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

If Barack Obama was taking on John McCain in a global election he would already be on his way to the White House. A recent worldwide poll showed him beating the Republican by more than three to one. In Europe, his margin of victory would be even greater: Mr McCain would get only 6 per cent of the vote in Germany, where a government spokesman has waxed publicly about the attraction of Mr Obama's “mixture of Martin Luther King and John F. Kennedy”. Just about the whole of France is backing Mr Obama. He is, in the words of Jack Lang, the former Socialist Culture Minister, “the America we love ... the youth and racial mix of an America under transformation and in movement”.

For the complete report from the TimesOnLine 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

The flower industry keeps those flowers perfect for our enjoyment with a heavy douse of chemical fertilizers, insecticides, growth hormones, fungicides, and highly toxic pesticides. Imports can have unregistered chemicals or those otherwise banned because of the high costs at stake. If bugs are found in the cargo, the entire lot can be rejected. Studies have found more than 50% more pesticides on flowers than the allowable limit on produce; roses had 1000 times more cancer-causing pesticides than food! The pesticides used are very strong toxic chemicals. They travel to neighboring farms and into their water supply. Many of these chemicals are listed as "category 1" and include the most hazardous of chemicals (Methyl Bromide). Some of these chemicals are known to deplete our ozone layer and cause birth defects. When you touch a chemically treated conventional flower, you get poisons on your skin which can be ingested when you put your hand to your face or your child's face or can even penetrate your body through your skin. When you smell the fragrance, you are also inhaling poisons. Worse yet, the workers (many sorely underpaid) on flower farms and in green houses usually work in toxic environments. Studies show that they are exposed to 60 times the "safe" standard. As you can imagine, the toxic fumes are intensified in green houses! And as the farm hands return from work toxic chemicals also enter their homes and into the lives and bodies of their children and loved ones. But it does not end there. When the flowers are shipped and arrive at their destinations around the world, health hazards can now also enter the home of the consumer. This time with the addition of usually environmentally unfriendly packaging.

Have you ever checked if the packaging or sleeves around the flowers you are buying are made from recyclable and sustainable materials. Like corn-based flower sleeve made from polylactic acid (PLA), a natural, rapidly biodegradable alternative to traditional petroleum based cellophane sleeves used by most flower companies! Are they safe to the to the environment, can they be recycled? Do the flowers you buy carry a sticker which says that the flowers are eco-friendly and have not been treated with poisonous chemicals?

The next time you buy flowers for someone or for some special occasion, make sure they are not only appealing to the eye, but also carry a label which guarantees they are eco-friendly. These are all serious questions that need to be addressed by the multi-billion flower industry, which at the moment seems to be burying their head in the sand.

For the complete report and additional news updates related to Europe in EU-Digest click on this link

Nineteen years ago, the fall of the Berlin Wall effectively eliminated the Soviet Union as the world's other superpower. Yes, the USSR as a political entity stumbled on for another two years, but it was clearly an ex-superpower from the moment it lost control over its satellites in Eastern Europe.

Less than a month ago, the United States similarly lost its claim to superpower status when a barrel crude oil roared past $110 [it has crossed $ 130 -- Ed] on the international market, gasoline prices crossed the $3.50 threshold at American pumps, and diesel fuel topped $4.00. As was true of the USSR following the dismantling of the Berlin Wall, the USA will no doubt continue to stumble on like the superpower it once was; but as the nation's economy continues to be eviscerated to pay for its daily oil fix, it, too, will be seen by increasing numbers of savvy observers as an ex-superpower-in-the-making.

For the complete report from IOutlookIndia.com 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

While many politicians are willing to engage with "rogue states" such as Iran and North Korea, they draw the line at terrorists, who are seen as intrinsically ruthless and radical. That's why "I will not negotiate with terrorists" is a refrain heard across the political spectrum – and why Jimmy Carter took such flak recently for visiting with Hamas.

But this knee-jerk rejection of negotiation with radicals is deeply misguided and likely to do more harm than good. The smart question is not whether to talk to terrorists, but, instead, which terrorists to talk to and how to talk to them. Many nonstate militants are weak and peripheral; they can be quickly squashed or contained without any need for negotiation. For instance, violent left-wing groups such as the Red Brigades in Italy and Weather Underground in the US were eliminated in the 1970s without negotiation.

But some terrorist and insurgent groups are very powerful. They are embedded in robust social networks, generate revenues from areas under their control, and have enough military power to impose serious costs on governments. They cannot be easily crushed, nor can they be wished away.Negotiations and cease-fire talks, or their offer, should be seen as one of a range of tools for overcoming militancy. Indeed, there are three good strategic reasons to talk to these kinds of armed organizations.

For the complete report from the Christian Science Monitor 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