Britain-Brexit: The Messier Brexit Gets, the Better Europe Looks - by Steven Erlanger

After Britain voted to leave the European Union in June 2016, its leaders were in a panic. It was mired in a migration crisis and anti-Europe, populist forces were gaining. Britain’s decision seemed to herald the start of a great unraveling.

Two years later, as Britain’s exit from the bloc, or Brexit, looks increasingly messy and self-destructive, there is a growing sense, even in the populist corners of the continent, that if this is what leaving looks like, no, thank you.

Nothing has brought the European Union together quite as much as Britain’s chaotic breakdown. “A country is leaving and has gotten itself into a right old mess, making itself ridiculous to its European partners,” said Rosa Balfour, a senior fellow at the German Marshall Fund in Brussels.

The challenges facing Europe — low growth, eurozone governance, migration, debt, border security and populism — have by no means gone away. Nor has Europe found consensus on how to deal with them.

The very prospect of losing a country like Britain, considered so pragmatic and important in the world, is deeply wounding for the EU.

But on the whole, while all parties will suffer with Brexit, particularly in the event of a so-called “no deal” departure, analysts tend to agree that the European Union, which will remain the world’s largest market, is likely to fare far better than Britain.

 Read more at :The Messier Brexit Gets, the Better Europe Looks - The New York Times: Steven Erlanger

Eurozone: The battle over the eurozone's future - by Duncan Weldon

While a Grexit has been avoided in the short term, the medium- to longer-term risk remains.

But in many ways the last few weeks in Greece have been the start of a bigger battle, a battle on what the eurozone of the future will look like.

Few now doubt that the institutional architecture of the zone is flawed. A currency union without a fiscal union was always vulnerable to these sort of shocks. And, perhaps more crucially, a currency union in which the banking system is still predominantly national, rather than European, was always likely to run into problems.

In a more ideal world - in a situation in which Greek banks were constrained and unable to extent credit - French, German and other lenders would have stepped into the breach.

It's hard to avoid the thought that the politics of European integration ran ahead of the economics of the underlying reality.

The last few weeks have exposed a sharp Franco-German divide. On one level, this is ideological. For France the euro is irreversible, the culmination of decades of integration. But the German view differs. They see the single currency as an agreed set of rules and behaviours and, if someone "breaks" the rules, they can be thrown out.

Their analysis of the underlying economics of the crisis differs, too. The Germans believe the tough fiscal rules agreed in 2012 are the answer to the crisis: legislate that states should be running sound public finances and these sorts of crises won't appear.

In a more ideal world - in a situation in which Greek banks were constrained and unable to extent credit - French, German and other lenders would have stepped into the breach.

It's hard to avoid the thought that the politics of European integration ran ahead of the economics of the underlying reality.

The last few weeks have exposed a sharp Franco-German divide. On one level, this is ideological.

For France the euro is irreversible, the culmination of decades of integration. But the German view differs.

They see the single currency as an agreed set of rules and behaviours and, if someone "breaks" the rules, they can be thrown out.

Their analysis of the underlying economics of the crisis differs, too.

The Germans believe the tough fiscal rules agreed in 2012 are the answer to the crisis: legislate that states should be running sound public finances and these sorts of crises won't appear.

Read more: The battle over the eurozone's future - BBC N

Greece: Eurozone sets Greece tough terms as euro exit looms

Eurozone leaders set Greece brutal take-it-or-leave-it conditions for a desperately needed bailout deal at a summit on Sunday as an exit from the single currency loomed ever larger.

Hawkish Germany pushed for a Greek "time out" from the euro if leftist Prime Minister Alexis Tsipras fails to agree terms for a three-year rescue plan worth up to 86 billion euros ($96 billion).

Athens faces demands to push through new reform laws next week to win a third bailout since 2010, with the government in a tight corner as the cash-starved country's banks look set to run dry in days. 

"There will be no agreement at any price," Merkel said as she arrived for the summit of 19 eurozone leaders, complaining of a loss of trust in Athens and warning of "tough negotiations" ahead.

Read nore: Eurozone sets Greece tough terms as euro exit looms - Yahoo News

Europe's Future Is Federal - by Jean Tirole

Numerous Europeans view Europe as a one-way street: they appreciate its advantages but are little inclined to accept common rules. An increasing number throughout the Union are handing their vote to populist parties – Front National, Syriza, Podemos – that surf on this Eurosceptic wave and rise up against “foreign”- imported constraints.

Embroiled with the Greek crisis, European policymakers will soon have to step back and reflect on the broader issue of the Eurozone’s future. Before envisaging an exit or, on the contrary, more sustained integration, it’s right to reflect upon the consequences of each option.

Oversimplifying, there are three strategies for the Eurozone: a minimalist approach that would see a return to national currencies, while keeping Europe perhaps as a free trade area and retaining a few institutions that have made a real difference such as common competition laws; the current approach based on the Maastricht Treaty of 1992 and its fiscal compact update in 2012; and, finally, the more ambitious version of federalism. My own clear preference is for the federalist version but I’m not at all convinced that Europeans are ready to make it work successfully.

Note EU-Digest:  Federalism is probably the only way to go if Europe does not want to become subservient to the presently ruling superpowers, China, the US, and even Russia. Populism and nationalism is not the way to go, as it has always turned sour in Europe's history. True federalism would certainly require finding another historic shining political star like Mustafa Kemal Ataturk, who has the ability to get the EU reorganized, and all the EU member states moving in the same direction. Let's hope we get blessed soon in finding that "needle in the political haystack" to rescue the EU out of the iron grip of the Wall Steet dominated financial community.

Read more: Europe's Future Is Federal » Social Europe

EU-Digest Poll Shows 80 % Of Those Polled Want Returning EU Jihadists Citizenship Revoked

A recent EU-Digest poll conducted from February 1 through the 18th of March shows that 80% of those polled want returning EU Jihadists Citizenship revoked.

20 % said they wanted them incarnated and prosecuted.

A new EU-Digest poll to last through April 19th. wants your opinion on the question: "Should Greece remain in the Eurozone or not ? "

EU-Digest

EU-Economy: EU selects projects worth 1.3 trillion-euro to revive economy and jobs

The European Union has drawn up a wish list of almost 2,000 projects worth 1.3 trillion euros ($1.59 trillion) for possible inclusion in an investment plan to revive growth and jobs without adding to countries' debts.

Investment has been a casualty of the financial crisis in Europe, tumbling around 20 percent in the euro zone since 2008, according to the European Central Bank.

Following a call by European Commission President Jean-Claude Juncker, EU governments have submitted projects ranging from a new airport terminal in Helsinki to flood defenses in Britain, according to a document seen by Reuters.

"Almost 2,000 projects were identified with a total investment cost of 1,300 billion euros of which 500 billion are to be realized within the next three years,'' said the document, to be discussed by EU finance ministers on Tuesday.

Read more: EU selects projects worth 1.3 trillion-euro to revive economy and jobs

EU: Why Europeans should think Big and think Bold "instead of harnessed by outdated capitalism" by Yanis Varoufakis

After the United States had lost its surpluses, some time in the late 1960s, the system of fixed exchange rates and highly regulated capital movements, which had nurtured capitalism’s Golden Age, was condemned. Its inevitable collapse could not but push the dollar down, release the bankers from their thirty-year-old restraints, and wind back rights and services that labour had wrestled from capital since the war.

In 2008, the pyramids of private money, that Wall Street and the City of London had built on the back of this constant tsunami of capital, crashed and burned. At first, continental Europeans smiled, allowing themselves an ‘I told you so’ moment, directed at the Anglo-saxons who had spent a decade or two sneering at the Continent’s antiquated commitment to manufacturing. Alas, that moment proved very brief. Soon, they realised that their own banks were replete with toxic assets and that their bankers had been allowed to run debts (or ‘leverage’) twice as great as those in the Anglo-sphere. Put simply, Mrs. Thatcher bubble had been surreptitiously exported to Frankfurt, Paris, Rome, Madrid, Brussels etc. As had the ‘model’ of building up competitiveness by squeezing wages until the local economies, behind the glitzy suburbs and the globalised jet set, were in a permanent state of slow-burning recession.

Post-2008, while the United States and Britain sought to bailout the bankers with a combination of taxpayers’ money and quantitative easing that aggressively sought to re-inflated the deflated toxic assets, Europe was making a meal of the same project. Having rid themselves of their central banks, the Eurozone’s politicians did their utmost to shift all the stressed bank assets onto the shoulders of the weakest amongst the taxpayers, thus causing a horrid recession and putting the European Union on a path leading toward certain disintegration.

Nevertheless, and despite the significant differences between Britain and the Eurozone, the broad picture remains the same: The establishment responded to the financial crisis by inflating bank and real estate assets (that were best left alone) and squeezing the majority of the population with soul and income sapping austerity. In short, the Thatcher model on steroids.

Growth is not the issue. The Left understands that there are many things whose growth must be stumped: toxic waste, toxic derivatives, ponzi finance, coal production, consumption that leaves the consumer unfulfilled and the planet worse for ware, etc. No, the issue is eclectic growth in the technologies and goods that contribute to a more successful life on a sustainable planet. The Left has always known that markets are terrible at providing these technologies and goods sustainably, and in a manner that sets prices at a level reflecting their value to humanity. What the Left was never very good at was in the conversion of that gut feeling into workable policy that the beneficiaries of this policy (i.e. the vast majority) would back.

A spectre is haunting Europe. It is the spectre of Bankruptocracy. A curious regime of rule by the bankrupt banks. A remarkable political arrangement in which the greatest extractive power (vis-à-vis other people’s income and achievements) lies in the hands of the bankers in control of the financial institutions with the largest ‘black holes’ on their asset books. It is a regime that quick-marches the majority of innocents into the trap of austerity-driven hardship that serves the guilty few, while Parliament and civil society are held at ransom. While 2008 was meant to raise ‘regulatory standards,’ we now know that nothing of substance has been done to reform finance.

This is not to say that we are anywhere near ready to replace capitalism. Indeed, realism commands us to recognise that, if anything, Bankruptocracy is well and truly in command of the European continent and the only political forces on the march are those of the bigoted, ultra Right. The Left must not err again, as it did in the 1930s, thinking that capitalism’s great crisis will naturally lead to something better. It may very well bring about the most hideous dystopia. This is why it is of the essence to stabilise capitalism (through banking regulation, a link between central banks and public investment, and a wider social safety net) while struggling to revive democracy at the local, national and European levels. Our success in this limited but crucial goal is a prerequisite for forging a sustainable future in which most people are gainfully employed in innovative enterprises of which they are the sole shareholders.

Read more: Why Europeans should think Big and think Bold

Dutch Confront Euro’s Just Desserts as EU Appetite Ebbs - by James G. Neuger and Fred Pals

The agitators lobbed the banana-cream projectiles at the official, Gerrit Zalm, on Jan. 4, 1999, to denounce the newly arrived euro currency, a tool they warned would lead to the dismantling of the welfare state and the dominance of bankers.

“I don’t regret it at all,” Jelle Goezinnen, a pie thrower then and currently a refugee counselor in Utrecht, says today. “I still stand behind all those actions.”

Fifteen years and one existential euro crisis later, his pie brigade, known as TAART, has successors questioning what the policy makers of that era wrought for what was once a model euro nation. Now the 16.8 million Dutch are caught in a trap much like the one that has caught their bailed-out neighbors: not enough economic growth, too much debt, and a shortage of policy options fueling doubts about the benefit of union.

For Frits Bolkestein, a former center-right Dutch political leader and member of the European Commission, the lesson is simple. “The monetary union has failed,” says Bolkestein, 80, himself once a target of pie-wielding assailants. “I have considerable difficulty in imagining us continuing like this for very much longer. Let us say 10 years ahead: will we then have the same sort of mess?”

From the start, the Netherlands has been intimately bound up with the euro. One of the six founders of the group that grew into the 28-nation European Union, it hosted the 1991 summit in Maastricht that laid out the roadmap to the currency and sent Wim Duisenberg to Frankfurt as the first president of the European Central Bank. The Dutch made a fetish of the euro’s deficit rules, only to run afoul of them when the crisis struck.

Austerity is no longer the national pastime of a country that pioneered global capitalism and made “going Dutch” a synonym for thrift. Even the purveyors of marijuana who dot the city carved by the canals that made Amsterdam a latter-day tourist destination complain of hard times made harder by government rules.

“Look what I got since we opened at nine this morning -- not even 10 euros,” Mohamed Ouchene, 38, co-owner of the “Blue Lagoon,” says around midday, pointing to his nearly empty cash register and the two customers in the shop. “We wanted to refurbish and upgrade the place but we postponed.”

The Dutch economy is set to be the third-worst performer in the 18-member euro area this year, with growth of 0.2 percent, according to the commission. Ireland, Portugal, Spain, even Greece -- four countries saved from financial ruin partly by Dutch aid, grudgingly granted -- will do better.

“When the party is going on, you don’t want to take away the fun,” says Arnoud Boot, a professor of corporate finance and financial markets at the University of Amsterdam. “As long as house prices were going up, there was no problem. The political process was not good at dealing with these things.” 

Note EU-Digest: whatever way you turn it the fact remains that there is a global economic crises going on all over the world - and - if the Netherlands would not have been part of the EU Eurozone the economic crises would have probably hit the country even harder than it did now. 

Where there is a major problem is that the Dutch Government is doing an extremely poor job at communicating the benefits of the EU, Eurozone and EURO. As a result  opportunist radical populist politicians like Geert Wilders are gaining traction with what in essence is total unfounded nonsense. 

Read more: Dutch Confront Euro’s Just Desserts as EU Appetite Ebbs - Businessweek

Europe tightens up financial market rules - but Britain once again "odd man out"

The Europe Union is to tighten regulation of financial markets under a deal to prevent any repetition of the rampant speculation which helped bring down banks and crash the global economy.

After two years of tough talks, the European Parliament and negotiators for the 28 member states agreed a deal in principle that sets new rules to regulate the market, known as MiFID II.

"These new rules will improve the way capital markets function to the benefit of the real economy," said the EU's Financial Markets Commissioner Michel Barnier.

"They are a key step towards establishing a safer, more open and more responsible financial system and restoring investor confidence in the wake of the financial crisis."

Barnier first pushed for the new rules in 2011 at the height of the eurozone debt crisis which was sparked by the 2008 global financial crash.

They aim to curb speculative trading in commodities and to regulate high-frequency trading so as better to protect investors and make the markets less crisis prone.

They will apply to investment firms, market operators and services providing post-trade transparency information in the European Union, a parliament statement said.

They will notably force market players to buy and sell financial instruments on regulated markets comparable to stock exchanges to ensure that all trading is tracked by MiFID.

 

International aid group Oxfam welcomed the deal but warned of the dangers of exemptions, especially for Britain which is home to one of the world's largest financial markets in London.

"Today's decision marks a good start in tackling 'gambling' on food prices which are a matter of life and death to millions," Oxfam said.

But "the deal is far from perfect," Oxfam said." Unjustified exemptions were granted to powerful lobbies and limits will be set nationally, rather than at the European level.

"There is a real risk, particularly in the UK, of ineffective sky high limits triggering a regulatory race to the bottom between European countries," it said in a statement.

Read more: Europe tightens up financial market rules - Yahoo News

Euro zone morale reaches two-year high in September but mood in the Netherlands worsened by 0.9 points - by Martin Santa

Optimism in the euro zone's economy brightened for the fifth month running and hit a 2-year high in September, driven by improving confidence across all sectors and confirming that a recovery is underway.

The European Commission said on Friday the 17-nation bloc's morale rose faster than expected to 96.9 from 95.3 in August, the best reading since August 2011.

In the wider European Union, confidence was up by 2.4 points to 100.6 points, taking the indicator above its long-term average for the first time since July 2011.

In the euro zone, the positive trend was particularly strong in three out of the bloc's five largest economies, with Spain and Italy rising by 2.5 points and France up by 1.6 points.

Sentiment in Germany, Europe's biggest economy, was broadly unchanged, while the mood in the Netherlands worsened by 0.9 points in September.

Across the bloc, employment plans were revised upwards in industry, services, retail trade and construction, the European Commission said.

Read more; Euro zone morale reaches two-year high in September | Fox Business