The real reason Greece has a massive tax-evasion problem

UK Business Insider has a great insight that the BBC will never me mention:

'On average, self-employed Greeks spend 82% of their monthly reported income servicing debt. To put this number in perspective, the standard practice in consumer finance (in the United States as well as Greece) is to never lend to borrowers such that loan payments are greater than 30% of monthly income. And that is the upper limit ... A number of banks in southern Europe told us point blank that they have adaptation formulas to adjust clients' reported income to the bank's best estimate of true income, and furthermore, that these adjustments are specific to occupations ... Take the examples of lawyers, doctors, financial services, and accountants. In all of these occupations, the self-employed are paying over 100% of their reported income flows to debt servicing on consumer loans You read that right: More than 100% of the self-reported income of Greece's professional classes is going toward paying off consumer debts. Not, we suspect, because they have massive unbearable repayments to make, but because they're colossally underreporting their income.'

The Euro Zone is getting worse and fearing democracy

Nigel Farage speaking the truth again and making some very good points re the socialist aspects of the EU which are constraining the UK economy.

What is the European Stabilization Mechanism (ESM)?

Whilst the BBC and much of the rest of the British media distract us with the Jubilee, a coup is taking place in Europe.

Junge Freiheit explain what the ESM will mean for the EuroZone, the EU and indeed beyond. It is explained in terms and detail that the BBC would never give. Be under no illusions the supranational EU is being foisted on Europe and don't expect our politicians to do anything about it.

' Final Warning
by Michael Paulwitz

1. The ESM institutionalizes the breaking of the treaty, intends to eliminate economic laws with floods of billions and is making permanent the politically rubber-stamped dragging-out of the bankruptcy of the failed protective shield.

2. The ESM cements the transfer and debt union and introduces Europe collective bond issues by the back door. Article 21: The ESM can sponsor borrowing “in fulfillment of its tasks,” i.e., financing overextended countries and their banks at the cost of the more solvent ones. The German-French window-dressing argument about Euro bonds is only distraction. The fact is…

3. The ESM removes the ban on central bank financing of national debts — a ban already as full of holes as a Swiss cheese because of the tender of trillions and the buying of bonds by the ECB (European Central Bank). The ESM will become a shadow central bank which is allowed to do everything still formally forbidden to the ECB. The ECB is degraded to a money-printing machine. Reason:

4. The ESM can operate as a supra-national bank. It can make loans to Euro countries (Article 16), subscribe to bonds of Euro countries (Article 17), deal with national bonds (Article 18), re-capitalize banks (Article 15), set up lines of credit for Euro countries (Article 14), establish interest rates (Article 20) and issue Eurobonds (Article 21). The bank license France and Italy intend to issue it would be the icing on the cake. Then — using high yield bonds as “security” — the ESM could supply itself directly and without limit with money from the ECB, to buy bonds and turn them in as security… a never-ending loop. Alternatively:


5. The ESM is a mega “bad bank” and super hedge fund rolled into one. It can buy national bonds that no one else wants; extend non-performing loans to countries no one wants to loan to anymore; like a gamer, use “leverage” to quadruple lending volume. And:

6. The ESM can increase its capital itself, anytime. In fact — Article 10 — by decision of the “governing council.” So Euro finance minister, Wolfgang Schäuble’s reassurance that German liability risk is covered is just a lie. He can simply be outvoted. The Bundestag can only say yes and amen. For,

7. The ESM annuls parliamentary budget law with a keystroke. If the “governors” decide that they need money, the states must pay inside of seven days. If one of them fails, the others must compensate. In the end, Germany is the last resort paymaster. When the bill comes due, it will already be too late:

8. The ESM has no clauses for dissolution or withdrawal. For better or worse, we, our children and our children’s children are guaranteeing the debts of others. The carousel will keep on turning until Germany too is broke. Judicial review is off the table:

9. The ESM is above statute and law. State norms, rules of overview and control do not apply to it now or in the future. It is released from the obligations of regulation and licensing for credit institutions (Article 32). No court can arraign or impound it . But it has the right to take legal action against all or any. Not even heads of state enjoy such a privilege. No wonder Schäuble wants to stay on when he was scheduled to become head of the “Euro Group.” The reason:

10. The ESM is becoming a self-service store — not only for insolvent nations but for its own “governors” and staff. They set their own stipends — secretly, of course; they are exempt from national taxes and fees (Article 36) and have immunity from legal prosecution (Article 35), even if they willfully gamble monies away. Fact:

11. The ESM secret cabinet is a putsch against sharing of powers and the sovereignty of peoples. To avoid plebiscites, the ban on collective debt (“no bailout”) in Article 125 is cancelled in a “simplified treaty alteration procedure” by means of an “amendment” to Article 136 of the Lisbon Treaty. Result:

12. The ESM stands the legal basis of the EU on its head and contravenes constitutional law and the decision of the federal constitutional court of September, 2011. The ESM law transfers national authority in unprecedented measure to an uncontrollable European mega institution. This self-castration of the parliament can never be legitimately decided without asking the people whether it agrees to the dismantling of its national state.'

Read point 11 again and understand that this putsch is real, happening and almost unstoppable.

'To avoid plebiscites, the ban on collective debt (“no bailout”) in Article 125 is cancelled in a “simplified treaty alteration procedure” by means of an “amendment” to Article 136 of the Lisbon Treaty.'

The EU has always been anti-democratic but the ESM takes the degree of supranational control to a whole new level. Don't expect any criticisms or even warnings from the Europhiles that control so much of the British media and politics. From the Europhile BBC to the EU placemen, such as Nick Clegg and Peter Mandelson, at the heart of British politics the pro-EU narrative has been set.

Thnaks to Gates of Vienna  for the translatiom of the original article.

Euro meltdown?

This morning bond markets continue to reflect the tensions in the EuroZone with the spread between 10-year Spanish and German bonds rising to 5.05 percentage points, this is a record difference.

If you think Spain is the biggest economy in the EuroZone to worry about then please note that Italian government bond yields are also higher this morning, rising to 5.87%.

"We cannot possibly let Greece go because if she leaves the Euro other countries will want to follow and that will be the end of our European project"

According to Nigel Farage the above were the words of Chancellor Angela Merkel, here's Nigel...

Plenty more in the speech about democracy in the EUSSR, David Cameron's broken promise and so on.

How the EU bailout fund will 'work'

'It is a slow day in a little Greek village. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night. The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher.  The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer. The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers’ Co-op takes the €100 note and runs to pay his drinks bill at the taverna. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him “services” on credit. The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note. The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything. At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything. However, the whole village is now out of debt and looking to the future with a lot more optimism. And that, Ladies and Gentlemen, is how the bailout package works.

MY REPLY:
XXXX I edited your bailout email a little to help make it more effective to clients, please see below.
It is a slow day in a little Greek village, planet earth.  The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night. The owner thinks about maybe beating the tourist to death, but decides to give him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and shoves it in his pocket.  He owes Piraeus Bank down the street €100,000 but has little intention of repaying it as his business has been contracting for several years.  That bank also has claims of €10,000 on a butcher’s business, €50,000 on a pig farmer, €75,000 to a supplier of feed and fuel, but in turn owes €100,000 to EFG Bank which itself has fractionally reserved claims on a pub owner and a prostitute who bought two homes on 105% LTV among many others.
At that moment the traveller comes down the stairs, states that the rooms are not satisfactory, and asks for his €100 note back.  The Greek innkeeper asks “what €100 note?”  The German threatens to call the police.  The innkeeper says “go ahead, ask for my brother who’s a Lieutenant down at the precinct, he’ll help you out.”  The German storms out back into the night, €100 poorer.  No one produced anything.  No one earned anything.  However, the whole village is still buried in debt and looking to the future with a lot more optimism at the thought that maybe the Germans really are that gullible.

And that, Ladies and Gentlemen, is how the bailout package works.

Thanks to Zero Hedge via Wasps Nest for the spot.

Why did the Euro come into being? Baldrick asks Blackadder...

Baldrick: "What I want to know sir, is before there was a Euro there were lots of different types of money that different people used. And now there's only one type of money that the foreign people use. And what I want to know is, how did we get from one state of affairs to the other state of affairs"

Blackadder: "Baldrick. Do you mean, how did the Euro start?"

Baldrick: "Yes sir"

Blackadder: "Well, you see Baldrick, back in the 1980's there were many different countries all running their own finances and using different types of money. On one side you had the major economies of France , Belgium , Holland and Germany , and on the other, the weaker nations of Spain , Greece , Ireland , Italy and Portugal . They got together and decided that it would be much easier for everyone if they could all use the same money, have one Central Bank, and belong to one large club where everyone would be happy. This meant that there could never be a situation whereby financial metldown would lead to social unrest, wars and crises".

Baldrick: "But this is sort of a crisis, isn't it sir".

Blackadder: "That's right Baldrick. You see, there was only one slight flaw with the plan".

Baldrick: "What was that then sir?"

Blackadder: "It was bollocks".

Thanks to Theo Spark for the spot.

The EU in context - 'Article 50 of Lisbon requires the EU to make a trade arrangement with any nation deciding to leave it.'

As the EU leaders meet to decide how to arrange the financial deckchairs on the Eurozone Titanic I thought some links to some EU related articles that I have been hoarding for a while.

1) Christopher Booker explains that:

'The EU's architects never meant it to be a democracy
The rise of a "technocracy" was always part of the plan for Europe.

...

The events of last week were by no means the first time that an elected prime minister has been toppled by the Euro-elite. The most dramatic example, as we also showed in our book, was in 1990, when Mrs Thatcher had emerged as the biggest obstacle to the next great leap forward in their slow-motion coup d’etat, the Maastricht Treaty, creating the European Union and the single currency. Following her ambushing at a European Council in October 1990, when she was outnumbered 11 to one, the trap was sprung. An alliance between the European elite, led by Jacques Delors, and our own Tory Europhiles, led by Geoffrey Howe and Michael Heseltine, brought her down within weeks.

They had disposed of the greatest political obstacle to the onward march of their project just as ruthlessly as they were later to brush aside all those referendums expressing the objections of the French, the Dutch and the Irish to their Constitution. The one thing for which there has never been any place in their grand design is democracy.'

2) Liebrich has a wonderful collection of EU and Europe related quotations, here's a few of my favourites - as ever just listen to what they say:

'"Monetary Union is the motor of European integration"
Jean-Luc Dehaene, Prime Minister of Belgium.


"The richest state in Asia is Singapore - a small island with almost no natural resources; the richest country in Europe is Switzerland, which is not even in the EU, never mind the Euro."
'In or out - the case against the Euro', Fabian Society Pamphlet by Janet Bush and Larry Elliott, Labour party policy wonks. 3 August 2002.


"On 1 January 1999 with the introduction of the Euro ... an important part of national sovereignty, to wit monetary sovereignty, was passed over to a European institution ... The introduction of a common currency is not primarily an economic, but rather a sovereign and thus eminently political act...political union must be our lodestar from now on: it is the logical follow-on from Economic and Monetary Union."
Joschka Fischer, German Foreign Minister and Vice Chancellor since 1998. Former Communist firebrand and photographed beater-up of a policeman (ironically called Mr Marx). Speech to the European Parliament, January 1999.


"The finance of the country is ultimately associated with the liberties of the country. It is a powerful leverage by which the English liberty has been gradually acquired. If the House of Commons by any possibility loses the power of control of the grants of public money, depend upon it, your very liberty will be worth very little in comparison."
William Ewart Gladstone, British Liberal Prime Minister 1868-74, 1880-85, 1886, and 1892-94. Speech in the House of Commons, 1891.


"The single currency is the greatest abandonment of sovereignty since the foundation of the European Community ... it is a decision of an essentially political nature. We need this United Europe ... we must never forget that the Euro is an instrument for this project."
Felipe Gonzalez, Socialist Prime Minister of Spain from 1982 to 1996. May 1998.


"There is no example in history of a lasting monetary union that was not linked to one State."
Otmar Issuing, Chief Economist of the German Bundesbank Council,1991.



"A single currency is about the politics of Europe. It is about a Federal Europe by the back door."
John Major, British Conservative politician, Prime Minister 1991-1997, widely viewed as a failure and famous mainly for calling Eurosceptics bastards and shagging Edwina Currie. November 1996.


"The fusion of economic functions would compel nations to fuse their sovereignty into that of a single European State"
Jean Monnet, founder of the European Movement. Former Cognac salesman and bureaucrat at the League of Nations. 3rd April 1952


"We have started a new chapter in the structure of Europe. The Euro was not just a bankers' decision or a technical decision. It was a decision that completely changed the nature of the nation states."

"The pillars of the nation state are the sword and the currency, and we changed that."

"[My] real goal [is to draw on] the consequences of the single currency and create a political Europe."
Romano Prodi, EU Commission President. Interview in the Financial Times, April 1999.


"The Euro can only lead to closer and closer integration of countries' economic policies ... This demands that member states give up more sovereignty".
Romano Prodi, EU Commission President. Interview in Daily Telegraph, 7 April 1999.


"We must now face the difficult task of moving forward towards a single economy, a single political entity... For the first time since the fall of the Roman Empire we have the opportunity to unite Europe."
Romano Prodi, EU Commission President, speech to European Parliament, 13th October 1999.


"The single market was the theme of the Eighties. The single currency was the theme of the Nineties. We must now face the difficult task of moving towards a single economy, a single political unity."
Romano Prodi, EU Commission President, speech to European Parliament, 14 April 1999.


"I am sure the euro will oblige us to introduce a new set of economic policy instruments. It is politically impossible to propose that now. But some day there will be a crisis and new instruments will be created."
Romano Prodi

"I know very well that the Stability Pact [which fines Euro-zone countries if they persistently run budget deficits over 3%] is stupid, like all decisions which are rigid."
Romano Prodi, EU Commission President. Interview with le Monde, 17 Oct 2002. The Stability Pact immediately became known as the Stupidity Pact.


"[European Monetary Union is] a German racket designed to take over the whole of Europe ... [if you are prepared to give up Sovereignty to the EU] you might just as well give it to Adolf Hitler, frankly."
Nicholas Ridley (1929 - 1993) Secretary of State for Trade and Industry under Margaret Thatcher, taking a career-ending dive into the swivel-eyed tendency, for which he was forced to resign. From an interview in Spectator magazine, July 1990.


"[What is needed is the] Europeanisation of everything to do with economic and financial policy. European Monetary Union has to be complemented with political union - that was always the presumption of Europeans."
Gerhard Schröder, German Chancellor from 1998 who does NOT dye his hair. Interview, 2002. Well that's pretty clear.


"Of course the risks will remain, especially if we don't follow up the bold step that led to a single currency with further bold steps towards political integration".
Gerhard Schröder, German Chancellor from 1998. Date uncertain.


"The introduction of the Euro is probably the most important integrating step since the beginning of the unification process. It is certain that the times of individual national efforts regarding employment policies, social and tax policies are definitely over. This will require to finally bury some erroneous ideas of national sovereignty... I am convinced our standing in the world regarding foreign trade and international finance policies will sooner or later force a Common Foreign and Security Policy worthy of its name... National sovereignty in foreign and security policy will soon prove itself to be a product of the imagination."
Gerhard Schroeder, German Chancellor from 1998. From 'New Foundations for European Integration', 19th January 1999.


"A European currency will lead to member-nations transferring their sovereignty over financial and wage policies as well as in monetary affairs... It is an illusion to think that States can hold on to their autonomy over taxation policies."
Hans Tietmeyer, Bundesbank President. Date uncertain.


"When exercising the powers and carrying out the tasks and duties conferred upon them ... neither the ECB, nor a national central bank, nor any member of their decision making bodies shall seek or take instructions from Community institutions or bodies, from any government of a Member State or from any other body. "
Treaty of Rome, 1957, Article 107. This doesn't explain why it was so important that the second head of the ECB be French, since he's not allowed by law to act in the interest of any one country.


"The process of monetary union goes hand in hand, must go hand in hand, with political integration and ultimately political union. EMU is, and always was meant to be, a stepping stone on the way to a united Europe."
Wim Duisenburg, President of the European Central Bank. Date uncertain. Note the choice of words "was always meant to be", which communicates a false inevitability.'

I'll repeat one of those for emphasis:
'"I am sure the euro will oblige us to introduce a new set of economic policy instruments. It is politically impossible to propose that now. But some day there will be a crisis and new instruments will be created."'
Romano Prodi, EU Commission President. Financial Times, 4 December 2001. Amazing, the front on these guys. So a future crisis is not seen as an indictment of the current system but an opportunity to extend it.


3) M E Synon in The Mail takes the EU to task for peddling the lie that: 'We (the EU) secured the last 50 years of peace'

'The word around Brussels is that the euro-elite thought the EU was in line to win the Nobel Peace Prize.

Yes, I know: all one can say is, 'Huh?'

Yet it seems that José Manuel Barroso, Herman Van Rompuy and the rest fancied the EU deserved the prize for keeping Europe at peace for 50 years.

At which point 'Huh?' becomes disgust. This 'the EU kept the peace for 50 years' lie is being used by euro-ideologues in their efforts to re-write history. (If you have school-age children, better check their school books to see just how far this lie has seeped into their curriculum.)'

4) The Telegraph reports that:

'Britain will be better off in five years’ time if the eurozone breaks up than if the single currency survives the debt crisis, research suggests today. '

According to The Telegraph the report that I have not heard the BBC mention suggests that:

'The disorderly break-up of the euro would mean a short, sharp economic shock and probably a recession, but would be followed by a quicker return to strong economic growth, according to the Centre for Economics and Business Research.

As European governments struggle to keep the eurozone together, Greek political leaders last night sealed a pact to form a national unity government after George Papandreou, the prime minister, announced his imminent resignation under pressure from a European ultimatum.

David Cameron will today tell MPs that the failure of eurozone leaders to resolve the debt crisis is harming the economy, and will warn that the break-up of the single currency would be even more damaging.

However, CEBR economists suggest that the demise of the euro would “not be anything like the disaster that has been argued”.

Freed from the constraints of the single currency, strong countries such as Germany would see their currencies gain in price in relation to the pound, boosting British exports.

The economists also predict that break-up would free many eurozone members from the deficit-cutting austerity policies that threaten to subdue their growth for years.

“If it breaks up the immediate pain is much more intense, but then there is a more stable basis and we would expect that within about 30 months growth will actually be faster than if the eurozone survives in its current form,” CEBR said.

After five years, Britain would be “at least as well off if the euro breaks up as it would be under the alternative scenario of holding it together”. '

This is not a majority view but it is a view that deserves discussion not ignoring.


5) Finally Simon Heffer in The Mail nails the lie propagated by the BBC and other Europhiles that 'leaving the EU would destroy Britain;. Here's an extract:

'a pamphlet published this week by David Campbell Bannerman, a Tory MEP, seeks to argue (against party policy) the contrary. Its title says it all: ‘The Ultimate Plan B: A Positive Vision Of An Independent Britain Outside The European Union.’

Coinciding as it does with the ICM poll findings, his thesis deserves to be studied carefully. Firstly we need to break out of the mindset that anyone who tries to make the case for Britain leaving the EU is mad — or, to judge from the contempt in which such a view is treated on certain BBC programmes, downright evil.

Mr Campbell Bannerman’s strongest argument is that there would be no economic downside to our departure. As the EU sells more to us than we do to it, it would be very much in its interests to enact a free trade agreement with us were we to leave. In 2009, our trade deficit — the excess of what we bought over what we sold — in manufactured goods with the EU was a shade under £35 billion.

Better than that — and here, at last, there is something to be said for the 2007 Lisbon Treaty — such a free trade agreement would not be a matter of conjecture. Article 50 of Lisbon requires the EU to make a trade arrangement with any nation deciding to leave it.

So the claim that there would be inevitable and large job losses is cast into doubt. He also argues that — with the ascent of China, India and Brazil — Britain would do well to leave a trading bloc whose share of world GDP is forecast to fall to 15 per cent in 2020, down from 36 per cent in 1980.

Just as the EU took no account of its role in a post-Soviet world, it seems incapable of understanding how to remain competitive in relation to rising powers such as China.

Britain also enjoys trading relationships elsewhere in the world that are not shared by other EU countries. We send 18 per cent of our exports to the U.S.: Germany sends only 7 per cent. And the biggest external investor in Britain is America.

Mr Campbell Bannerman rests much of his case for leaving the EU on the liberation it would bring from over-regulation of every aspect of our lives — one of the reasons for the EU’s poor competitiveness. He says that more than 100,000 regulations and directives have been imposed upon us since we joined the EU in 1973.

For example, the working-time directive — designed to limit the number of hours we can work, and which is estimated to cost £11.9 billion a year in lost productivity — would go if we left the EU. So, too, would a host of environmental orders such as the EU renewables directive, which insists we derive 20 per cent of our energy from renewables such as wind power, at an estimated £22 billion a year.

The Open Europe think tank reported last year that EU regulations had cost Britain £124 billion since 1998. This figure is not a partisan invention, but based on the Government’s assessments.

But the truth is the ‘bonfire of regulations’ that ministers talk about would be possible only if we left the EU or had a successful renegotiation to repatriate such powers.'

There is a lot more in the article, do read it all and remember the fact that 'Article 50 of Lisbon requires the EU to make a trade arrangement with any nation deciding to leave it.'

Some graphs and charts that should scare the living daylights out of you

Zero Hedge's EU economic roundup is a scary read with charts and graphs that speak for themselves. Here's one to whet your appetite...

'All benefits from the creation of the euro have been erased: Spreads above levels prevailing before the euro's birth'

Ireland, Greece, Portugal, Spain, Italy...

and now France?

'France's Finance Minister Francois Baroin said Tuesday that the government would do everything in its power to maintain its triple-A rating after Moody's warned it may place the country on negative outlook.

"We will be there to preserve our triple-A rating... We will do everthing in our power not to be downgraded," Baroin told France 2 television after Moody's issued the warning, saying France's financial strength had weakened.

...

Moody's fired a warning shot at France on Monday saying it would determine over the coming three months whether Europe's second largest economy merited its stable status given its weakening economy.


If Moody's changes the French credit rating from stable to negative following that assessment then that would signal a likely downgrade in future, something the French government is anxious to avoid as it would lift the cost of borrowing.


If that is the case then France would follow in the unwilling footsteps of the United States.


In August, Standard & Poor's dealt the US its first-ever ratings downgrade.


France is rated triple-A by all three leading credit rating agencies, Moody's, Standard & Poor's and Fitch Ratings.


Moody's said France's "financial strength has weakened, as it has for other euro area sovereigns, because the global financial and economic crisis has led to a deterioration in French government debt metrics -- which are now among the weakest of France's Aaa peers."'

Could the EuroZone bailout fund run to bailing out France?