Global Economy: Sluggish U.S. Economy Weakens Global Growth

The International Monetary Fund on Thursday trimmed its forecast for global economic growth for this year to take into account the impact of recent weakness in the United States.

But the global financial institution said growth prospects for next year remain undimmed, despite Greece's debt crisis and recent volatility in Chinese financial markets.

In an update to its World Economic Outlook report, the IMF said the global economy should expand 3.3 percent this year, 0.2 percentage point below what it predicted in April. Growth should speed up to 3.8 percent next year, it said, unchanged from earlier forecasts.

The IMF pinned much of the blame for the lower growth forecast on the United States. The U.S. economy contracted in the first quarter, hurt by unusually heavy snowfalls, a resurgent dollar and disruptions at West Coast ports.

The IMF said it expected the U.S. economy to grow 2.5 percent this year - it lowered the U.S. growth forecast last month from 3.1 percent in April. The IMF also said U.S. economic sluggishness had spilled over to Canada and Mexico.

"(But) the unexpected weakness in North America ... is likely to prove a temporary setback," the IMF wrote in the report.

The IMF also maintained its forecasts for a pickup in growth in the euro zone, despite Greece moving ever closer to the edge of default and an exit from the currency bloc as it races to find a last-minute third bailout.

"Developments in Greece have, so far, not resulted in any significant contagion," the IMF said. "Timely policy action should help manage such risks if they were to materialize."

Read more: Sluggish U.S. Economy Weakens Global Growth | The Fiscal Times

Greece crisis: Tsipras under pressure to submit reform blueprint to creditors - total foreign debt: € 246 billion

Fforeign debt of €246b Greece and local debt € 32b 

Greece is under intense pressure to table a last-chance blueprint for radical economic reform, tax increases and spending cuts on Thursday in order to secure a future in the euro and stave off financial collapse.

The reform proposals are to be sent to Greece’s creditors with negotiations at the critical stage. The embattled Greek prime minister, Alexis Tsipras, accused his eurozone creditors on Wednesday of exploiting his country as an “austerity laboratory” for the past five years while formally asking Europe for three more years of rescue funds.

Note EU-Digest: Athens has accumulated a debt mountain of 175% of GDP amounting to € 246 billion. If you spread that over the population of 11.3 million Greeks, every Greek Citizens presently would owe approximately € 21 million to cover the debt. Very difficult to figure out how Greece would ever be able to pay this off unless a lot of the debt would be "forgiven".

EU-Digest

TTIP: US House of Reps says: "Europe Can't Boycott Israel"

According to the PNN, Israel’s Ynetnews indicated that two versions of the law had been presented to the House of Representatives and the Senate, clarifying that both versions included the section obligating EU countries to refrain from the boycott of Israeli products.

This section states that any affiliation and cooperation with the Boycott, Divestment and Sanctions (BDS) movement on the part of EU countries is in violation of the “principle of non-discrimination’ statute in the General Agreement on Tariffs and Trade (GATT).

According to Ynetnews, the second law did not pass at this stage due to disputes with respect to compensation for businesses in Europe. There was also severe opposition from Obama’s own Democrats, but it is expected that an agreement will be reached between the House of Representatives and the Senate during the coming days.

From the moment that an agreement is reached, a unified document will be presented to the American President, Barack Obama, for a review of the trade agreement as soon as possible. He will then sign the document and it will be put to the vote in the House of Representatives and the Senate.

Note EU-Digest: This is a "pipe dream" - US House of Representatives can't tell the EU what to do.

Read more: US House of Reps: Europe Can't Boycott Israel - International Middle East Media Center

Greece Exposes The Flaws Of A Wrong Europe - by Mehmet Ugur and Ozlem Onaran

The Greek people, their newly-elected government and many Europeans and non-Europeans with a sense of justice, history and solidarity, have been shouting loud: the “Greek problem” is a consequence of neo-liberal economic and financial policies that have become increasingly dysfunctional and dangerous. The problem has been made worse by the ascendance of sheer inter-governmentalism in Europe.

Both neo-liberalism and inter-governmentalism are the results of collusion between economic, financial and political elites in Europe, aided by economists, political scientists, lawyers, analysts and journalists with a conservative outlook. The symbiotic relationship between these two has been feeding on the spoils of increasingly unequal wealth accumulation. Their narrative about “Greeks living beyond their means” is nothing but an unashamed distortion of facts about both the present and the past.

The distortion of current facts takes the form of preaching to the Greek people on how they should show penance despite the facts on the ground. The origin of Greek debt, like subprime lending in the US and, given the general dysfunctionality of the financial system as laid bare by the Great Recession, is a result of reckless lending by private banks. Accommodating economic policies and perverse financial regulations have facilitated this – just as much as the symbiotic relations between the European arms industry and corrupt politicians in Greece, and tax evaders in Greece and tax havens in Luxembourg and elsewhere in Europe.

This distortion takes the form of misleading public opinion despite evidence that the ruling elite has secreted away. The conservative European elites and their henchmen have been pushing Greece towards destruction despite IMF documents showing that austerity is unlikely to make Greek debt either repayable or sustainable in the medium- to long-term.

The conservative rhetoric distorts the history of Europe too. Europe prospered and avoided repeated crises and wars only when it found collaborative solutions to collective problems. The leading proponent of austerity, Germany, was by far the biggest beneficiary of debt forgiveness. After World War I Keynes argued in the Economic Consequences of the Peace that the Versailles Treaty was a “Carthaginian peace” that would ruin Europe rather than set the conditions for economic recovery. This is very important not only because the demand for solidarity with the German people came from a scholar at the winning side, but also because the demand was made despite the fact reparations were meant to compensate for the human and material costs of more sinister German military actions in the form of war.

Note EU-Digest: Excellent report on the flaws of the European monetary and political structures which can be traced back to European Conservative Political forces copying and linking themselves to the "ruthless and corrupt" US financial system and the general dysfunctionality of that system, as laid bare by the 2007-2009 recession. This in addition to the reckless lending by private banks and accommodating economic policies and perverse financial regulations. When will Europe understand that the future of Europe must depend on our own needs and objectives and not be influenced by "surrogate" decisions on the other side of the Atlantic, as it unfortunately is today.

Read more: Greece Exposes The Flaws Of A Wrong Europe » Social Europe

Eurozone struggles to find joint response to Greek referendum - by Ian Traynor

Germany and France scrambled to avoid a major split over Greece on Monday evening as the eurozone delivered a damning verdict on Alexis Tsipras’s landslide referendum victory on Sunday and Angela Merkel demanded that the Greek prime minister put down new proposals to break the deadlock.

Read more: Eurozone struggles to find joint response to Greek referendum | Business | The Guardian

Insurance Industry: How the Internet of Things is transforming the insurance industry - by John Greenough

The ability to bring internet connection to nearly every type of consumer device will have huge implications for the insurance industry over the next five years. Insurers looking to cut costs, improve business practices, and better assess clients' risk levels, will increasingly invest in the Internet of Things (IoT). 

Some auto and health insurers are already offering a new type of insurance — usage-based insurance (UBI) that uses IoT devices to track clients' activity and offer discounts or rewards for healthy and safe behavior. We expect 17 million people will have tried UBI auto insurance by the end of this year.

In a new report from BI Intelligence, we examine the impact of the IoT on the insurance industry. From free fitness trackers to track individuals' exercise habits to drones to assess damages in unsafe post-disaster conditions, we analyze current US insurance markets — including the auto, health, life, and property insurance markets — and look at ways insurers are integrating IoT devices.

Read more: How the Internet of Things is transforming the insurance industry - Business Insider

Greece: With Greek ‘No’ Vote, Tsipras Wins a Victory That Could Carry a Steep Price - by Liz Alderman

Prime Minister Alexis Tsipras may have won a victory at home on Sunday as the Greek people dealt a resounding “no” to European austerity policies.

But Greece risks paying a high price for that decision. While the vote sharply consolidated Mr. Tsipras’s popularity, that could fade quickly if he leads the country deeper into bankruptcy and financial chaos, creating a new round of instability with consequences for Greece and the broader European project.

If anything, Mr. Tsipras is likely to find it harder, rather than easier, to strike a new financing deal quickly with European creditors, heightening the risk that Greece will careen out of the eurozone unless Europe decides to give Mr. Tsipras and his defiant nation another chance.

“What we need now is more wisdom from both sides,” said Loukas Tsoukalis, the president of the Hellenic Foundation for European and Foreign Policy, an Athens-based think tank. “Greece can’t go on because we’re on the edge of cliff,” he said. “After all this, the question is whether our partners would be so unwise as to push Greece over the edge, because that would be damaging for everyone.”

Some European officials acknowledged Sunday that greater flexibility might now be needed from their camp. Just as the referendum vote divided Greece, so, too, did it reveal fault lines between those European countries that appear willing to bend to keep Greece in the eurozone, and others, including Germany and the Netherlands, whose policy makers have all but suggested that the eurozone would be better off without Greece.

Read more: With Greek ‘No’ Vote, Tsipras Wins a Victory That Could Carry a Steep Price - The New York Times