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Wed, 07 Jun 2023
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The eurozone decouples from the world

The G20 summit last Friday certainly did not measure up to the billing it was given by the UK Chancellor in September, when he said that policymakers had "six weeks to save the world". Nevertheless, equities and other risk assets have risen markedly over the same period. As Goldman Sachs' Jim O'Neill argues this weekend, this is probably due to improvements in economic data in the US, and to the rising prospects of a soft landing in China. A less optimistic way of summarising recent news is to say that Europe has now decoupled from the rest of the world. It is already in recession, which may prove to be a deep one, and the debt crisis is arguably getting worse, not better.

There never was much reason to expect the G20 to come to the rescue of the eurozone. Certainly, there are no grounds in terms of equity why such an extraordinarily rich and economically successful region should be "rescued" by poorer nations. Furthermore, the eurozone has a small surplus on the current account of its balance of payments and a manageable public debt position, so it really has no need for outside capital. The problem is one of the distribution of funds within the eurozone, which admittedly has proven very difficult to solve.

The eurozone is often accused of lacking a strategic plan, but that is not true. It does have a plan, and a very clear one. The plan, which has been imposed by the creditor nations led by Germany, requires the debtor nations to take two major actions, both of which will be beneficial in the long term. First, they need to balance their budgets on the timetable agreed in recent summits. Second they need to introduce major reforms to their economic structure, notably involving labour market flexibility and privatisation. In exchange for these reforms, the creditor nations and the ECB are willing to provide short term liquidity injections to prevent sovereign bankruptcies. The question is not whether this plan exists, but whether it can work.


Anonymous Wins Round One of Drug Cartel Fight

© SecurityNews
Say hello to my 133713 friend! Credit: Universal Pictures

The "hacktivist" movement Anonymous appears to have won a victory over a ruthless Mexican drug cartel, with word late yesterday (Nov. 3) that the Anonymous member kidnapped by Los Zetas had been released. However, unofficial Anonymous spokesman Barrett Brown says he may yet share an alleged 25,000 Mexican government emails containing the names of Zetas members and associates.

Arrow Down

Goldman: Euro Could Split Apart

© Reuters
Portugal, Ireland, Finland and Greece could pull out of the single currency rather than have to operate under a single eurozone treasury.
The chairman of Goldman Sachs Asset Management has said that the need for a German-led fiscal integration in the eurozone would make it increasingly unattractive for all the countries who joined to stay in the single currency.

Jim O'Neill, whose division manages more than $800bn (£500bn) of assets, said that countries as diverse as Portugal, Ireland, Finland and Greece could pull out of the single currency rather than have to operate under a single eurozone treasury.

Yesterday, Angela Merkel, the German chancellor, said the market turmoil could last for a decade and there was still "a chunk of work" to do.

"The Germans want more fiscal unity and much tougher central observation - with the idea of a finance ministry,"

Mr O'Neill said in an interview with The Sunday Telegraph. "That will emerge for those that want to stay in this damn thing, or can stay in.

"With that caveat, it is tough to see all countries that joined wanting to live with that - including the one that is so troubled here [Greece]. If you wind the clock back, it was pretty obvious that economically probably only Germany, France and Benelux of the original joiners were the ones that were ideal for a monetary union.


Defiant Silvio Berlusconi Refuses IMF Bailout and Insists He Will Not Resign Despite Mounting Italian Debt Crisis

Defiant Italian prime minister Silvio Berlusconi today refused an offer of financial support from the IMF - and insisted he would not resign.

The 75-year-old leader insisted he did not think his coalition government would collapse as they struggle to deal with their debt crisis.

With its colossal £1.6trillion debt, Italy is now at the eye of the storm and is paying 6.43 per cent to borrow money for ten years.
Silvio Berlusconi
© unknown
Resolute: Italian prime minister Silvio Berlusconi insists he will not resign as he speaks to journalists in Cannes at the G20 today

Bad Guys

Is the Black Bloc a COINTELPRO operation?


Black Bloc anarchist attacks bank window in London protests in March.
It happens over and over again, wherever a successful left-wing protest movement is underway. A peaceful march is going along, and suddenly mysterious black-clad ninja wannabes step out of the crowd and start throwing rocks through windows and throwing rocks, bottles, and firecrackers at police officers. In response, TV news shows only the violence and covers the cause that the protest was about not at all, newspapers print outraged editorials about how violent, vile and despicable left-wingers are, and the majority of people shake their heads and turn on Rush Limbaugh, who, after all, has never thrown a brick through a window.

Is the Black Bloc a COINTELPRO operation? That's certainly a question worth asking. The fact that they show up *only* at left-wing protests, not at any other events that attract crowds, is rather... odd. As is the fact that they show up in geographically far-removed places with no visible means of funding for such widespread travelling. And while the Black Bloc claims to be anarchists, anarchists of my acquaintance have nothing but disdain for the Black Bloc and their tactics, pointing out that smashing the windows of a Starbucks is hardly the same thing as smashing the power structures that anarchists believe must be removed in order to bring anarcho-paradise of voluntary syndics of like-minded people blah de blah.

Star of David

Activists: Gaza boat passengers refuse deportation deal

November 2011 freedom flotilla Gaza
© MaanImages/Freedom Waves, HO
Activists detained in Israel after they attempted to sail to Gaza are refusing to sign a deportation agreement, a spokeswoman for the group said Sunday.

The document states that they entered Israel voluntarily and in an illegal manner, which the imprisoned boat passengers dispute, Huwaida Arraf said in a statement.

Their refusal to sign the deal, which would see them deported immediately, means they will be held for 72 hours before an Israeli immigration judge reviews their deportation, Arraf added.

The Irish-flagged Saoirse ("Freedom") and the Canadian ship Tahrir ("Liberation") -- carrying 27 activists and reporters from nine countries -- were intercepted by Israeli naval commandos in international waters off the Gaza coast and taken to Israeli port Ashdod on Friday.

Bad Guys

US: Nebraska tries to draw line in sand over Keystone pipeline

© TransCanada

Nebraska may try to draw a line in the sand when it convenes a special session of the state legislature on Tuesday to debate whether to seek changes to a planned $7 billion oil pipeline traversing the state.

At issue is whether TransCanada's Keystone pipeline from Canada to Texas should cross the ecologically sensitive Sand Hills area of Nebraska, which sits atop a major source of the region's water, the Ogallala aquifer.

Opposition to the pipeline has grown so much in Nebraska that Republican Governor Dave Heineman, who once said a special legislative session would be a waste of time and money, changed tack last week and called just such a conclave.

Heineman said the purpose of the session is to "find a legal and constitutional solution to the siting of the pipeline within the state."

"I believe Nebraskans are expecting our best efforts to determine if alternatives exist ... that could impact the route of the pipeline," he said.


Greek prime minister George Papendreou to step down after deal agreed with opposition leader

Papandreou greek financial crisis IMF
© Reuters
Greek President Papoulias holds a meeting with PM Papandreou and leader of conservative New Democracy party Samaras in Athens
Greece political leaders sealed a pact to form a national unity government on Sunday night after the prime minister announced his imminent resignation under pressure from a European ultimatum.

European leaders forced George Papendreou to act under the threat of national bankruptcy.

An agreement in principle was reached between Mr Papandreou and Antonis Samaras, the conservative opposition, leader after an hour and a half meeting with the president on Sunday night.

The two men will meet on Monday to decide on the composition of the new government, which will take office after Mr Papandreou formally tenders his resignation. A presidency statement said they will discuss who would head the coalition government, but that Papandreou would not lead the new administration.

"Tomorrow there will be new communication between the prime minister and the opposition leader on who will be the leader of the new government," the statement said.

The statement made no mention of how long the interim government would last.

The European Union gave Greece 24 hours on Sunday to explain how it will form a unity government to enact a bailout agreement.

Heart - Black

Making Fortune on Poverty: JP Morgan's Big Food Stamp Business

While most Americans are struggling hard to overcome the hardships of the recession, the profits of national banks continue to rise. JP Morgan is among those cashing-in ... and it's a contract to process food stamp payments that's helping it on its way. RT's Maria Portnaya found out how the rich benefit off the back of the poor.


Copwatch@Occupy Oakland: Police Infiltrators and Provocateurs Caught on Camera

Produced by Jacob Crawford with assistance from Ali Winston and Josh Wolf.

Undercover cops have been caught red-handed, infiltrating the Occupy Wall Street movement in the US in order to try to get protestors "to do things we want them to do" - instigating violence, vandalising things, starting fights and generally causing mayhem.