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Will Britain Exit From EU Before Greece?

November 19, 2012 1 comment

It is unclear what benefit EU derives from British membership. But British expulsion from EU will surely simplify EU politics & debates

Britain is the cussed slow-driver on the Euro-bahn who will not let the Euro-truck overtake  |  Cartoon By Tom Janssen, The Netherlands - 12/12/2011 12:00:00 AM; source & courtesy - caglecartoons.com

Britain is the cussed slow-driver on the Euro-bahn who will not let the Euro-truck overtake | Cartoon By Tom Janssen, The Netherlands – 12/12/2011 12:00:00 AM; source & courtesy – caglecartoons.com

Britain – EU’s Fifth Column?

At each stage of the European Union, Britain has been a reluctant member. In the last few decades, with its manufacturing in deep decline, Britain has been working on propping up its multinationals.

Vodafone is one such example. It has become the world’s largest telecom operator using tax-loopholes (provided by the British Govt.) and massive debt underwritten by British banks. Vodafone has nothing – no manufacturing, no technology, no R & D with which it has become the largest operator.

Is the EU going to be such a push-over? US would definitely hope so.  |  Euro-loser cartoon By Taylor Jones, Hoover Digest  -  4/24/2012 12:00:00 AM; source & courtesy - caglecartoons.com

Is the EU going to be such a push-over? US would definitely hope so. | Euro-loser cartoon By Taylor Jones, Hoover Digest – 4/24/2012 12:00:00 AM; source & courtesy – caglecartoons.com

The Anglo-Saxon Bloc

Britain derives much greater power and influence by coordinating policy and finance within the four Anglo-Saxon countries – Australia, Canada, US and Britain itself.

The Anglo-Saxon Bloc is

  1. Top producer of
    • Oil
    • Gold
    • Defence
  2. Controls world production in
    • Media
    • Microchips
    • Academia
  3. Regulates
    • Global finance and banking
    • Money production

It is unclear what benefit EU derives from British membership – but British expulsion from EU could surely simplify EU politics and debates.

Compared the colossal debt that Britain is carrying, the EU budget is smaller issue.  |  Cartoon on  EU Budget cut row by Paresh Nath, The Khaleej Times, UAE  -  11/4/2012 12:00:00 AM; source & courtesy - caglecartoons.com

Compared the colossal debt that Britain is carrying, the EU budget is smaller issue. | Cartoon on EU Budget cut row by Paresh Nath, The Khaleej Times, UAE – 11/4/2012 12:00:00 AM; source & courtesy – caglecartoons.com

Bite the Bullet

EU officials have begun work on a plan to create a long-term budget without the UK in a move that reflects mounting frustration that Britain’s demand for a spending freeze cannot be reconciled with the rest of the bloc.

Both EU officials and national diplomats have been studying the legal and technical feasibility of devising such a budget, according to people familiar with the discussions, ahead of a two-day summit beginning on Thursday in Brussels, where the EU’s 27 heads of government will try to reach an agreement on the long-term budget.

The prospects for that meeting have darkened in recent days as several diplomats have come to the conclusion that it will be impossible to accommodate the UK’s demands, and are now predicting failure.

“Because of the British stance people are looking, both in national capitals and in Brussels, for a solution at 26. It’s being looked at from a financial and legal point of view,” one official said.

The plan may be a negotiating ploy to try to put more pressure on David Cameron, the UK prime minister, to compromise. The budget talks will resume on Monday evening when Herman Van Rompuy, the European Council president, hosts a dinner of European ministers.

Officials acknowledge that such an approach – if pursued – would be rife with complexities. It could also have grave consequences for the UK’s already fragile relationship with the rest of the EU. “There are people talking about this,” a diplomat said, but added: “There are huge questions.”

Downing Street on Sunday said it was “sure” the idea was being discussed in Brussels but rejected the idea of a budget deal without Britain as “not acceptable”.

“Ultimately we have to agree to spending this money,” a spokesman for Mr Cameron said. “We make a significant net contribution and parliament has a strong view on this.”

Mr Cameron has staked out the most aggressive position in the debate over the long-term budget, which will cover roughly €1,000bn in spending from 2014 to 2020, calling for a real-terms freeze from 2011 levels.

Sweden has taken a similar position to the UK and other countries could yet thwart a deal. France’s President François Hollande said on Saturday that “above all, spending on the common agricultural policy must be preserved”.

via EU makes budget plans without UK – FT.com.


Leadership – A Global Crisis?

November 20, 2011 4 comments

In the post-globalized world, political ideology, lack of leadership, economic crisis are all global problems – respecting no boundaries or territories.

Liberty will do ... as long as my Welfare State and my bailout is safe!   |  Cartoon Michael Ramirez; on 8th April, 2009; Source and courtesy - investors.com)  |  Click for larger image.

Liberty will do ... as long as my Welfare State and my bailout is safe! | Cartoon Michael Ramirez; on 8th April, 2009; Source and courtesy - investors.com | Click for larger image.

Thin Indian State

Over the last few years, 2ndlook research has shown that the Indian State is comparatively smaller and less widespread, compared to its more ‘developed’ counterparts in the world.

Unlike popular perception, the Developed World is shackled by a huge bureaucracy and an enormous compliance burden. This burden of legal compliance has made business impossible – except for mega corporations, which can invest in structures, systems and specialist for managing compliance.

Fat & ‘Developed’ World

Anecdotal confirmation of this data-based conclusion came this week. In a post by the nytimes.com columnist – Thomas Friedman.

Driving to the Indian town of Jodhpur last week, our Indian guide stopped to point out a modern landmark. “Do you see that stoplight?” he asked, pointing to a standard green-yellow-red stoplight in the busy intersection. “It’s the only stoplight in Jodhpur. There are 1.2 million people living here.”

The more you travel around India, the more you notice just how lightly the hand of government rests on this country. Somehow, it all sort of works. The traffic does move.

India needs to prove that its democracy can make and implement big decisions with the same focus, authority and stick-to-itiveness as China’s autocracy. No leaders want to take hard decisions anymore, except when forced to. Everyone — even China’s leaders — seems more afraid of their own people than ever.

One wonders whether the Internet, blogging, Twitter, texting and micro-blogging, as in China’s case, has made participatory democracy and autocracy so participatory, and leaders so finely attuned to every nuance of public opinion, that they find it hard to make any big decision that requires sacrifice. They have too many voices in their heads other than their own.

From India to America, democracies have never had more big decisions to make … The European Union has a particularly acute version of leaders-who-will-not-lead, which is why both Greece and Italy have now turned to unelected technocrats to run their governments.

Leaders shape polls. They don’t just read polls. And, today, across the globe and across all political systems, leaders are in dangerously short supply. (via Who’s the Decider? – NYTimes.com).

Look East … my friend

The answer to this crisis in leadership is Indic polity – भारत-तंत्र Bharat-tantra

A system that works on more freedom not increased governance, as the solution. On the other hand Western political constructs based on Desert Bloc political ideology have bloated State machinery to impossible sizes.

Friedman is right – and wrong

Yes.

There is a crisis of leadership. It is because we have invested to much power in the hands of polity. We have moved in a linear direction – with Desert Bloc systems that progressively need more laws, more powers that limit freedom.

No.

What we need is less political power – and more intellectual leaders. The Indic model, has the solution. One Vighneswara, sitting in a small town in Karnataka, wrote a legal text. Later, the Vighneswara’s Mitakshara became the law of the land of Bharat-ah.

For the next 700 years.


What is भारत-तंत्र Bharat-tantra – The classical Indian system of polity worked on ensuring

4 freedoms

– धर्म (dharma – justice)

– अर्थ (arth – wealth and means)

– काम (kaam – human desires)

– मोक्ष (moksha – liberty)

and

3 rights

– ज़र (jar – gold)

– जन (jan – human ties)

– जमीन (jameen – property)

for all.

An encounter in Athens

July 21, 2010 9 comments
Socrates being offered hemlock - death by drinking poison! The Death of Socrates by Jacques-Louis David at Metropolitan Museum of Art. Click for larger image.

Socrates being offered hemlock - death by drinking poison! The Death of Socrates (1787) by Jacques-Louis David (French, 1748–1825) at Heilbrunn Timeline of Art History. New York - Metropolitan Museum of Art. Click for larger image.

Socrates, the greatest of all oral communicators, was freaking out over “the very latest communications technology, written language based on an alphabet” though as Powers concedes, “writing wasn’t completely new”. Socrates believed that scrolls would erode thought by permitting people to forget what they had learned because they’d be able to look things up, that “they wouldn’t feel the need to ‘remember it from the inside, completely on their own.’ ” Worse, writing wouldn’t “allow ideas to flow freely and change in real time, the way they do in the mind during oral exchange.” (via Born to Check Mail By LAURIE WINER, Published: July 9, 2010, Book Review – Hamlet’s Blackberry – By William Powers – NYTimes.com).

Indian yogis in Athens

Socrates was a great believer in oral teaching. The shruti tradition in India was alive before Socrates was born. Was that a coincidence? After all, Valmiki committed to palm leaves pre-existing history. Similarly, Krishna Dwaipayan Vyasa wrote the pre-existing history of Mahabharata!

Mentioned by Aristoxenus and recalled by Eusebius, Socrates’ encounter with an Indian yogi however, is not well-known. Mentions of the Athenian encounter between the Indian yogi and Socrates are a rarity in modern history. Socrates was accused of

disrespect for the gods whom the state recognizes, of introducing new divinities and of corrupting the young

Socrates was condemned to death by poison. Compare this to Indian ethics which forbid violence against the intellectual class – the Indian brahmins, priests, and rishis.

One question!

What were the alien gods that Socrates was promoting? What was it that Socrates was teaching that ‘corrupted the Greek youth’. The alien gods and teachings that Socrates was accused of promoting – were these from India?

Why would the ancient Greeks be anti-Indian?

Pliny’s moralizing verdict on the Roman trade with India,’ borders on being an anti-India polemic. Pliny’s India writing’s remain a significant academic memory even today.

Why the anti-Indian polemic?

Indic ideas that threatened the world

Indian teachers and intellectuals were sent to all corners of the world. The spread of Buddhism in Asia is well-chronicled. In 2nd century AD, Origen, a Christian pioneer, attributed the spread of Christianity “The island (Britain) has long been predisposed to it (Christianity) through the doctrines of the Druids and Buddhists, who had already inculcated the doctrine of the unity of the Godhead”

Why did Buddhism become the most popular religion in the world. Pretty statues, musical chants? Unlikely ... (Photo by Benoy K. Behl, Courtesy - ngenespanol.com)

Why did Buddhism become the most popular religion in the world. Pretty statues, musical chants? Unlikely ... (Photo by Benoy K. Behl, Courtesy - ngenespanol.com) Click for larger image.

Mani, the Buddhist teacher,  and his adherents, known to Christians as Manicheans were the nightmare for Christianity till the 15th century, feared by the Vatican for a 1200 years. Vatican killed, burnt and quartered all those who displayed any leaning towards Manichean-ism.

St.Augustine was canonised for his conversion from Manichean to Christianity. When Mani called for overthrow of slavery, the Vatican at the Council of Gangra, re-affirmed its faith in slavery. Islamic invaders searched and destroyed statues or boet /buta (meaning statues of Buddha?).

The reason behind this ‘persecution’?

Indian economic system in 500 BC ensured property rights for all – something that Europe could achieve only in the 19th century. Property, wealth and power concentrations in Greece would be threatened by Indic thought.

Travelling salesmen stop travelling

From 5th century we increasingly see more stories of visits to India. Visits by Indian rishis begin to dry up. The last Indo-Buddhist seems to be Mani.

1000 years after Mani’s death, the Vatican was afraid of his his ‘hold’ over the European populations.

Socrates was a great believer in oral teaching. The shruti tradition in India was alive before Socrates was born.

After all Valmiki committed to palm leaves pre-existing history. Similarly Krishna Dwaipayan vyasa wrote the pre-existing history of Mahabharata!

This is not to forget the encounter between Socrates and the Indian Rishi.

From 5th century we increasingly see more stories of visits to India. Visits by Indian rishis begin to dry up. The last Indo-Buddhist seems to be Mani – of whom the Vatican was adraid even 1000 years later.

Were the alien gods and teachings that Socrates accused of promoting, from India? After Pliny’s anti-India polemic remains a significant memory even today .

How the Greeks learnt about emeralds!

The Mogul Emerald - only known emerald of the Mogul Period; dated near 1695; 10cm tall; weighs 217.8 carats; with intricate floral design including a rosette with poppies and foliage on one side; an Islamic prayer on the other; sold at an auction in London for $2.2 million (US).

The Mogul Emerald - only known emerald of the Mogul Period; dated near 1695; 10cm tall; weighs 217.8 carats; with intricate floral design including a rosette with poppies and foliage on one side; an Islamic prayer on the other; sold at an auction in London for $2.2 million (US).

Original Greek Word: σμάραγδος
Transliteration: smaragdos
Phonetic Spelling: smar’-ag-dos
Short Definition: emerald

via Strong’s Greek Dictionary: 4665. smaragdos.

From smaragdos, to esmeralde to emerald. The Greek word smaragdos, seems to be derived from Sanskrit word smarak-dosh.

Emerald is something that supposedly cures poor memory – a curative for smarak-dosh! Interesting that Indian astrology, gemmology and ayurvedic ideas affected Greece so deeply!

Ode to a Grecian Urn

So broke ... and so little glue?

So broke ... and so little glue?

Leaders of the 16-nation euro region endorsed a Franco- German proposal for a mix of IMF and bilateral loans at market interest rates, while voicing confidence that Greece won’t need outside help to cut Europe’s biggest budget deficit.“It’s an extremely clear political message,” European Union President Herman Van Rompuy told reporters after the leaders met in Brussels late yesterday. “It’s a mixed mechanism but with Europe playing the dominant role. It will be triggered as a last resort.”

After objecting to a possible IMF intrusion on the $12 trillion euro-region economy, the ECB endorsed the package, with President Jean-Claude Trichet saying that European governments will remain in control of the process.Trichet, who told France’s Public Senat television earlier that surrendering control to the IMF would be “very, very bad,” held his own press conference after the summit to revise the comments. (via EU Steers Greece to IMF, Pledges Loans in Last-Resort Update1 – BusinessWeek).

The genesis

On January 9, Standard & Poor’s announced that Greece, Spain and Ireland were on review for a possible downgrade, indicating that a Euro-zone country could default. The Greek situation acquired some urgency, as redemptions are due soon. Greece cannot be left to fend for itself, without reducing the credibility of the EU among its own member states – and may turn out to be the acid test for the EU and the Euro. But EU-Zone economy is contracting now for the last 18 months.

Enter IMF

Britain and Sweden are suggesting that IMF is better suited to handle the Greek situation – rather than the ECB. Germany and France, being the economic and political leaders of the Euro-pride brigade, are worried about IMF entry into Europe.

The gross debt (government, private, corporate) of the Greece, Hungary, Ireland, Italy, Portugal, Spain, UK, US are all above 200% – going upto more than 1000% in case of Ireland.

The Great Recession – Outlines of Round 2

March 26, 2010 1 comment

Is the global economy staring at a double-dip? Round-II of the Great Recession coming your way?

Gross Indebtedness - Some sample countries  |  Image source & courtesy - livemint.com  |  Click for image.

Gross Indebtedness - Some sample countries | Image source & courtesy - livemint.com | Click for image.

The next tsunami

Gross debt (government, private, corporate) of the Greece, Hungary, Ireland, Italy, Portugal, Spain, UK, US are all above 200% – going up to more than 1000% in case of Ireland.

These leaves the governments with a tough choice.

Analysts are already pointing to a policy dilemma: If these countries cut back on government borrowing, growth will suffer. But if they don’t prune their deficits, the bond market, spooked by the higher borrowing, will push up interest rates, which, in turn, will impact growth.

For the banks, much depends on what happens to the housing sector. US analyst Meredith Whitney has said the US is sure to see a double dip in housing, which will force credit writedowns in banks and impair capital. Bank lending in the US has still not picked up, which means that the US consumer is wary of taking on more debt. That is not difficult to understand, given the job losses and the fact that household debt to GDP ratios are still very high.

Societe Generale SA economist Albert Edwards, admittedly an unabashed bear, points out: “Household leverage has returned to 94% of GDP from its peak of 96% in both 2007 and 2008. But consider this: At the peak of the Nasdaq bubble, household leverage was just shy of 70%. There is a very, very long way to go.” (via Round 2 of crisis in developed world to mar global recovery – Economy and Politics – livemint.com).

The lure of a welfare state

The lure of a welfare state

So, what happens if a borrower(s) default on repayment? There is insurance for non-repayment.

Going insurance rates for repayment risk, knowwn as credit default swap (CDS) are indicative of the market perception. What exactly do CDS rates signal?

Explains a journalist,

Higher spreads on credit-defaults swaps indicate sellers have raised the price of guaranteeing protection because they perceive the likelihood of a default as higher. A spread of 97 means it would cost about $97,000 to buy protection on $10 million in U.S. government debt. (from U.S. sovereign-credit spreads rise sevenfold in year, By Laura Mandaro, MarketWatch, San Francisco).

The ratings game

The second patch of quicksand in money-markets is the ratings business.

Ratings game is a very curious business. India, a US$1 trillion economy, growing at 7%, with a gross debt of 129%, has a rating of BBB-. Look at Ireland, where accordingto the most recent World Bank data, Ireland’s number stands at a staggering 1,267%” – has a rating of AA-, after a recent rating downgrade in November 2009.

Brazil, India, Russia and South Africa are missing  |  Image & courtesy - paul.kedrosky.com  |  Click for image.

Brazil, India, Russia and South Africa are missing | Image & courtesy - paul.kedrosky.com | Click for image.

Or a situation where,

China swaps cost 66 basis points, down from 297 on Oct. 24. That’s cheaper than Greece and Ireland and within 9 points of Austria, Italy and Spain.

Obviously, such artificial pricing and manipulation can only be ‘sustained’ for short bouts.

And when does that short bout end?

It is obviously true that market perceptions of sovereign default risk in the eurozone (as reflected in CDS rates) are rising across the board and are now very high indeed by historical standards.  According to Markit, on 12 January 2009, Germany’s 5-year  CDS rate was 44 basis points, France’s 51 basis points, Italy’s  155 basis points and Greece’s 221 basis points.  The same is true, of course, for the US, with a CDS rate of 55 basis points and and for the UK, with a 103 basis points CDS rate.  Sovereign CDS markets may not be particularly good aggregators and measures of default risk perceptions because issuance is patchy and trading is often light, but the numbers make sense.

Engines of growth

EU’s economy is contracting now for the last 18 months. The burden of the Welfare State is not reducing. EU’s populations are not scaling down their expectations. Who will pay for these gold-plated services, that Europeans consider is their birthright.

The Chinese+ASEAN economies depend on exports to US and European markets for growth. With these bankrupt economies as customers, the outlook for China+ASEAN is questionable. Middle East depends on US+EU for security, banking, monetary and fiscal management.

That leaves the global economy with Brazil, Africa India and Russia as engines for growth

Debt-GDP Ratio's - Major economies  |  Image source & courtesy - visualeconomics.com  |  Click for source image.

Debt-GDP Ratio's - Major economies | Image source & courtesy - visualeconomics.com | Click for source image.

The Russian conundrum

After decades of boycott, machinations and confrontation, the Russian Government is in  a strong position of being low on debt.

With the lowest levels of Government and private debt, it is the Russian corporate sector which is the main debtor. Russia is in a league of its own, with debt levels ranging between 2%-20%.

Russian crisis and default are ‘artificial’ and opportunistic creations of Western bankers, trying to squeeze a recalcitrant country. Russia managed the “budget deficit to hit 6.8% of GDP this year and wants to lower that to around 3% by 2012.”

Never have so many depended on so few – for economic growth. Thin gruel to go round.

arch 10, 2009, 7:19 p.m. EDT · Recommend (31) ·


Can’t Rescue States With Deficits – EIB

February 11, 2010 1 comment
This may hurt European pride

This may hurt European pride

Can EU ignore Greece …

If Greece is left to fend for itself, it may reduce the credibility of the EU among its own member states.

European Investment Bank President Philippe Maystadt said the bank can’t rescue member states struggling with budget deficits.

“The EIB’s mission and statute do not allow for bailouts in terms of budget deficits or balance-of-payments support to individual member states,” he said in a statement posted on the Luxembourg-based lender’s Web site today. (via EIB Says It Can’t Rescue States With Deficits (Update1) – BusinessWeek).

The problem with EU

Race to the bottom ...?

Race to the bottom ...?

Greece may turn out to be the acid test for the EU and the Euro. Britain and Sweden are suggesting that IMF is better suited to handle the Greek situation – rather than the ECB. Germany and France, being the economic and political leaders of the Euro-pride brigade, are worried about IMF entry into Europe.

The crisis has exposed the EU’s Achilles’ heel — states remain independent to spend as they wish, but their decisions can affect all 16 eurozone nations. Countries that help Greece risk having their own borrowing costs rise as a result, and could see other struggling eurozone economies get in line for aid. (from Star Tribune)

Meanwhile, the Greek Prime Minister winged his way to India – and announced that Greece will solve its own problem – and does not need either the EIB, ECB or the IMF.

Touche.

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