IMF admits 'austerity' wrong for Greece

In yet another case of, quite hypocritical, "too little, too late", the International Monetary Fund has admitted (so far only internally but to be published this week) that the organization underestimated the damage that austerity would cause to the Greek economy and society. 

They also admit that the Greek debt bubble was only possible because the IMF bent its own rules in order to pretend and extend.

The acknowledgement seems to forecast a haircut of the Greek debt. 

Source: The Guardian.

D-Day: Dijsselmbloem Day: laughs, panic or both?

Quite aristocratically the guy, mostly unknown for non-Dutch until yesterday, has four names before his hard-to-spell surname. Jeroen René Victor Anton Dijsselmbloem (pictured) is the Finance Minister of the Kingdom of the Netherlands and acting chairman of the Eurogroup.

And he has a big mouth.

In an interview with Reuters published yesterday that will no doubt go into the history books of the near future, he declared that the nefarious "bail-in" of Cyprus by which banksters' loses go to savers instead than to banksters themselves is a model to follow elsewhere in Europe:

A rescue programme agreed for Cyprus on Monday represents a new template for resolving euro zone banking problems and other countries may have to restructure their banking sectors, the head of the region's finance ministers said.

This declaration has sent all stock markets into confusion, even if, after the Ecofin corrected him, they managed in most cases to avoid loses (Dow Jones lost yesterday 0.44% and Spain's IBEX more than one percentile point today).

European credibility is on the brink, although I must admit that this Jeroen guy has a point: banks must fall. But not this way: they must fall like any regular company in normal bankruptcy, letting the insurance pay the deposits under the €100,000, as is by law, and then the res publica may want to acquire the skeleton of the bank and refloat it as public service banking facility, whose profits would go to social services and other public expenses.

That might work. But the bankster rulers of Europe are not at all concerned about social stability or the cost for commoners. They only care about keeping their profits, and therefore their power, up. That's why banks are being bailed out by the public or by any means necessary in a decadent spiral of financier parasitic Capitalist swan song.

This madness, like the Ancien Régime of Louis XVI, can't keep going for long. A revolution is needed like fresh air in a coal mine.

'France is not Spain' - symptomatic

Portugal is not Greece, Spain is not Greece nor Portugal... and now France is not Spain (ref. FT(registration needed)). It may sound obvious but these sentences should be preserved in the history books of the near future as some of the greatest idiocies repeated through Europe in the eve of the extreme disasters and radical changes to come.

A. Montero dedicates some musings in Spanish today to this false obviousness. I'm almost glad that the syndrome European Capitalist collapse has begun knocking at the French door (and not just them: nearly all Western Europe, including Britain and the Netherlands are in dire straits, as mentioned already in May) because only if more Europeans are involved the much needed revolution can go ahead at the necessary pan-European scale.

The French state is the fifth largest economy on Earth (right after Germany). 

Catalonia, Andalusia... drift away from Spain

The two largest autonomous communities and, per their statutes, historical nationalities, of the Kingdom of Spain, are in direct confrontation with the central State on matters of financing. While the state has achieved better conditions from Germany and the ECB in the end, it is reserving all those benefits for the central state it is giving no truce to the embattled autonomous communities, which manage healthcare and education in many cases.

By means of that the creepy conservative government of Spain seems to have two things in mind: (1) to erode the autonomies and (2) to force them to apply the same kind of draconian cuts that they are applying in Madrid and elsewhere. 

But by means of that they may end up without a state. 

Today there was a key meeting of the autonomous communities under the state of Spain meant to dictate the ceiling of regional spending, which is being determined by the conservative PP, which controls most regions of clearer Spanish identity. 

Catalonia (second largest and first wealthiest community) simply decided to be absent.

Andalusia (largest community), ruled by the social-democratic opposition, arrived but left soon after knowing the new impositions. 

Canary Islands and Asturias also voted against. But even two communities ruled by the conservatives broke voting discipline and abstained.

The arrogant Minister of Finance, Mr. Montoro, unable to get the parties to agree, unable to make any concession, unable to rule with any minimal element of legitimacy... declared that "coming or not coming, the law is compulsory". 

The details are not clear yet but the conditions seem tailored for the communities ruled by the PP: while Andalusia saw its debt target reduced from 15.1% to 13.2%, the conservative and extremely corrupt Valencian Community was allowed 23% instead of the previous 22%. 

While the Andalusian government seems only able to conceive an appeal to the Constitutional Court, the Catalan institutions are demanding the creation of a separate Catalan financial system. While at the moment it is just a demand, it is clear that the feeling among Catalans is secessionist and I believe that the Spanish government is setting the basis for the disintegration of the state. 

Disintegration that I would welcome as something good, of course, but that may be troublesome and painful.

Tax heaven to tax... workers

The well known pirate den tax heaven offshore financial center Cayman Islands has decided to begin taxing. But worry not banksters of the world, pirate warlords, drug and human traffickers, weapon traders and pseudo-libertarian ideologists plundering Honduras and Europe... 

Worry not. 

The government of the islands has decided to tax only immigrant workers (with nothing less than 10% on salary). Your loot is in no danger, only your servants will pay.

Where did all the money go? $32 trillion in tax heavens

Cayman Islands:
your typical modern pirate enclave

That's what Al Jazeera discusses today in its "Europe" blog. But while they say that those $32 trillion are the equivalent to the US and Japanese GDP together, the reality is even worse: $32 trillion is more than half the planetary GDP and adds up for the economic value of the USA and the European Union in fact (ref.)

This pirate wealth belongs to some 10 million people (0.14% of World's population) and half of it is concentrated in just 100,000 wallets (0.01% of Humankind).

Those people do not pay taxes but benefit of laws tailored for their interests and the boot-licking support of governments, parliaments and tribunals almost directly appointed by them. 

That's how the Global Capitalist Dictatorship works: that's the core of it. 

The research was carried out for pressure group Tax Justice Network, which campaigns against tax havens, by James Henry, former chief economist at consultants McKinsey & Co.
John Christensen of the Tax Justice Network told Al Jazeera that he was shocked by "the sheer scale of the figures".

"What's shocking is that some of the world's biggest banks are up to their eyeballs in helping their clients evade taxes and shift their wealth offshore," said Christensen.

"We're talking about very big, well-known brands - HSBC, Citigroup, Bank of America, UBS, Credit Suisse - some of the world's biggest banks are invovled...and they do it knowing fully well that their clients, more often than not, are evading and avoiding taxes."

Much of this activity, Christensen added, was illegal.

______________________________________________

Addendum:

A list to tax heavens belonging to EU states or associates (per the IMF):

• Member states:
• Cyprus
• Ireland
• Malta
• Luxembourg
• Associate states:
• Switzerland
• Andorra
• Liechtenstein
• Monaco
• San Marino
• British dependencies:
• British Virgin Islands
• Cayman Islands
• Gibraltar
• Guernsey
• Jersey
• Isle of Man
• Montserrat
• Turks and Caicos
• Dutch dependencies:
• Aruba
• Curaçao
• Sint Marteen

There are also a number of other states and dependencies which are considered tax heavens or, euphemistically, offshore financial centers: Anguilla, Bahamas, Bahrain, Barbados, Belize, Brunei, Costa Rica, Cook Is. (New Zealand), Dominica, Grenada, Hong Kong (China), Lebanon, Liberia, Macau (China) Marshal Is. (USA), Mauritius, Nauru, New Zealand, Niue (New Zealand), Palau (USA), Panama, Philippines, Samoa, Seychelles, Singapore, St. Kitts & Nevis, St. Lucia, St. Vincent & The Grenadines, United Arab Emirates, Uruguay and Vanuatu. 

A quite curious common element between most of these pirate enclaves is that they are product of British or US imperial policies, underlining the "anglosaxonness" of the extant capitalist imperial world order.

The great Eurobanking scam! Episode one zillion and one

More or less you know the story: European and global banksters get the money from all sources, fix the rates and conditions, and do not even have to run after all that because nobody is after them. Meanwhile the common citizens are being squeezed to the last drop of blood to pay for that scheme.

The Libor and the Euribor (the reference credit rates in the Anglosaxon and mainland European spheres respectively) have been tampered with for many years and there is nobody in jail for it, never mind resigning from their posts as bank heads... it's almost not even in the news anymore.

The Hong-Kong and Shanghai Banking Corporation (HSBC), a Scottish bank, is found guilty of systematical money-laundering and complicity with global drug-trafficking and what's the penalty? A petty fine. Euronews calls it "a hefty fine" but it's peanuts compared with the benefits already made. And what about the jail terms? If the petty drug seller down the street gets years of prison, the bank director who laundered his boss' dirty money should get at least death by impalement, right? Nope. They don't even go to court. 

The latest is again being unreported: Greek banks are running a Ponzi scheme... but never mind, as Yannis Varoufakis puts it:

In a country where, supposedly, a new conservative, pro-European, ‘sensible’ government was freshly elected on a mandate of bolstering the nation’s credibility (at least in the eyes of Europe), this blatant attempt to bend the rules of bank recapitalisation (by means of a ponzi scheme where one bankrupt bank provides loans to another so that the latter’s ‘owners’ can inject the loans as capital into ‘their’ bank) went spectacularly unnoticed. Workers’ pay is reduced to sub-Saharan levels, hospitals are starved of chemo-drugs, ‘respected’ journalists lambast unionists who are trying to defend the starvation wages of unskilled labour but, when such a scandal directed at misleading the EBA, the ECB, the troika itself, is revealed, SILENCE. And as if that were not enough, the troika itself, the ECB, the EBA, whose will and directions are being usurped, also remain SILENT.

Nothing to see here: the whole financial system is bankrupt but if we ignore the matter it will go away... a thousand years from now... maybe. 

Time to sharpen the pitchforks!