Alstom is to accept €300 million less than previously agreed for its power turbines unit from General Electric as a contribution to the US-based buyer's efforts to win antitrust clearance in Europe.
It would be a mistake to keep pretending that Europe will emerge stronger from the latest round of the Greek crisis, or to ignore that all the shouting at Athens, and the shouting back at Germany, sets the scene for the “NO camp” to win other referendums, too. There is only one positive decision to take, argues Diogo Pinto.
The Greek crisis has strained nerves on the eurozone debt market, but unlike four years ago there has been no contagion of financial uncertainty across the single currency bloc.
Asylum seekers in Germany only have limited access to medical care, an attempt by the state to keep costs low, but a new study shows health-related costs are much lower when refugees can freely access health services. EurActiv Germany reports.
The EU’s Trade Commissioner Cecilia Malmström was amazed at German criticism over the planned EU-US Transatlantic Trade and Investment Partnership (TTIP) and emphasised its benefits in an interview with Tagesspiegel.
The European Commission has taken Paris to court for failing to recover nearly €10 million in anticompetitive subsidies paid to Ryanair and Transavia. EurActiv France reports.
About 400 Europeans, mostly people living in Eastern Europe, die each day of hepatitis B and C, while almost 30 million live with the infection, the World Health organisation (WHO) said on World Hepatitis Day (28 July).
Over the past four decades, there has been a significant increase in Europeans affected by hepatitis B and C, diseases that are caused by a virus that primarily affects the liver. As hepatitis is often asymptomatic and progresses slowly, it is also known to be a "silent killer."
You’ve probably read that there is a “war on cash” being waged on various fronts around the world. What exactly does a “war on cash” mean?It means governments are limiting the use of cash and a variety of official-mouthpiece economists are calling for the outright abolition of cash. Authorities are both restricting the amount of cash that can be withdrawn from banks, and limiting what can be purchased with cash.These limits are broadly called “capital controls.”Why Now?Before we get to that, let’s distinguish between physical cash — currency and coins in your possession — and digital cash in the bank. The difference is self-evident: cash in hand cannot be confiscated by a “bail-in” (i.e., officially sanctioned theft) in which the government or bank expropriates a percentage of cash deposited in the bank. Cash in hand cannot be chipped away by negative interest rates or fees.Cash in the bank cannot be withdrawn in a financial emergency that shutters the banks (i.e., a bank holiday).When pundits suggest cash is “obsolete,” they mean physical paper money and coins, not cash in a bank. Cash in the bank is perfectly fine with the government and its well-paid yes-men (paging Mr. Rogoff and Mr. Buiter) because this cash can be expropriated by either “bail-ins” or by negative interest rates.Inflation and Negative Interest RatesMr. Buiter, for example, recently opined that the spot of bother in 2008–09 (the Global Financial Meltdown) could have been avoided if banks had only charged a 6 percent negative interest rate on cash: in effect, taking 6 percent of the depositor’s cash to force everyone to spend what cash they might have.Both cash in hand and cash in the bank are subject to one favored method of expropriation, inflation. Inflation — the single most cherished goal of every central bank — steals purchasing power from physical cash and digital cash alike. Inflation punishes holders of cash and benefits those with debt, as debt becomes cheaper to service.The beneficial effect of inflation on debt has been in play for decades, so it can’t be the cause of governments’ recent interest in eliminating physical cash.So now we return to the question: Why are governments suddenly declaring war on physical cash, the oldest officially issued form of money?Why They Hate Cash in HandThe first reason: physical cash has the potential to evade both taxes as well as officially sanctioned theft via bail-ins and negative interest rates. In short, physical cash is extremely difficult for governments to steal.Some of you may find the word theft harsh or even offensive. But we must differentiate between taxes — which are levied to pay for the state’s programs that in principle benefit all citizens — and bail-ins, i.e., the taking of depositors’ cash to bail out banks that became insolvent through the actions of the banks’ management, not the actions of depositors.Bail-ins are theft, pure and simple. Since the government enforces the taking, it is officially sanctioned theft, but theft nonetheless.Negative interest rates are another form of officially sanctioned theft. In a world without the financial repression of zero-interest rates (ZIRP — central banks’ most beloved policy), lenders would charge borrowers enough interest to pay depositors for the use of their cash and earn the lender a profit.If borrowers are paying interest, negative interest rates are theft, pure and simple.Why are governments suddenly so keen to ban physical cash? The answer appears to be that the banks and government authorities are anticipating bail-ins, steeply negative interest rates and hefty fees on cash, and they want to close any opening regular depositors might have to escape these forms of officially sanctioned theft. The escape mechanism from bail-ins and fees on cash deposits is physical cash, and hence the sudden flurry of calls to eliminate cash as a relic of a bygone age — that is, an age when commoners had some way to safeguard their money from bail-ins and bankers’ control.Forcing Those With Cash To Spend or Gamble Their CashNegative interest rates (and fees on cash, which are equivalently punitive to savers) raise another question: why are governments suddenly obsessed with forcing owners of cash to either spend it or gamble it in the financial-market casinos?The conventional answer voiced by Mr. Buiter is that recession and credit contraction result from households and enterprises hoarding cash instead of spending it. The solution to recession is thus to force all those stingy cash hoarders to spend their money.There are three enormous flaws in this thinking.One is that households and businesses have cash to hoard. The reality is the bottom 90 percent of households have less income now than they did fifteen years ago, which means their spending has declined not from hoarding but from declining income.While corporate America has basked in the glory of sharply rising profits, small business has not prospered in the same fashion. Indeed, by some measures, small business has been in a six-year recession.The bottom 90 percent has less income and faces higher living expenses, so only the top slice of households has any substantial cash. This top slice may see few safe opportunities to invest their savings, so they choose to keep their savings in cash rather than gamble it in a rigged casino (i.e., the stock market).The second flaw is that hoarding cash is the only rational, prudent response in an era of financial repression and economic insecurity. What central banks are demanding — that we spend every penny of our earnings rather than save some for investments we control or emergencies — is counter to our best interests.A War on Cash Is a War on CapitalThis leads to the third flaw: capital — which begins its life as savings — is the foundation of capitalism. If you attack savings as a scourge, you are attacking capitalism and upward mobility, for only those who save capital can invest it to build wealth. By attacking cash, the central banks and governments are attacking capital and upward mobility.Those who already own the majority of productive assets are able to borrow essentially unlimited sums at near-zero interest rates, which they can use to buy more productive assets. Everyone else — the bottom 99.5 percent — is reduced to consumer-serfdom: you are not supposed to accumulate productive capital, you are supposed to spend every penny you earn on interest payments, goods, and services.This inversion of capitalism dooms an economy to all the ills we are experiencing in abundance: rising income inequality, reduced opportunities for entrepreneurship, rising debt burdens, and a short-term perspective that voids the longer-term planning required to build sustainable productivity and wealth.Physical Cash: Only $1.36 TrillionAccording to the Federal Reserve, total outstanding physical cash amounts to $1.36 trillion.Given that a substantial amount of this cash is held overseas, physical cash is a tiny part of the domestic economy and the nation’s total assets. For context: the US economy is $17.5 trillion, total financial assets of households and nonprofit organizations total $68 trillion, base money is around $4 trillion, and total money (currency in circulation and demand deposits) is over $10 trillion (source).Given the relatively modest quantity of physical cash, claims that eliminating it will boost the economy ring hollow.Following the principle of cui bono — to whose benefit? — let’s ask: What are the benefits of eliminating physical cash to banks and the government?Benefits To Banks and the Government of Eliminating Physical CashThe benefits to banks and governments by eliminating cash are self-evident: Every financial transaction can be taxed. Every financial transaction can be charged a fee. Bank runs are eliminated.In fractional reserve systems such as ours, banks are only required to hold a fraction of their assets in cash. Thus a bank might only have 1 percent of its assets in cash. If customers fear the bank might be insolvent, they crowd the bank and demand their deposits in physical cash. The bank quickly runs out of physical cash and closes its doors, further fueling a panic.The federal government began insuring deposits after the Great Depression triggered the collapse of hundreds of banks, and that guarantee limited bank runs, as depositors no longer needed to fear a bank closing would mean their money on deposit was lost.But since people could conceivably sense a disturbance in the Financial Force and decide to turn digital cash into physical cash as a precaution, eliminating physical cash also eliminates the possibility of bank runs, as there will be no form of cash that isn’t controlled by banks.
EU data privacy chief Giovanni Buttarelli has said a forthcoming law gathering detailed information on air passengers is too invasive and is unlikely to stop terrorism.
French economy minister Emmanuel Macron Monday said that non-euro countries need "a fair set of rules" amid talks in Berlin and Paris of further integrating the eurozone. "We need a fair treatment of the 'out' countries," said
Macron, after meeting UK finance minister George Osborne in Paris.
European Data Protection Supervisor Giovanni Buttarelli published his recommended version of the data protection regulation today (27 July) and launched a mobile app that compares his suggestions to the three proposals from the European Parliament, Commission and the Council.
The three proposals currently at the centre of negotiations are "not the ideal reform," Buttarelli said.
Altering the eurozone treaty to allow states to leave or be expelled will help guarantee the future stability of the EMU, argues Thomas Schuster.
The UN is this week finalising its post-2015 development agenda in New York. Big questions remain over the implementation and evaluation of the new SDGs. EurActiv France reports.
Britain and France agreed on Monday that efforts by eurozone nations to shore up the single currency after the Greek crisis could go hand-in-hand with wider reforms the UK needs to stay in the European Union.
Prime Minister David Cameron wants assurances that non-eurozone EU members such as Britain will not see their influence wane in the wider 28-country bloc as the eurozone integrates more, before he puts British membership of the EU to a landmark referendum by 2017.
EU bosses are pushing to resolve a clash between industry and environmental policy with a new strategy to phase out funding to export coal technology to developing nations, ahead of a meeting of leading economic powers on the issue.
The European Commission, the EU executive, urges tougher rules on when subsidies, known as coal export credits, can be used in a paper seen by Reuters, ahead of interim talks this week.
In Greece, hospitality is a concept as old as the Acropolis. But the country's hated creditors cannot expect the usual warm welcome when they arrive this week to thrash out a third huge international bailout.
It has been more than a year since top negotiators from the International Monetary Fund, European Union and European Central Bank - together known as the "troika" - last set foot in Athens, and the symbolism of their return is not lost on Greeks.
The European Commission is proposing to reform the EU’s energy labelling system after it emerged that the current system confuses customers.
Developing countries such as Bhutan, which are hard hit by climate change but contribute little to it, face significant challenges in reaching a fair agreement at the UN Climate Change Conference in Paris, writes Ian Duncan.
Ian Duncan is a Scottish Conservative MEP and a member of the European Conservatives and Reformists group in the European Parliament.
Europe should be prepared to commit hard defence in support for Ukraine and maintain sanctions against Russia, writes Richard Howitt ahead of a UN Security Council meeting over the downing of Malaysia Airlines MH17 one year ago.
Britain must remain a member of the European Union if its higher education sector is to maintain its status, quality and research capabilities, a university lobby group said on Monday (27 July).
Prime Minister David Cameron is planning to renegotiate Britain's ties to the EU and then, by the end of 2017, hold a referendum on whether the country should stay in the bloc.