Portuguese Army Joins Protests Against Austerity (PHOTOS)

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Thousands of soldiers in civilian dress have marched through Lisbon in protest of the austerity program that's part and parcel of the country's 2013 budget. An estimated 10,000 active and retired military personnel rallied against the "unjustified cutbacks," calling for President Anibal Cavaco Silva to veto the controversial austerity budget adopted by the center-right government. The quiet march carried banners calling to respect the military and "national sovereignty." "We are getting cut after cut and there is no light at the end of the tunnel," one soldier told AFP. Some officers complained that their monthly wages have been cut as much as 25 per cent.

Besides focusing on the military problems, such as a decline in finances for maintenance and training, the march also targeted disagreements over cuts to the social sphere, as well as tax hikes. Portuguese military members gather in the central Restauradores Square (Independence Restoration Square) during a protest against the 2013 state budget draft in Lisbon November 10, 2012. (Reuters/Jose Manuel Ribeiro) A number of associations representing the military called on the country’s Constitutional Court to review the legality of next year's budget. In July, the court ruled against a finance law and told the government to revise the measure, which stripped bonuses from civil servants, arguing that it violated constitutionally-guaranteed rights to equal treatment. Activists hope for a similar outcome with the austerity budget.

Portuguese military members hold up red cards to protest against the 2013 state budget draft in Lisbon November 10, 2012. (Reuters/Jose Manuel Ribeiro) In 2011, Portugal received a €78-billion bailout package from the Troika – the group of creditors comprised of the European Union, the European Central Bank and the International Monetary Fund. Belt-tightening is needed to meet the creditors’ deficit threshold. Now Lisbon needs to lower its budget deficit to three per cent of GDP by 2014. As a result of the austerity measures, the economy is expected to shrink by three per cent in 2012, while unemployment is hanging around 15.7 per cent, according to Eurostat.

(Infowars)

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Eurozone Collapse: Greece grinds to halt amid mass austerity strike

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A far-reaching national strike against new outrageous austerity measures has left Greece totally paralyzed. Thousands are marching in the streets of Athens in protest against measures that unions say will sink the country’s already-flagging economy.

The 48-hour strikes have brought most of the country to a standstill, shutting down public transport, schools and air traffic control. Hospitals are also working with skeleton crews. Broadcasts and publications were halted until further notice as journalists joined the nationwide strike.

“About 10,000 people on Syntagma square right now. More arriving. All peaceful,” RT correspondent Peter Oliver wrote on Twitter. Police cordoned off areas around government buildings in Athens in preparation for possible violence. Extra officers were also called for crowd control during the demonstrations.

The protests are expected to continue throughout the week, culminating on Wednesday to coincide with a parliamentary vote on the new austerity measures. The new round of budget cuts the Greek parliament will vote on Wednesday has enraged a population already exhausted by economic belt-tightening. Athens is currently debating measures that aim to allay bankruptcy through some $17 billion in cuts by 2016.

Demonstrators shout slogans during a protest against new government austerity bill aimed at securing international aid needed to prevent the debt-crippled nation from defaulting, in Thessaloniki on November 6, 2012. (AFP Photo/Sakis Mitrolidis) 

Image from Twitter/@AZakharyan_RT

The Greek government remains divided over the issue, with the Democratic Left Party that comprises one-third of the governing coalition refusing to back the measures. The second-largest member of the union government, Pasok, has also seen dissension in its ranks, with several MPs refusing to back the package.
The measures stipulate a two-year increase in the Greek retirement age to 67, and several tax hikes. The new package also includes provisions making it easier to fire civil servants, which has provoked the ire of public workers amid a current unemployment rate of over 25 percent.

The austerity package is required for Greece to qualify for a bailout loan from the ‘Troika’ – the European Commission, the European Central Bank and the International Monetary Fund. Previous austerity measures slowed Greece’s economy, shrinking its economy by one-fifth since the financial downturn began in 2007. The outlook for 2013 is bleaker still, with the country’s debt at 189 percent of GDP and further austerity looking increasingly likely.

The Greek capital has seen numerous protests over the past months, with Athenians rallying against austerity they criticize as bringing the country perilously close to collapse. Anti-austerity demonstrations in Greece have frequently turned violent, leading to clashes between police and disgruntled youths.

Protesters from the communist-affiliated trade union PAME march outside the parliament during a rally in central Athens November 6, 2012. (Reuters/John Kolesidis)

(RT)

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Toshiba cuts forecast on global economy worries

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TOKYO, (Reuters) - Japan's Toshiba Corp cut its full-year operating profit forecast by 13 percent to 260 billion yen ($3.3 billion) on Wednesday, saying the uncertain global economy weighed on its prospects. The company said the continuing European debt crisis, slowdowns in China and India, and a strong yen were combining to "increase uncertainty about the future." For the July-September period, Toshiba posted an operating profit of 57.5 billion yen, slightly better than expected, but down 23 percent from a year ago due to revenue and profit declines in its semiconductor, television and home appliance segments.

That compared with an average operating profit forecast of 55.5 billion yen by four analysts surveyed by Thomson Reuters I/B/E/S. Toshiba, Japan's leading chipmaker, saw operating profit for its electronic device segment, which includes its NAND memory chip business, drop 28 percent to 27.6 billion yen in the six months to September.

Its NAND chip business returned to profit in the three months to September, though it lost money in the April-June quarter, said Executive Vice President Makoto Kubo. The performance of the sector was the biggest single swing factor in Toshiba's results. Toshiba's NAND chips are used in Apple Inc's iPhones and tablet devices. Toshiba, which cut NAND chip output at its main plant by 30 percent after seeing a supply glut its earlier this year, will continue production cuts in the October-March period, but by less, Kubo said.

"We were able to bring the memory chip business back into profit in the second quarter, though the profit level is still not sufficient," he told reporters at a briefing. NAND operating profit in the second quarter was between 10-99 billion yen, though much closer to 10 billion yen, he added. Toshiba's biggest rival, Samsung Electronics Co Ltd , forecast last week global shipments of NAND chips to grow in the mid-20 percent range in the current quarter, led by new mobile product launches. Toshiba booked a 3.6 billion yen loss in its digital products segment in April-September, largely due to a major drop in LCD television demand in Japan.

It also cut its television sales target by 19 percent to 13 million units and said the television business will probably be in the red for the financial year, although it may eek out a profit in the fourth quarter, Kubo told reporters. In May, Toshiba said it aimed to more than double its annual operating profit in three years by expanding its social infrastructure business, which makes products ranging from elevators to medical systems to nuclear power plants, and by boosting sales of electronic devices. The social infrastructure segment posted a record-high operating profit of 49.7 billion yen in the April-September quarter.

Shares of Toshiba, which competes with Hynix Semiconductor Inc in semiconductors and with General Electric Co and Areva SA in nuclear reactors, closed up 4.59 percent ahead of the results. Tokyo's benchmark Nikkei closed up 0.98 percent.

(Reuters)

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S&P Downgrades Spain to just above JUNK Status

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Spain’s credit rating has been downgraded by American ratings agency Standard & Poor's by two notches, leaving it at the lowest investment-grade status, BBB-. ­The Spanish government's options for averting a national financial crisis are limited by a grinding recession, high unemployment and social unrest, S&P said in a statement. The agency also assigned a negative outlook to the rating. Financial institutions were not at all surprised by such a development.

“The Spanish government itself has come out and said, 'look, come 2013, our debt-to-GDP ratio is going to be approximately 91%,'” Margaret Bogenrief from financial advisory ACM Partners told RT. “Debt is growing. There is no internal growth within the Spanish economy to boost those GDP numbers.” “So as far as everyone focusing on what the S&P and other rating agencies are saying,” Bogenrief said, “I think they’re actually reflecting the reality that the Spanish economy is not going anywhere good for the rest of 2012 and into 2013.”

It was predicted that the European bailout fund would help recapitalize Spanish banks without piling on more debt, but now, “any recapitalization plan will likely add more debt” to the central government in Madrid, the S&P statement said. Spain has not asked for outside help, for example a bailout from the European Central Bank. Instead, the government decided to deal with the deficit by introducing a number of austerity measures, causing popular discontent across the nation, where nearly one in four is unable to find work.

“The Spanish population has demonstrated that they are comfortable protesting and rioting these matters. I think you will see more riots, I think you will see more civil unrest, just like you see in Greece. At the very least, the Spanish economy needs 100 billion euro to get back on its feet, and as Greece demonstrated… you may need a second round,” Bogenrief said.

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Greece to Run Out of Money by November

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Greece will run out of money as early as the end of November, if it doesn’t receive the scheduled bailout plan payment, according to the PM. Budget cuts - a precondition for bailout – are starting to severely hurt the economy. The officials from the European Commission, International Monetary Fund and European Central Bank- the so-called “troika” – are currently in Greece to check the country's progress in fulfilling the terms for receiving the aid. If their report doesn't pave the way for the payment of the next €31bln ($40bln) tranche of the country's bailout, Greece could be forced to default on its debts and perhaps leave the euro.

Prime Minister Antonis Samaras said he is confident the money would arrive on time, but in an interview with the German daily Handelsblatt published Friday warned that it is “very difficult'” to make the further cuts to pensions and wages the country's debt inspectors are seeking. “The troika is demanding above all further cuts to pensions and wages. That is very difficult, because we are already bleeding,” he said. “The existing cuts already go to the bone. We are at the limit of what we can expect of our population.” Greece has relied on bailouts from increasingly impatient international creditors since May 2010. In return, it imposed a punishing austerity program, repeatedly slashing incomes, hiking taxes and raising the retirement age.

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Bankruptcy: USZ Government Shutdown Looms again

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As USZ lawmakers return to work on Monday after a five-week recess, they will push aside big issues to once again try to avert a government shutdown before Sept. 30, thereby holding off on issues that could trigger another recession. This Congress is one of the most unpopular and unproductive in modern history, reaching an all-time low approval rating of 10 percent, Gallup found. Few tasks will get done between now and the November 6 election as lawmakers return to their home districts to campaign for their seats, Reuters reports. “Everyone wants to get out of town – fast,” a top Senate aide told Reuters. Lawmakers may be around just long enough for a necessary spending bill to keep the government running, leaving behind much unfinished business.

The six-month temporary spending bill that finances the USZ government would give the next Congress time to create a full-year plan. Failure to agree on one could cause a government shutdown, which would decrease the 112th Congress’ approval rating at a crucial time before the election. Speaker of the House John Boehner and Senate Majority Leader Harry Reid plan to introduce a spending bill this week. But after that measure is given attention, few other tasks are likely to be taken care of in the next two months. One of the most urgent of these tasks is preventing a “fiscal cliff” in January as a result of tax increases and automatic spending cuts – but Congress is holding off on it until after the election. The Dec. 31 expiration of the George W. Bush-era tax cuts, combined with more than $100 billion in automatic spending cuts could trigger another recession if Congress doesn’t come up with a solution.

Aside from preventing a government shutdown, there are few tasks that Congress is willing to deal with this month. A five-year farm bill, which would replace the farm bill expiring at the end of this month, is on the table. The legislation would implement better crop safety net programs and fund the food stamp program. With 46 million Americans eligible for food stamps, putting this bill on hold too long could affect low-income families – but Congress, facing time constraints and disagreement among Democrats and Republicans, is likely to just extend the old bill, the Associated Press reports.

The House may also vote on a bill called the “No More Solyndras Act” on Friday, which would take away loan guarantees for solar and wind energy companies from the Energy Department. But the bill is unlikely to pass the Senate. While members of Congress are prioritizing their campaigns and the Senate has a shortened September schedule, there will be a lot of unfinished work. Several other important issues are likely to be put on hold, including preventing a 30 percent cut in physicians’ Medicare fees, passing the annual Pentagon policy bill, a Russia free trade bill and legislation to reform the Postal Service. “My faith in Congress is pretty minimal,” Dan Ripp of Bradley Woods, a New-York based public policy research firm, told Reuters.

The Postal Service is currently losing $25 million a day and could easily default on a $5.5 billion payment into its pension fund if Congress doesn’t act soon. “The metaphor for congressional ineptitude is its inability to even reform the postal service,” said Greg Valliere of the Potomac Research Group. “Members in both parties talk tough about reducing deficits, but they are scared to close a local post office because they will get angry letters from constituents.” And at a time where lawmakers are campaigning to keep their seats, they are unlikely to deal with tough issues until after the election, putting aside everything that does not have an immediate deadline and taking risks that could trigger another recession.

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Finland Preparing for End Of Euro, Deeply Suspicious Of EU’s ‘Gang Of Four’

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If you have been watching the financial headlines, the media is quoting more and more analysts and economists saying the ejection of Greece from the Euro-zone won’t be that big of a deal.

This of course comes after years of claims that such an event would not only be the beginning of the end for the single Euro currency, but would trigger a cataclysmic financial Armageddon as the fallout from Greece alone would amount to nearly 10 trillion in lost GDP upon the core and the peripheries.

Now we are being prepared for the event; and since it isn’t such a big deal, we can only assume those reports were nothing more than lies to push harsh austerity measures on the masses in order to fund banskter bailouts with insanely high interest rates.

As we are now even getting a timeframe for the first domino to fall – an ejection of Greece – being projected to happen as early as September - quoted live right now on Bloomberg’s ticker - we are also being prepped for the final domino in the chain that will fall: the dissolution of the single European currency.

As the governments across Europe have secretly been planning for the dissolution of the Euro publicly, all have maintained lockstep public policy of not even acknowledging the scenario, instead lying to the public with outlandish claims that the ‘Euro is irreversible’.

Nations rise and fall, and so do their currencies, so clearly any fool can see how outlandish such claims are.

Keeping with that mentality, Finland’s foreign minister apparently doesn’t want to end up being part of YouTube compilations in the near future in which people will say look at those bastards lying through their teeth the whole way (much like we see looking back at Bush with Iraq, the unfolding Libor Scandal, Greenspan with the mortgage crisis, and so forth).

As Zero Hedge reports, these are the first cracks in Europe’s Nash equilibrium as FM Toumioja even goes as far as saying he is deeply suspicious of the ‘gang of four.’

While not advocating the break-up of the Euro-zone, Finland’s foreign minister Erkki Tuomioja told the Daily Telegraph this evening that 'it is only a matter of time'. In a somewhat stunning show of truthiness, perhaps the first cracks in Europe’s Nash Equilibrium are starting to show through following Monti’s ‘threats’, Draghi’s ‘promises’, and Merkel’s ‘well, nothings’. The Finn continues, via Reuters, 'Either the south or the north will break away because this currency strait-jacket is causing misery for millions and destroying Europe’s future.'

Finland, which has a veto that could be used to block any new bailout measures, has already stirred the pot unilaterally by demanding collateral from Greece and Spain, and is quite clear in its view that Europe 'is a total catastrophe,' but adds that no one wants to be first to get out of the Euro and take all the blame.

Insisting that the break-up of the Euro does not mean the end of the European Union, Tuomioja believes 'it could make the EU function better,' but comments that he is deeply suspicious of the ‘gang of four’ – which includes Draghi – with regard to his promises (especially ESM seniority), adding that he 'does not trust these people.' Source: Zero Hedge

Now that we have had the first major EU government official jump ship from titanic lie that has been perpetuated for all too long, we will either see more rats follow him; or see him get assassinated by the gang (politically I assume), as a clear message to others not to even think about it.

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How the IMF and the European Central Bank Are Strangling the Greek Economy

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With Greek workers bracing themselves for more announcements of privatization of public services and industries, the fight among political factions continues. But the drama that is unfolding proves that Greek Parliament is but a puppet regime for an occupying force known as the troika: the International Monetary Fund, the European Commission and the European Central Bank.

The pro-austerity government (led by the conservatives, New Democracy) installed this summer is already on shaky ground. With three ministers already having resigned, the country is just a few rowdy demonstrations away from new elections in the fall.  The troika is using its leverage to arrange the debt-ridden country’s economy and governance as it sees fit, which, as shadow justice minister and Coalition of the Radical Left (SYRIZA) parliamentarian Zoe Konstantopoulou said, constitute “violations of our international obligations,” and amounts to the nation being “a guinea pig for Europe, and the experiment has failed again and again.”

Common sense says that lower wages means people would spend less money, hurting the retail economy and giving the government less through value-added taxes. Unemployment is above 20 percent, and left-wing activists and politicians note the country is already experiencing pain in the healthcare sector because of medicine shortages and delays in surgeries due to cuts in spending. While the International Labor Organization recently stated that these austerity measures will only cause even more unemployment, European Commission President Jose Manuel Barroso told the Greek government to “deliver, deliver, deliver” on the cuts.

Greece has seen its fair share of foreign occupiers and home-grown tyrants: the Ottomans, the Nazis and the military dictatorship that fell in 1974. Geopolitically, Greece is the West, considering its ancient contributions to its early entrance into NATO. But in other ways, it is more like an small nation in the Global South. It’s been occupied, but never an empire in modern times. It shares a religion and borders with Eastern Europe. And like Jamaica or Argentina, it is enduring a political crisis as it copes with its debt. When the country came into the European community, it was told that it was poor, at least in terms of its industrial output, despite its agricultural self-sufficiency. The new European order would integrate it into the modern economy, which of course wouldn’t work for geopolitical reasons, so now the lenders get to auction off its assets through forced privatization.

“We were self-sufficient in bread, sugar, olive oil and meat,” Liana Kanelli, a member of Parliament from the Communist Party (KKE), said of the country before 2001. “We survived under German occupation by just eating olive oil. Now we import everything. We have three state-owned sugar companies--they will be [liberalized], and the price will go up.” Kanelli believes that unless Greece leaves the Eurozone and the entire European community, the "loan sharks" of the troika and Northern Europe will continue to come and impose hurtful economic policy onto Greeks.

Yet, the mundane punditry about the crisis focuses on this myth that Greece suffers from a bloated public sector and a backward private sector that consists of nothing but tourism and feta cheese--there is also shipping and steel, and as some activists point out, the often overlooked fact that the Greek Orthodox Church, despite being a major land owner, doesn’t pay enough taxes, they say. It is true that the public sector is rife with corruption, but activists point out that cutting people’s wages doesn’t address that problem.

And like any other colonizer, Northern Europe has found allies in the Greek 1 percent. As Konstantopoulou explained, one of the most curious things about the austerity plan first implement by the Panhellenic Socialist Movement (PASOK) led government is that its mandates for labor reform in the private sector went beyond what the troika asked for. “There are very strong internal interests who have found their way into the troika,” she said.

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EU-IMF Rescue Program Destroying Greece: Greek Union

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Greece’s leading private sector union says international auditors monitoring Greece's compliance with its EU-IMF rescue package would have failed their own evaluation.

"Their program has destroyed us, pushing the Greek economy into recession," Yiannis Panagopoulos, head of the GSEE, an umbrella union with some 700,000 members, said on Friday.

He made the remarks in Athens after meeting with the EU-IMF mission.

Panagopoulos called the auditors "charlatans," adding, “If (the auditors) were civil servants and had to be evaluated, it is certain that they would have been fired."

The auditors are inspecting Greece's finances, and urging the government to fulfill its promises to evaluate the civil service and cut 150,000 state jobs by 2015.

Athens is obligated to make spending cuts of 11.6 billion euros ($14.1 billion) over the next two years in order to keep getting loans.

The money is supposed to be saved by making cuts in pensions, health support and other benefits.

"We told them that if the measures reported in the newspapers are carried out, recession in 2013 will be over 5.5 percent and unemployment could approach 28 percent," Panagopoulos noted.

GSEE has vowed to present a "dynamic" response against the cuts.

Greece has been at the epicenter of the eurozone debt crisis and is experiencing its fourth year of recession, while harsh austerity measures have left about half a million people without jobs.

One in every five Greek workers is currently unemployed, banks are in a shaky position, and pensions and salaries have been slashed by up to 40 percent.

Greek youths have also been badly affected, and more than half of them are unemployed.

The long-drawn-out eurozone debt crisis, which began in Greece in late 2009 and reached Italy, Spain, and France last year, is viewed as a threat not only to Europe but also many of the world’s more developed economies.

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Eurozone Collapse Accelerating: Euro Slips to 12-year Low

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The common currency dipped as low as 94.61 yen in morning Asian trade. The euro tumbled below 95 yen for the first time in almost 12 years on Monday as dealers rushed to the safe-haven Japanese unit owing to growing fears about Spain s debt crisis. The common currency dipped as low as 94.61 yen in morning Asian trade -- its lowest level since November 2000 -- from 95.38 in New York trade on Friday.

It was changing hands at 94.66 yen by 0320 GMT. The euro was also weak against the dollar, treading around two-year lows at  $1.2112, while the dollar bought 78.15 yen. The euro fetched $1.2152 in New York trade Friday while the dollar was at 78.48 yen. Dealers have been moving out of the euro after the borrowing costs on 10-year Spanish bonds soared to euro-era highs above seven percent, which is seen as unsustainable for the government to service.

With yields so high, unemployment at 24 percent and the economy expected to remain in recession throughout next year, analysts say Madrid will likely need a bailout on top of the one agreed for the country s banks last week. The Japanese currency -- which hit record highs against the dollar last year -- has been increasingly viewed as a safe-haven amid worries about Europe and a lumbering US economic recovery. But the strong currency has taken a toll on Japan s exporters by making their products pricier overseas while shrinking the value of their foreign income.

Officials in Tokyo have repeatedly warned that the yen was overvalued and previously intervened in forex markets in a bid to temper the unit. "As I ve been saying, I will take decisive steps against speculative movement of excessive volatility," Japanese Finance Minister Jun Azumi told reporters. "As far as the current situation is concerned, I m watching it carefully," he said in Tokyo Monday, according to Dow Jones Newswires.

Also Monday, the government said the Japanese economy faces growing downside risks stemming from the European debt crisis, adding that it was increasingly concerned about the outlook for the nation s export sector. In its monthly economic report for July, the Cabinet Office said the overall economy was "on the way to recovery at a moderate pace". But a Cabinet Office official added that: "The downward pressure on our economy through negative effects on exports and financial markets is increasing."

"Against the euro, we ve been seeing quite a strong yen," the official said. National Australia Bank said in a note that "Europe is to blame with a renewed flare up in euro-peripheral bond markets," noting Spain s 10-year borrowing costs spiked to euro-era highs. Japan s Prime Minister Yoshihiko Noda held talks with Bank of Japan governor Masaaki Shirakawa on Monday morning, Jiji Press and other media said. Shirakawa declined to give details of the talks after the meeting, and said only said the pair had "a frank exchange of opinions", the reports said.

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IMF warns eurozone crisis at critical stage

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The International Monetary Fund has warned that the eurozone is in “critical” danger and there is “a sizable risk” of deflation in the single currency bloc.

“The euro area crisis has reached a new and critical stage,” the IMF said in a report on the state of eurozone policy published on Wednesday.

“Despite major policy actions, financial markets in parts of the region remain under acute stress, raising questions about the viability of the monetary union itself,” the report added.

The IMF urged the European Central Bank to play a bigger role in fighting the debt crisis through more rate cuts, purchasing government debts and fund banks.

According to the report there is a 25 percent risk of consumer price deflation before 2014.

Deflation, a destructive decline in prices that can be extremely difficult to reverse, would make it even harder for countries like Greece, Italy and Spain to get government debt under control, as falling prices and wages would further depress tax receipts.

The risk of deflation was low in the faster-growing economies but “significant in the periphery”.

The IMF once again criticized European leaders for the way they have handled the crisis, saying “The deepening of the crisis suggests that its root causes remain unaddressed”.

The international organization also warned that a worsening of the crisis would have a big impact on neighbouring European countries “and the rest of the world”.

However, the IMF urged Europe’s leaders to move toward a more monetary and banking union backed by fiscal integration and “more risk sharing”.

Various eurozone member states, including Greece, Spain and Italy, have been struggling with deep economic woes since the bloc's financial crisis began roughly five years ago.

There are worries that more delays in resolving the eurozone debt crisis, which began in Greece in late 2009 and infected Italy, Spain and France last year, could push not only Europe but also much of the rest of the developed world back into recession.

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China Threatens With Furious Retaliation In Growing Trade Wars

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Last week it was the Fairness Distributor In Chief threatening China with WTO action over its unfair duties on US car imports. Before that it was Europe trying to protect its crumbling trade at all costs with its primary trade partner. Now, it is China’s turn to retort to the world’s beggars, and all those who just happen to ravenously import its iWares with the reckless abandon of a gadget junkie.

FT reports: “Beijing has threatened swift retaliation against a range of European Union industries if Brussels presses ahead with an investigation into government subsidies granted to two Chinese telecoms equipment companies.

The Chinese threat was delivered at a meeting with EU trade officials in Beijing late last month that was arranged at the behest of Chen Deming, China’s commerce minister, to try to defuse a brewing trade dispute that is straining commercial relations between the two sides. Instead, it collapsed into acrimony, with the Chinese warning their EU visitors that they would respond to any investigation of Huawei and ZTE Corp by probing subsidies granted to European agriculture, automotive, renewable energy and telecoms companies. “Put it this way: it’s not like they went for a beer after and watched football,”one person briefed on the meeting said.” None of this is new: recall China Lays Out Conditions Under Which It Will Bail Out Europe; Does Not Want To Be Seen As“Source Of Dumb Money“ in which Li Daokui “added that Beijing might also ask European leaders to refrain from criticising China’s currency policy, a frequent source of tension with trade partners.” Looks like we can scrap those “China bails out Europe” (ignore the fact that the Chinese economy itself is imploding for a second) rumor in perpetuity.

FromFT:

Karel De Gucht, the EU trade commissioner, declined to comment. An EU official sought to play down the meeting, saying that Brussels would wait to see what level of co-operation the Chinese would provide in an effort to ward off a formal trade complaint.

Nonetheless, concerns about the Chinese reaction – and pressure from worried member states –appear to have put on ice a case that once seemed imminent, according to several EU diplomats. They said it was now unlikely that Mr De Gucht would act before September.

In the meantime, both sides are bracing for another trade confrontation in the solar industry. European solar companies have been preparing a complaint accusing Chinese competitors of using improper government subsidies to underprice them, and requesting punitive tariffs. That complaint could materialise as early as this week, according to people familiar with the matter, and could also trigger Chinese retribution.

Combating Chinese government subsidies has been one of Mr De Gucht’s top priorities. The cutting-edge telecoms equipment industry, in which Huawei and ZTE have quickly gained market share, would be a signature case.

Yet it is one thing for bureaucrat to sabre rattle, it is something totally different for idiotic trade war proposals to get traction with corporations:

Mr De Gucht’s case has been undermined by a lack of support from European telecoms companies – Ericsson, Siemens-Nokia, and Alcatel-Lucent – which fear that any action from Brussels could harm their own business interests in China’s fast-growing market.

In an effort to get around that, he has drawn up plans to launch the complaint at the commission’s initiative – and not based on a complaint from a company –setting a new precedent in EU trade defence.

Trade analysts in Brussels said that some member states had also expressed reservations about the case after receiving complaints from Beijing. Germany is understood to be wary of igniting a trade war with China before a planned visit by Chancellor Angela Merkel in August.

And now that China has told Europe what it can do with its empty threats, it is time for it to shift its attention to the US.

(infowars)

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Britain's Struggling Economy facing a New Threat

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Briatin's struggling economy is facing a fresh threat from a collapse in business confidence, according to three separate surveys.

Finance directors believe there is a one-in-two chance of the double-dip recession lasting until the end of the year and four-fifths believe it would be better to delay investment plans due to the current uncertain environment, according to Deloitte’s CFO survey. Confidence among the group in the second quarter dropped to a five-year low.

Deloitte’s findings were matched by BDO, which found that business confidence had plummeted to its lowest level this year. A separate report on activity levels from Lloyds TSB found that growth had slowed to the weakest reading in seven months.

The findings will further dent hopes that businesses will drive the recovery by investing the £750bn of cash they have hoarded to see them through a crisis.

As well as the double-dip, finance directors blamed the eurozone for the drop in confidence. They said the probability of one or more countries leaving the euro by the end of the year was 36pc, the highest level so far recorded. Some 28pc said their contingency plans had been put in place or were at an advanced stage.

Ian Stewart, Deloitte chief economist, said: “The survey underscores the connection between the macroeconomic environment and corporate behaviour, in an indication of the challenge in getting corporates to invest their cash reserves and drive UK economic growth.

“Some 95pc of finance directors rate the current financial and economic uncertainties facing their business as being above normal.

“Uncertainty has had a corrosive effect on risk appetite and 80pc of CFOs say this is not a good time to take risk on to their balance sheets.”

According to BDO’s business trends report for June, optimism has collapsed to its weakest level this year, “indicating a bleak second half of 2012 for the economy”. It also warned that the short-term economic outlook took a knock, with the forecast for business conditions in one quarter’s time posting its biggest drop for 12 months.

Lloyds TSB’s June regional purchasing managers’ index found that the regions reported their slowest overall activity since November 2011.

At 51.3, it indicated a marginal rise in activity but a slower rate of output growth than in May.

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Bankrupt Cyprus Applies for EU Bailout

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Cypriot President Demetris Christofias

The Cypriot government has issued a statement confirming that it has officially made an EU bailout bid, citing heavy exposure to debt-stricken Greece. This makes it the fifth state within the currency union to ask for help.

The request comes just days before a deadline to recapitalize one of the country’s largest banks.

“The purpose of the required assistance is to contain the risks to the Cypriot economy, notably those arising from the negative spillover effects through its financial sector, due to its large exposure in the Greek economy,” the government's statement said.

Government spokesman Stefanos Stefanou wouldn't reveal how much Cyprus would ask for, saying the amount is subject to negotiations. The 27 EU leaders are meeting in Brussels on Thursday and Friday, where the subject will be discussed.

Analysts estimate the sum is likely be around €5 billion ($6.2 billion), but could be as high as €10 billion ($12.5 billion). It is a fraction of the bailouts given to other EU countries, with the latest sufferer Spain asking for as much as €100 billion ($125 billion) for its banks.

Earlier, US ratings agency Fitch downgraded Cyprus to "junk" status. The move was prompted by the amount of rescue money that would be needed to bail out its Greece-exposed banks. The ratings agency estimated that the country will need another €4 billion to recapitalize its banking sector.

The government spokesman said Monday that Cyprus would continue negotiations for another possible loan from a country outside the EU, such as Russia or China. "One doesn't preclude the other," Stefanou told AP. "Our efforts to secure a bilateral loan will continue."

However, Cypriot Finance Minister Vassos Chiarly recently said he would prefer eurozone assistance to aid from Russia, which has already given Cyprus a €2.5 billion loan.

The island nation joined the eurozone in 2004 and began using the common currency four years later.

The eurozone crisis has reached a tipping point, especially in the case of Cyprus, says crisis researcher Jerome Roos. “The mutual dependence of banks and states on one another has reached the point where the state is no longer capable of propping up its own banks, and the banks are no longer capable of propping up their own government,” he told RT.

“So basically what needs to happen is that external forces need to come in to prop up the Cypriot government so it can continue bailing out its own banks.”

If the Cypriot government were to continue bailing out its banks without external help, its credit rating would go so far down that it would lose access to foreign credit markets, Roos explained.

One of the main threats to Europe’s economic stability are the big banks, which have become too reliant on rescue. “The banks have been taking enormous risks knowing that if they take losses, if something goes wrong, if the fire spreads, they’ll be bailed out eventually. It’s a moral hazard issue.”

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