Tag Archives: Europe

The EU Backs Off its War on Cash. Here’s Why, by Don Quijones

It’s proving harder than its proponents thought to get rid of cash and herd people into the banking system. From Don Quijones at wolfstreet.com:

People view paying in cash “as a fundamental freedom, which should not be disproportionately restricted.”

The European Commission, in its official war on cash, admitted that physical cash is perhaps not quite the source of all evil that many EU institutions, including the Commission itself, had made it out to be. And it has abandoned its war on cash.

In a report to the European Parliament and Council on the viability of EU-wide cash payment restrictions, the Commission made three crucial observations.

1. Cash restrictions would have little effect on terrorist financing

Cash plays a major role in many terrorist activities, “offering anonymity and facilitating the ability to conceal not only illegal activities, but also ancillary legal transactions that could otherwise be tracked by law enforcement agencies,” the report points out. But according to the findings of a detailed analysis of recent terrorist attacks, restrictions on payments in cash would have had little impact on the capacity to prepare these attacks, especially given the “observed trend of the decreasing costs of terrorist attacks.”

The amounts of individual transactions are often even lower, and would therefore not have been impacted by restrictions. What’s more, many common transactions made in the preparation of recent terrorist attacks were done using traceable means (credit and debit cards, bank transfers, etc.) without raising any red flags.

2. Cash restrictions could be useful in combating money laundering but are of limited help against tax fraud.

The report notes that cash limits could be a useful tool in the fight against money laundering, of which cash transactions are normally the starting point. Despite the steady growth in non-cash payment methods and the changing face of criminality (i.e., the rise in cybercrime, online fraud and illicit online market places), criminal activities continue to generate profits in the form of large amounts of cash.

The fact that EU Member States have vastly different rules on cash limitations makes it easier for criminals to launder the proceeds of their operations as it allows them “to circumvent controls in their country of origin by investing in cash intensive businesses in another EU Member State with no or a lower control of cash expenditures.”

To continue reading: The EU Backs Off its War on Cash. Here’s Why

Advertisements

Whose Trade War Is It Anyway? by Valentin Schmid

Trump called attention to the fact that US trading partners’ tariffs are higher than those the US imposes. Isn’t that to blame for the trade war, and not Trump’s determination to do something about it. From Valentin Schmid at theepochtimes.com:

Everybody complains about Trump, but he wasn’t the one who started it

War is aggression, often with the use of physical violence to conquer land, people, and power. Trade wars, though not quite as bad, also are aggressive in nature. Where two or more private parties want to transact freely, aggressive governments step in the way and prevent trade from happening with the threat of force.

In 2018, most of the mainstream media and the establishment powers blame President Donald Trump and his administration for starting a trade war, which—like real wars—can only produce losers on both sides. “How Much Damage Will Trump’s Trade War Do?” read a headline in The Atlantic, and countless other articles and official statements say similar things.

So the mainstream media and some politicians are pretending that trade was 100 percent free before Trump started to threaten the “free traders” of China, the European Union (EU), Mexico, and Canada with tariffs. The media paints Washington as the aggressor in this trade war. Trump shot first.

However, truth be told, this trade war did not start this year and certainly the United States isn’t the biggest aggressor. In real war terms, the Americans are now starting to shoot back after being under siege for decades and the whole world is complaining about this act of self-defense.

As Trump wrote in a tweet before meeting the EU’s Jean Claude Juncker on July 25, he doesn’t want a war, he just wants the other side to stop shelling the United States.

To continue reading: Whose Trade War Is It Anyway?

NATO Is a Goldmine for US Weapons’ Industries, by Brian Cloughley

The numbers are staggering. From Brian Cloughley at strategic-culture.org:

Countries of the NATO military alliance have been ordered by President Trump to increase their spending on weapons, and the reasons for his insistence they do so are becoming clearer. It’s got nothing to do with any defence rationale, because, after all, the Secretary General of the US-NATO military alliance, Jens Stoltenberg, has admitted that “we don’t see any imminent threat against any NATO ally” and the Stockholm International Peace Research Institute recorded in its 2018 World Report that “at $66.3 billion, Russia’s military spending in 2017 was 20 per cent lower than in 2016.”

Even Radio Free Europe, the US government’s anti-Russia broadcaster, records that Russia has reduced its defence spending.

There is demonstrably no threat whatever to any NATO country by Russia, but this is considered irrelevant in the context of US arms’ sales, which are flourishing and being encouraged to increase and multiply.

On July 12, the second and final day of the recent US-NATO meeting, Reuters reported Trump as saying that “the United States makes by far the best military equipment in the world: the best jets, the best missiles, the best guns, the best everything.”  He went on “to list the top US arms makers, Lockheed Martin Corp, Boeing Co and Northrop Grumman Corp by name.”

On July 11 the Nasdaq Stock Exchange listed the stock price of Lockheed Martin at $305.68.  The day after Trump’s speech, it increased to $318.37.

On July 11 the Nasdaq Stock Exchange listed the stock price of Boeing at $340.50.  The day after Trump’s speech, it increased to $350.79.

On July 11 the New York Stock Exchange listed the stock price of Northrop Grumman (it doesn’t appear on Nasdaq) at $311.71.  The day after Trump’s speech, it increased to $321.73.

General Dynamics, another major US weapons producer, might not be too pleased, however, because its stock price rose only slightly, from $191.51 to $192.74.  Nor might Raytheon, the maker of the Patriot missile system which Washington is selling all over the world, because its stock went up by a modest five dollars, from $194.03 to $199.75.  Perhaps they will be named by Trump the next time he makes a speech telling his country’s bemused allies to buy US weapons.

To continue reading: NATO Is a Goldmine for US Weapons’ Industries

Twilight of the Euro? by Hans-Werner Sinn

The euro has not been a success, and it’s probably just a matter of time before Europe puts it out of its misery. From Hans-Werner Sinn at project-syndicate.org:

Twenty years after the formal creation of the euro, few can honestly say that the single currency has been a success. After fueling a massive credit bubble in Southern Europe in its first decade, it gave rise to an array of complex monetary-policy and transfer schemes in its second – and more trouble is looming as it enters its third.

MUNICH – In May 1998, irrevocable conversion rates for the currencies that would be merged into the euro were implemented. In a sense, this makes the single currency just over 20 years old. The first decade of its life had the feeling of a party, particularly in Southern Europe; but the second decade brought the inevitable hangover. Now, as we enter the third decade, the prevailing mood seems to be one of increasing political radicalization.

The original party was a cornucopia of cheap credit, which capital markets happily issued to the countries of Southern Europe under the protection of the euro. For a while, these countries finally had enough money to increase public-sector salaries and pensions, as well as spur private consumption and investment.

But the credit flooding into these countries created inflationary bubbles, which burst when the 2008 financial crisis in the United States spread to Europe. As capital markets refused to extend further credit, Southern Europe’s previously halfway-competitive but now overpriced economies soon ran into serious trouble.

The Southern Europeans’ response was to start printing what they could no longer borrow. Aided by the European Central Bank – which loosened its collateral policy for refinancing credits and increased its tolerance for emergency liquidity assistance and credits under the Agreement on Net Financial Assets – they drew hundreds of billions of euros out of the monetary system through so-called Target overdrafts. And from 2010 onward, they were the recipients of EU fiscal rescue packages.

But, because financial markets viewed these rescue packages as insufficient, the ECB, in 2012, issued a promise to cover unlimited member-state government bonds under its “outright monetary transactions” program, turning them into de facto euro bonds. Finally, in 2015, the ECB launched its quantitative-easing program, whereby member states’ central banks bought €2.4 billion ($2.8 billion) worth of securities, including €2 billion of government bonds. Accordingly, the eurozone’s monetary base grew dramatically, from €1.2 trillion to over €3 trillion.

To continue reading: Twilight of the Euro?

Is Europe America’s Friend or Foe? by Jean Pisani-Ferry

It’s hard to tell if Trump regards Europe as a friend or foe. However, Europe has to define itself before it will command respect from either Trump or the world. From Jean Pisani-Ferry at project-syndicate.org:

Since Donald Trump took office as US president, a new cottage industry in rational theories of his seemingly irrational behavior has developed. On one issue, however, no amount of theorizing has made sense of Trump: his treatment of America’s oldest and most reliable ally.

PARIS – Since Donald Trump became US president in January 2017, his conduct has been astonishingly erratic, but his policies have been more consistent than foreseen by most observers. Trump’s volatility has been disconcerting, but on the whole he has acted in accordance with promises made on the campaign trail and with views held long before anyone considered his election possible. Accordingly, a new cottage industry in rational theories of Trump’s seemingly irrational behavior has developed.

The latest challenge is to make sense of his stance towards Europe. At a rally on June 28, he said: “We love the countries of the European Union. But the European Union, of course, was set up to take advantage of the United States. And you know what, we can’t let that happen.” During his recent trip to the continent, he called the EU “a foe” and said it was “possibly as bad as China.” Regarding Brexit, he declared that British Prime Minister Theresa May should have “sued” the EU. Then came the truce, on July 25: Trump and Jean-Claude Juncker, the president of the European Commission, agreed to work jointly on an agenda of free trade and World Trade Organization reform.

So it seems we are friends again – or perhaps just resting before the dispute resumes. But the deeper question remains: Why has Trump repeatedly attacked America’s oldest and most reliable ally? Why does he seem to despise the EU so deeply? Why should the US try to undermine Europe, rather than seeking closer cooperation to protect its economic and geopolitical interests?

To continue reading: Is Europe America’s Friend or Foe?

Tariffs, Barriers and Subsidies, by Raúl Ilargi Meijer

If your tariffs, trade barriers, and subsidies are low and the other nation’s are high, if you want them lowered, what leverage do you have other than to raise yours? From Raúl Ilargi Meijer at theautomaticearth.com:

There’s not a shade of a doubt that I’m not an expert on tariffs, trade barriers and subsidies, and I’d be the last to suggest any such thing. But I can read. Still, do correct me if I’m wrong anywhere. The whole field is so complicated -no doubt often on purpose- that there’s always the possibility that there are side issues involved for which one would need to actually be an expert.

But still. Now that EU chief Jean-Claude -‘When it becomes serious, you have to lie’- Juncker is due to arrive at the White House soon, I looked at some of the items involved. Last night Trump said that all tariffs, barriers and subsidies should be dropped between the EU and US. Why the TTiP doesn’t come anywhere close to that is anyone’s guess. Too complicated for the boys and girls?

In at least some major fields, Trump does seem to have a point or two. The US has a 2.5% tariff on European cars, while the EU slaps a 10% tariff on American cars. That’s 4x as much, or a 300% difference. Whoever said yes to that? Sure, the US has a 25% tariff on EU pickups, but nobody in Europe drives pickups, hence they don’t produce them, so that’s not consequential.

So what had Trump done? He’s threatened a 20% tariff on Beemers and Mercs, and added -for entertainment value only- that he doesn’t want to see any of them in on Fifth Avenue anymore. Cue EU carmakers warning about the cost to American customers.

That’s all fine and well, but those tariffs on personal cars are still 300% higher. So push your European government to make them equal. Easy as -American- pie. How about zero? I can see where Trump’s coming from. Issuing warnings to the American public about BMW’s getting more expensive doesn’t look entirely on the up and up.

To continue reading: Tariffs, Barriers and Subsidies

 

NATO Trumped, by Patrick Armstrong

If we can’t get rid of NATO because it’s essential for the defense of Europe and the Russian threat, why don’t NATO’s members seem, judging by what they spend on defense, at all concerned about that threat? From Patrick Armstrong at strategic-culture.org:

Those of us who regard NATO as one of the primary sources of international instability thanks to its wars of destruction in the MENA and provocation of Russia were looking forward with delighted anticipation to Trump’s appearance at the NATO summit. We were not disappointed. I would have loved to have been a fly on the wall when Trump came late to the meeting where Ukraine and Georgia were banging on about the Russian threat, started ranting about spending and blew up the decorous charade. Ukraine and Georgia were then dismissed and a special meeting was convened. (A side effect of his “creative destruction” was that the Ukrainian President delivered his speech to a practically empty room). He started his assault before the meeting, opening Twitter fire on Germany, returning to the attack in his breakfast meeting with NATO’s GenSek:

Germany is totally controlled by Russia because they will be getting from 60% to 70% of their energy from Russia, and a new pipeline, and you tell me if that’s appropriate because I think it’s not and I think it’s a very bad thing for Nato.

Good fun for some of us but a stunner to the Panjandrumocracy: “meltdown“, “tantrum“, “latest diplomatic blowup“, “making bullying great again” and so on.

As ever, Trump’s statements were extreme and his numbers might not stand up to examination but most commenters (typically) left out the context. Which was a piece by German Chancellor Merkel herself in which she called for NATO to focus on the threats from Russia: “the alliance has to show determination to protect us”.

This gave Trump the opening to pose these questions (posed in his own way, of course, in a strategy that most people – despite the example of North Korea – have still not grasped).

1. You tell us that NATO ought to concentrate on the Russian threat. If Russia is a threat, why are you buying gas from it?

2. You tell us that Russia is a reliable energy supplier. If Russia is a reliable supplier, why are you telling us it’s a threat?

3. I hope you’re not saying Russia is a threat and its gas is cheap but the USA will save you.

To continue reading: NATO Trumped