Fri, 23rd June 2017

Anirudh Sethi Report


Archives of “european countries” Tag

German Media Predicts Dire Consequences for Europe Amid Falling Oil Prices

European drivers are happy about the fact that prices for fuel are becoming lower but their joy won’t, however, last long, because on a global perspective the fall in oil prices will affect the region’s economy poorly, German newspaper Die Welt wrote.

For the first time, the cost of fuel fell below one euro per liter and the price is likely to decline further at an accelerated pace. Such a situation can be dangerous not only for countries producing oil, but also for economically sustainable European countries, such as Germany, the newspaper reported.

First, the most fragile states, such as Nigeria, Malaysia and Colombia, will be forced to drastically reduce public spending due to low oil prices, which may result in civil protests and riots. This, for its turn, may lead to the collapse of these states, which means that new refugees will head to Europe, the article noted.

Second, European countries are now largely focused on extracting shale oil, which in the present circumstances is extremely unprofitable. If the exploration of new wells stops, the whole shale industry may collapse, leading to a shock of the market and to a subsequent sharp jump in prices, the newspaper wrote.

Putin: No More Gas Discounts for Ukraine Under Current Oil Prices

“Moscow can no longer give Ukraine gas discounts due to the current drop in oil prices,” Russian President Vladimir Putin said Wednesday. The price must be comparable to that for other European countries, like Poland, he added.

 Kiev currently purchases gas from Russia with a $100-discount per 1,000 cubic meters, and also receives reverse gas flows from Slovakia, Hungary and Poland.

In the second quarter of 2015, the final price for Russia’s gas deliveries to Ukraine has been set at $247.18 per 1,000 cubic meters.

Poverty Crisis in the European Union

There are very few people that actually give even one hoot and even fewer that could give two of them when it comes to poverty of people that are living in society alongside us. We live in an I’m-alright-Jack world where love thy neighborprobably means just a quick extra-marital affair rather than a hand reaching out to give some help. But the austerity measures that have washed the European Union away have left in the wake of the tsunami just a lost generation of people that are trapped in growing and ever-increasing poverty.

Failed Policies of the EU

The charity Oxfam in the UK has just published a damning report that will probably go very much unheard of showing that by 2025 there will be 25 million people that are living in poverty due to the austerity measures imposed upon them. It will go largely unheard of because other things are turning the media’s attention away from such a social crisis and in turn the people of those very same countries are fixated with the belief that it is Syria, Bachar-al-Assad or Vladimir Putin or even the election of Angela Merkel that are more important than people actually starving from lack of financial resources in the countries that they live in.

Oxfam believes that the austerity measures imposed on populations in European countries takes us back to the havoc wreaked by structural programs of readjustment in developing countries that most of us only witnessed sitting in the comfort of this side of television-land. Now, that’s not the case. Back then, in the 1980s and in the 1990s it was the fault of the International Monetary Fund that in their infinite wisdom had gladly wanted to bail out the failing countries of the world just as long as they cut spending to a minimum and they imposed increases in taxes on the entire population. Not that much different from what is being done right now in the European Union. How little we remember! Read More 

Deutsche Bank’s Jain: Europe is falling behind

READ THISDeutsche Bank’s co-CEO Anshu Jain has been speaking at a banking conference in Frankfurt this morning organised by German newspaper the Handelsblatt, reports the FT’s Frankfurt correspondent, Alice Ross.

After suffering some light teasing from the German presenters about the fact he was speaking in English, here are some highlights:

  • He expressed concern over the stricter rules on leverage ratios being imposed on US banks compared to European banks, saying that the US was adopting a ‘very’ high standard and that Europe hadn’t and shouldn’t. Still, he said that the debate over leverage ratios was “done” and that the industry now needed to move on.
  • He sounded repeated warnings about the growing gap in economic growth between the US and Europe, with European countries falling further behind: “Europe is falling behind the US in every factor; the banking sector is one of them,” he said.
  • He also warned that regulation has become competitive between different regimes: specifically the US and Europe, such that at times the regulations contradict each other and make it hard for the banks to follow – though he insisted he was critical of the need for regulation as such. Read More 

RBI releases its monthly Bulletin for August 2013

Major findings:

  • India’s export of software services (computer services and Information Technology Enabled Services (ITES)/Business Process Outsourcing (BPO) services) during 2011-12 was estimated at ` 2,484.3 billion (US$ 51.8 billion), of which computer services exports accounted for a share of 75.2 per cent.
  • India’s total export of software services increased by 14.5 per cent during 2011-12. While export of computer services recorded a growth of 16.8 per cent, export of ITES/BPO services exhibited 8.0 per cent growth during the year.
  • Public limited companies, which accounted for 58.7 per cent of the total export of software services, registered significantly lower growth than private limited companies.
  • Delivery of software services exports through off-site mode with a share of 82.2 per cent increased by 18.7 per cent, whereas on-site mode delivery observed a decline of 1.8 per cent during the year.
  • ‘USA and Canada’ remained the major destination for software exports with 64.3 per cent share in total software services exports. European countries had a share of 23.3 per cent, of which UK accounted for 14.3 per cent. US Dollar remained the major invoice currency for software exports with 76.4 per cent share.
  • Total international trade in software services by India, including the services delivered by foreign affiliates established abroad, stood at ` 2,937.7 billion in 2011-12, of which over two third share was accounted for by the cross-border supply mode (mode-1).

India still second fastest growing economy, says FM P Chidambaram

NOTHING-NEWNoting that India continued to be the second fastest growing economy in the world after China, Finance Minister P Chidambaram today said people should not be worried about the current slowdown and expressed hope of achieving six per cent growth this fiscal.

“People should remember India continues to be the second fastest growing economy after China. Even China’s growth which was at 10 per cent has come down to seven per cent now, while our growth has slid to five per cent from nine per cent,” he said at a bank function here.

“Economic slowdown is there in all the countries. When there is slow growth rate in the world, India cannot remain unaffected,” he said inaugurating the 2110th branch of the Indian Bank in this small town in his Sivaganga Lok Sabha constituency.

Chidambaram said even European countries had been affected by the economic slow down. Read More 

EU Extends Deficit Deadlines For Most European Countries, Admits Structural Adjustment Failure, Kills Austerity

Moments ago, the following European Commission website hit the interwebs, which can be summarized as follows:


Translation: the theatrical spectacle of Europe’s austerity, which never really took place, is finally over. Going forward political incompetence will henceforth be known as just that: incompetence, and elected rulers will not be able to pass the buck to evil, evil, “austerity.” More importantly, Europe has also proven without a doubt, that any “structural adjustments” on the continent are impossible, and that governments are locked in a spend till you drop mode.

For Europe’s sake, it better find a sake of endogenous credit creation once the BOJ’s carry trade fueled mask of all that is wrong with Europe fades away. Alas, following yet another painful M3 report, and an intractable ECB which refuses to monetize de novo and unsterilized (and simply can’t “lack of fiscal union” reasons previously explained), where such credit creation will come from is unknown.

George Soros Says Euro To Eventually Destroy European Union

The controversial financial speculator George Soros believes that the existence of the common European currency and the unwillingness of Germany to guarantee the debts of the poorer European countries will eventually lead to the dissolution of the European Union.

George Soros, also known as “the man who broke the Bank of England”, has been promoting the idea of Eurobonds i.e. special debt instruments backed jointly by all members of the European Union. The money obtained from selling such bonds would be used to finance the deficits of countries like Greece, Portugal, Spain or Italy.

At the same time, the shared responsibility for paying the debts assumed through Eurobonds would mean that Germany would likely have to pay for the financing of the weaker European countries, implicitly transferring money from the German taxpayers to the welfare recipients from France, Italy and other countries with oversized welfare systems. George Soros argues that it is both a moral obligation of Germany and the soundest solution for the European crisis. The German economists who oppose the issuance of such bonds believe that “debt mutualization” would be detrimental for the fiscal discipline of the European countries and would benefit the countries that have unsustainable deficits at the expense of the more disciplined countries like Germany. Read More 

The Poverty Lie: How Europe’s Crisis Countries Hide their Wealth

How fair is the effort to save the euro if the people living in the countries that receive aid are wealthier than the citizens of donor countries like Germany? A debate over a redistribution of the burdens is long overdue.

The images we see from the capitals of Europe’s crisis-ridden countries are confusing to say the least. In the Cypriot capital Nicosia, for example, thousands protested against the levy on bank deposits, carrying images of Hitler and anti-Merkel signs, one of which read: “Merkel, your Nazi money is bloodier than any laundered money.”

German Chancellor Angela Merkel was greeted by a similar scene when she visited Athens in October 2012. An older man with a carefully trimmed moustache and pressed trousers stood in Syntagma Square. The words on the sign he was carrying sharply contrasted with his amiable appearance: “Get out of our country, bitch.”

Despite these abuses, the protesters and all of Merkel’s other critics in Rome, Madrid, Nicosia and Athens agree on one thing: Germany should pay for the euro bailout, as much as possible and certainly more than it has paid so far.

They argue that Germany is a rich country that has benefited more than all others from the introduction of the euro, and that it has flooded other European countries with its exports, becoming more prosperous at their expense.

Germans Own Less than Those Asking for Money

But there is also a second image of Germany, one that’s based on numbers, not emotions. The figures were obtained by the European Central Bank (ECB) and released last week. This image depicts a country whose households own less on average than those that are asking for its money.

In this ranking of assets, Cyprus is in second place Europe-wide, while Germany ranks much lower, even lower than two other crisis-ridden countries, Spain and Italy. Read More 

Merkel: Europe must give up some sovereigny

German chancellor Angela Merkel has caused a stir this afternoon after declaring that European countries needed to yield some sovereignty to ensure Europe’s survival.

Merkel made a pitch for more integration at a press conference with Polish prime minister Donald Tusk — who expre

The chancellor was concerned that other European leaders lose their commitment to a closer Europe when the crisis ebbs away.Tusk, though, warned that it could be counterproductive for Berlin to force its agenda on the rest of the EU

As Reuters reports:

“We seem to find common solutions when we are staring over the abyss,” Merkel said. “But as soon as the pressure eases, people say they want to go their own way.

“We need to be ready to accept that Europe has the last word in certain areas. Otherwise we won’t be able to continue to build Europe,” she added.

Tusk said it would be “dangerous” if other countries in Europe felt Germany was imposing its own economic model across the entire bloc. Read More