Browsing all articles tagged with political

French President Urges Euro Zone Government

Francois Hollande, French President called on Thursday for an economic government for the euro zone with its own budget the right to borrow a harmonized tax system and a full time president.

At a 150 minute news discussion marking his first year in office a day following economic statistics showed France had fall into recession, the Socialist leader defended his record on economic reform and budget regulation and informed the French people they would have to work a bit longer for a complete pension in future.

Rebutting criticism that France has lost its leadership role in Europe as of its dwindling economic competitiveness, Hollande thought he wanted to create a fully-fledged political European Union within two years.

Hollande said it is my responsibility as the leader of a founder member of the European Union to pull Europe out of this torpor that has gripped it and to reduce people’s disappointment with it.

He accepted that he could face resistance from Germany, Europe’s dominant power, which opposes mutualising debt between member states. Berlin is also reluctant to give the euro zone its own secretariat for fear of deepening division in the EU, among the 17 members of the single currency and the 10 others.

Non-euro Britain’s government previously faces growing domestic pressure to hold a referendum on leaving the bloc.

Hollande stated he wanted Britain to stay in the EU but added, he can understand that others don’t want to join the single currency, however they cannot stop the euro zone from advancing.

Hollande said a future euro zone economic government would debate the main economic and political decisions to be taken by member states, harmonize welfare policies and national fiscal and launch a battle against tax fraud.

He proposed bringing forward planned EU spending to combat record youth unemployment, pushing for an EU-wide transition to renewable energy sources and envisaged a budget capacity that would be decided to the euro zone along with the gradual likelihood of raising debt.


Tax Officials Cite Momentum, Challenges in Tax Revamp

Two US policymakers from opposed ends of the political spectrum on Friday stated thrust is building for a top-to-bottom revamp of the tax code, however the largest question is whether there is political will to get it done.

Mark Prater, a long-time Republican Senate tax counsel and Mark Mazur, assistant secretary for tax policy at the Treasury Department, cited major policy proposals and two years of public hearings and private meetings that have set the foundation for the first rewrite of the code since 1986.

Mazur, who is Treasury Secretary Jack Lew’s top policy aide on tax issues, said this year the stars are aligned for tax reform in a way they haven’t been, he and Prater spoke at a legal conference in Washington, at the moment it is just a matter of political will.

The two top tax writing lawmakers expect to push legislation through Congress this year to lower most tax rates and simplify the code that many Americans regard as far too complex.

They may have more political liberty to write a bill as Senate Finance Committee Chairman Max Baucus, a Democrat, is retiring following this term and House of Representatives Ways and Means Committee Chairman Dave Camp a Republican is term-limited as chairman.

President Barack Obama says he backs tax reform, while some have said it does not appear to be high on his agenda.

Mazur accepted there are tons of obstacles, including the divide between the parties on whether the tax reforms should produce more revenue. Democrats generally favor doing this as Republicans do not.

Prater, a tax policy aide to Senator Orrin Hatch the senior Finance Committee Republican, agreed energy is building. One advantage he quoted is the January 1 fiscal deal that lifts taxes on Americans making more than $400,000 a year and also established a budget baseline both parties agree on.

Prater said that the playing field is a lot clearer concerning where we are starting from.

He said on the question of whether a tax renovate should lift revenue, that to me is actually a political question that comes down to what the other pieces of the picture are.


German Court to Hear Case Against ESM, ECB bond-buying in June

Germany’s Constitutional Court said on Friday that it would hold a public hearing on complaints against the euro zone’s bailout fund the European Stability Mechanism, and the European Central Bank’s bond buying program on June 11 and 12.

The seven complaints in total, reflect German unease regarding the mounting costs of dealing with the three year debt crisis and fears that the ECB bond buying program may violate the taboo against direct central bank financing of state budgets.

The court based in Karlsruhe southwestern Germany, ruled in a preliminary verdict previous September that the ESM did not violate German law and could go further on, while it insisted on veto rights for the German parliament.

The ECB has not yet trigger the program as struggling euro zone states, previously implementing tough austerity measures, are reluctant to recognize the onerous conditions of the program, however the pledge alone has been enough to bring down their borrowing costs over recent months.

Gunnar Beck, constitutional law expert said he did not expect Karlsruhe to support the complaints, given its precedent record on not blocking moves towards European integration, despite the legal worries over the bond buying program.

There is no doubt that the EU contract, rule out bond purchases whenever they might facilitate state financing through the printing press and permit indebted states to obtain enhanced rates than they would otherwise.

There is no significant precedent where the German constitutional court has directly challenged the German government over an issue of European policy.

He added, I have no doubt the court will present to the government’s wishes in one form or another when it comes to the ECB bond purchases.

Political analysts say a decision is unlikely earlier than Germany’s September election when Chancellor Angela Merkel, her popularity enhanced by what voters see as her competent handling of the euro zone crisis is expected to win a third four year term.


California Democrats Hesitant Following Call to Unwind Prop 13 Tax Curb

A push by California Democrats to unwrap part of Proposition 13, the measure to limit the growth of property taxes that started a nationwide revolt, emerge to be losing ground on Monday because leaders in both houses of the state’s Legislature distanced themselves from the proposal.

The cool reaction let some of the air out of a resolution passed at the Democratic Party’s state convention on Sunday that called the measure’s approach to taxes on marketable property unfair and demanding reform.

Rhys Williams, a spokesman for the Senate’s top Democrat, Darrell Steinberg said that we won’t do anything in 2013-2014 if at all we have just been given that super majority by the voters who have hand over us to deliver so let’s deliver that first.

Howard Jarvis, The anti-tax group in Taxpayers Association, which is named for Proposition 13′s original sponsor and opposes any attempts to diminish it didn’t appear too concerned.

Kris Vosburgh, the group’s spokesman said that Pardon me as I give a giant yawn.

Grassroots activists, make confident by the Democratic super majority in both houses of the state legislature, have guarantee to take their crusade to the mainstream, and eventually push reluctant lawmakers to take on Proposition 13.

David Mark, political analyst and editor in chief of the website Politics said that it’s in their Democratic hearts it’s on their wish list. However it seems like any real action is not likely to happen any time soon.

Backers plan a two-year campaign to win over public opinion as well as elected lawmakers said that Lenny Goldberg, a Proposition 13 critic who assist write the Democrats resolution.


A fiscal Cautions from two former budget chiefs

Two ex- budget chiefs who worked for presidents from opposing political parties stated on Monday that the government should decrease military spending, end decade-old income tax cuts and scale back Social Security payments to reduce the federal deficit.

David Stockman, who was a key architect of tax cutting policies and Republican Ronald Reagan’s budget director from 1981 to 1985, and Peter Orszag, budget director for Democratic President Barack Obama from January 2009 until July 2010, agreed that the US spends more on defense than is needed.

Both also stated that the country would be well served if wealthier citizens paid more taxes and took less significant benefits from the government in their old age.

Orszag said that the governments are right to use spending to stretch out the economic regulation to keep huge segments of population from losing their jobs, which itself can sourced long lasting problems.

The Great Deformation is the men spoke on the eve of the official publication of Stockman’s new book, the Corruption of Capitalism in America.

Stockman criticizes politicians of both parties, opening with Democrat Franklin Roosevelt in the 1930s and including his former boss Reagan as well as previous Republican President George W. Bush.

Stockman advises investors to sell their securities and hold cash as an alternative. He confess he does not believe Washington will adopt his advice.

Orszag stated Stockman was not correct to place so much blame for the budget deficit and weak economy on government policies. Changes from new technology and global trade have hurt employment and incomes.

Some $85 billion of comprehensive government spending cuts automatically took effect on March 1 following Congress and the White House failed to agree on federal budget decisions. The drain of money has placed pressure on the US Federal Reserve to keep interest rates low to prop up the economy.

Washington is having returning fiscal showdowns over how to slash the budget deficit and $16 trillion of national debt, which was build from years of spending on wars in Afghanistan and Iraq and stimulation for the US economy.


Bank of Cyprus Controls To Previous Month, Minister Says

Bank of Cyprus conceded on Thursday that firmed capital controls would remain in force greater than expected as the island’s banks reopened for the first time following the government was forced to believe a hashed EU rescue package to prevent bankruptcy.

Cypriots lined up peacefully to withdraw partial amounts of cash, however there was no symbol of a run on deposits, as had been frightened.

Banks were shut for almost two weeks as the government discussed a 10 billion euro which is equal to $13 billion international bailout, the first in Euro zone to enforced losses on bank depositors.

Ioannis Kasoulides, Foreign Minister stated curbs on money arrangements imposed following the bailout would be phased out over regarding a month.

A number of restrictions will be lifted and steadily, most likely over a period of about a month according to the estimation of the central bank, the limits will be fully lifted.

Government primarily stated the controls would remain in place for a week subject to reassess. Economists say they will prove hard to boost as long as the economy is in crisis.

A lot of money had already missing electronically. Statistics published by the Central Bank of Cyprus illustrate that savers from other euro zone countries withdrew 18 percent of their deposits from the suffering island in February, as talk of a tax on bank accounts added ground. Overall private sector bank deposits in Cyprus knock down by 2.2 percent to 46.4 billion euros previous month, following a similar slump in January.

To assist the Cyprus banks conditions the crisis, the ECB flew in 5 billion euros which is equals to $6.4 billion in cash overnight from Frankfurt.

Government said it had appointed a board to investigate the banking meltdown and look into assert of junior bondholders.

Constantinos Petrides, under secretary to the Cypriot president said that it will have a broad mandate. It will investigate criminal, political and civil responsibilities.


Cyprus Bank Deposit Tax lifted Long Term Political Risk

Markets react optimistically on Tuesday to signal that the instant fallout from a plan to tax deposits in Cyprus would be partial, although some analysts cautions regarding longer term risks, particularly for the political future of the euro zone.

Eurogroup president and Jeroen Dijsselbloem, Dutch Finance Minister said that the execution of the reform measures included in the draft program is the greatest assurance for a more successful future for Cyprus and its citizens, through a feasible financial sector sustainable economic growth and stable public finances. He further said that he repeated the stability levy on deposits is a one off determine.

Capital Economics stated that the reaction from markets so far which they explain as a calm reaction, most probably reflects a reasonable assumption that Cyprus is a special case and that a decision to tax depositors won’t be taken somewhere else.

The Capital Economics team further said that a bailout of the banking sector was not possible in Cyprus because deposits correspond to a much larger share of bank liabilities than in other countries. That also means that the country has fewer options in terms of finding capital from other creditors.

But, they don’t suppose that Spanish and Italian savers will begin moving deposits out of banks in those countries, something which occurred previous year and threatened to slash the euro zone apart as they thought that situation had been driven by the risk domestic banks would re-denominate deposits in a new domestic currency.

So far the market has taken this reports very much in its pace. This replicate the sad truth that hardship for the little Cyprus does not move the dial for the broader European economy. yet they believe it is right to remain careful, as the ill-wind of political and economic disorder prevails.


EU Requir’s Who Vanished Italy Debate on Austerity

European official’s should be asking themselves who lost Italy following a common revolution’s against severity, political privilege and the unemployment reasoned an electoral earthquake in the euro zone’s third economy.

Instead most are persist that their policy mix to fight the euro zone’s debt crisis is right, although the current EU prediction’s have pushed any outlook of significant economic recovery in southern Europe back.

Beppe Grillo and the surprise resurrection of former Prime Minister Silvio Berlusconi on an anti-austerity platform in previous week’s election have thrust Rome into political deadlock a flow in support for anti-euro populist.

Mario Monti governed Italy with respected technocrat for 15 months since Berlusconi’s previous government knock down, is far from the worst exaggerated by the three year old debt crisis.

There unemployment rate is at 11.7 percent, less than half the rate of Spain and Greece, where one of every two young people are jobless.

If a milder slump and tax climb and less harsh spending cuts can sourced such a electoral and social revolt in Italy, the risks of an detonation in Spain and Greece ought to be superior.

European Commission President Jose Manuel Barroso said in a combined statement with Monti stated that the crisis is not yet over and efforts must not be relaxed.

Barroso stumble off statistics presenting current account deficits in Spain, Portugal, Greece and Italy were recoiling and Ireland was back in surplus. Exports from Portugal and Spain were growing and the labor competitiveness gap among southern and northern Europe was contracting.

Those statistics have a backside. Payments inequity are down mostly as those countries imports have contracted due to sinking demand. The labor cost gap has turn down mostly due to mass layoffs in southern states rather than productivity addition’s.


Gold heads for 3rd weekly Drop as Stronger Greenback weighs

Precious Gold traded at a little changed rate on Friday and was headed for a third straight weekly decline, with a stronger Greenback weighing on outlook.

The US dollar index floated near a six month high strike in the preceding session as risk appetite was hurt by political doubts in Italy and US government spending cuts that are due to kick in. The US Greenback involved safe haven inflows, however that weighed on dollar priced commodities.

The US government is facing $85 billion in cuts across federal programmed on Friday, missing a highly doubtful last ditch deal, which could deliberate the US and world economies.

Holdings of SPDR Gold Trust, the world’s biggest gold backed exchange traded fund knock down 0.3 percent on the day to 1,254.487 tonnes on Feb. 28, the weakest since early August 2012. The fund saw a testimony monthly outflow of 73.606 tonnes in February.

Spot gold was little changed at $1,580.14 per ounce by 0045 GMT, following concluding February down 5 percent in a fifth consecutive month of turn down, its longest stretch of monthly sufferers in 16 years.

US gold climbed up 0.1 percent to $1,580 per ounce.

The factors that contributed to precious metal’s fifth straight monthly turn down were currency fluctuations, central bank monetary policy cues, asset relocation, economic data and emerging markets are usually the same as they have been for yellow metal’s more than decade long bull run.

Jan Skoyles, head of research at The Real Asset Co said that gold’s investment platform contribute those that pay interest to the markets know that governments hold easy monetary policy, they knows that the euro will persist to have considerable problems and they know that currency wars will continue to rise. That is why precious metal bearish factors such as improved US statistics have greater impact on the yellow metal prices.


Europe Steadies Following Italy clears Auction Assessment

Euro bond and shares prices stabled on Wednesday following solid demand at an auction of Italian government debt facilitate calm fears that political stalemate in Rome could reignite the bloc’s debt crisis.

Though paying more than half a point additional interest previous to the vote, Italy sold all 6.5 billion euros of the 5 and 10 year bonds it presented investors two days following an election presented no party a majority and rehabilitated worries over its finances, It could have chosen to sell less.

European stocks and Italian bonds briefly increased following the sale. Bonds of other euro zone countries suffering worries over their creditworthiness were also helped. Save haven German bonds chop down before recouping losses, as the euro dropped having just strike a session high of $1.3114.

Michael Leister, a senior bond strategist at Commerzbank in London said that a very strong auction on all accounts, mutually when we look at the pricing side and the demand side. The Tesoro packed the maximum amount, with 4 billion allocated in the new 10-year which is very strong.

Italian 10-year yields chop down 7 basis points to 4.83 percent in the secondary market, the Bund future was 18 basis points up on the day at 145.09 following the sale.

The reinforcement over Italy was somewhat offset by statistics from the European Central Bank which demonstrate bank lending to euro zone firms contracted for the ninth month in a row in January although its record low interest rates.