EU-DIGEST - special edition

"There are no sellers without buyers". That's the first law of practical economics. Everyone knows this to be true, whether or not one has ever taken a course in Economics. Everyone except, apparently, a few Ph.D economists who seem to forget this rule when they are hired by the Heritage Foundation, the American Enterprise Institute, etc., from which they migrate, back and forth, between offices in Republican/conservative administrations and these right-wing think tanks.

For these worthies, the "first law" is replaced by the dogmas of deregulation, "trickle-down" and market fundamentalism: impoverish the masses, throw money at the rich who will then invest it, and then "the invisible hand" of the unregulated free market will bring forth a cornucopia of goods and services. Never mind that there will be few if any buyers for these consumer goodies. Henry Ford saw the fallacy of such a policy when he raised the wages of his workers. His competitors in the auto industry were aghast. "Why did you do that?," they asked. Ford is said to have replied, "If I don't pay them more, who will buy my cars?".

For the complete report and other stories related to Europe click on this link

The Irish can not be so ignorant that they can't see all the benefits the EU has brought them. They also better stop listening to those so-called "Euro skeptics" in Britain - a country which has never treated the Irish with much respect.

The British Euro Skeptics actually are very much like the old time British Imperialists. They are ultra conservative, nationalistic and believe Britain is superior to all nations.

Francis A. Boyle, a law professor at the University of Illinois at Urbana-Champaign, wrote a report commissioned by the New York-based Irish Famine/Genocide Committee which concluded that "Clearly, during the years 1845 to 1850, the British government pursued a policy of mass starvation in Ireland with intent to destroy in substantial part the national, ethnic and racial group commonly known as the Irish People.

EU membership for Ireland is not only a guarantee that this will never happen again, but it is also a source for long term economic prosperity. Voting yes on Thursday also means voting yes for an independent and strong Ireland.

For the complete report click on this link

The tricky practice of placing value on a company's illiquid holdings has been responsible for many of the multibillion-dollar write-downs that have hobbled the U.S. banking industry in the past year and threatens to do the same to insurers' balance sheets. Under a proposal for an international accounting standard, insurers may have to change the way they value insurance contracts, a move that could strike at the overall value of the carriers.

While it is unclear when, or even if, U.S. companies will have to comply with rules being crafted by the International Accounting Standards Board, which is based in London, the possible convergence of U.S. and international rules has left insurance companies fearing the worst.

Financial services companies faced unprecedented volatility in their financial statements after valuing illiquid mortgage-linked securities this year, leading to some $300 billion in write-downs and credit losses by companies like Citigroup, the world's biggest bank, and American International Group, the biggest global insurer.


For the complete report from the IHT on the above story and other European related reports go to EU-Digest

"The super-large banks and investment banks from one end of our country to the other are being rescued by the Federal Reserve Bank. If the rescue operation had not taken place, many of our largest banks would have failed. We were forced to help the banks for two reasons. Number one, they are not allowed to go bankrupt because they are "too big to fail." This means that the effect of their failure would be devastating to the economy and therefore the whole country, even to the point of a depression deeper than the 1930s.

What all of this double-speak means is that we taxpayers are covering the gambling losses of the giant banks and also the companies that insured them.

However, currently we are facing a problem with our credit cards that could be as big as the sub-prime mortgage problem. The large banks are raising the interest rates on our credit cards - just because they want to. They want to raise rates because their profits have been reduced by their losses on sub-prime mortgages.

The banks have a whole list of ways to scam us on our credit cards. They can charge several different rates. For example, one rate is for cash or cash-like purchases. A second rate can be charged for transfers from another card and then a third rate for regular purchases. Multiple interest rates make it very difficult for card owners to keep track of their rates. Then, of course, if we are late, even once, there are special fees and charges. Some credit card companies are even raising our rates if we are late paying someone else, our electric bill for example.

Credit card companies have dozens of reasons, I should call them excuses, for raising our interest rates. I have read that these large banks have formulas for their computers to automatically raise rates when they can determine that a family is trapped in a debt too large to handle.

Some of these large banks are as bad as loan sharks. When the banks' computers detect that a consumer is near the maximum on his card and is only making the minimum payment, the rates are raised. Why would credit card companies push someone who is already in trouble into deeper trouble? Because they can.

These large banks are now protecting themselves just like they did with the sub-prime mortgage fiasco. They are transferring their risk on bad credit card loans to insurance companies. We could very easily find ourselves in another national financial crisis. And this crisis would be handed to the taxpayers, just like the mortgage crisis was.

However, the gigantic banks that control most of our banking systems are only interested in short-term profits and are working against the long-term health of our economy."

For the complete report from the People Defender click on this link

According to preliminary data, the Center for Resource Solutions (CRS) certified 15 million MWh of renewable energy sales in 2007, up more than 50% from 2006. This represents sales to more than 90,000 new residential customers and 50% more commercial customers, for Green-e certified renewable energy. The audited report will be released later in the fall.

The CRS Green-e program in the US provides independent, third-party certification to ensure certified renewable energy meets environmental and consumer protection standards. The program currently certifies products for 190 participating vendors.

For additional information click on this link

These days Europeans and most other people around the world feel they are getting soaked of every last penny from their government and big business on fuel prices. The question is who is right here and who is wrong, or is everyone to blame?

The recent testimony of Big Oil executives on the US Capitol Hill is a classic case-in-point of the charade going on about energy and oil prices. Government policy spinners from both the left and the right marketed this hearing to the US public as a "stern interrogation" of those mainly responsible for the US’s rapidly deepening energy crisis. Afterwards the whole testimony turned out to be a dog-and-pony show. Despite the big oil corporations’ record profits, their pursuit of price gouging probably explains no more than 10 percent of the current price of gas at the pump. So, probably the whole focus on the oil companies, ruthless as they may appear to be, is simply a distraction.

Let's face it: If anyone would care to study the facts - there is a problem somewhere in what we are being told. Statistics show that the demand for oil products did not double magically in the past two years. China, India or any other country's economy or demand for oil has not progressed twofold in the last two years.

It is also hypocritical for the U.S. to demand that OPEC meets its energy needs while the US refuses to pursue all the supply options at hand. Moreover, trade relations go two ways. If the US wants to exercise its "God Given Right" to cheap oil, then Saudi Arabia should demand cheap wheat in return.

The fact is that the price for oil has mainly gone higher because the dollar, which still is pegged to the sale of oil, has devalued considerably against stronger currencies like the euro and the Yen.Increased demand and depleting supplies is another factor, manipulation of the oil market shares by dishonest stock brokers is another one, While the going was good many governments also increased taxes on gasoline and other oil related products, without any valid reason.

So it seems the screws must not only be tightened on the oil companies, but also against governments. What every responsible government should be doing now is putting energy conservation programs on top of their agenda. That is the secret to solving the so-called global energy emergency. Unfortunately they are not, because most of our political leaders want this issue off-the-table, for motives which mainly have to do with greed and shortsightedness. They are doing it in this way because they know that attacking the energy crises in a more open and direct way would probably deal a deadly blow to corporate capitalism. It would also mean the end of what is now the dominant force of energy squandering in the uncontrolled world free market system.

Don't be fooled, regardless of what the corporate press or your government might be saying. The oil crisis is here to stay, despite the periodically manipulated price fluctuations. All the effective solutions to the energy crises are on the demand-side. Efficiency, conservation and proximity are the keywords here. To be able to make meaningful sacrifices and adjustments, governments will need to be more honest with their constituents. The time for change is not tomorrow but today. Everyone will have to scramble like crazy to develop, make and distribute as much wind, water, bio-gas, and solar technology as makes sense.

In the end our energy problems can only be solved by ourselves through smart, effective and innovative programs. Sometimes we tend to forget that we the people elect governments and that we are the source feeding corporate capitalism. It is high time we start using that power more effectively to change our energy habits.

For news related to Europe click on this link

It was inevitable that the subprime financial crisis would provoke jeremiads from the left. That has been particularly true across the Atlantic, where politicians and eurocrats have used it as an opportunity to pour scorn on “Anglo-Saxon casino capitalism.” As such, the crisis has been particularly useful in distracting attention from the problems of overregulated European economies. Moreover, it has presented an opportunity to climb aboard the old moral high horse and trot out the hoary Marxist menagerie. Last week, German President and former IMF head Horst Kohler described global financial markets as a “monster” that needed to be put in its place. He compared bankers to medieval alchemists. French President Nikolas Sarkozy has called for a “re-moralization of capitalism.” (Wonder if that would include a re-moralization of marital relations?) In Italy, Silvio Berlusconi has returned to power bemoaning globalization. EU finance ministers have spent a good deal of time lately berating executive pay. Nobody calls for the outright scrapping of capitalism any more. Instead, what is reportedly needed is more and wiser “governance” of the capitalist beast by diehard proponents of the system that failed.

Note EU-Digest: Excuses and more excuses. The fact is that the unregulated Global Markert Place has been exploited by a greedy corporate world and not benefitted the average citizen

For the complete report from FP click on this link

There are plastic time bombs sitting in your wallet - they are called credit cards. The "bargain" you bought at your favorite store with your credit card will increase in price by at least 28 percent, within a year, if you keep that purchase on your credit card by not paying off your credit card monthly.

The situation in the credit card industry is getting out of hand on both sides of the Atlantic. In Europe earlier this year the European Commission's antitrust regulator said in a draft summary it would possibly investigate banks and payment card providers for colluding on prices and using practices aimed at keeping competitors out of their markets. Also, according to the report, credit card fees and interest rates vary between countries, which indicate that there is limited cross-border competition.

In the US the Merchants Payments Coalition, which groups about 30 associations, representing almost 2.7 million stores in America, applauded a congressional hearing on unfair credit card practices in the United States. The hearing, held by the US Senate Permanent Subcommittee on Investigations, is one of several meetings already held this year to investigate the allegedly unfair practices imposed on consumers and merchants by credit card companies and their member bank companies. "This hearing is another example of how serious the issue of credit card abusive practices is for everyone", said a Senator on the Subcommittee. "The credit card industry is profiting from outrageous fees". During the Tuesday Subcommittee meeting the discussion also focused on the so-called "interchange" fee, which represents a percentage of each transaction that American Express, Discover Visa, MasterCard and their member banks collect from retailers every single time a credit or debit card is used to pay for a purchase. The fee varies with the type of merchant, transaction, and card, but averages out to roughly 2% per transaction. This fee is the reason why some merchants require a minimum purchase of X amount before they will permit a customer to make their purchase using a credit or debit card. Unfortunately, the US Congress so far has only held discussions, but has done nothing to actually reduce or limit the exorbitant fees, sky-high penalties, and above normal interest rates being charged to cardholders. The need for action is becoming more and more pressing. Specially now the US Federal Reserve has cut benchmark interest rates. The credit card companies and their member bank companies have not followed suit after the interest rates were dropped and are still charging abnormally high interest rates and ridiculously bloated service fees.

In the US the five banks that issue most Visa and MasterCards include JPMorgan Chase, Bank of America, Citibank, Capital One, and HSBC. Surveys show all these banks have a poor reputation for making their Customers pay outrages fees for services and far higher than normal interest rates. The Household Bank MasterCard has a cash advance rate of 25.15 percent. Blue from American Express and Sun Trust’s Visa charge 23.34 percent. On top of that, there usually is a transaction fee of 3 percent or more. Someone using their Chase credit card to get a $1,500 cash advance will pay about $465 in interest and fees for this so-called "service" within the first year.

During the past months the Central Banks from all over the world have pumped billions of hard currency into the world-wide banking system to fight off liquidity problems, mainly the result of their own making and poor judgment. So far, the benefits of the Central Banks bailout have not trickled down to the US consumer, where household debt continues to rise, after it reached $14.2 trillion in the third quarter, or a record 138% of US household disposable income, up from 113% in 2002.

Therefore it seems that one of the areas which urgently needs to be looked at by governments world-wide is the unregulated credit card industry.

Figures today show that the average American owes about euro 6,872 ($9.900.00) in credit card debt, which amounts to a staggering total of euro 639bn ($920bn)for the whole US. In Europe, according to the BBC and the Credit Action Group the average European has about euro 2,185.00 ($ 3,147) of unsecured/credit card debt. One third of the total European credit card debt involves British credit card owners. Banks in Britain generally apply American credit card policies and standards.

Given these facts and the steady rise in the use of credit cards and consumer debt in the EU, the European Parliament would do EU consumers and the economy a service to also open an investigation into the practices of the credit card industry, but hopefully with better results than the US Senate Permanent Subcommittee on Investigations has achieved so far for American citizens.

For the complete report click on this link

UK juddering down a rockier policy path than the US - by Gerard Baker

For all the fashionable chatter in economic circles about how the world has decoupled from America in the past few years, the crisis unfolding in Britain is proceeding along remarkably similar lines to the one that has engulfed the US. Nothing better illustrates the point than the bleak state of the incumbent party’s political prospects. In Britain the governing party toils below 30 per cent in the opinion polls, the Opposition wins control of London and takes its first parliamentary by-election in 30 years. In the US the approval rating of the President barely touches 30 per cent and his party has lost three “safe” congressional seats in special elections in the past three months.

Note EU-Digest - the reason why Britain is still coupled to the US can all be traced back to the "meeting of the minds" between former President Reagan and former UK PM Thatcher, as to the alignment of economic policies of the US and Britain. Both Britain and the US can thank these two politicians for the disastrous state these two nations are in. On top of that, Britain's aversion of the EU and everything it stands for, including its superior long-term economic policies which do not align themselves blindly with the US is coming to haunt them in a big way.

For the complete report from the Times on line click on this link

When 53-year-old Don Cressman was struggling financially, he charged a bit more than usual on his card, but carefully watched his balance to make sure he didn't go over his limit. When he opened his credit card statement, he was shocked to find a $29 over-the-limit fee added to his bill. Consumers aren't the only ones who are fed up. Regulators are starting to take notice too. The credit card industry has been under fire lately by various government agencies. Members of Congress have proposed new legislation and the Federal Reserve is moving ahead on new regulations that might force lenders to rein in some of their deceptive billing tactics and make their fees more transparent to customers.

For the complete report from CNN click on this link