within the EU is aimed at preventing the diversion of Russian LNG cargoes to other destinations. Currently, Belgium, France, and Spain are the largest importers of Russian LNG, with many of these imports being re-exported to other countries, including China. By imposing restrictions on trans-shipments, the EU hopes to ensure that Russian LNG does not find its way to markets outside of Europe.

In addition to the ban on trans-shipments, the European Commission is also considering sanctions on three Russian LNG projects – Arctic LNG 2, Ust Luga, and Murmansk. While the details of these sanctions are still being discussed, they are expected to target projects that are not yet operational, further complicating Russia’s efforts to expand its LNG exports.

The move by the European Commission reflects growing unease within the EU over its dependence on Russian energy. With tensions between Russia and the West showing no signs of abating…

…click on the above link to read the rest of the article…

Cities are often 10-15 °C hotter than their rural surroundings

April 24, 2024

A recent global study conducted by the Joint Research Centre looks at the difference between surface temperatures of urban areas and their neighbouring rural areas in summer.

Worldwide, more than half of the people live in cities, and the share of city dwellers is projected to grow further. Cities often suffer from ‘heat islands’, the phenomenon of temperatures being higher within cities than in neighbouring rural zones. This amplifies the effect of heatwaves in cities and increases the risk to human health.

Scientists at the European Commission’s Joint Research Centre examined the difference between land surface temperatures in urban areas with a population over 50,000 people and in their rural surroundings in summer between 2003 and 2020.

Working with satellite data, scientists measured that surface temperatures in cities were sometimes up to 10-15°C higher than in their rural surroundings. The study also estimated that the temperature in extreme heat islands in cities around the world has risen on average by 1°C in since 2003.

The global scale of the study and high-resolution of the spatial analysis make it possible to compare cities in different climate zones and even different parts within megacities.

Hotspots and cooler areas within global megacities

Across global megacities, such as Tokyo, New York, Paris and London, the study observed a very high intra-city variability in temperature. Hotspots are often found in industrial areas, where waste heat, the use of dark construction material and absence of vegetation can result in very high land surface temperatures. For example, in Paris hotspots are found east of Saint-Denis and near Chevilly Larue, around large industrial complexes.

The study highlights that slums can also form hotspots of heat due to their chaotic, dense and unregulated urbanisation. Intense heat exposure, combined with poverty, poor housing conditions and reduced access to cooling options poses serious health threats to people.

…click on the above link to read the rest of the article…

Poland’s central bank predicts double-digit inflation until 2024

November 22, 2022

Poland’s central bank predicts double-digit inflation until 2024

(Natural News) The National Bank of Poland (NBP) has predicted that the Central European nation will be saddled with high inflation for the next two years.

According to the NBP, yearly inflation will hit 14.5 percent in 2022 and drop to 13.1 percent in 2023. Single-digit rates will only begin by 2024, when the country’s inflation is projected to decrease to 5.9 percent. The central bank’s inflation target of 2.5 percent is only expected to be accomplished in 2025.

Figures from Statistics Poland (GUS) showed that inflation in the country hit 17.2 percent in September, and increased to 17.9 percent in October.

The NBP also forecast a 0.7 percent growth in Poland’s gross domestic product (GDP) for 2022. Meanwhile, the GUS predicts a 1.4 percent GDP growth in 2023 and a flat two percent GDP growth in 2024.

Amid all these projections, economic activity in Poland is about to weaken because of the heightened uncertainty, a tightening of financing settings and the economy’s adjustment to higher commodity costs, according to the European Commission’s latest economic forecast.

“The Polish economy continued its upward trajectory in the first half of 2022, although a marked drop in inventories and investment led to a contraction in real GDP in the second quarter. Data on the real economy suggest that growth was at full steam in the third quarter, with industrial output and retail sales expanding at a solid pace. As a result, despite a deterioration in confidence indicators, the second half of the year is expected to see a relatively good performance, leaving annual real GDP growth in 2022 at a projected 4.0 percent,” the European Commission (EC) report said.

Increase in inflation due to rise in food and energy prices

As stated by the NBP’s November report on inflation, the present increase can be largely attributed to the rise in food and energy prices brought by the war in Ukraine and the enormous increase in money printing by global central banks during the Wuhan coronavirus (COVID-19) pandemic…

…click on the above link to read the rest…

Debt is the Hidden Issue in The European Elections

May 23, 2019

Debt is the Hidden Issue in The European Elections

The citizens of the European Union are called to vote this week for the European Parliament. It is not a real parliament, and it lacks prospects for becoming one, since all important decisions are taken by the unelected heads of the European Commission and the European Central Bank, dubbed “the worst-run Central Bank in the world”.

These elections capture however the general mood of exasperation with current policies. Conservative and extreme Right parties will rise, reflecting widespread scepticism as to the economic course of the EU and its lack of benefits for the common people. The mainstream Left unfortunately neglects these issues, and it will pay the price.

The conservatives generally blame the weak and scapegoat the refugees, the immigrants, the women, and the poor, while promising to save the middle class from the onslaught of big capital. They create false hopes of easy reform, and they never denounce the exploitation inherent in today’s system. History shows however that small owners manage to resist financial stranglehold only when they make common cause with workers and the poor, and they are not afraid to fight.

The economy looks ever more frail. In all, the Eurozone’s nominal GDP stagnates, shrinking 12% in its six largest economies in 2008-2017. The European Union remains indifferent to the peoples’ needs, while it caters for every whim of the corporations. Even so, Quantitative Easing and other crony capitalist schemes promoted by the ECB, such as the Private-Public Partnerships (PPPs) or the new Targeted Long-term Refinancing Operations (TLTRO-III) cannot save the day.

…click on the above link to read the rest of the article…

Europe: More Nifty Censorship from the EU

January 12, 2019

Europe: More Nifty Censorship from the EU

Sadly, the main victims of many of the abuses that the European Commission seemingly wishes to silence are often Muslims, often women and children, and often too scared to speak out.
One of the foremost tools used by the EU is its “Code of conduct on countering illegal hate speech online,” including hate speech against Muslims. By signing up to the Code, the major technology and social media corporations have committed themselves to censoring the internet on behalf of the EU.
Apparently, it is no longer enough, as “each offense to a religion” is now “an offense to all”, that members of one religion are offended. Now, it seems, according to the OSCE, every European is supposed to be offended in solidarity with them, as well.

On December 3, the European Commission hosted a “high-level conference to address intolerance, hate speech and discrimination affecting Muslims in the EU”. According to the EU press release, “By sharing good practices, the aim of the event is to identify key actions at all levels to address intolerance, racism and discrimination against Muslims in the coming years”. The event brought together over 100 “representatives of national authorities, civil society, academia, the religious community, EU agencies and international organisations.”

There is, according to the European Commission, a “need for action”, as “unfavourable views of Muslims appear to have surged in the past few years”. The European Commission does not, of course, offer up the possibility that such unfavorable views might be due to the fact that an overwhelming majority of all terrorist attacks on European soil in recent years have been committed primarily by one group, among several other signs of transformation on the European continent. Examples include preaching jihad against “infidels” in mosques; the rise of rape, as well as rape grooming gangs —

…click on the above link to read the rest of the article…

Salvini Threatens To Collapse Italy’s Government If Deficit Target Is Changed

November 24, 2018

Salvini Threatens To Collapse Italy’s Government If Deficit Target Is Changed

Italy’s Deputy Prime Minister Matteo Salvini escalated the ongoing standoff between the EU and Italy, saying he would bring down the government if the coalition’s budget deficit target was changed.

The remarks by Salvini, Italy’s de facto leader who has been enjoying a steady climb in public opinion polls as he has continued his hardline negotiating approach with the European establishment, were quoted by newspaper La Repubblica hours before the country’s prime minister, Giuseppe Conte, was scheduled to make an attempt in Brussels to convince the European Commission that the country’s budget is sound. That, as is widely known by now, include the 2.4% deficit goal for 2019 that has become a lightning rod for Commission objections.

“The 2.4 percent deficit target can’t be touched, otherwise I will bring down the government,” Repubblica quoted Salvini as saying in a telephone call to Conte. The report said Salvini was willing to make only minor concessions in next year’s spending plan.

For Savlini the threat of new elections poses little downside risk: according to a recent poll, most Italians view Salvini, the outspoken leader of the anti-immigrant League party, as the real head of government, with just one in six casting Prime Minister Giuseppe Conte in that role. The monthly survey in La Repubblica newspaper showed 58% considered Salvini the leader, while 16 percent picked Conte and 14 percent chose Luigi Di Maio, who heads the anti-establishment 5-Star Movement and is the co-head of the coalition government. Salvini and Di Maio are deputy prime ministers in Conte’s coalition government, which took office in June and which the Demos poll found that 58 percent of respondents support.

…click on the above link to read the rest of the article…

In Unprecedented Clash, EU Rejects Italy’s Budget, Paves Way For Sanctions

November 21, 2018

In Unprecedented Clash, EU Rejects Italy’s Budget, Paves Way For Sanctions

Yields on Italian government bonds fell on Wednesday morning as the euro climbed following reports that Italy’s ruling coalition might be open to reviewing its budget plan. Though the Italian government swiftly denied the reports about being open to changes in its plan, the moves in the euro and yields persisted, as analysts said they didn’t appear to be news driven.

The spread between the 10-year BTP and 10-year German bund tightened to tightening as much as 16 basis points to 309 basis points.

Italian bank shares also eased off their highs of the session after the denials, but remained 2% higher on the day after sinking to two-year lows on Tuesday.

And in other signs that the confrontation between Italy and Europe is heading toward a precipice, the European Union confirmed Wednesday morning that it would officially reject Italy’s budget plan, an unprecedented move that will likely lead to billions of euros in fines being levied against Rome for violating the bloc’s budget rules.

The Italian government calls for an expansion of the country’s budget deficit to 2.4% of GDP to finance tax cuts, expanded pension benefits and other handouts to unemployed and desperate Italians.

“Our analysis today suggests that the debt doesn’t respect our budget rules. We conclude that opening a proceeding against excessive spending based n the debt is then justified,” the EU said, according to ANSA.

The Italian plan represents a “particularly grave disrespect” of EU budget rules, particularly the recommendation from the meeting of EU ecofin ministers last July 13. The statement confirms Brussels’ previous analysis.

European Commission Vice President Valdis Dombrovskis said Italy’s aggressive spending would eventually have a negative impact on growth.

…click on the above link to read the rest of the article…

60% Of Italians Think EU Is Bad For Italy

November 17, 2018

60% Of Italians Think EU Is Bad For Italy

If the European Commission does levy billions of fines against the Italian government (or enforce some other punishment), some “60 million Italians will rise up” against the trade bloc – or at least that’s what a clearly frustrated Deputy Prime Minister Matteo Salvini told a group of Italian reporters following reports that the Commission could move to punish Italy as soon as next week.

The Italian people, Salvini added, would never accept those penalties, according to a report in Italy’s ANSA newswire. And according to the latest polling, there’s more than a little truth to that.

As the 27 EU members who aren’t the UK brace for the inevitable fallout for what increasingly looks to be a bumpy Brexit, one shocking poll revealed that 60% of Italians feel that their country has been mistreated by the European Union. If accurate, that’s several percentage points higher than the percentage of Britons who voted to leave the EU back in 2016.

According to Express, pollsters Coldiretti and Ixè found that some 43% of Italians believe that Brussels’ economic policies were designed by stronger economies with little concern for weaker EU members. And fittingly enough, one of Italians’ biggest concerns about the EU and its unfair treatment of Italy stems from policies related to agriculture.

Two-thirds of Italians believe that the EU’s policies on food damage products made in Italy and only 10 percent believe the Italian agri-food sector is benefitting from EU choices.

A spokesperson for Coldiretti said: “The clear majority of Italians therefore believe that community regulation and the recent choices regarding international treaties are not adequate to guarantee quality, safety but also respect for the gastronomical traditions of Italy.”

But the dissatisfaction runs deeper than food.

…click on the above link to read the rest of the article…

Beware Fireworks As Italy’s Budget Resubmission Deadline Looms

November 13, 2018

Beware Fireworks As Italy’s Budget Resubmission Deadline Looms

With stocks in Europe attempting a modest relief rally after yesterday’s sharp selloff, traders remain on edge over political developments as today is the deadline for Italy’s cabinet to resubmit their budget proposal after the EC requested a new fiscal plan. Virtually nobody expects any material changes, especially with Il Sole reporting this morning that Italy will maintain its 2019 deficit target at 2.4% of GDP and could alter the 2019 GDP growth rate of 1.5%

When looking at next steps, Deutsche Bank economists yesterday concluded that as contagion has been relatively limited for now, the commission will continue to adopt a tough stance on Italy, and it now seems inevitable they will recommend an Excessive Deficit Procedure (EDP) in the next few weeks.

And speaking of Deutsche Bank, the German lender’s Head of Research and Chief Economist David Folkerts-Landau penned a hard hitting Financial Times op-ed on the Italian situation, whose argument is that Europe must cut a grand bargain with Italy and that another costly sovereign debt crisis is inevitable unless the confrontational approach of the EC gives way to greater co-operation. According to Landau, Italy has actually been a frugal member of the single currency with a cumulative primary surplus every year outside of the GFC. However, these surpluses have simply helped finance the interest on the legacy debt and debt/GDP has still climbed. Meanwhile, the associated spending cuts and austerity required to run a primary surplus have lowered the standard of living for the population and led us to the political situation we find ourselves at today. What is his proposal?

The only viable option left is to reduce Italy’s debt service payments. This would create room to increase spending to modernise its economy without increasing the deficit and debt.

…click on the above link to read the rest of the article…

Fitch Warns Italy’s Government May Not Survive Amid Calls For A Vote Of Confidence

November 6, 2018

Fitch Warns Italy’s Government May Not Survive Amid Calls For A Vote Of Confidence

Update: Picking a perfect moment to prove Fitch’s point, Bloomberg reports that the Italian government may call a vote of confidence in the Senate on the migration measures. This would aim to strong-arm Five Star dissenters who face expulsion from the party if they vote against the government.

Additionally, Five Star and the League are also at loggerheads in the lower house of parliament over Five Star’s demand in an anti-corruption bill to scrap time limits on how long people can be prosecuted after an initial trial. Salvini has said the government must “avoid trials that last forever, also for the innocent, which would be a defeat for everyone.”

It appears that if the internal bickering within Italy’s “coalition” government continues, the EU may just opt to wait to discuss the Italian deficit with whatever government comes as a replacement.

* * *

While European bond traders have been focused on the escalating standoff between Italy and Brussels over Italy’s budget-busting deficit proposal, which culminated this morning with EU’s Dombrovskis warning that the European Commission is considering a sanction procedure against Italy if the budget does not change – even as Italy has sternly refused to change the budget – this morning the head of Fitch’s sovereign ratings, James McCormack, warned that uncertainty involving Italy’s coalition government is as great a risk for BTP investors as the budget for the simple reason that the government may not survive as its members are “too different.”

Speaking on Bloomberg TV, the Fitch strategist said that there are not many things that the coalition partners agree on, and that raises questions about the government’s survival.

“We are not convinced that this coalition government is actually going to survive. It has very different coalition partners” and there are “not many things that they agree on”, McCormack said.

…click on the above link to read the rest of the article…

Why’s France so Worried about Italy’s Showdown with Brussels?

October 31, 2018

Why’s France so Worried about Italy’s Showdown with Brussels?

The French megabanks are on the hook.

France was just served with a stark reminder of an inconvenient truth: €277 billion of Italian government debt — the equivalent of 14% of French GDP — is owed to French banks. Given that Italy’s government is currently locked in an existential blinking match with both the European Commission and the ECB over its budget plan for 2019, this could be a big problem for France.

On Friday, France’s finance minister, Bruno Le Maire, urged the commission to “reach out to Italy” after rejecting the country’s draft 2019 budget for breaking EU rules on public spending. Le Maire also conceded that while contagion in the Eurozone was definitely contained, the Eurozone “is not sufficiently armed to face a new economic or financial crisis.” As Maire well knows, a full-blown financial crisis in Italy would eventually spread to France’s economy, with French banks serving as the main transmission mechanism.

France isn’t the only Eurozone nation with unhealthy levels of exposure to Italian debt, although it is far and away the most exposed. According to the Bank of International Settlements, German lenders have €79 billion worth of exposure to Italian debt and Spanish lenders, €69 billion. In other words, taken together, the financial sectors of the largest, second largest and fourth largest economies in the Eurozone — Germany, France and Spain — hold over €415 billion of Italian debt on their balance sheets.

While the exposure of German lenders to Italian debt has waned over the last few years, that of French lenders has actually grown, belying the ECB’s long-held claim that its QE program would help reduce the level of interdependence between European sovereigns and banks.

…click on the above link to read the rest of the article…

French FinMin: The Euro Zone Is Not Prepared To Face A New Crisis

October 29, 2018

French FinMin: The Euro Zone Is Not Prepared To Face A New Crisis

Europe finds itself at a troubling crossroads: while on one hand the official narrative emanating from Brussels and Berlin (and, of course, the ECB) is that there is no risk of contagion from Italy’s budget crisis in the European Union, on the other hand the euro zone is “not prepared enough to face a new economic crisis”, French Finance Minister Bruno Le Maire told daily Le Parisien on Sunday.

“We do not see any contagion in Europe. The European Commission has reached out to Italy, I hope Italy will seize this hand,” he said in an interview.

“But is the eurozone sufficiently armed to face a new economic or financial crisis? My answer is no. It is urgent to do what we have proposed to our partners in order to have a solid banking union and a euro zone investment budget.”

Le Maire’s remarks come just days after the European Commission rejected Italy’s draft 2019 budget earlier this week for breaking EU rules on public spending, and asked Rome to submit a new one within three weeks or face disciplinary action. And while Brussels officials said that Rome’s “unprecedented” standoff with Brussels seems certain to delay the reform process and probably dilute it for good, Italy has remained defiant and has repeatedly said it would not budge on its target deficit at 2.4% of GDP.

The standoff between Italy and the EU, and concerns about who will buy Italian debt after the ECB ends its QE at the end of the year, has sent Italian yields soaring to the highest level in nearly 5 years.

…click on the above link to read the rest of the article…

Europe’s self-destructive war on Italy

October 29, 2018

Europe’s self-destructive war on Italy

Illustrated | SERGEI CHIRIKOV/AFP/Getty Images, ANDREAS SOLARO/AFP/Getty Images, ALBERTO PIZZOLI/AFP/Getty Images

Italy and the European Union are headed for a throwdown. Italy’s new government wants to help its citizens following years of grinding economic immiseration. And the EU is hellbent on stopping them, all in the name of neoliberal budget discipline.

It’s an astonishing spectacle, one that exposes the bottomless stupidity and self-destructive high-handedness of EU leadership.

Italy was hit hard by the global economic collapse of 2008 and the ensuing eurozone crisis. Italy’s unemployment rate peaked at 13 percent, and after years of suffering under EU-imposed austerity measures, Italy’s unemployment is still hovering around 10 percent. Not surprisingly, Italians finally got fed up with this state of affairs; in June, they revolted by electing an oddball coalition of left-wing and right-wing populists to run their government.

That new government promptly proposed an ambitious national budget, including a guaranteed minimum income, cancellation of planned cuts to Italy’s public pension system, a bevy of tax cuts, and more. Needless to say, this massive spending package, along with reductions in tax revenue, would require bigger deficits. Italy projects a gap between spending and tax revenues of 2.4 percent of GDP in 2019.

Why do this? Quite simply, the Italian government wants to cut poverty and offer its citizens some help as their economy continues to trudge along. But it’s also sound macroeconomic policy: With unemployment at 10 percent and GDP falling — from almost $2.4 trillion in 2008 to $1.9 trillion today — Italy is clearly suffering from a big shortfall in aggregate demand. The way to fix that is for the government to spend more than it taxes; specifically, to spend on programs that get money into the hands of consumers. Italians would subsequently spend that extra money, which in turn would create more jobs.

The European Union’s technocratic overlords are not in favor of this plan, to put it mildly.

…click on the above link to read the rest of the article…

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