After the Brexit Referendum, a Fiscal Union Will be Brussels’ Surprise

The process of drawing up a joint EU budget has just commenced: it is the first step to a fiscal union. The idea of having a joint budget has long been pushed forward by the proponents of a more tight integration, just as it has been opposed by the European population at large. The term budgetary or fiscal capacity should be properly understood: it is a joint budget for the eurozone that will be governed by a real treasury in Brussels. To create a collective treasury, Europe’s social and economical model has to be brought in line. For this, Brussels wants all minimum wages to be equal. Martin Schulz, the President of the European Parliament, announced drastic reforms after the Brexit referendum. Following 23 June the aforementioned process of integration will gain momentum and it is likely to encounter upheavals because there is widespread aversion to federalization. Continue reading

Poland Prepares to Import Own Gas From the North Sea

Polish President Andrzej Duda has visited Norway to attend the Polish-Norwegian Economic Forum in Oslo. As a result, the political approval for gas supply to Poland from Norway has been made. Also Denmark has offered its support for the construction of the Baltic Pipe (a gas link that would connect Poland and Norwegian gas fields through the Danish infrastructure as part of the route). The state-run Polish gas company PGNiG bought in 2014 shares in four fields on the Norwegian Continental Shelf. The gas supply from Norway as well as the LNG supplies to the Świnoujście terminal are part of Poland’s plan to reduce its reliance on gas supplies from Russia. The Baltic Pipe would also secure gas supply to Poland, Ukraine, Slovakia and the Baltic states or even Finland.
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French Manufacturing PMI Resembles that of Greece Rather than Germany

The monthly €80 billion ECB’s quantitative easing, harmful internal reforms and high public deficit have not helped the French manufacturing sector which has contracted for the third straight month in May, even if the reading was insignificantly higher than expected. The Markit Eurozone Manufacturing PMI posted a three-month low in May. The euro area has stuck in stagnation and France has joined Greece as a main concern.

Mario Draghi’s policy did not prevent the widening of the economic gap between Germany and France. PMI data shows that both the imbalance between the two countries and Germany’s power within the monetary block have increased. From the latest PMI data one can conclude that the cheap euro improves German economy while it cannot prevent France from falling further behind. While Germany’s ruling elite are voicing a vehement opposition to the ECB’s policies, it is absolutely clear that the Paris Establishment are not amused by the result. Continue reading

Belarus: between international recognition and a Maidan scenario

Belarus the last pariah of Europe? Its leader, referred to as dictator, shunned by polite society? Its image tarnished in the media? No longer so. Alexander Lukashenko’s fortress has been laid siege to, has been bombarded and… emerged victorious. With flying colors. Minsk has hosted talks on Ukraine’s future, the sanctions have been lifted, and President Lukashenko has been readmitted both to the lay (Rome) and spiritual (the Vatican) European salons. Continue reading

France plunged in chaos; are the days of François Hollande numbered?

Two weeks before the UEFA EURO 2016 starts in Saint-Denis near Paris the situation in France is deteriorating rapidly now that the country is also running out of petrol due to labor unrest. The French police are overwhelmed due to the state of emergency after the two terrorist attacks in Paris last year. Since then there have been large-scale civil upheavals and riots due to labor law reforms and chaos as a result of  immigration problems near Calais.

France is known for its radical labor protests and it is not the first time the country experienced a petrol shortage due to blockades. But this time it is different because there is now discontent at all levels of French society. Francois Hollande has an approving rating of 17 %, which is the lowest ever for a president of the Fifth Republic. Continue reading

The Downing of Flight MS804 Can Crash the European Economy

Is the downing of MH804 the first in a series of attacks that will crash the European economy? It is not yet clear what brought the Egyptian Flight MS804 down. No Jihadist group has claimed responsibility until now. The data from the plane sent to a data center just before the crash indicates that there was smoke near the cockpit. One of the possible scenario’s is that some of the Charles De Gaulle airport staff smuggled a bomb on board of the plane. The same plot brought down the Russian plane . Charles De Gaulle already dismissed 70 staff members due to their connections with ISIS.

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The ECB grants debt relief to all Eurozone nations except Greece

source: VoxEU.org
Greece may be about to get some debt relief, although there is still resistance to the idea. This column argues that the ECB has been providing other Eurozone countries with debt relief since early 2015 through its programme of quantitative easing. The reason given for excluding Greece from the QE programme – the ‘quality’ of its government bonds – can easily be overcome if the political will exists to do so. It is time to start treating a country struggling under the burden of immense debt in the same way as the other Eurozone countries are treated.

It looks like Greece may get some debt relief. There is as yet no certainty about this because some German politicians continue to conduct rear-guard battles to prevent it. What is certain, however, is that all Eurozone countries, with the exception of Greece, have been enjoying debt relief since early 2015. That may seem surprising to the outsider. Some explanation is necessary here. Continue reading