Author Archives: Andi Howe

Tsipras: For Whom the Bell Tolls…

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Greek Prime Minister Tsipras writes in Le Monde (translation by w-t-w.org):  The Greek people made a courageous decision. They dared to challenge the one-way street from the rigorous austerity of the Memorandum, in order to claim a new agreement. The Greek people paid a high price for these mistakes. In five years, unemployment has soared to 28% (60% for young people), and average income fell by 40%, while Greece, according to Eurostat statistics, has become the State of the Union European (EU) having the highest social inequality index.
Worse, despite the blows that have been brought to the social fabric, the program failed to restore the Greek economy’s competitiveness. Public debt has soared by 124% to 180% of GDP. The Greek economy, despite the great sacrifices of his people, is still trapped in a climate of uncertainty caused by ongoing non attainable goals of the doctrine of the financial equilibrium, which obligate to stay in a vicious circle of austerity and recession.

The main aim of the Greek government in the last four months is to end this vicious circle and to this uncertainty. A mutually beneficial agreement that will set realistic targets in relation to surplus while reintroducing the development agenda and investment – a definitive solution to the Greek case – is now more necessary than ever. Moreover, such an agreement will mark the end of European economic crisis that erupted there seven years, ending the cycle of uncertainty for the euro area.

Today, Europe is able to take decisions that will trigger a strong recovery of the Greek and European economy by ending scenarios of a “Grexit” (Greek exit). These scenarios prevent the long-term stabilization of the European economy and are likely to undermine confidence at any time both citizens and investors in our common currency.
However, some argue that the Greek side does nothing to move in this direction because it comes to negotiations with intransigence and without proposals. Is that the case?

Tsipras continues in this vein and ends with the caution from John Donne as quoted by Ernest Heminway:  For whom the bell tolls, but does not get to: “If a clod be washed away by the sea, Europe is the less.”

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Infrastructure Repair

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Paris will say goodbye to  the Pont des Arts loved by couples worldwide. On Monday 1 June, the padlocks which represent a love pledge will all be removed. One of the barriers had collapsed.  After almost a million couples have declared their love by plaing padlocks on the bridge, 54 tons of metal threaten to sink the deck.

The mayor of Paris has found a solution: the Plexiglas panels will be installed this fall, but as of Monday 1 June, the bridge will be closed for a week to remove the padlock.. Artists will display their work this summer.

o-PONTS-DES-ARTS-facebook

 

Clean Energy Initiatives

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Clean Energy on the Rocky Road to Globalization

U.S. Energy Secretary Ernest Moniz launched several new initiatives with other global energy leaders at the Energy and Climate Partnership of the Americas (ECPA) and the sixth Clean Energy Ministerial (CEM6) this week in Merida, Mexico. These initiatives will further strengthen momentum in the Western Hemisphere and around the globe to combat climate change and accelerate clean energy technology and policies ahead of the December 2015 climate talks in Paris. At both ECPA and CEM6, energy ministers discussed technology solutions to grow low-carbon economies while helping to implement national commitments to reduce climate pollution.

At ECPA, Secretary Moniz met with energy ministers from across the Western Hemisphere to discuss areas of cooperation in the region. The ministerial established two new initiatives – the North American Energy Ministers Working Group on Climate and Energy with Canada and Mexico, and the ECPA Western Hemisphere Clean Energy Initiative with governments from around the region.

The new trilateral Working Group enhances a North American Energy Ministers’ Areas of cooperation include reliable, resilient, and low-carbon electricity grids; modeling and deployment of clean energy technologies; energy efficiency for equipment, appliances, industries, and buildings; carbon capture, use, and storage; climate change adaptation and resilience; and emissions reduction from the oil and gas sector.

At CEM6, Secretary Moniz and fellow ministers announced new efforts to increase the ambition and productivity of CEM – or “CEM 2.0.” They created a year-round steering committee made up of China, Denmark, the European Commission, France, India, Mexico, the United Arab Emirates, and the United States to guide the strategy for CEM.

Together with a series of hemispheric partners, Secretary Moniz also announced the ECPA Western Hemisphere Clean Energy Initiative, under which countries announced that they intend to work toward a collective doubling of renewable sources such as solar, wind, small-scale hydropower, sustainable biomass, and geothermal, by 2030.

billion high-efficiency, high-quality and affordable advanced lighting products as quickly as possible. With lighting accounting for 15 percent of global electricity usage, replacing the world’s existing

The United States also announced efforts to dramatically scale-up the Clean Energy Solutions Center, a CEM initiative that has already provided real-time, no-cost clean energy expert policy assistance to more than 80 countries around the world.

Clean Energy

Crime and Exemptions for Big Banks

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The ever clever Matt Levine suggests that the more banks you charge with crime, the less damaging the charge is.  In Texas, the state employees’ pension fund stopped doing business with Credit Suisse last year because it had “a policy against hiring firms convicted of felonies,” but now that basically all the big banks have been convicted of felonies, it has tossed that policy. Welcome back Credit Suisse! We’ve talked before about how charging all the banks with crimes de-stigmatizes those crimes, and I won’t belabor the point.

Our associate Andres Frank testifified before the US Department of Labor on January 15, 2015 on the Credit Suisse exemption.  Credit Suisse had pled guilty to a criminal charge of aiding and abetting tex evasion by US citizens.  Credit Suisse was granted a temporary exemption, but Maxine Waters, Congresswoman from Callifornia, insisted that a permanent exemption be preceded by hearings.

Perhaps to make it seem that the ‘culture of corruption’ apparent in Credit Suisse could be cured, the CEO stepped down after this hearing.  No final decision has yet been rendered.

When Does Guilty Mean Guilty?

Grexit?

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Mohamed A. El-Erian writes: In 2011, overwhelming opposition from Greece’s European partners forced Prime Minister George Papandreou to withdraw a proposal for a referendum seeking a “clear mandate” from voters to carry out European Union-backed policies. Last week, the opposite scenario unfolded: Germany suggested that the Greek government hold a plebiscite on whether to accept creditors’ demands for economic reforms or ultimately leave the euro zone. Greece demurred.

This role reversal reveals at least three consequential aspects of the changes:

  •  First, having achieved progress on containing and isolating the Greek crisis, Europe seems a lot less worried about the potential for negative spillover effects should the multiyear drama now end in tragedy.
  •  Second, Europe is becoming less resistant to the notion of Greece exiting the single currency, especially if this were the result of a Greek decision rather than one imposed by its EU partners.
  •  Third, the proposed referendum would push the Syriza-led government into a lose-lose situation.

To understand these three developments, it is worth recalling why Europe crushed the referendum proposed by the Greek government in 2011.

Confronted by pockets of internal opposition, Papandreou saw the referendum as a way to mobilize broad-based voter backing to implement difficult economic reforms.

Almost four years later, Europe is far less worried about the adverse consequences of a Grexit.  The change in Europe’s attitude has been influenced by events in Greece. Syriza’s election success was fueled by repeated promises to alter course on economic policy, including by being less compliant with the austerity demands imposed by Greece’s European partners and the International Monetary Fund. At the same time, the government’s ability to secure agreement with its creditors has been repeatedly undermined by public disagreement, a trust deficit, and rookie governing mishaps. In such circumstances, a referendum presents a lot more downside for the Greek government than in 2011.

A referendum that showed broad-based support for EU-imposed measures would undermine both the unity and electoral credibility of Syriza.

Even the rejection of EU-imposed measures in a referendum wouldn’t be a good outcome for Syriza. The vote would accelerate capital outflows, risk a large-scale run on banks and make it very hard for the European Central Bank to continue to provide Emergency Liquidity Assistance, all of which would bring closer the country’s economic and financial implosion.

The Greek government’s hope is to retain control as it secures time to compel creditors to agree to an easing of austerity measures, a reorientation of some structural reforms, greater debt relief and a large injection of immediate funding beyond what is being provided by the ECB.  That is why it will resist a referendum; and why its European partners will continue to insist on such a vote.

Grexit?

France’s Tough Stand Against Russia

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Josh Gelernter writes:  Early last year Russia invaded and annexed Crimea, and ginned up a separatist movement in Ukraine’s east. Ever since, it has supported those separatists financially, with arms, and, sometimes, in battle.

When Russia started violating “21st-century norms,” the West responded with 1930s-style anti-aggression sanctions. As the EU worked out what its sanctions would include, France made sure they excluded two Mistral helicopter carriers that France was building, for which Russia had already paid nearly a billion dollars.

The deadline for the carriers’ delivery to Russia was last September. As the deadline approached, France suffered a stroke of conscience and announced that it wouldn’t deliver the ships until there was a ceasefire, and movement toward a political settlement, in East Ukraine. The September deadline came and went. Russia demanded the ships; France wouldn’t budge. Russia gave the French a new, December 1 deadline to turn the Mistrals over. That deadline came and went as well.

What’s the big deal about helicopter carriers? Like Ukraine, each of the three Baltic countries — Latvia, Lithuania, and Estonia — has a large ethnic-Russian population. NATO, and any number of geopoliticos in the U.S. and Europe, believe that after East Ukraine joins Crimea and northern Georgia in Russia’s new empire, Putin plans a pivot to the Baltics. Last September, Russia held an enormous war game along the Latvian and Lithuanian borders. About the same time, Russian spies crossed into Estonia, kidnapped an Estonian intelligence officer, and tossed him in prison. (Where he remains. Free Eston Kohver!)

Russia’s threat to the Baltics is backed up by its Baltic fleet, which is based in Kaliningrad, the Russian Baltic-coast enclave sandwiched between Lithuania and Poland. Kaliningrad is the focus of new military investment.

Here’s the kicker: According to the wiki-leaked Stratfor analysis, if the Mistrals join Russia’s Baltic fleet, they will “[cut] deployment time [of Russian forces] to anywhere in the Baltic states from five days to 24 hours.”

So give the French credit; they’re taking a big financial hit in order to do the right thing. They will, evidently, repay Moscow’s money.

Surprisingly, the Russians — who have lost two carriers and, according to the Moscow Times, are stuck with “a special batch of Ka-52 attack helicopters” specially designed “to fill them” — have responded to France’s hard line with conciliation.

It’s a sad day when the U.S. gets lessons in courage from France.

Mistral ships

Tsipras Threat and Aftermath

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 Greece’s Prime Minister Alexis Tsipras had at one stage warned foreign creditors that Athens would not repay 750 million euros due to the IMF in May unless they provided it with immediate liquidity, the Kathimerini newspaper reported.

Athens ultimately made the May 12 payment by emptying an International Monetary Fund holding account.

Citing European sources, the newspaper said Tsipras made the threat in a May 8 letter to EU Commission President Jean-Claude Juncker, IMF head Christine Lagarde and ECB President Mario Draghi.

Greek Debt

 

The Clintons and The Bankers

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Nomi Prins writes:  When Hillary Clinton video-announced her bid for the Oval Office, she claimed she wanted to be a “champion” for the American people. Since then, she has attempted to recast herself as a populist and distance herself from some of the policies of her husband. But Bill Clinton did not become president without sharing the friendships, associations, and ideologies of the elite banking sect, nor will Hillary Clinton. Such relationships run too deep and are too longstanding.

To grasp the dangers that the Big Six banks (JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, Goldman Sachs, and Morgan Stanley) presently pose to the financial stability of our nation and the world, you need to understand their history in Washington, starting with the Clinton years of the 1990s. Alliances established then (not exclusively with Democrats, since bankers are bipartisan by nature) enabled these firms to become as politically powerful as they are today and to exert that power over an unprecedented amount of capital. Rest assured of one thing: their past and present CEOs will prove as critical in backing a Hillary Clinton presidency as they were in enabling her husband’s years in office.

In return, today’s titans of finance and their hordes of lobbyists, more than half of whom held prior positions in the government, exact certain requirements from Washington. They need to know that a safety net or bailout will always be available in times of emergency and that the regulatory road will be open to whatever practices they deem most profitable.

Whatever her populist pitch may be in the 2016 campaign — and she will have one — note that, in all these years, Hillary Clinton has not publicly condemned Wall Street or any individual Wall Street leader.

 

Hillary Clinton’s access to her husband’s past banker alliances, amplified by the ones that she has formed herself, makes her more of a friend than an adversary to the banking industry. In her brief 2008 candidacy, all four of the New York-based Big Six banks ranked among her top 10 corporate donors. They have also contributed to the Clinton Foundation. She needs them to win, just as both Barack Obama and Bill Clinton did.

No matter what spin is used for campaigning purposes, the idea that a critical distance can be maintained between the White House and Wall Street is naïve given the multiple channels of money and favors that flow between the two. It is even more improbable, given the history of connections that Hillary Clinton has established through her associations with key bank leaders in the early 1990s, during her time as a senator from New York, and given their contributions to the Clinton foundation while she was secretary of state. At some level, the situation couldn’t be less complicated: her path aligns with that of the country’s most powerful bankers. If she becomes president, that will remain the case.  The Clintons and the Banks

US Senate Strikes Deal on Trade

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On the Rocky Road to Globalism:

Alex Bolton: “Senate leaders have reached a deal to revive President Obama’s trade agenda, which stalled Tuesday after Democrats filibustered it. Under the agreement, senators will vote on two controversial bills favored by Democrats before moving to a wide-open debate on granting Obama fast-track authority to negotiate future trade deals. It comes a day after an embarrassing defeat for the White House that highlighted tensions between the president and liberal Democrats led by Sen. Elizabeth Warren (D-Mass.). Republicans said Democrats shifted their stance after getting pummeled in the media.”

Some US Senate Democrats Vote for TPP

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The Rocky Road to Globaliation

Alexander Bolton writes: Washington Sen. Patty Murray is breaking with the rest of the Senate Democratic leadership over trade legislation.

Murray supports granting President Obama fast-track authority to negotiate trade deals, such as the Trans-Pacific Partnership. She also favors moving the fast-track measure before the Senate recesses for its Memorial Day break.  But other Democratic leaders oppose fast-track.

Senate Democratic Leader Harry Reid (Nev.) has vowed to delay it until Republicans lay out a clear path for passing an extension of the Highway Trust Fund and the National Security Agency’s surveillance authority in the next two weeks.

Nearly 40 percent of Washington state’s jobs are tied to exports, according to local business leaders, and she doesn’t want to play with fire when she’s facing reelection next year.

Senate Democratic Whip Dick Durbin (Ill.) said Tuesday there are “major challenges” that give him pause over granting Obama fast-track authority, and noted he voted against a similar bill in 2002.

Murray and Durbin could face each other for the whip post at the end of this Congress.

Durbin said he agrees with Reid that trade legislation should not move until Republicans lay out a clear plan for highway funding and surveillance authority.

New York Sen. Charles Schumer, the third-ranking member of the Senate Democratic leadership, who is a lock to replace Reid as the Senate’s top Democrat in 2017, voted against TPA in the Finance Committee.

Murray downplayed tensions with other Democratic leaders over trade.

“We all accept that we come from different regions and different states,” she said.

Kris Johnson, president and CEO of the Association of Washington Business, said she hails from one of the most trade-dependent states in the country.

“Forty percent of jobs in Washington state are tied to trade in one manner or another,” he said. “I think last year alone we set an all-time high record of just over $100 billion in exports.”  He said Washington exports more per capita than any other state except for Louisiana, adding that the local aerospace, technology and agriculture industries depend on trade.

Microsoft is headquartered in Redmond, Wash., and Boeing employs more than 80,000 people across the state.

Sen. Maria Cantwell (D), Murray’s home-state colleague, said she will vote for fast-track if it moves with an extension of the Export-Import Bank and other measures.

 TPP in Washington State