#G077* – The EU OPENS OUR BORDERS FOR A BARBARIAN HOARD
it does look like history is about to repeat itself – but did we have to revert to the invasions of the dark ages due to the crass incompetence of our Politicians?
Not content with having serial economic illiterates and City Slickers who are merely self important professional Gamblers with delusions of grandure and pin stripe business boiler suits!
Not content with gambling they lacked the basic integrity to protect their clients and when they won on the tables they trousered huge bonuses and if there was profit left over they stole that too and put it in their pension funds! Did you ever hear of the crooks in the board rooms selling their houses or their childish cars etc. or refunding the bonus from the last good deal to bail out those whose money their incompetence had cost their clients?
The situation was not good and getting worse from the first relaxations of the soft communism of Harold Wilson and his visibly incompetent Government. Then in 1997 the staggering stupidity of Gordon Brown was let loose whilst the liar cheat and puppet Tiny Blur set out on his mission of showboating and betrayal on the international stage stuffing his pockets and ‘gearing’ his great game of war crimes and massacre.
The imbecilic Brown almost immediately surrendered control of the economy to the Bank of England in cahoots with their cronies in the banks. Not only were asset controls and financial regulation relaxed but brown set about systematicly selling off Britain’s gold to fund his excesses and destroying the structure of the British Pound by buying into The EUro heavily.
It is not as if the collapse was not predicted – the gamblers with their tunnel vision, greed and other peoples’ money just went on indulging in ever greater risk and hugely increased dishonesty – backing currency deals with little more than Monopoly Hotels and toilet paper. The Bankers may not have been able to foresee the inevitable collapse and the Politicians were far too self important to see their part in the destruction!
I and I’m sure others was regularly writing of and discussing just how terrible the collapse would be and how the longer it was avoided the greater it would be.
You may remember long before the staggeringly crass Margot Waldstrom was put in Goebbels’ position as Propaganda Commissioner – I was writing of the ‘potential’ for 200,000,000 deaths in EUrope due to The Wars of Disassociation and the collapse of currency as a result of centralising control and competition, production and currency in just one febrile form – along came CAP, CFP, Gallileo, centralised EUropean airbus building, centralised EUro Failure Fighter, Centralised Police with EUroPol and a Rapid Repression Army AND THE ULTIMATE STUPIDITY: The EUro!!!
All so very predictable. So very predicted!!
Now we have the PROBABILITY of a failure of power production because of the idiocy of the new religion ‘Wind Power’, ‘Tidal Power’, ‘Global Change’, ‘Climate Warming’ (whatever) this has all lead to the catastrophic failure of not building power stations where the only realistic way of producing enough power in any viable and clean way as being Nuclear.
We start to slip into the age of the Barbarian as the power starts to fail and we are unable to fund the purchase of fuels. Power stands every probability of ‘power outs’ without warning within 2 years!
Increasingly due to the CAP & CFP’s disasterous mismanagement of our agriculture and food stock needs there is already a notable increase stock theft such that farmers can not protect their stock cost effectively – not only did the deliberate damage of the British livestock industry by the EU with Foot & Mouth cause such harm but livestock numbers have continued to diminish party due to rising costs of feed, partly costs of bureaucracy and partly just disheartened by cheap imports able to profit from lower standards.
Now as Bruno Waterfield gently explains to his readers in The Telegraph – well he mustn’t frighten them with too much truth!
Read his article but then read the actual hard nosed blackmail by the President of Hungary and the threat of a barbarian invasion of Western EUrope and particularly these United Kingdoms.
When last the Barbarian hoard reached the channel Britain was fortunate as we were protected by the sea and our National control of our borders.
New ‘Iron Curtain’ threatens to split Europe over economic crisis
Europe is in danger of being split by a new ‘Iron Curtain’ as the deepening economic crisis separates east from west, the EU has been told.
By Bruno Waterfield in Brussels Last Updated: 10:49PM GMT 01 Mar 2009
Hungarian protestor argues with riot police outside the Hungarian Parliament Photo: AFP
Hungary warned the growing split threatened to provoke outbreaks of social unrest and a flood of unemployed immigrants travelling to Western Europe in search of jobs.
Ferenc Gyurcsany, the Hungarian prime minister, called for a £169 billion bail-out of Eastern Europe to prevent a major crisis that would reverberate across the continent.
He spoke as nine Central and Eastern European countries – Poland, Hungary, the Czech Republic, Slovakia, Latvia, Lithuania, Estonia, Bulgaria and Romania – held an unprecedented breakaway summit before the meeting of all 27 EU member states in Brussels.
He said: “We should not allow a new iron curtain to be set up and divide Europe in two parts. This is the biggest challenge for Europe in 20 years. At the beginning of the 90s we reunified Europe. Now it is another challenge – whether we can unify Europe in terms of financing and its economy.”
In a six-page letter to European leaders meeting for a crisis summit lunch, Mr Gyurcsany made dire predictions about the consequences of letting Eastern Europe, the EU’s poorest countries, bear the brunt of a recession.
He warned that if EU member states in Central and Eastern Europe faced a severe downturn, then other European countries would feel the knock-on effect of social unrest and an influx of millions of migrants.
“A significant economic crisis in Eastern Europe would trigger political tensions and immigration pressures. With a Central and East European population of around 350 million of which 100 million are in the EU, a 10 per cent increase would lead to at least five million additional unemployed within the EU,” he wrote.
Mr Gyurcsany went on to forecast “massive contractions in economic activity and large-scale defaults” with governments in Eastern Europe refusing to pay back up to £89bn of debts owed to Western European banks.
“A 10 per cent default rate on the Eastern European external loan book would put significant further strain on the solvency of the European banking sector, the capital impact would be at least EUR100bn,” he said.
The summit ended with EU leaders saying they were determined to avoid protectionist moves in response to the economic crisis.
European Commission president José Manuel Barroso said: “There was consensus on the need to avoid any unilateral protectionist measures.”
But Angela Merkel, the German chancellor, dismissed the call for an Eastern Europe aid fund, saying: “I see a very different situation among eastern countries, I do not advise going into the debate with massive figures.”
The gathering followed a bitter row over protectionism and Eastern European fears that larger Western EU economies, especially France and Germany, were engaged in protectionist bailouts of national industries.
France and the Czech Republic, representing the West versus East split, have been at the centre of a deeply damaging row over economic protectionism.
When announcing a £2.7 billion (EUR3bn) aid package to French car makers Renault and Peugeot Citroen last month, President Nicolas Sarkozy implied that the cash was in exchange for a promise not to shut French plants or move to cheaper sites “in the Czech Republic or elsewhere”.
Mirek Topolanek, the Czech Prime Minister and current holder of the EU’s rotating presidency, warned against taking “beggar thy neighbour” protectionist measures as recession bites.
“This is the greatest crisis in the history of European integration,” he said. “We do not want any new dividing lines. We do not want a Europe divided along a North-South or an East-West line; pursuing a beggar-thy-neighbour policy is unacceptable.”
In a move to ease the tension, the European Commission declared itself satisfied with guarantees from Paris that the French plan to bail out its auto sector was not protectionist.
President Sarkozy insisted that accusations of French protectionism were “totally nonsensical things that do not reflect reality”.
He claimed that the Czechs, and other countries, should be grateful for jobs in factories owned by French automobile makers.
“If we don’t save the parent company then the subsidiaries will come down as well,” he said. “You might well be surprised that we did not ask these countries whose friends we are, where these plants are in, not to help us in bailing out our automotive industry.”
The French president insisted that the United States, rather than Europe, was the source of protectionist threats.
He said the situation in Europe meant no-one could accuse any country of being protectionist when the Americans had put up $30 billion (£21 billion) to support their automotive industry. “There, there is a risk of protectionism,” he said.
Donald Tusk, the Polish prime minister, who hosted the meeting, said: “All participants agree that in the time of crisis, maintaining solidarity in Europe is of paramount importance. We would like Europe to do everything to avoid the temptation of protectionism and egoism.”
To view the original article in The Telegraph CLICK HERE
Non-paper Proposal for setting-up a Multilateral European Stabilization and Integration Program (ESIP) to support CEE economies
MULTILATERAL action required to prevent a second systemic shock CAUSED BY eastern europe
Despite cautious economic policies, Eastern Europe is being affected disproportionately by the global financial and economic crisis:
With only a few exceptions, economic policies in CEE have been conservative, e.g.: large national bank reserves; high compulsory bank solvency ratios; large-scale privatizations, including in the banking sector; relatively low public debt; low budget deficits
Open capital accounts, integration with the EU, and excessive global liquidity have led to an exceptionally large flow of funds to the region:1 EUR ~700 bn in international loans outstanding, and even larger amounts of cumulative foreign direct investment. This veritable tidal wave of money has been the main reason for the region’s low savings rates, large current account deficits (especially in South-East Europe, the Baltic states, and Ukraine), asset price bubbles, and substantial balance sheet risks in case of devaluation. These conservative economic policies in most CEE countries have led to a longer-than-usual maturity structure for these flows (e.g., intra-group and long-term debt)
Long-term investments and funding in Eastern Europe have led to significant acceleration of economic integration with the EU. However, the resulting high export quota2 has created a sensitive dependency on the EU, which is becoming particularly apparent in the current recessionary environment.
Failure to act could cause a second round of systemic meltdowns that would mainly hit Eurozone economies:
Central Europe’s (re)financing needs in 2009 could total EUR ~300 bn (~30% of the region’s GDP). Partial failure to refinance could lead to massive contractions in economic activity and large-scale defaults
A major crisis in Eastern Europe would have global systemic effects:
A 10% default rate on the Eastern European external loan book (at the lower range of previous emerging market crises) would put significant further strain on the solvency of the European banking sector; the capital impact would be at least EUR ~100 bn, or ~10% of European banks’ cumulative tier-1 capital
A 30% drop in the region’s imports would reduce global turnover by
EUR ~150 bn and European GDP by ~ 1%
A significant economic crisis in Eastern Europe would trigger political tensions and immigration pressures (with a CEE population of ~350 million, of which 100 million are in the EU, a 10% increase in unemployment would lead to at least 5 million additional unemployed people within the EU).
Despite clear vulnerabilities, no effective stimulus or rescue package has been put in place so far, mainly due to an exceptionally complex stakeholder situation:
Financial intervention (e.g., liquidity provisions, interest rate cuts, capital increases) is largely ineffective:
A few Western European banking groups (domiciled primarily in Austria, Italy, and Greece) have accumulated most of the foreign debt exposure to the region. These groups are currently aggressively deleveraging their subsidiaries, as their central balance sheets are vulnerable3
Interest rate cuts and liquidity provisions could lead to capital flight and currency devaluations, further aggravating the balance sheet situation
National governments, whether in CEE or Western Europe, are struggling to find an angle to tackle European banking groups’ exposure across the region as a whole
Local governments cannot independently launch economic stimulus programs because of the high capital flight risk in the event of large budget deficits or reduced national reserves.
A COMPREHENSIVE multilateral EUROPEAN Stabilization and Integration Program (ESIP) should be LAUNCHED
Despite the challenges mentioned above, we strongly believe in the economic strength of the region and its prospects within the European economic system. In an effort to forestall possible grave economic impact, we are proposing to design and launch a European Stabilization and Integration Program (ESIP), with the following objectives:
Rebuild trust, by implementing support programs tailored to each country, but coordinated in a single transparent framework
Enable a sustainable integration trajectory by offering faster integration with the Eurozone to countries successfully implementing the program, while repairing excessive imbalances and strengthening productivity growth
Ensure transparency and ongoing oversight.
We would consider the following design principles to be critical when establishing the cornerstones of the ESIP:
Maximum economic and social impact. The financial resources activated should target areas of economic activity that will provide the highest economic multiplier (through increases in GDP) as well as positive social impact, with the lowest cross-the-cycle net cost
Fairness and equitability. The distribution of financial resources should be based on objective criteria, and the upside should be shared with fund providers
Transparency and accountability. The initial distribution of funds must be followed by strict control of secondary disbursements by local governments and financial institutions to ensure real impact
Minimal moral hazard. Shareholders and governments should bear the consequences of their own past decisions. This is especially important in the today’s very diverse situation of both individual banks (banking groups) and national economies. More prudent players should not be levied the same costs as bigger risk takers. Economically and financially more stable countries should not carry the same costs as countries with riskier and more unbalanced economic policies in the recent past.
Market driven. Secondary disbursements must be driven by market forces in the respective CEE economies, not by local political objectives.
The main elements of the proposed program are:
Establish an ESIP Recovery and Solvency Framework to boost solvency and remove non-performing loans from the CEE banking sector while facilitating effective recovery
Establish an ESIP Fund to provide emergency liquidity and capital to the banking system. The funding would come from the IMF, the World Bank, and EU institutions (including the ECB and the EBRD/EIB), with their roles clearly split
Establish an ESIP Multi-Year Stabilization Plan to reduce imbalances, including a clear and aggressive timetable for Euro adoption in EU and candidate countries and FX debt risk reduction in other countries.
1) Establish a robust ESIP Recovery and Solvency Framework
The ESIP Recovery and Solvency Framework would regulate four key areas, with the objective of establishing a sound legal basis for strengthening the financial sector as well as corporate and household balance sheets:
Strengthen collateral recovery and bank insolvency legislation in each country (accelerate and simplify procedures)
Establish “bad bank” legislation in each country to allow non-performing loans to be quickly segregated
Establish a coordinated debt restructuring framework (a “Super Chapter 11”) to enable private borrowers which are solvent but illiquid to reschedule their debt
Deploy tighter bank regulations ensuring, e.g., strengthened insolvency limits and increased reserve levels for FX lending.
2) Establish an ESIP Fund of EUR 160-190 bn
The ESIP Fund would act on four key areas, with the objective of strengthening the financial sector and providing solvent borrowers with access to liquidity:
Provide emergency liquidity of approximately EUR 50-60 bn4 (e.g., contingent credit lines or swaps, facilitated by the ECB and the IMF in the most challenging situations):
To CEE central banks, requiring structural economic adjustments in the most imbalanced economies and pricing in the additional country risk (albeit at lower rates and longer maturities than current market conditions provide)
To Western European banks heavily exposed to the region, but only if country exposures are clearly separated and if coupled with capital injections
Support coordinated debt rescheduling of approximately EUR 1.5 bn,5 funded partially by the ESIP:
Under the plan for private debt, the maturity would be lengthened and the interest rate and/or FX rates would be brought below market rates. This plan would be funded by the borrowers (mainly through extensions of terms), the banks (by accepting lower margins), and the ESIP (through providing long-term liquidity). The implementation of the plan could include a large-scale swap from FX to local currency loans (structured to eliminate FX rate impact) to reduce further FX exposure, mainly in non-EU countries
The public debt of selected countries should be restructured along the same lines, as needed on a case-by-case basis
Provide capital injections to restructured banks (e.g., with the EBRD in the lead) of approximately EUR 35-45 bn:6
To Western European banks, but only if country exposures are separated and if pre-specified trigger criteria are met (in conjunction with liquidity provisions)
To CEE banks, together with their respective national banks (international involvement in the capital would reduce domestic political pressures for un-economic lending)
To newly established bad banks, but only in return for equity in “clean” banks
Provide guarantees and/or liquidity to support the real economy, including:
Enhancing the region’s ability to export (e.g., with the World Bank in the lead), entailing approximately EUR 35 bn7 in trade finance
Channeling money to economic areas that are enduring the highest impact, in particular the infrastructure and SME sectors, entailing approximately EUR 40-50 bn or 3-4% of GDP
Ensuring the extension of parent banks’ credit lines to their subsidiaries.
3) Establish an ESIP Multi-Year Stabilization Plan
The stabilization framework for EU and EU candidate countries should be based on a clear, aggressive timeframe for Euro adoption (because CEE countries are structurally tightly linked to the Eurozone economy, failing to anchor them quickly to the Euro would perpetuate the current systemic instability). This would motivate concomitant political action in CEE (as EU accession has done) and strengthen the trust of international investors. The plan should be based on:
More stringent criteria vis-à-vis Maastricht, especially via incentives to increase the savings rate (structurally reducing the need for external investment funding)
Unlocking EU structural funds for rapid spending (including on larger and more targeted projects). The lower EU requirements, control, and oversight would be mitigated by the strong involvement of the ESIP in structuring and disbursing funds
Required legal reforms and meaningful initiatives to fight corruption.
The IMF and EU bodies (i.e., the ECB, EBRD, EIB, and EU governments) would fund the above-described program. The responsibility for specific elements should be allocated based on the current institutional framework and relevant skill sets to ensure swift program implementation. A possible solution might be:
The Recovery and Solvency Framework could be designed by the European Commission, based on input from the IMF
The IMF could directly fund and/or coordinate the liquidity programs and debt rescheduling framework at the national bank/governmental level
The EBRD/EIB could be responsible for capital injections into banking groups
The World Bank could be responsible for the trade finance liquidity program
The European Commission could be responsible for designing and enforcing the Multi-Year Stabilization Plan.
Oversight of the overall coordination and implementation should be provided by an ESIP Supervisory entity representing the key stakeholders providing funds. The ESIP program would be driven by a simplified ESIP Board directly coordinating with the national governments and banking groups within the overall framework.
1) Numbers in this paper refer to CEE-10 EU members plus Croatia and Ukraine.
2) Exports as a percentage of GDP. This ratio exceeds 50% for the region (80%+ in some Central European economies).
3) Due to excessive short-term funding and low capital buffers, caused by the central booking of loans to avoid the high capital ratios required at the subsidiary level.
4) 25-30% of short-term gross external debt. If intercompany loans are included, the amount would be EUR 75-90 bn.
5) 30% of high-risk FX and 10% of domestic assets rolled over at an overall cost of 15%, with ESIP supporting 1/3 of the cost (the rest would be internalized by banks through lower margins and by ultimate borrowers through longer maturities).
6) 4-5% of total banking assets (EUR 875 bn) in the region, assuming a 10% average NPL hit with a 50% recovery ratio and current capitalization above the regulatory minimum.
7) 5% of exports.
To view my source for this document CLICK HERE with thanks to The Ind.dem.Group
Perhaps you should distribute this widely amongst your family and friends as forewarned is fore armed. The more people who are capable of reading this and putting it in context the better our opportunity of survival.
In real terms the safest route is to call our own Politicians to account and at every election until these United Kingdoms are liberated from vassal status in the EU –
Write on your ballot paper:
LEAVE THE EU
I know of no alternative that offers hope.