Auditors have identified a black hole in European Union budgets that could lead to extra demands for cash from the British taxpayer of up to £34billion over the next six years.

David Cameron will be legally obliged to make up a share of a shortfall of £259billion by 2020 with liabilities for the Treasury estimated at £33.7bn, calculated at the usual rate of Britain’s EU contributions.  The hole in EU spending has been identified by the European Court of Auditors and represents a political disaster for the Prime Minister who has made after repeated pledges to bring down the amount Britain pays into Brussels budgets.  In a special report earlier this week, EU auditors identified the sum in outstanding bills for legally binding spending commitments made by the European Commission over the last four years. “Assuming that commitments will not be de-committed, and we don’t see how most of them could, it might be problematic to get this money from member states to finance the expenditure foreseen,” Igor Ludborzs, an EU auditor, told the Euractiv website. The shortfall is known in Brussels jargon as “reste à liquider”, or “outstanding amount” and, while Britain has a veto on going above the maximum payment cap, national contributions are still expected to reach record highs.  Hitting the ceiling would push British EU contributions to above £13billion a year over the next six years, higher that the previous record high £11.3bn paid into Brussels coffers last year.

“If the EU spends right up to the payment ceiling, as now seems to be likely, that means that national contributions will go up,” said an official. Implicitly conceding that contributions could increase, British officials said that the “bottom line” would be ensuring that spending did not go above the payment ceiling, negotiated at a historically low level by Mr Cameron last year. “We’re making sure that the EU sticks to the budget limit that the Prime Minister successfully negotiated last year, and which is crucial to controlling the cost of the EU to Britain,” said a diplomat. “The figure from the European Court of Auditors does not affect the ceiling in the current long term EU budget.”

Cold war, this is the new mantra, it is on every lips. It is trendy. Gents you must be scared, they (the West) have run out of idea on how to demonize Russia as it is not working so well anymore, so let's go back to Cold war fears and wake up some old demons.  And with the Republicans back in power in the US, it might as well end up in a hot war....Western countries are at the gates of a new cold war with Russia, sparked by the Ukraine crisis and a continuing failure to grasp the depth and seriousness of Vladimir Putin’s grievances with the US and EU, the Finnish president, Sauli Niinistö, has warned.  Speaking to the Guardian at his official residence before Thursday’s conference in Helsinki attended by the UK prime minister, David Cameron, and Nordic and Baltic state leaders, Niinistö said Finland had a long tradition of trying to maintain friendly relations with Russia. But it would not be pushed around. ... “The Finnish way of dealing with Russia, whatever the situation, is that we will be very decisive to show what we don’t like, where the red line is. And that is what we are prepared to do,” Niinistö said, referring to recent violations of Finnish airspace by Russian military aircraft.  “We put the Hornets [US-made Finnish air force F-18 fighter aircraft] up there and the Hornets were flying alongside the Russian planes … The Russians turned back. If they had not, what would we have done? I would not speculate.”... "Finland, formerly a grand duchy of the Russian empire, declared its independence in 1917 after the Russian revolution. It survived two separate conflicts with the Soviet Union during the second world war. During the cold war Finland followed a policy of “active neutrality” to keep Moscow at bay. The two countries share an 830-mile (1,300km) land border."  No mention of effectively being allied with Nazi Germany.  Although we all know that the Nazis are being rehabilitated as they become re-useful to Europe and its latest Drang nach Osten....Putin is what he is, and Russia is what it is. Unfortunately the EU is what it is as well, and the EU largely caused this by meddling in the Ukraine, forcing it to make a choice when it is a country divided by a national and ethnic faultline. The part in contention was actually part of Russia until about 60 years ago and the population there naturally feel an affinity with Russia because they speak and are ethnically, Russian.  Whether the EU wants a Cold War is a moot point given the economic ties and the danger of further conflict, but lest we forget, this is an organisation comprised of countries that regard defence spending as an overhead and their armed forces as a ceremonial guard for foriegn dignitaries, and flag wavers for third world disaster relief. If there was a new Cold War we would be relying on the hated Americans for military muscle, and where was the EU when Bush wanted to put early warning radar in Poland

The US growth rate will slow in the last three months of 2014.

Chris Williamson, chief economist at Markit explains: “The flash PMI survey data show the pace of economic growth easing for a fourth consecutive month in October. The weakened growth of new orders and downturn in business optimism suggest that growth and hiring could slow further in coming months. “Having signalled an annualised rate of GDP growth of approximately 3.5% in the third quarter, the October readings indicate that the pace of economic growth looks set to moderate in the fourth quarter, down to perhaps 2.5% or less if the PMI falls further in coming months. “There are clearly many concerns, ranging from worries about the impact of Ebola, the Ukraine crisis, the ongoing plight of the Eurozone , signs of further weakness in emerging markets and the Fed starting to tighten policy. “We should not lose sight of the fact that the pace of growth nevertheless remains robust, having merely eased from very strong rates in prior months. The survey is also indicating another month of non-farm payroll growth in excess of 200,000 in October. This sustained strength should help alleviate recent worries about a sudden deterioration in the economy’s health. The pace of expansion appears to be easing only moderately.”

Two mafia bosses - incompetent and corrupt - leaving the EU stage - thank's god !!!

BRUSSELS (EUObserver) - Herman Van Rompuy and Jose Manuel Barroso said goodbye to EU leaders on Friday (24 October) after attending their final summit as presidents of the EU council and commission.  For the Belgian Van Rompuy it marks almost the end of an almost 5-year term in which he worked behind the scenes to keep the EU united as it went through its deepest-ever economic crisis and tried to find solutions from preventing it ever happening again.  He was the first ever permanent president of the European Council, meaning the poetry-writing politician got to define the parameters of the job, making it a chairman rather than presidential post and preferring to be low-key.  "Politics is a rough trade" he noted but said he had been given loyalty and respect by colleagues. "I am leaving with the feeling that I have done all that I could." He recalled the bitter negotiations on the EU's longterm budget as requiring the most political skill and, like Barroso, remembered the pride of collecting the EU's Nobel peace prize. "Not only is my mandate coming to a close but so is my political and public life which has filled a large part of my life," said Van Rompuy, who formally steps down on 30 November.  He added, in his typical style, "in my life I have never had the feeling of being irreplaceable. There was a European Council before me. There will be a European Council without me." Barroso, whose term finishes next Friday (31 October), noted that he had attended 75 EU leader summits since he became commission president ten years ago. He said that how the EU had evolved over the years made him optimistic about its future, and spoke of "great" and "very difficult" moments over the past decade.  The Portuguese politician, who was generally regarded as reactive rather than visionary president, spoke for longer at the final press conference than Van Rompuy and mentioned that he had gathered his "testimonies" which could be downloaded "for free". An earlier ceremony among leaders saw the two leaders given porcelain plates as gifts a long with a signed 'family photo' of all the leaders.  Van Rompuy's plate was inscribed with one of his Haikus (Japanese poetry form) about Europe, written in his native Dutch; Barroso a plate with his motto "Let's build Europe together".  German Chancellor Angela Merkel gave a little speech on behalf of everyone. She was chosen, she said, because she was now the longest-serving EU leader.  She said Barroso worked as a lynchpin between the EU main institutions and reminded member states of the rules "whether we liked it or not" and said leaders would "miss" having Van Rompuy at the helm. While it was the two politicians' last summit, the meeting is most likely to be remembered for a row with Britain over it having to pay an extra €2bn towards the EU.  Prime Minister David Cameron, in a podium-banging press conference, said he would not pay it by the 1 December deadline.  The dispute escalated because it was initially unclear how the figures were arrived at. Barroso spent much of his final press conference as EU commission president going through the finer details of EU budget calculations for member states.

Greece’s finance minister, Gikas Hardouvelis, argued in talks with the IMF boss, Christine Lagarde, that Athens can do without further loans from the Washington-based lender of last resort. Emergency bailout funds have propped up the Greek economy since it came close to crashing on a mountain of deficit and debt in 2010.

“Not only do we not need a new memorandum [loan agreement],” said prime minister Antonis Samaras, addressing parliament hours before his government survived a crucial vote of confidence early on Saturday. “We don’t need the rest of the money that from the start of next year we were on course to get from the current memorandum. We can leave it one and a half years earlier … that is our goal.”

Funding from the IMF had been due to expire in March 2016, while funds from the eurozone end this year. At €240bn (£188bn), the lifeline was the largest rescue programme in global financial history and was aimed at preventing the debt crisis that affected Athens from spreading to the rest of the eurozone.

Samaras denies that Greece wants an acrimonious break from the IMF. The organisation, perhaps more than the EU, has insisted on tough reforms and austerity measures in return for the rescue funds. These have exacerbated a six-year recession, the worst on record, left a quarter of the workforce unemployed, and seen support for Samaras’s fragile coalition plummet.

Hardouvelis, who met Lagarde with his predecessor, the governor of the Bank of Greece, Yannis Stournaras, is thought to have presented a plan detailing the country’s ability to cover its financing needs from bond markets. But the IMF chief has already signalled that she does not share such confidence. Although the IMF is also keen to disengage from the programme – and is under pressure from member states to focus on countries in the developing world – Greece is faced with a financing gap of about €15bn next year.

"DRAGHI SAYS EU BUDGET RULES ARE THERE TO BE RESPECTED" - Draghi also realises that big countries will ignore them with impugnity - just like they did the first time around. France is already in violation and knows full well that the EU and the ECB are utterly importent in the face of that.  Just as they were when Germany - yes, Germany - lead the way in breaking the rules shortly after the euro came into being. All countries remember this, espescially the ones on the receiving end of imperious Germanic lectures about "doing their homework".  Germany has made the classic mistake of doing well when others around it are doing badly, presuming this state of affairs will persist eternally and feeling it has a free hand to treat it's neighbours as it pleases. The moment German needs demand it, the Fiscal Pact will be out of the window; Anegla Merkel would be out of office within weeks if her government were to attempt the sort of austerity it has, in essence, forced upon Greece. The Netherlands were, if anything, even more hawkish than the Germans regarding "lazy Southerners" and wanted things like automatic fines. Then their own economy began to suffer the same problems and they also breached the rules - you don't hear much from them these days. Our Scottish friends may wish to ponder the huge difference in the treatment meted out to small countries as opposed to large ones in the EU. Of course, none of this should be greeted with any Satisfaction in the UK. A recession in the eurozone is bad for us too. Though thankfuly we have at least managed to dodge the madness of dropping a hand-grenade into the economy via a Scottish separation. Now, a worsening recession means there will be less taxable income for governments to fund ever growing entitlements. Add that to a huge pile of moldering away bad debts. What I see is not a solvable problem the way the world works today.

Neither Draghi or any of the bankers even bother to talk about the real problem of not enough regional income and too much government spending. Draghi’s only solution is some form of money printing. Printing money to pay bills might work over the short term. But long term, it cannot. If money printing works in the real world why not print and give every one a billion dollars, euros or yen?

The most Draghi can do is have the ECB print money to service existing bad debts made by banks and governments. But printing money to pay interest and principle on loans is not debt service. That is called money printing, debasing the currency whatever. Yes, governments want to do whatever possible to avoid bad times for its citizens. But, as someone else once said, the road to hell is paved with good intentions.

The “troika” of the International Monetary Fund (IMF), European Commission and European Central that bailed out the Greek economy are waiting for further austerity measures before the IMF disburses a further tranche of €3.5bn in loans. Athens is currently awaiting the final tranche of €1.8 billion euros from the European Financial Stability Facility. 

Greece must also put forward proposals to the troika on how it will meet a projected €2 billion budget gap in 2015. The index reshuffle was made to the S&P Dow Jones emerging markets BMI index and at the same time Qatar and the United Arab Emirates stock indices were promoted from frontier to emerging markets status with a weighting of 0.9pc and 1.0pc in the index respectively.  The reclassification by S&P Dow Jones Indices follows the move by the more widely followed MSCI and Russell Indexes last year who also downgraded Greece to emerging market status. The FTSE index has Greece on its developed market watchlist. 

The changes to the S&P Dow Jones emerging BMI index will become effective on September 22 ... The Greek government have done nothing to restructure their public sector and are now talking about tax cuts! The EU is terrified because Syriza are leading in the opinion polls and are saying that the will refuse to pay back any of their loans (until economic prosperity returns LOL) and will restore all wage and pension cuts to the public sector. They are also talking about a campaign to cause the break up of NATO should they gain power. Greece has been downgraded to an emerging market by S&P Dow Jones Indices, in a blow for the country which was badly hit during the financial crisis.  The Greek market was assigned a weighting of 0.8pc by S&P Dow Jones Indices making it a relative minnow in the emerging market index compared to China which constitutes about a quarter (24pc) of the measure and Brazil and India which make up 11.3pc and 10pc respectively 

The shift could mean that pension funds and more cautious investors will have to move out of the Athens stock index. Greek stocks opened yesterday down 0.4pc to 1,156 on the Athens stock exchange and the bond yield on Greek debt increased, meaning that investors view it as a riskier prospect.

The downgrade comes as Greek government officials held talks in Paris at the start of the month to demonstrate that its austerity measures are on track. The talks were organised ahead of a full sixth review of Greece’s austerity programme to be held by troika officials in Athens at the end of this month.

The Greek economy has to fix its finances under the terms of two bailouts worth a combined €240bn

I imagined the U.S. GDP will be going up a bit more since Israel will have used up lots of ammunition and shooty things and will have to replace them. Bombing things works wonders for GDP. As do car accidents, fires, natural disasters of all kinds and human suffering in general, all of which will induce people to go out and buy stuff to cheer themselves up. Even better, create an atomized society of really sad, lonely people who will consume lots and lots of trash to convince themselves that their empty lives have meaning. Oh no, hang on, we've already done that. Back to bombing things thenThe US is facing economic disaster...all the indicators are there. First of all the College debt stands at 800billion and is shackled around the neck of college graduates before they even start their working career. Its a scam, education should be the first priority of a government not some ponzi scheme, it should not be a power that shackles people into enslavement at no cost to the corporate juggernauts.(coming to the UK soon)

They made a poll some time ago on doctors in the US and 40% said they would have done something different if they had known the hassle of the death and the years of hard work it took to get to a break even point.  Watching the US news they seem to be praying on another upswing in the property market for economic recovery. Yes because property bubbles have proven to solve all problems...and now you can also get subprime loans to buy cars(GMs favourite tactic)another disaster in the making.  Then you have the serious economic issues linked to climate change which is really knocking the GDP with all the repair costs and knock on effects. The state of California and Nevada are bone dry, the armageddon coming from the water shortages are going to have massive repercussions for the rest of the US especially when you consider that California is the bread basket of America. And then lets not talk about the Fed who have been printing money like nobodys business...the only way thats sustainable is if the Dollar remains the default currency of the world any seismic shift to that thinking would tank the US economy immediately.

The war is waged by each ruling group against its own subjects, and the object of the war is not to make or prevent conquests of territory, but to keep the structure of society intact."  Passengers using airports that offer direct flights to the US may be forced to switch on their mobile phones and other electronic devices to prove to security officials that they do not contain explosives, it was announced on Sunday.
“During the security examination, officers may also ask that owners power up some devices, including cell phones,” the US Transportation Security Administration (TSA) said in a post on its website. It warned: “Powerless devices will not be permitted onboard the aircraft. The traveller may also undergo additional screening.”

The TSA did not disclose which airports would be conducting the additional screening. It was reported last week that passengers at British airports travelling to the US were facing extra checks on phones. Belgian officials said passengers there would also have devices checked.

Britain's Department for Transport (DfT) advised that the new restriction meant any electronic device with a flat battery would not be allowed on flights, the Press Association reported.

Last week the DfT said undisclosed extra measures at British airports were not expected to cause "significant disruption" to passengers and noted that the official UK threat status remained unchanged.
The chairman of the UK parliament's intelligence and security committee, Sir Malcolm Rifkind, said the increased airport security measures were "unavoidable".

Writing in the Sunday Telegraph, he said jihadi extremists were deploying "devilish technical skill" to create ever more sophisticated devices to evade existing security measures. And he warned of the dangers of "complacency" among the public in the face of the failure of the terrorists to mount any successful mass casualty attack in the UK since the 7/7 bombings in London in 2005.

The new airport measure is the first to be confirmed since Jeh Johnson, the US Homeland Security secretary, warned last week that enhanced security checks would be implemented imminently at "certain overseas airports with direct flights into the United States".

 

Orwell:

“The war, therefore if we judge it by the standards of previous wars, is merely an imposture. It is like the battles between certain ruminant animals whose horns are incapable of hurting one another. But though it is unreal it is not meaningless. It eats up the surplus of consumable goods, and it helps to preserve the special mental atmosphere that the hierarchical society needs. War, it will be seen, is now a purely internal affair. In the past, the ruling groups of all countries, although they might recognize their common interest and therefore limit the destructiveness of war, did fight against one another, and the victor always plundered the vanquished. In our own day they are not fighting against one another at all.

The head of the International Monetary Fund has warned that a persistent violation of ethics among bankers and rising inequality pose a major threat to growth and financial stability.

Christine Lagarde told an audience in London that six years on from the deep financial crisis that engulfed the global economy, banks were resisting reform and still too focused on excessive risk taking to secure their bonuses at the expense of public trust.

She said: "The behaviour of the financial sector has not changed fundamentally in a number of dimensions since the crisis. While some changes in behaviour are taking place, these are not deep or broad enough. The industry still prizes short-term profit over long-term prudence, today's bonus over tomorrow's relationship.

"Some prominent firms have even been mired in scandals that violate the most basic ethical norms - Libor and foreign exchange rigging, money laundering, illegal foreclosure."

Lagarde warned the too-big-to-fail problem among some of the world's largest financial institutions was still unresolved and remained a major source of systematic risk, with implicit subsidies of $70bn (£42bn) in the US, and up to $300bn in the eurozone.

In a speech littered with quotations from Winston Churchill to Pope Francis and Oscar Wilde, Lagarde said international progress to reform the financial system was too slow. "The bad news is that progress is too slow, and the finish line is still too far off. Some of this arises form the sheer complexity of the task at hand. Yet, we must acknowledge that it also stems from fierce industry pushback, and from the fatigue that is bound to set in at this point in a long race." Lagarde told the inclusive capitalism conference that rising inequality was also a barrier to growth, and could undermine democracy and human rights. The issue has risen up the agenda in recent months with the publication of the French economist Thomas Piketty's book, Capital in the Twenty-First Century.

"One of the leading economic stories of our time is rising income inequality, and the dark shadow it casts across the global economy," Lagarde said.  Borrowing from Oxfam research, she noted that the world's richest 85 people, who could fit into a single London double-decker bus, control the same wealth as the poorest half of the global population of 3.5 billion people.

Options to address inequality include more progressive tax systems and greater use of property taxes, she said.

"We must recognise that reducing inequality is not easy. Redistributive policies always produce winners and losers. Yet if we want capitalism to do its job – enabling as many people as possible to participate and benefit from the economy – then it needs to be more inclusive. That means addressing extreme income disparity."

Lagarde compared the rising awareness of social responsibility tied into the financial system with the world's expanding environmental consciousness. "Just as we have a long way to go to reduce our carbon footprint, we have an even longer way to go to reduce our 'financial footprint'. Yet we must take those steps."

Money needs to go where you need it to go. Private banks only lend a small fraction of what they could lend into industry because of the risk. With private banks creating 97% of all new broad money into the economy in the form of debt the kind of change you want wont happen. Private banks prefer to speculate in derivatives and property or use it to rig LIBOR rates, so doing the same old thing like QE doesn't work. banks dont give a damn about social policy that government wants to follow they go where the profit is, which most definitely are not social projects where the people want it to go. Private banks control the money so believe me when i say they will not give that control up without regulation and another form of money reform its just not in their interest. We need a sovereign money creation economy, where the introduction of money is done centrally where government and the people want it to go, not where the banks want it to go.

Most economists don't include money creation in their models of the economy , which is completely crazy, because if you don't count money in the economic models you cant see what effects it has. 

The best way to really understand how a sovereign money system would operate is to seek sites about how this can be done. 

www.positivemoney.org has a lot of very good ideas if you can go through the literature. 

Its also very interesting to see that most people talk in banking circles about fractional reserve banking, but that doesn't happen , it doesn't exist. 

Here is a link to the Bank of England quarterly report that proves that a) 97% of all money is created by private banks and b) fractional reserve banking is a much vaunted but not a truthful explanation of banking in the modern economy.

http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/m05.aspx

Banks (private) do not work the way you think they do. They do not lend savers money into the economy, they create the debt electronically and add interest. There are not enough savers in the world to cover the debt that is lent by banks(not even a tiny fraction of that debt) How many grannies savings accounts would you need to cover lending to just the U.K.'s mortgages? never mind the $634 Trillion debt the U.S. carries, its laughable really that we fell for it. 

This massive amount of debt IS 97% CREATED BY BANKS.  So sovereign money is the solution.

Portugal, Ireland, Greece, Spain (P.I.G.S.) and now Ukraine. The new collective group can be renamed U.P.I.G.S.

Another nation of debt slaves to the bankers, and all their resources quickly sold off to the highest Western Corporate bidders to be exploited for profits the Ukraine population will never see...The International Monetary Fund has agreed a $14bn to $18bn bailout for Ukraine, a deal that will unlock further credits to reach a total of $27bn over the next two years.

The agreement is intended to help Ukraine meet debt payments looming this year after months of anti-government protests that culminated in the overthrow of President Viktor Yanukovych and a standoff with Moscow in which Russia annexed the Crimea region.

"The mission has reached a staff-level agreement with the authorities of Ukraine on an economic reform programme that can be supported by a two-year standby arrangement with the IMF," the organisation said in a statement.

"The financial support from the broader international community that the programme will unlock amounts to $27bn over the next two years. Of this, assistance from the IMF will range between $14-18bn, with the precise amount to be determined once all bilateral and multilateral support is accounted for."

The agreement is subject to approval by the IMF's management and executive board, which will consider it in April.

"Following the intense economic and political turbulence of recent months, Ukraine has achieved some stability, but faces difficult challenges," the IMF statement said.

Announcing the agreement in Kiev, the IMF mission chief, Nikolay Gueorguiev, declined to say how big the initial tranche of aid would be.

Kiev has said it desperately needs cash to cover expenses and avert a possible debt default. The country's finance minister has predicted the economy will contract by 3% this year, weakened by years of mismanagement and political turmoil.

The bailout will help prop up Ukraine's economy and clear the way for several billion dollars in aid from the US, EU, Japan and other nations.

Ukraine's new leaders announced a radical 50% increase in the price of domestic gas on Wednesday with effect from 1 May, meeting an unpopular IMF condition that Yanukovych had refused...Maybe the Ukranian people should just sit back whilst its interim coup "government" borrows billions from EU/US/IMF. Then, when Ukraine has elected a legitimate government to represent its people, they should tell the EU/US/IMF that those loan agreements were negotiated by an illegitimate government and therefore without legal basis ... and if they want their money back they need to take it up with the neo nazis that they illegally negotiated the loans with.

Banks with high levels of distressed debts will have to face the music eventually as interest rates return to normal and this will be the moment of highest risk for the Eurozone. The question is what will be the trigger for rates to increase - growth in the US, a credit crunch in China or war in Russia - take your pick! The deepening slowdown in emerging markets is holding back global recovery and risks fresh financial strains in Spain, Britain and other European countries with large bank exposure to the bloc, the OECD has warned.

Rintaro Tamaki, chief economist for the OECD club of rich states, said bond tapering by the US Federal Reserve has “only just begun” and threatens to trigger a fresh wave of capital flight from vulnerable parts of the emerging market nexus. “There remains a risk that capital flows could intensify,” he said.

Mr Tamaki said Spanish bank exposure to developing countries is 35pc of Spain’s GDP, mostly through the operations of Santander and BBVA in Latin America. Exposure is 21pc for Britain and 18pc for Holland. The US is largely insulated at just 3pc of GDP.

Much of Britain’s link is through lending to Chinese companies on the dollar market in Hong Kong. British-based banks account for almost a quarter of the estimated $1.1 trillion of foreign-currency loans to China.

The OECD called on the Fed to go easy on bond tapering and said the European Central Bank and the Bank of Japan may have to step up stimulus to prevent the recovery faltering. This round if it really gets out of sync, would be far worse than anything previous. I have my doubts if Yellen will soften up on the tapering as she is a home baser. Vlad could knock the chessboard as EU landers stew with fiscal ferment. The Greeks will need more bailout dosh too....given the recent meetings for the 3rd bailout have stalled.

I have my doubts that Draghi can control a potential runaway situation when real asset shifting starts. The Eurozone economics aren't that sound as he makes them out to be given lander debt is rising faster.

A new "low" is coming with levies; just park ones dosh in the right place.

The troika of lenders - the EU, European Central Bank and IMF - helped four countries through the financial crisis but had a flawed structure and a negative impact on employment, according to the European Parliament. After a vote on two resolutions on the troika, a European Parliament statement said: [The troika] helped four EU countries through the crisis and prevented it from getting worse. But its flawed structure and working methods hindered national “ownership” and compromised transparency and accountability, says a resolution on the EP inquiry findings. A second resolution deplores the widespread negative impacts that Troika-inspired reforms had on employment and advocates revising the measures put in place. Both resolutions were voted on Thursday. The one on the Economic and Monetary Affairs Committee’s inquiry into the workings of the Troika, drafted by Othmar Karas (EPP, AT) and Liem Hoang-Ngoc (S&D, FR), was approved by 448 votes to 140, with 27 abstentions. The Employment and Social Affairs Committee’s resolution, authored by Alejandro Cercas (S&D, ES) was approved by 408 votes to 135, with 63 abstentions. The Troika system is... criticised for taking a “one-size fits all” approach from which it was often reluctant to depart. EU finance ministers, particularly in the Eurogroup, are blamed for failing to give clear and consistent political pointers to the Commission and for failing to shoulder their share of responsibility in their capacity as final decision-taker.  As a first step, there should be clear, transparent and binding rules of procedure for the interaction of the Troika institutions which regulate the allocation of tasks between them. An improved communication strategy is also an “utmost priority”, says the Economic Affairs Committee text. For the medium term, the inquiry resolution recommends a radical overhaul of the troika, in which IMF involvement would become “optional”, the ECB would be present only as a “silent observer”, and the European Commission’s role would be taken over by a “European Monetary Fund” (EMF). The second resolution calls on the Commission and the Council to give the same attention to social imbalances as to macroeconomic ones. Member states and the EU should put in place a job recovery plan once the worst of the financial crisis has passed, taking particular account of the need to create favourable conditions for small firms, for instance by repairing the credit system.

Capitalism covers a very wide range of systems, and is not the direct culprit for our problems. However, the way capitalism is implemented today is a big problem, it is undermining democracy and radicalizing large portions of the population. It will not end well, if this trend is allowed to persist.

Probably the single most harmful detail is the stock exchange. There are many other issues also, but shareholders in particular have been given the rights of owners, which is illogical, as they are in fact speculators. The owners should be the long term caretakers of corporations, with managers more interested in short term benefits. All shareholders care about is the short to mid term value of the stock, not the long term viability of the enterprise. To get the managers to play this game, they have given managers salaries that approach investor profits in scale. As a result, capitalism has gone bananas, not caring for long term viability, the communities they function in, the environment, the law, not even the customers .... share value is all that counts these days and no cost is too great to achieve it.

Democratic Capitalism need not be like this, it is just the default mode of operation it will slip into if left unattended. And this mode is bent on self-destruction, with a tendency to degenerate into Fascism or Communism ... if left to play out its natural course. If this is not to happen, the democratic part of Democratic Capitalism needs to be more pronounced...point / counterpoint...Capitalism works because entrepreneurs and managers figure out how customers, employees, suppliers, communities, and people with the money all can cooperate to benefit....No it doesn't.

• Capitalism works by creating profit. Where there is profit there is deficit.
• Capitalism works by making profit out of the exploitation of those who create that profit in the first place. This is why workers are not paid the actual value of what they produce, because the capitalist or entrepreneur cant make any profit out of that.
• Capitalism may not be perfect, yet it is the greatest system of social co-operation ever created thus far.

No it isn't, the greatest system of social co-operation is where everyone is equal and treated equally, that is true co-operation. Capitalism is exploitation of the masses for the benefit of the minority.

The ECB’s own policies appear to be in contradiction. Its latest Financial Stability Review warned that bond tapering by the US Federal Reserve could lead to an interest rate shock, with a sharp rise in bond yields. Yet it has been slow to mitigate the dangers with pre-emptive stimulus.

Mario Draghi, the ECB’s president, told an audience in Berlin last week that bank needs a “safety margin against deflationary risks” after eurozone inflation fell to 0.7pc.

He warned that low inflation makes it harder for crisis states in Southern Europe to control their debt trajectories while at the same time carrying out internal devaluations within EMU to regain competitiveness, though he denied that the two goals are inherently contradictory.

“If average inflation is allowed to drift too low, adjustment runs into major head winds as demand suffers and real debt burdens rise,” he said.

Mr Draghi has to walk through a political minefield. The German constitutional court has not yet ruled on the legality of his back-stop plan for Italian and Spanish debt (OMT), making it very risky for him to push his case too hard. While Germany does not have a legal veto on ECB decisions, it has a de facto political veto.

Veteran EU watchers say the sacred contract of monetary union is that Germany will never be overruled on crucial matters. Mr Draghi has to work in tandem with Germany’s ECB board member Jörg Asmussen. The bank is in reality a twin-headed institution.

The Philippine television station GMA reported its news team saw 11 bodies, including that of a child, washed ashore on Friday and 20 more bodies at a pier in Tacloban hours after the typhoon ripped through the coastal city. At least 20 more bodies were taken to a church in nearby Palo town that was used as an evacuation centre but had to be abandoned when its roofs were blown away, the TV network reported. TV images showed howling winds peeling off tin roof sheets during heavy rain. Ferocious winds felled large branches and snapped coconut trees. A man was shown carrying the body of his six-year-old daughter, who drowned, and another image showed vehicles piled up in debris. Haiyan, one of the strongest storms ever to hit land, was leaving the Philippines behind on Saturday, having flattened houses, triggered landslides and floods and knocked out power and communications across a number of islands. More than 750,000 people were forced to flee their homes. The toll of death and damage is expected to rise sharply as rescue workers and soldiers reach areas cut off by the massive, fast-moving storm, now heading towards Vietnam. Authorities in 15 provinces in Vietnam started to call back boats and prepare for possible landslides. Nearly 300,000 people were moved to safer areas in two provinces alone – Da Nang and Quang Nam– according to the government's website. Forecasters said the storm was expected to pick up renewed strength over the South China Sea. There were hopes the Philippines had avoided a worse disaster because the rapidly moving typhoon blew away before wreaking more damage, officials said. But because communications were severed, it was impossible to know the full extent of casualties and damage.

Southern Leyte governor Roger Mercado said the typhoon ripped roofs off houses and triggered landslides that blocked roads. The dense clouds and heavy rains made the day seem almost as dark as night, he said. "When you're faced with such a scenario, you can only pray and pray and pray," Mercado told the Associated Press by telephone. He said mayors in the province had not called in to report any major damage. "I hope that means they were spared and not the other way around," he said. "My worst fear is there will be massive loss of lives and property."

BBC News reports...

The former Italian Prime Minister, Silvio Berlusconi, has relaunched Forza Italia, the center-right party that brought him two power two decades ago.

A leaders' meeting voted to suspend the People of Freedom Party (PDL) and restore the name used until 2007. Deputy Prime Minister Angelino Alfano and other PDL figures were absent from the vote, hinting at party divisions. Earlier this month party moderates refused to support Mr Berlusconi's attempt to bring down the government. The national council of the PDL will meet on 8 December to ratify the decision of its leaders.

"With today's decision we returned fully to the status of Forza Italy that gives the president the right and duty to delegate responsibilities and functions," said Mr Berlusconi in a press conference after the meeting.

He said the move had been voted for "unanimously" by those present at the meeting, which was not attended by Mr Alfano, who is the PDL secretary, and four other government ministers.

Turbulent period

"The five members who have decided not to attend tonight agreed that it was better to have a unanimous decision and therefore, with my consent, have not participated," Mr Berlusconi said.

But he insisted that the party was still united.

Silvio Berlusconi: "We have decided, not without internal travail, to express a vote of confidence in this government"

"We continue to focus on the desire for unity, which is something we all believe in, regardless of any points on which we are divided," he said.

But political observers say a party split is very likely, with Mr Berlusconi's relaunch of Forza Italia indicating that he is attempting to transfer influence towards more conservative elements in the party.

It has been a turbulent period for Silvio Berlusconi.

Four weeks ago Mr Berlusconi promised to topple the government by withdrawing the PDL's support for the cross-party government of Prime Minister Enrico Letta- a move which prompted a vote of confidence by the Senate.

But he was forced into a humiliating climbdown when it became clear that several of his senators would back the government.

In August he was convicted of fraud and tax evasion. The Italian Senate will soon vote on whether to expel him, a move which would open up the risk of arrest over other criminal cases.

Negociators Thursday plunged into difficult budget talks to avoid a repeat crisis within months, and quickly agreed to lower their sights from the sort of grand bargain that has eluded the two parties for three years.

After approval late Wednesday of the agreement ending the standoff, the deal-making mantle shifted overnight from the leaders of the Senate to the Budget Committee leaders, Senator Patty Murray, Democrat of Washington, and Representative Paul D. Ryan, Republican of Wisconsin, two less senior lawmakers who nonetheless could make very effective salespeople since they command loyal followings in their parties. The political pressure lifted as well, for now. But the need for a bipartisan breakthrough, even a modest one, was amplified by the economic costs wrought by the 16-day shutdown and near-default on government obligations.       

“The key now is a budget that cuts out the things that we don’t need, closes corporate tax loopholes that don’t help create jobs, and frees up resources for the things that do help us grow — like education and infrastructure and research,” President Obama said Thursday from the White House, setting ambitious goals for Congress even as his own role in the bargaining was unclear.

The question of what a new House-Senate budget conference can deliver by its Dec. 13 deadline — in time for Congress to act by Jan. 15 on funding to keep the government open — remained the subject of deep skepticism, well earned by past failures at reaching so-called grand bargains for deficit reduction and spending investments in the past three years.

With the scope of the talks narrowed for now, on the table are ideas left over from past, failed bargaining: possible reductions in other programs — like farm subsidies, federal pensions, the Postal Service and unemployment insurance — and relatively minimal tax loophole closings, possibly as little as $55 billion.

The European Central Bank (ECB) has improved its outlook for the eurozone economy this year. It now expects the single-currency area to shrink 0.4% compared to its previous forecast in June of a 0.6% contraction. The ECB on Thursday held interest rates at 0.5% despite tentative signs that the eurozone is recovering.

The 18-nation bloc emerged from recession in the second quarter of this year, with growth of 0.3% recorded between April and June. 

ECB president Mario Draghi said: "I am very, very cautious about the recovery. I can't share enthusiasm. It is just the beginning. Let's see, these shoots are still very, very green."

The euro fell to a six-week low against the US dollar after Mr Draghi's comments. Explaining the drop, Adam Cole, head of currency strategy at RBC Capital Markets, said: "He didn't pay any lip service to the better data that we've had in recent weeks. He also reiterated the forward guidance from a month ago."

In July, Mr Draghi said interest rates are likely to remain low for an "extended period". It was the first time the central bank issued so-called forward guidance on interest rates, but the bank has not given any indication on how long an "extended period" might be.

That will in part depend on how European economies fare over the coming months. In the second quarter of the year, Germany and France saw stronger-than-expected growth of 0.7% and 0.5%, respectively.

But weaker economies, including Spain, Italy, and the Netherlands, all saw output fall. The ECB expects the recovery to be gradual over the rest of the year, and strengthen in 2014.