Calculate your payments. Island does not want us. Bank bailout á la Fantozzi.
Greece has its primary budget surplus lower than 1%. It means that excluding debt costs revenues are higher than expenditures. This piece of news is a standard successes fanfare of Troika announcing the recovery of the economically devastated country. The problem is that Greece also has a high debt, and annual economic growth below 2%. To be able to begin to amortize the debt, the surplus would have to be at least 12%. Therefore, Greeks would have to collect 11 billion more in taxes (or possibly combine it with budget cuts) while having only 50 billion overall budget today. On the other hand, Germans would be able to pay off their debt even with 0.2% primary deficit. Slovakia would need approximately 0.53% surplus, while now it has primary deficit of 1.2% GDP.
It is reported that the longstanding fall in real estate prices in Spain is coming to an end, but simultaneously unemployment rate has reached 26%, and the level of non-performing loans is up to 15%. Portuguese opposition has rejected the governmental proposal to set public expense limits until 2017. The opposition will not support “pauperization of the country.” Or maybe they are just afraid there will not be anything left for them after the subsequent election. There are not many reasons to celebrate also north of the Pyrenees. French deficit in 2013 was in fact 2.7 billion euros higher than had been expected. This is due to lower tax incomes, even though tax levels have been increased and new taxes have been introduced. Well, who would have thought … However, 2.7 billion is like a drop in the ocean if we take a look at the huge 75 billion overall deficit.
The topic of the week was immigrants though. Not the immigrants who are running from wars and coming to Europe on small crowded boats, but us – Eastern Europeans. The UK has restricted some welfare benefits to British citizens. The government will not save a lot by this policy (more than 90% of beneficiaries are British citizens), but we can hardly say anything – it is their decision and their money. But Cameron’s government is also trying to restrict the free movement of labour within the EU, which is one of the main points of the EU. Cameron has not been very successful yet, but he has some support also among leaders of other Western European countries. We can only hope the meaning of the EU for us will not be reduced to cucumber regulations and guarantees to Greek debts.
In Britain a strong PR campaign is surrounding the upcoming referendum to leave the EU. It is reported that European farming regulations are one of the causes of recent floods in the UK. Regulations have forced farmers to get rid of “unwanted vegetation,” which includes bushes that were previously retaining rain water. This may or may not be true. The fact is that successive bureaucratization and unification of every aspect of European life kill private initiative and the trial-and-error attitude that were the sources of many inventions or improvements in the past.
The EU is unsuccessful in buying its popularity via regional development, too. “EU funding has become a ‘straightjacket’ and a barrier to real economic growth in Wales,” claims one of Welsh Member of Parliament. His opinion has also been approved by studies. Handing out money works neither in Africa, nor in Europe.
Recently, we have finally found out how to save European banks – the Union has reached a consent on banking regulations. It only needs 24 members of the Board of the Single Supervisory Mechanism, 24 members of the ECB Governing Council, 3 members of the SSM Mediation Panel, 28 members of the Council of the EU, and 28 Commissionaires. All these bodies need to decide on their own and subsequently also among themselves. Optimistic predictions say it will take them 147 years to make the decision.
But it is very possible that this decision will be needed in the upcoming years. A new study has calculated that, if the upcoming stress test is tough (i.e. meaningful), it will discover a capital shortfall of 770 billion euros (45 Slovakian government budgets). Our taxes have been used also for bank bailouts. This fact has been highlighted by our campaign suggesting that people should be more interested in what happens to their money. The campaign was noticed by Czech Reflex magazine.
Guy Verhofstadt is a new candidate for the President of the Commission. But the comeback of the living legend of Italian politics, who has struck a deal with the largest centre-left party on electoral reform, is of more interest. Berlusconatot would not probably be stopped even by a hydraulic press.
However, maybe he could freeze to death. British scientists claim that Sun is showing signs of Maunder Minimum, i.e. a quiet phase of lower activity which could potentially lead to a mini-ice age, like the one in 17th century. That would be a terrible shame after so much investment into reducing carbon emissions…
One good piece of news at the end – in the autumn we will get rich. In September, Eurostat is going to change its methodology of GDP calculation, which will lead to a one-time-only increase in the European GDP by 2.4%.
Let there be Christmas, not only in September and December, but every month!