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Why Europe Keeps Failing........ merged with "EU Seizes Cypriot Bank Accounts"

I still see Europe as being divided into five zones:

1. England
2. The Nordic States
3. Germany/Mittel Europa
4. France/Roman Europe
5. Eastern Europe.

Eastern Europe is centered on Poland as the largest and most cohesive state, the former Warsaw Pact nations, and might be considered to include the Ukraine west of the Dnieper River (East of the river is the Slavic/Eastern Orthodox Ukraine: the river is one of the dividing lines in a Huntingtonesque "civilizations map"). Greece and the Balkans might be considered another zone (although much smaller and less important that the "Big Five").

Europe is far more complex than the typical Op Ed piece would have you believe...
 
There are constitutional issues, especially for the Brits and this blog - which I don't know well enough to either endorse or condemn - explains some of them in a post which is reproduced under the Fair Dealing provisions of the Copyright Act from Witterings from Witney:

http://witteringsfromwitney.com/parliamentary-sovereignty/
WitteringsfromWitney.jpg

Parliamentary Sovereignty

    Politics is the art of making your selfish desires seem like the national interest.
    Thomas Sowell

    Those who expect to reap the benefits of freedom, must, like men, undergo the fatigue of supporting it.
    Thomas Paine

Two articles today are of interest for two different, but connected reasons; the first from Dominic Raab (Daily Telegraph) and the second from Steve Richards (The Guardian CiF).

That from Raab compares Netanyahu with Cameron where the subject of calling a referendum is concerned, arguing that both can benefit from such a decision. Setting to one side the comparison with Netanyahu’s situation, let us concentrate on the UK aspect of Raab’s article, one which it is worth repeating has the headline: How to harness the power of the people. Knowing from past experience (think 1975) how a EU referendum can be “rigged” through presentation of spin and half-truths perhaps Raab’s article should really be titled How to hoodwink the power of the people.

If Cameron were to follow Raab’s suggestion that he (Cameron) concentrate on the subjects of Immigration, Parliamentary veto over EU law and restoring the right of the UK to negotiate trade agreements; all three areas will fail because of the Acquis, which maintains that a power ceded to the EU cannot ever be recovered.

Immediately, with the second item, we have a conundrum – even a contradiction – between that which Raab wishes Cameron to do and what Cameron has actually said. Speaking about Parliamentary Sovereignty, Cameron said:

    A United Kingdom Sovereignty Bill, to ensure the ultimate sovereignty of the UK Parliament. Unlike many other European countries Britain does not have a written constitution. Given the increasing amount of EU law
    with which we have to deal we would amend the law to insert a sovereignty clause, to make it explicit that ultimately Britain’s Parliament is sovereign and cannot be overruled by the EU against its will. This is similar
    in principle to the situation in Germany whereby the German constitution (the basic Law) is ultimately supreme. This would not mean striking down individual items of EU legislation but would provide ultimate
    constitutional safeguards against any attempts by EU judges to erode our sovereignty. (Emphasis mine)


Now either Cameron would need to amend the UK Sovereignty Act or he won’t, recognising that under the Lisbon Treaty – in the words of the European Commission to Stefano Manservisi,  Director General, DG Home : ..it must be recalled that Union Law prevails over national law, including national constitutional law. It is also worth commenting on Cameron’s assertion that constitutional safeguards would be in place to stop any attempts by EU judges to erode our sovereignty. It should be recalled that the role of the European Court of Justice (ECJ) in giving prominence to the primacy principle of Community law cannot be overlooked.

Where Raab seems to condone the ability of Cameron to tinker with the sovereignty of the UK yet also seems to support Cameron’s unequivocal statement that the sovereignty of the Falklands and Gibraltar will be maintained, it does beg the question of how does Falklands’ and Gibraltar’s sovereignty differ from that of the UK?

Now let us turn to the article of Steve Richards in the Guardian, one which contains the sub-heading: Direct democracy is alien to our system. Which is why, as with AV, and now in Scotland, we can’t seem to get it off the ground. The immediate question for Richards is when did referendums constitute the only requirement of Direct Democracy; coupled with the question when has there ever been a discussion about Direct Democracy and its possible introduction? That, as Richards writes, political leaders only ever offer referendums to get their party out of a hole (or to further their hold on power) can be accepted as fair comment, one can take exception to his belief that political leaders have no idea how to run one – they sure do; spin and half-truths, as mentioned above?

Has not Cameron presented his personal desires – some may well argue his selfish desires – and attempted to spin them as the national interest? Is not Raab doing exactly the same? Recently John Redwood was tackled on his blog by one of my commenters about the 6 Demands and the introduction of direct democracy, to which Redwood replied that he did not detect enthusiasm for such a radical change in our constitution and as was pointed out, voters would have to do much more in this system. With an increasing outcry about the loss of personal freedom within this country due to the also ever increasing control over our lives by central government, is it not right that if people wish to retain what they consider their freedom that they should indeed undergo the fatigue of supporting their freedom?

When the subject arises as to what is exactly the problem within the UK, some cite Parliamentary sovereignty, some the lack of a codified constitution and others the system of representative democracy. For the purposes of this post let us concentrate on the first: Parliamentary sovereignty.

While the words Parliamentary sovereignty are not mentioned in either Raab’s nor Richards’ articles, as I have written previously much is made of Parliamentary Sovereignty; but what is Parliamentary Sovereignty? A.V. Dicey gave the classic exposition of the doctrine of parliamentary sovereignty:

    The principle of parliamentary sovereignty means neither more nor less than this, namely, that Parliament… has, under the English constitution, the right to make or unmake any law or whatever; and, further, that
    no person or body is recognized by the law of England as having a right to override or set aside the legislation of Parliament.


It should be noted that, to my belief, there exists no legislation establishing the doctrine of Parliamentary sovereignty, neither is it a rule that comes from statute and nor is there any case that can be cited as the origin of the doctrine. On this point from Wikipedia we are informed:

    From 1790 to 1859 it was argued that sovereignty in the UK was vested neither in the Crown nor in the people but in the “Monarch in Parliament”. This is the origin of the doctrine of parliamentary sovereignty and
    is usually seen as the fundamental principle of the British constitution. With these principles of parliamentary sovereignty majority control can [and has; Ed] gain access to unlimited constitutional authority, creating
    what has been called “elective dictatorship” or “modern autocracy.


Indeed, what has evolved is an elective, or democratised, dictatorship; one which cannot have any pretense to sovereignty nor democracy.

It is the opinion of Carl Gardner, a Barrister and author of the Head of Legal blog, that in defense of Parliamentary sovereignty, it can be argued that it still ensures that major issues of public policy are ultimately decided by a democratically elected institution that is directly accountable to the public. On the other hand he also believes that it can be argued that under our system, in which effectively the Prime Minister controls a majority in the Commons – and which can force its view on the Lords and even reform the Lords as it sees fit – there is no effective check or balance on the power of the executive to impose on us whatever laws it wishes.

Of the those two statements, the latter confirms that there exists the need for Demand #3 of the 6 Demands, namely a separation of power twixt the Executive and the Legislature. That Wikipedia informs us that – as is, in fact, the case – we now have an elective, or democratised, dictatorship under which we live there is also the need for an effective check or balance on a class within our society that believe they have a god-given right to eternal rule. That the only system of democracy that provides the people with an effective check or balance against all levels of political rule is that of direct democracy must surely be plain for all to see.

Where Parliamentary sovereignty is concerned there are those that maintain Parliament can repeal ECA 1972, thus ending this country’s membership of the EU without recourse to Article 50 of the TEU. It is worth returning to the words of Carl Gardner, writing on Insite Law (a rather long quote but one worth repeating):

    In the UK legal system, treaties entered into by the Crown are not automatically part of domestic law: in themselves, they are binding only on the international law plane. This approach to international law is
    called “dualist”, and differs from that of some “monist” states (France is an example) who see treaties entered into by their governments as forming part of the same legal order as domestic law, when ratified.
    Because of Britain’s dualist approach, when we joined the EEC, it was not enough merely for the government to accede to the relevant Treaties: in order for the Treaties to bite on firms and individuals here, they
    had to be brought into the domestic legal order. This was done by the European Communities Act 1972. The key provision is section 2. Section 2(1) provides that

    All such rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Treaties, and all such remedies and procedures from time to time provided for by or under the
    Treaties, as in accordance with the Treaties are without further enactment to be given legal effect or used in the United Kingdom shall be recognised and available in law, and be enforced, allowed and followed
    accordingly This brings the whole of European law into our domestic legal system – including the EC law doctrine that EC law is supreme (some people prefer to talk of EC law having “primacy”). Section 2(4), which is
    somewhat obscurely drafted, provides among other things that any enactment passed or to be passed, other than one contained in this part of this Act, shall be construed and have effect subject to the foregoing
    provisions of this section This is a provision of huge constitutional significance, since it makes all of Acts of Parliament, both past and future (“any enactment passed or to be passed”) subordinate to (“subject to”) EC
    law as brought into the UK system under section 2(1) (“the foregoing provisions of this section”). The full significance of this was brought home in R v Secretary of State for Transport, ex parte Factortame [1990]
    UKHL 13, [1991] 1 AC 603. Factortame was a British company owned and managed by Spanish nationals; it owned fishing vessels, and was registered as British for the purposes of fishing against the British “quota”
    under the common fisheries policy. In order to keep the British quota for genuinely British fishermen, Parliament passed the Merchant Shipping Act 1988, which required ships fishing against the quota to be British
    owned and controlled.

    Factortame argued this was contrary to EC law. The High Court decided to make a reference to the European Court of Justice for a preliminary ruling on the issues of Community law raised in the proceedings; and
    ordered that, by way of interim relief, the application of the 1988 Act should be suspended as regards the applicant. This was a radical step, since it amounted to judges “overruling or setting aside” and Act of
    Parliament. When the government appealed, the Court of Appeal held that under national law the courts had no power to suspend, by way of interim relief, the application of Acts of Parliament. The case then went
    to the House of Lords, which held that, under national law, the English courts had no power to grant interim relief in such a case; but since the dispute raised an issue concerning the interpretation of Community
    law, the House of Lords decided, to stay the proceedings until the Court of Justice had given a preliminary ruling on the question whether EC law nonetheless obliged or empowered the national courts to grant such
    an interim order. The ECJ’s answer (Case C-213/89) was short and clear:

          Community law must be interpreted as meaning that a national court which, in a case before it concerning Community law, considers that the sole obstacle which precludes it from granting interim relief is a rule of
          national law must set aside that rule.The House of Lords then proceeded to grant interim relief, suspending the operation of the Merchant Shipping Act. If we consider once against Dicey’s formulation of
          Parliamentary sovereignty, we can see that Factortame appears contrary to both limbs: it shows that Parliament could not effectively make law contrary to the EC Treaty; and that the courts can and in
          appropriate circumstances must override or set aside an Act of Parliament that conflicts with EC law. Truly a historic judgment. However, before concluding that it consigns Parliamentary sovereignty to history, we
          must remind ourselves that EC law could only be applied by the House of Lords because of the ECA 1972 – which Parliament can always repeal. There is an argument that EC law does not affect Parliamentary
          sovereignty at all, since Parliament, having made the rule of law that led to the court’s conclusion in Factortame, can still if it chooses unmake that law.

    EC law and implied repeal In a complex case about metrication, Thoburn v Sunderland City Council, [2002] EWHC 195 (Admin) – often called the “metric martyrs” case – it was argued that the ECA 1972 was impliedly
    repealed, to the extent that its provisions affected the law of weights and measures, by a subsequent Act of Parliament on the same subject. The judgment of Laws LJ in the Administrative Court has two interesting
    aspects. First, he rejected Sunderland’s argument that EC law had become entrenched – in other words, unrepealable, either impliedly or expressly – as a result of the ECA 1972: Parliament cannot bind its
    successors by stipulating against repeal, wholly or partly, of the ECA. It cannot stipulate as to the manner and form of any subsequent legislation. It cannot stipulate against implied repeal any more than it can
    stipulate against express repeal… The British Parliament has not the authority to authorise any such thing. Being sovereign, it cannot abandon its sovereignty. Accordingly there are no circumstances in which the
    jurisprudence of the Court of Justice can elevate Community law to a status within the corpus of English domestic law to which it could not aspire by any route of English law itself. This is, of course, the traditional
    doctrine of sovereignty. This is important because it confirms Parliament’s power to repeal the ECA 1972. But secondly, he ruled that the ECA 1972 is in a special class of “constitutional statutes” recognised by
    common law, which cannot be impliedly repealed:

          The special status of constitutional statutes follows the special status of constitutional rights. Examples are the Magna Carta, the Bill of Rights 1689, the Act of Union, the Reform Acts which distributed and
          enlarged the franchise, the HRA, the Scotland Act 1998 and the Government of Wales Act 1998. The ECA clearly belongs in this family… Ordinary statutes may be impliedly repealed… A constitutional statute can
          only be repealed, or amended in a way which significantly affects its provisions touching fundamental rights or otherwise the relation between citizen and State, by unambiguous words on the face of the later
          statute. Laws LJ’s approach is a bold attempt to explain why implied repeal does not apply to the ECA 1972, but it is not clear that higher courts would adopt it. An alternative analysis would be to say that it is
          the words of section 2(4) of the ECA 1972 itself which have the effect of reaching into the future to “disable” implied repeal. In any event, it is clear that the doctrine of implied repeal, as laid down in the Ellen
          Street Estates case considered in the previous chapter, has been modified by the ECA 1972. To that extent at least, it must be accepted that Dicey’s traditional notion of sovereignty has been affected.


Note that, referring to Section 2 of ECA 1972, Gardner states that this brings the whole of European law into our domestic legal system – including the EC law doctrine that EC law is supreme (some people prefer to talk of EC law having “primacy”).  One can but refer back to the point made earlier about the European Commission advising Stefano Manservisi that Union law prevails over national law, even national constitutional law.

It is on that basis that if this country wishes to cease its membership of the EU it must follow the route of Article 50.


Maybe one of our resident lawyers can help with this.



 
Kirkhill said:
Meanwhile, back in Viking country: Iceland Pulls Bid to Join EU.

Who's your money on?  The Vikings or the Serbs?


The British "Brits OUT!" campaign gets a wee bit of a boost in the quality press with this article which is reproduced under the Fair Dealing provisions of the Copyright Act from The Telegraph:

http://www.telegraph.co.uk/comment/columnists/christopherbooker/10308801/Myths-about-our-membership-of-the-EU.html
the-telegraph-logo.jpg

Myths about our membership of the EU
If Britain were to leave the EU, we could still trade with the single market by joining the European Free Trade Area

Christopher Booker

14 Sep 2013

It has become the most deliberately buried secret of the bloodlessly unreal debate over Britain’s membership of the European Union. Last Tuesday, virtually unnoticed in Britain, the European Parliament voted to give £5  million to a campaign to “raise awareness” across Europe that “with the majority of laws being shaped at EU level, the Parliament is now at least as powerful as any national parliament”. On Thursday, in direct emulation of the USA, José-Manuel Barroso, president of the European Commission, delivered a “State of the Union” address, calling for more urgent moves towards full “political union”.

Meanwhile, back here, influential voices continue to be raised to tell us that for Britain to leave the EU would be disastrous, because exclusion from its single market would be devastating for our economy. In recent days, Tony Blair, the Lord Mayor of London, big business represented by the CBI and numerous others have all been repeating the same plaintively concerted cry. But what is almost wholly absent from all this one-sidedly lacklustre debate is any reference to the fact that, if Britain were to leave the EU, we could still enjoy full access to that single market by joining the European Free Trade Area (Efta), allowing us to continue trading with the EU just as we do now.

It is not surprising that the cheerleaders for continued membership so consistently fail to explain this to us, because it completely removes from them almost the only argument they offer for why we must stay in, as part of Mr Barroso’s drive for political union. If they do occasionally mention it, this is only so that they can scornfully dismiss it by claiming that, although Efta members such as Norway have full access to the single market, they must obey all its rules without playing any part in shaping them.

But this merely betrays an astonishing ignorance of how the system works. Not only do Norway and other Efta members play a very active part in consulting on single market laws before they are finalised. Ever more rules these days in fact originate in global bodies above the EU, such as the United Nations Economic Commission for Europe (UNECE) or the Aarhus Convention on environmental issues, on which Norway is represented in its own right as an independent country, exercising more influence than Britain, which is represented only by the EU.

This is the kind of hard, factual evidence which should be right at the centre of any proper, grown-up debate on Britain’s future relations with the EU. Yet it is ruthlessly swept under the carpet because, to the scaremongers who want to pretend that, outside the EU, Britain would have no influence, it is the very last thing they want the British people to know about.


The European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland) was founded 50 years ago and, at one time or another, its members included Austria, Denmark, Finland, Portugal, Sweden and the United Kingdom as well as the current four. The UK would certainly be welcomed back if it decided to leave the EU.

EU Commission President José-Manuel Barroso appears to be challenging Britain when he talks about "urgent moves" towards "full political union." He must know that is a deal breaker for the UK and, perhaps, for a few others, too.
 
I like the idea of re-igniting EFTA.

The following map video in the Daily Mail shows how permanent Europe's solutions are.

As time goes by: The mesmerising video that documents a MILLENNIUM of European history in just three minutes

Perhaps someone with greater skills can figure out how to capture and import that video.

In this company, that truly believes that maps explain everything, this explains everything.
 
I believe you can download it from the website noted on the video in the bottom right hand corner.

You can buy the full monty, but there is a free download with limitations...
 
Very interesting. This sort of follow's Kaplan's assertion that "History is Geography"; many of the areas of stability that remained for prolonged periods of time are indeed defined by various geographic barriers and features.
 
As could be predicted, everyone who thought Cyprus pointed the "way ahead" for European politicians was 100% correct:

http://www.zerohedge.com/news/2013-09-06/poland-confiscates-half-private-pension-funds-cut-sovereign-debt-load

Poland Confiscates Half Of Private Pension Funds To "Cut" Sovereign Debt Load
Submitted by Tyler Durden on 09/06/2013 14:50 -0400

While the world was glued to the developments in the Mediterranean in the past week, Poland took a page straight out of Rahm Emanuel's playbook and in order to not let a crisis go to waste, announced quietly that it would transfer to the state - i.e., confiscate - the bulk of assets owned by the country's private pension funds (many of them owned by such foreign firms as PIMCO parent Allianz, AXA, Generali, ING and Aviva), without offering any compensation. In effect, the state just nationalized roughly half of the private sector pension fund assets, although it had a more politically correct name for it: pension overhaul.

By way of background, Poland has a hybrid pension system: as Reuters explains, mandatory contributions are made into both the state pension vehicle, known as ZUS, and the private funds, which are collectively known by the Polish acronym OFE. Bonds make up roughly half the private funds' portfolios, with the rest company stocks.

And while a change to state-pension funds was long awaited - an overhaul if you will - nobody expected that this would entail a literal pillage of private sector assets.

On Wednesday, Prime Minister Donald Tusk said private funds within the state-guaranteed system would have their bond holdings transferred to a state pension vehicle, but keep their equity holdings.  The funds would effectively be left with only the equities portions of their assets, even this would be depleted, and there will be uncertainty about the number of new savers joining.

But why is Poland engaging in behavior that will ultimately be disastrous to future capital allocation in non-public pension funds (the type that can at least on paper generate some returns as opposed to "public" funds which are guaranteed to lose)? After all, this is a last ditch step which no rational person would engage in unless there were no other option. Simple: there were no other option, and the driver is the same reason the world everywhere else is broke too - too much debt.

By shifting some assets from the private funds into ZUS, the government can book those assets on the state balance sheet to offset public debt, giving it more scope to borrow and spend. Finance Minister Jacek Rostowski said the changes will reduce public debt by about eight percent of GDP. This in turn, he said, would allow the lowering of two thresholds that deter the government from allowing debt to raise over 50 percent, and then 55 percent, of GDP. Public debt last year stood at 52.7 percent of GDP, according to the government's own calculations.

To summarize:

Government has too much debt to issue more debt
Government nationalizes private pension funds making their debt holdings an "asset" and commingles with other public assets
New confiscated assets net out sovereign debt liability, lowering the debt/GDP ratio
Debt/GDP drops below threshold, government can issue more sovereign debt
And of course, once Poland borrows like a drunken sailor using the new window of opportunity, and maxes out its new and improved limits, it will have no choice but to confiscate more assets, and to make its balance sheet appear better, until one day, there is nothing left in the private sector to confiscate. At that point the limit itself will have to be legislated away, and Poland will simply continue borrowing until one day there are no foreign lenders willing to take the same risk as the nation's private pensioners. At that point, Poland, which is in the EU but still has the Zloty, can just go ahead and monetize its own debt by printing unlimited amounts of its currency.

Of course, we all know how that story ends.

The response to the confiscation was, naturally, one of shock:

The reform is "a decimation of the ...(private pension fund) system to open up fiscal space for an easier life now for the government," said Peter Attard Montalto of Nomura. "The government has an odd definition of private property given it claims this is not nationalisation."

"This is worse than many on the markets had feared," a manager at one of the leading pension funds, who asked not to be identified, told Reuters.
"The devil is in the detail and we don't yet know a lot about the mechanism of these changes, what benchmarks will be use to evaluate our performance... (It) looks like pension funds will lose a lot of flexibility in what they can invest."
Catastrophic consequences for fund flows aside, the Polish prime minister had a prompt canned response:

Tusk said people joining the pension system in the future would not be obliged to pay into the private part of the system. Depending on the finer points, this could mean still fewer assets in the private funds.

"The (current) system has turned out to be built in part on rising public debt and turned out to be a very costly system," Tusk told a news conference.

"We believe that, apart from the positive consequence of this decision for public debt, pensions will also be safer."
You see, he is from the government, and he is confiscating the pensions to make them safer. Confiscation is Safety and all that...

Polish officials have tried to reassure investors, saying the overhaul avoids the more radical options of taking both bond and equity assets away from the private funds outright.

They say the old system effectively made Polish public debt appear higher than it really is.
Well, once you nationalize private assets, the public debt will lindeed appear lower than it was before confiscation: we give them that much.

End result: "The Polish pension funds' organisation said the changes may be unconstitutional because the government is taking private assets away from them without offering any compensation.... This may lead to the private pension systems shutting down," said Rafal Benecki of ING Bank Slaski."

Unconstitutional? What's that. But whatever it is, it's ok - after all the public pension system is still around. At least until that too is plundered. But in the meantime, all such pensions will be "safer", guaranteed.

But best of all, in the aftermath of Cyprus, we now know what the two most recent European blueprints for preserving the myth of solvency are: bail-ins, which confiscate deposits, and pension fund "overhauls", which confiscate, well, pension funds.

And now, back to the global recovery soap opera.
 
NinerSix said:
Would this be akin to Canada taking over my RRSP or my TFSA?
Sounds more like seizing part of your company's pension plan assets.
 
I think it was Argentina that raided private funds (eg. whatever resembles RRSPs etc) a few years back.
 
In Canadian terms, siezing RRSP's is the exact analogy. The Poles have been kindly left with their version of the CPP, so everyone can have an equally slender retirement and the busy and industrious are denied the fruits of their labour and whatever time and effort they spent in designing their retirement investment plans.

There have also been public musings from time to time in the United States by some politicians to sieze the accumulated $2 trillion in 401K retirement savings accounts; this would cover about 1 1/2 years worth of deficits, or perhaps the unfunded liabilities of public service pension plans in the various States.
 
I can't figure out how politicians expect to get away with that without being assassinated.  Joe Blow and I earn the same; he spends all his money living large and I sock some away for retirement.  And it apparently makes sense to some people that I need to share my "wealth" with poor old Joe who has nothing for his retirement.
 
Brad Sallows said:
I can't figure out how politicians expect to get away with that without being assassinated.  Joe Blow and I earn the same; he spends all his money living large and I sock some away for retirement.  And it apparently makes sense to some people that I need to share my "wealth" with poor old Joe who has nothing for his retirement.

They think they can get away with this because they already have, in so many ways. Inflation eats the value of savings and investment and hurts the poor, it primarily benefits the spendthrift by devaluing their debts. Crony capitalism devalues the hard work and effort of the busy and industrious; the fruits of their labours ends up in the pockets of their better connected competition... I think we can all think of other examples.

And sad to say, the historical way for this behaviour to end is when the politicians are swinging from the lampposts and we have to navigate our way through burning streets.
 
Good news, maybe, for a change. CBC News is reporting (and Reuters is confirming) that Greek police have arrested many leaders of the fascist group Golden Dawn, including elected parliamentarians.
 
And since all even remotely good news must be offset, CBC News is reporting now that the Italian Government (3rd largest economy in Europe) has just fallen, again, because Silvio Berlusconi has pulled his ministers from the coalition.


Edit to add: And here is the Reuters report.
 
ERC:

While I share your distaste for fascists I am not sure that it is ever good news when one side of the legislature starts arresting the folks across the aisle.  That way generally leads to civil war - Egypt immediately comes to mind as does a chap name of Cromwell.

It is particularly a problem in societies like Spain and Greece with a history of Red/Black polarization.

I don't see the Greek situation as improving.
 
Kirkhill said:
ERC:

While I share your distaste for fascists I am not sure that it is ever good news when one side of the legislature starts arresting the folks across the aisle.  That way generally leads to civil war - Egypt immediately comes to mind as does a chap name of Cromwell.

It is particularly a problem in societies like Spain and Greece with a history of Red/Black polarization.

I don't see the Greek situation as improving.


I agree fully with the highlighted bits.
 
Well the plague of "bail ins" (legalized theft of savings and deposits by governments) could get a lot worse. It seems many governments, including our own, have been making plans for this sort of thing. Time to start sizing up the lamp posts:

http://www.zerohedge.com/news/2013-09-26/cyprus-style-wealth-confiscation-starting-all-over-world

Cyprus-Style Wealth Confiscation Is Starting All Over The World
Submitted by Tyler Durden on 09/26/2013 15:10 -0400

Bank Failures Bond Creditors European Central Bank European Union Fail Iceland Italy LTRO Monte Paschi Nationalization New Normal New Zealand Poland Reuters Too Big To Fail

As we warned two years ago, "the muddle through has failed... and there may only be painful ways out of this."

Submitted by Michael Snyder of The Economic Collapse blog,

Now that "bail-ins" have become accepted practice all over the planet, no bank account and no pension fund will ever be 100% safe again.  In fact, Cyprus-style wealth confiscation is already starting to happen all around the world.  As you will read about below, private pension funds were just raided by the government in Poland, and a "bail-in" is being organized for one of the largest banks in Italy.  Unfortunately, this is just the beginning.

The precedent that was set in Cyprus is being used as a template for establishing bail-in procedures in New Zealand, Canada and all over Europe.  It is only a matter of time before we see this exact same type of thing happen in the United States as well.  From now on, anyone that keeps a large amount of money in any single bank account or retirement fund is being incredibly foolish.

Let's take a look at a few of the examples of how Cyprus-style wealth confiscation is now moving forward all over the globe...

Poland

For years, there have been rumors that someday the U.S. government would raid private pension funds.

Well, in Poland it just happened.

According to Reuters, private pension funds were raided in order to reduce the size of the government debt...

Poland said on Wednesday it will transfer to the state many of the assets held by private pension funds, slashing public debt but putting in doubt the future of the multi-billion-euro funds, many of them foreign-owned.

The Polish government is doing the best that it can to make this sound like some sort of complicated legal maneuver, but the truth is that what they have done is stolen private assets without giving any compensation in return...

The Polish pension funds' organisation said the changes may be unconstitutional because the government is taking private assets away from them without offering any compensation.

Announcing the long-awaited overhaul of state-guaranteed pensions, Prime Minister Donald Tusk said private funds within the state-guaranteed system would have their bond holdings transferred to a state pension vehicle, but keep their equity holdings.

He said that what remained in citizens' pension pots in the private funds will be gradually transferred into the state vehicle over the last 10 years before savers hit retirement age.

Iceland

For years, Iceland has been applauded for how they handled the last financial crisis.  But now it is being proposed that the "blanket guarantee" that currently applies to all bank accounts should be reduced to 100,000 euros.  Will this open the door for "haircuts" to be applied to bank account balances above that amount?...

Following the crisis in October 2008, Iceland's government declared all deposits in domestic financial institutions were 'blanket' guaranteed - an Emergency Act that was reafrmed twice since. However, according to RUV, the finance minister is proposing to restrict this guarantee to only deposits less-than-EUR100,000. While some might see the removal of an 'emergency' measure as a positive, it is of course sadly reminiscent of the European Union "template" to haircut large depositors. This is coincidental (threatening) timing given the current stagnation of talks between Iceland bank creditors and the government over haircuts and lifting capital controls - which have restricted the outflows of around $8 billion.
Europe

European finance ministers have agreed to a plan that would make "bail-ins" the standard procedure for rescuing "too big to fail" banks in the future.  The following is how CNN described this plan...

European Union finance ministers approved a plan Thursday for dealing with future bank bailouts, forcing bondholders and shareholders to take the hit for bank rescues ahead of taxpayers.

The new framework requires bondholders, shareholders and large depositors with over 100,000 euros to be first to suffer losses when banks fail. Depositors with less than 100,000 euros will be protected. Taxpayer funds would be used only as a last resort.
What this means is that if you have over 100,000 euros in a bank account in Europe, you could lose every single bit of the unprotected amount if your bank collapses.

Italy

As Zero Hedge reported on Tuesday, a "bail-in" is now being organized for the oldest bank in Italy...

Recall that three weeks ago we warned that "Monti Paschi Faces Bail-In As Capital Needs Point To Nationalization" although we left open the question of "who will get the haircut including senior bondholders and depositors.... given the small size of sub-debt in the capital structures." Today, as many expected on the day following the German elections, the dominos are finally starting to wobble, and as we predicted, Monte Paschi, Italy's oldest and according to many, most insolvent bank, quietly commenced a bondholder "bail in" after it said that it suspended interest payments on three hybrid notes following demands by European authorities that bondholders contribute to the restructuring of the bailed out Italian lender. Remember what Diesel-BOOM said about Cyprus - that it is a template? He wasn't joking.

As Bloomberg reports, Monte Paschi "said in a statement that it won’t pay interest on about 481 million euros ($650 million) of outstanding hybrid notes issued through MPS Capital Trust II and Antonveneta Capital Trusts I and II." Why these notes? Because hybrid bondholders have zero protections and zero recourse. "Under the terms of the undated notes, the Siena, Italy-based lender is allowed to suspend interest without defaulting and doesn’t have to make up the missed coupons when payments resume." Then again hybrids, to quote the Dutchman, are just the template for the balance of the bank's balance sheet.

Why is this happening now? Simple: the Merkel reelection is in the bag, and the EURUSD is too high (recall Adidas' laments from last week). Furthermore, if the ECB proceeds with another LTRO as many believe it will, it will force the EURUSD even higher, surging from even more unwanted liquidity. So what to do? Why stage a small, contained crisis of course. Such as a bail in by a major Italian bank. The good news for now is that depositors are untouched. Unfortunately, with depositor cash on the wrong end of the (un)secured liability continuum it is only a matter of time before those with uninsured deposits share some of the Cypriot pain. After all, in the brave New Normal insolvent world, "it is only fair."
Fortunately, it does not appear that this particular bail-in will hit private bank accounts (at least for now), but it does show that European officials are very serious about applying bail-in procedures when a major bank fails.

New Zealand

The New Zealand government has been discussing implementing a "bail-in" system to deal with any future major bank failures.  The following comes from a New Zealand news source...

The National Government are pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts, the Green Party said today.

Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.

"Bill English is proposing a Cyprus-style solution for managing bank failure here in New Zealand - a solution that will see small depositors lose some of their savings to fund big bank bailouts," said Green Party Co-leader Dr Russel Norman.

"The Reserve Bank is in the final stages of implementing a system of managing bank failure called Open Bank Resolution. The scheme will put all bank depositors on the hook for bailing out their bank.

"Depositors will overnight have their savings shaved by the amount needed to keep the bank afloat."

Canada

Incredibly, even Canada is moving toward adopting these "bank bail-ins".  In a previous article, I explained that "bail-ins" were even part of the new Canadian government budget...

Cyprus-style "bail-ins" are actually proposed in the new Canadian government budget.  When I first heard about this I was quite skeptical, so I went and looked it up for myself.  And guess what?  It is right there in black and white on pages 144 and 145 of "Economic Action Plan 2013" which the Harper government has already submitted to the House of Commons.  This new budget actually proposes "to implement a 'bail-in' regime for systemically important banks" in Canada.  "Economic Action Plan 2013" was submitted on March 21st, which means that this "bail-in regime" was likely being planned long before the crisis in Cyprus ever erupted.

So what does all of this mean for us?

It means that the governments of the world are eyeing our money as part of the solution to any future failures of major banks.

As a result, there is no longer any truly "safe" place to put your money.

One of the best ways to protect yourself is to spread your money around.  In other words, don't put all of your eggs in one basket.

If you have your money a bunch of different places, it is going to be much harder for the government to grab it all.

But if you don't listen to the warnings and you continue to keep all of your wealth in one giant pile somewhere, don't be surprised when you get wiped out in a single moment someday.
 
Swiss military planers are apparently taking the financial crisis to heart.

http://www.telegraph.co.uk/news/worldnews/europe/switzerland/10344029/Swiss-war-game-envisages-invasion-by-bankrupt-French.html

Swiss war game envisages invasion by bankrupt French
Hordes of bankrupt French invade Switzerland to get their hands on their “stolen” money — such is the imaginary scenario cooked up by the Swiss military in simulations revealed over the weekend.

The current number of recruits in the Swiss army stands at around 155, 000 — the biggest army in Europe relative to population size.  Photo: AFP/GETTY

Carried out in August, the apparently outlandish army exercise was based on the premise of an attack by a financially stricken France split into warring regions, according to Matin Dimanche, the Lausanne-based daily.

One of these, “Saônia,” corresponding to the existing Jura region, was preparing attacks on Switzerland to retrieve money it had apparently swiped from France.

Operation “Duplex-Barbara” went as far as imagining a three-pronged invasion from points near Neufchâtel, Lausanne and Geneva, according to a map published in the Swiss newspaper.

Behind the dastardly raid was a paramilitary organisation dubbed BLD, the Dijon Free Brigade bent on grabbing back “money that Switzerland had stolen from Saônia”.

“For its credibility, the Swiss army must work (to ward against) threats of the 21st century,” Antoine Vielliard, Hauate-Savoie councillor, told Matin Dimanche.

However, Daniel Berger, captain of the Swiss armoured brigade, sought to play down the specificity of the threat.
"The exercise has strictly nothing to do with France, which we appreciate" he told the Swiss press. “It was prepared in 2012, when fiscal relations between both countries were less tense.” “French towns were cited to provide soldiers with a real scale,” he said.
Famous for its bank secrecy laws, Switzerland often comes under criticism for allowing foreign account holders to hide their wealth from tax officials at home.

But these opaque laws are coming under increasing fire as France and the US, among others, are cracking down on tax evasion during a period of economic hardship.

This is by no means the first imaginary scenario dreamed up by the Swiss army. Last year, it carried out an exercise based on the premise that a huge wave of refugees crossed into the country after the implosion of the European Single Currency and ensuing chaos across the continent.
“Stabilo Due” centered around a risk map created in 2010 and envisaged internal unrest between warring factions as well as the possibility of refugees from Greece, Spain, Italy, France, and Portugal.

Warning of an escalation of violence in Europe, defense minister Ueli Maurer said at the time: “I can’t exclude that in the coming years we may need the army.” The military is a hot topic in Switzerland, which has mandatory military service. Under Swiss law, all able-bodied men at age 19 have to undergo five months of training, followed by refresher courses of several weeks over the next decade.
A referendum held a week ago saw a large majority of Swiss voters reject plans to abolish conscription.

The current number of recruits stands at around 155, 000 — the biggest army in Europe relative to population size.
Some 73.2 per cent of Swiss said “no” to proposals by the anti-military group, Group for a Switzerland Without an Army, to have either a professional army or one made up of volunteers.

Neutral Switzerland has not been invaded since the Napoleonic Wars of the early 19th century.

Recent scholars have questioned the belief that the Swiss military’s complex of underground bunkers deterred an invasion by the Nazis during the Second World War.

Some historians argued that Adolf Hitler left the Swiss alone because he wanted to use their banks.
 
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