BREAKING: HUNDREDS OF THOUSANDS ARE MARCHING IN MADRID, SPAIN against Corruption, Bank debts,politicians’ high wages; Spanish POLICE ON ALERT
They are going to demonstrate in front of the House of Representatives. People is fed up with politicians’ corruption and private debt. Far-right and far-left groups are marching along with liberals, libertarians, social-democrats, conservatives, communists, anarchists against the political corruption.
A Government’s representative has said that this demonstration is a coup d’etat. Hope everything goes fine.
As EU bankers squeeze Greece beyond it’s ability to pay, the social consequences mount.
Greece’s austerity policies could create a crisis of insolvency within the country, undermining the very reason they were implemented – to repay the country’s debt – says the country’s biggest labour confederation.
“I am afraid that we may see a phenomenon that could cause a social explosion,” says Savvas Robolis, scientific director for the Labour Institute of the General Confederation of Workers in Greece (GSEE), the private sector’s confederation of unions. “Right now many people can’t pay their taxes. That’s why state revenue fell 300 million euros ($395m) short of January targets. If that continues, I don’t know if the state will be able to meet its obligations by June or July. It may not have the cash to pay salaries and pensions.”
The state heavily subsidises approximately 1.3 million pensions, according to finance ministry data. It also pays the salaries of almost 800,000 state employees, roughly a quarter of all people still working in the country. Failure to pay those pensions and salaries in full would greatly impact on the state’s own tax revenues, and therefore its ability to maintain payments to international creditors.
It’s a little known fact about the Spanish crisis is that when the Spanish Government merges troubled banks, it typically swaps out depositors’ savings for shares in the new bank.
So… when the newly formed bank goes bust, “poof” your savings are GONE. Not gone as in some Spanish version of the FDIC will eventually get you your money, but gone as in gone forever (see the above article for proof).
This is why Bankia’s collapse is so significant: in one move, former depositors at seven banks just lost virtually everything.
And this in a nutshell is Europe’s financial system today: a totally insolvent sewer of garbage debt, run by corrupt career politicians who have no clue how to fix it or their economies… and which results in a big fat ZERO for those who are nuts enough to invest in it.
Be warned. There are many many more Bankias coming to light in the coming months. So if you have not already taken steps to prepare for systemic failure, you NEED to do so NOW. We’re literally at most a few months, and very likely just a few weeks from Europe’s banks imploding, potentially taking down the financial system with them. Think I’m joking? The Fed is pumping hundreds of BILLIONS of dollars into EU banks right now trying to stop this from happening.
Now this: in 2012, Germany achieved something rarely seen anywhere in the world, and if it’s espied at all, it’s there only briefly, mirage-like: a budget surplus. It wasn’t much, €4.2 billion. The first surplus in five years, the third since Reunification. While the federal government and the states (Länder) still ran up deficits, the surplus of the communities and the social security system more than made up for it. Anytime a government gets anywhere near a budget surplus, it deserves a round of applause. Then, after the noise dies down, we can quibble over how it got there, if it got there at all, or if it was a figment of governmental accounting imagination, and why it had to extract that much in taxes from its strung-out taxpayers.
Given that extraction of taxes, private consumption—another detail in the awful GDP surprise—increased by a measly 0.6% in 2012. But consumption by the government, flush with record tax revenues, increased by 1.4%. It got worse towards the end of the year: December retail sales saw a brutal plunge of 4.7%. January retail sales weren’t available yet, but January vehicles sales were….
Total vehicle sales plummeted 9.3% from January last year. An equal opportunity fiasco. Passenger car sales tumbled 8.6%. The biggest losers of what Germans consider German brands: Ford swooned 32.2% and VW, the megastar that could do no wrong, skidded 13.3%. Among foreign brands, Lexus suffered a dizzying 62.8% dive. It’s tough in Germany these days. And an indicator of how businesses viewed the future in Germany, sales of light, medium, and heavy trucks fell by 14.6% and tractors by 23%. There wasn’t a scintilla of good news in this report.
This is the economic engine of Europe, the country that is expected to pull Europe out of its funk. Sure, things could turn around on a dime. China and other Asian countries could unleash a tsunami of orders. France could suddenly rebound. Miracles happened before. And this could be one of them.
The eurozone will not return to growth until 2014, the European Commission said on Friday, reversing its prediction for an end to recession this year and blaming a lack of bank lending and record joblessness for delaying the recovery.
The 17-nation bloc’s economy, which generates nearly a fifth of global output, will shrink 0.3 percent in 2013, the Commission said, meaning the eurozone will remain in its second recession since 2009 for a year longer than originally foreseen.
The Commission, the EU executive, late last year forecast 0.1 percent growth in the eurozone’s economy for 2012, but now says tight lending conditions for companies and households, job cuts and frozen investment have delayed an expected recovery.
- advertisements -