Sour on Europe

By Robert Kahn – Today’s (May 15) Eurozone GDP numbers remind us that Europe remains in a grinding recession; a second-half recovery now looks to be a long shot at best.  The only bright spot comes elsewhere, with news of  a German labor deal that will raise engineering wages by nearly 6 percent over the next 20 months (rebalancing European demand and stimulating German consumption needs more of this).

Notably, the need for jobs dominates other issues on the economic agenda. The mood is particularly bleak in the periphery, reflecting those countries’ economic troubles. more> http://tinyurl.com/bsglppy

Related>

• Eurozone now in its longest recession, Graeme Wearden, guardian.co.uk
• What the euro has meant, Economist
• Europe’s irrelevant austerity debate, Daniel Gros, europeanvoice.com

German role in steering euro crisis could lead to disaster, warns expert

By Ian Traynor – Jürgen Habermas, the Frankfurt professor whose political thinking has helped shape Germany over the past 50 years, called for the EU to be turned into a supranational democracy and the eurozone to become a fully fledged political union, while lambasting the “technocratic” handling of the crisis by Brussels and European leaders.

“The German government holds the key to the fate of the European Union in its hands. The main question is whether Germany is not only in a position to take the initiative, but also whether it could have an interest in doing so,” he said. more> http://tinyurl.com/cjnf8ke

Europeans Are Thinking the Unthinkable: That Debt Defaults Might Make Sense

By Michael Sivy – None of the euro zone’s problems have gone away. Political crises beset France, Italy and Spain. Smaller countries, from Portugal to Cyprus, face even more pressing financial troubles. Germany grows less and less willing to foot the bill for bailouts.

There is, in fact, a historical case for tolerating default. Argentina suffered a financial crisis in 1999 that led to a period of high unemployment… more> http://tinyurl.com/c5rfxh3

Russia after Cyprus: Bringing the money home

By William E. Pomeranz – The Kremlin’s initial outrage over developments in Cyprus – and the island’s shocking expropriation of billions of dollars held by Russian companies and citizens – has given way to mild indifference. “If somebody gets caught and loses money at the two largest [Cypriot] banks, it’s a shame,” First Deputy Prime Minister Igor Shuvalov recently stated, “but the Russian government isn’t going to do anything about it.”

It turns out that the European Union settlement that left Cyprus’s banking sector in shambles has done Moscow a big favor. Not only did the EU take down a major offshore banking center, it helped President Vladimir Putin’s campaign to return to Russia any money stashed away in offshore bank accounts. more> http://tinyurl.com/d3rzv2h

Austrians’ love of bank secrecy has deep roots

By Michael Shields – Call it the battle for grandma’s passbook.

That is how politicians here are framing a debate over whether Austria should roll back banking secrecy and share information on depositors with European partners and the United States. Luxembourg’s decision this week to open its books has fixed attention on Austria, the last EU holdout.

The discussion has touched a nerve in a country where the confidentiality banks offer is so cherished that banking secrecy is anchored in the constitution. Why Austrians are so wedded to such secrecy is answered in part by a distrust of authority. The country’s Catholic identity and a nod-and-wink approach to off-the-books work in the shadow economy may play a role too. more> http://tinyurl.com/clhe2zr