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Posted on Sustainabilitank.info on July 7th, 2012
by Pincas Jawetz (pj@sustainabilitank.info)


Back, February 20, 2011, the RIO+20 headletter was used by the UN information office in Vienna to note that the World conference of 2012 is started on that day in Austria with a call for “Justice in a Finite World” and gave the impression that this will be about the initiatives that stretch from RIO92 to RIO+20.

By now, having watched the preparation in New York of the RIO+20 “Outcome Document” –  that was supposed to be growing organically out of the initial “Zero Document” – with all 195 UN seats occupied – we are rather convinced that the June 2012 meeting in RIO is aspiring to become the RIO-20 event instead – or a reformulation of targets as if AGENDA 21 has never been accepted in 1992.

With this observation in my right breast-pocket, let us see the awakening of real Vienna as depicted in these last three days, the end of the week before the week that will see New York attempting another 5 days of haggling about the Outcome Document.

I will be reviewing here several meetings that were held in Vienna.

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(1) On Tuesday May 22nd the Modul University at Kahlenberg, Vienna, an institution that has strong programs on Tourism, sponsored an event titled “Did Tourism become more Sustainable?”

The main guest speaker was Mr. Eugenio Yunis who was former Chief of Sustainable Development of Tourism Department, World Tourism Organization headquartered in Madrid, Spain, and is now Exrcutive Vice-President of all tourism in Chile – FEDETUR. He was very outspoken about Rio, saying things he never would have said earlier  – while still with the UN.

With him on the panel was Manfred Pils,  President of Vienna based Naturefriends International.

The moderator was Professor Dagmar Lund-Durlacher, Head of the Department of Tourism, and Dean, Tourism and Hospitality Management, Modul University, Vienna. Their motto is BUILDING EXCELLENCE FOR SUSTAINABLE TOURISM.

The obvious question was – How do we teach Sustainable Tourism? Yunis said that at WTO – that was their main mission – to do research on how to make tourism more sustainable.

THERE WAS NO SUSTAINABLE TOURISM MENTIONED IN AGENDA 21 of RIO 1992. But tourism is an important part of World economy. With growth of 4%/year it constitutes 5% of World GDP, and makes for 6-7% of World’s Jobs (direct and indirect).

It was only at CSD 7 – in 1999 – that Sustainable Tourism entered the Sustainability talks at the UN. By the time of RIO+10 at Johannesburg in 2002, Sustainable Tourism already rated for 6-7 articles in the Jo’burg outcome document.

Manfred Pils added that he personally got involved in what became ST (Sustainable Tourism) even before the word Sustainable was coined – the talk in 1981 was of SOFT TOURISM – the kind that uses muscles and not machines. They led to the first Green Suitcase awards – but this failed.

Today we have TOI – the Tourism Operators Initiative and we think of how to use tourism to make more sustainable the rest of the society.

Listening to the introductory speeches I tried my hand at a definition of Tourism – and came up with:

SUSTAINABLE TOURISM – THE MAXIMIZATION OF SOCIAL, CULTURAL, AND ECONOMIC GOALS, WHILE CREATING MINIMUM ENVIRONMENTAL DAMAGE ON LOCATION, AND ENHANCING AWARENESS ABOUT ENDANGERED SPECIES.

Mr Yunis took a liking to this definition. In effect there is already an Environmental Degradation Tourism. While there is controlled tourism in Costa Rica, Spain, New Zealand, Botswana, Bhutan that limits numbers of tourists – while Kenya and Senegal say the more the better.  Mr. Yunis was ready even to name chains of hotels as involved in eco-tourism and Sustainable Tourism – these like the ACCOR hotels that include the Sofitels, but in the end it is in the hands of the consumers – if they demand it – it will happen.

China generates already 15 million outboard tourists/year – traditionally big tourism travelers – Germany have only 4-6 million. There will have to be a more regulated movement of people. Talking regulation, Mr. Yunis continued that in general, we must move from the former liberal capitalist society to a more regulated society – this is an INFLECTION POINT to  MORE STATE INVOLVEMENT.

Problem points – IN TRANSPORTATION and the smaller places have bigger problems. Bigger cities have actually more of a chance of tackling the problem.

Mr. Yunis provided an example – Andes Latina operators who try to use only local leaders, use locally produced and grown food – they have a list of 25 points – questions they ask the hotels. Also the TUI travel operators who originally were German, but now have many Nations involved,  manage to work in direction of a more Sustainable Tourism.

Moving to the subject of RIO+20 Mr. Yunis said it comes at a very bad time and to be honest – he has no great expectation all together.

Turning back to ST – tourism needs more planning, more regulation – it is not a tree that can be let to grow by itself.

RIO+20 MUST TAKE STOCK OF DEVELOPMENT.  NOW WE HAVE ISSUES OF GLOBAL DEVELOPMENT AND GLOBAL SOCIAL DEVELOPMENT. We have now issues that were not part of the text in 1992 – tourism is realy  just a small part of this situation.

———-

When planned and managed in a sustainable manner, tourism is one of the few sectors that ally socio-economic development and biodiversity conservation.

Tourism has shown a sustained and resilient growth over the last 50 years. According to the World Tourism Organization forecasts, this sector will pursue its growth and, every year, more people will be in motion than ever before.

There is now recognition that uncontrolled growth in tourism aiming at short-term benefits often results in negative impacts, harming the environment and destroying the very basis on which tourism is built and thrives. On the contrary, when tourism is planned, developed and managed using sustainable criteria, its benefits can spread through society and the natural environment.

This fact is now widely recognised and, as a part of this recognition, the interrelations between biodiversity conservation and sustainable development of tourism are reflected in various major documents such as:

– The Plan of implementation of the World Summit on Sustainable Development (2002) contains an article on sustainable tourism (43) and an article on biodiversity (44) referring to “sustainable tourism, as a cross-cutting issue relevant to different ecosystems, sectors and thematic areas.”
– The Quebec Declaration on Ecotourism (2002)
– The CBD Guidelines on Biodiversity and Tourism Development (2003)
– The special recommendations of the V World Park Congress (2003):  “Tourism as a Vehicle for Conservation and Support of Protected Areas”

Besides these principles and guidelines, many tools and techniques exist that allow tourism developers to increase, among others, environmental sustainability in the sector, such as: Zoning, ecolabels and other certification schemes, environmental indicators, water and waste management in tourist establishments, congestion management at tourism sites, etc.

The World Tourism Organization has conducted studies and published works aiming at raising awareness among all tourism stakeholders (public and private). WTO activities and publications in this field can be found under link:      www.world-tourism.org/sustainable

The Organization also encourages local authorities, NGOs and universities to conduct research on the actual impacts of tourism activities upon ecosystems, biodiversity, as well as upon local and indigenous cultures and the socio-economic fabric of the tourism destinations. Indeed, it has to be clearly understood that no action aiming at reducing the impacts on the environmental sphere can be dissociated from the two other dimensions of the sustainable development, which are the social and the economic ones.

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The problem with my not having posted this earlier stemmed from my not having  completed the article by introducing the two other meetings. I give up at this time and post just what I already have, with the idea of a follow up later.


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Posted on Sustainabilitank.info on June 3rd, 2012
by Pincas Jawetz (pj@sustainabilitank.info)

George Soros Remarks at the Festival of Economics.

June 2, 2012

Trento, Italy

Ever since the Crash of 2008 there has been a widespread recognition, both among economists and the general public, that economic theory has failed. But there is no consensus on the causes and the extent of that failure. I believe that the failure is more profound than generally recognized. It goes back to the foundations of economic theory.

Economics tried to model itself on Newtonian physics. It sought to establish universally and timelessly valid laws governing reality. But economics is a social science and there is a fundamental difference between the natural and social sciences. Social phenomena have thinking participants who base their decisions on imperfect knowledge. That is what economic theory has tried to ignore.

Scientific method needs an independent criterion, by which the truth or validity of its theories can be judged. Natural phenomena constitute such a criterion; social phenomena do not. That is because natural phenomena consist of facts that unfold independently of any statements that relate to them. The facts then serve as objective evidence by which the validity of scientific theories can be judged. That has enabled natural science to produce amazing results.

Social events, by contrast, have thinking participants who have a will of their own.  They are not detached observers but engaged decision makers whose decisions greatly influence the course of events. Therefore the events do not constitute an independent criterion by which participants can decide whether their views are valid. In the absence of an independent criterion people have to base their decisions not on knowledge but on an inherently biased and to greater or lesser extent distorted interpretation of reality. Their lack of perfect knowledge or fallibility introduces an element of indeterminacy into the course of events that is absent when the events relate to the behavior of inanimate objects. The resulting uncertainty hinders the social sciences in producing laws similar to Newton’s physics.

Economics, which became the most influential of the social sciences, sought to remove this handicap by taking an axiomatic approach similar to Euclid’s geometry. But Euclid’s axioms closely resembled reality while the theory of rational expectations and the efficient market hypothesis became far removed from it. Up to a point the axiomatic approach worked. For instance, the theory of perfect competition postulated perfect knowledge. But the postulate worked only as long as it was applied to the exchange of physical goods. When it came to production, as distinct from exchange, or to the use of money and credit, the postulate became untenable because the participants’ decisions involved the future and the future cannot be known until it has actually occurred.

I am not well qualified to criticize the theory of rational expectations and the efficient market hypothesis because as a market participant I considered them so unrealistic that I never bothered to study them. That is an indictment in itself but I shall leave a detailed critique of these theories to others.

Instead, I should like to put before you a radically different approach to financial markets. It was inspired by Karl Popper who taught me that people’s interpretation of reality never quite corresponds to reality itself. This led me to study the relationship between the two. I found a two-way connection between the participants’ thinking and the situations in which they participate.

On the one hand people seek to understand the situation; that is the cognitive function. On the other, they seek to make an impact on the situation; I call that the causative or manipulative function. The two functions connect the thinking agents and the situations in which they participate in opposite directions.

In the cognitive function the situation is supposed to determine the participants’ views; in the causative function the participants’ views are supposed to determine the outcome. When both functions are at work at the same time they interfere with each other. The two functions form a circular relationship or feedback loop. I call that feedback loop reflexivity. In a reflexive situation the participants’ views cannot correspond to reality because reality is not something independently given; it is contingent on the participants’ views and decisions. The decisions, in turn, cannot be based on knowledge alone; they must contain some bias or guess work about the future because the future is contingent on the participants’ decisions.

Fallibility and reflexivity are tied together like Siamese twins. Without fallibility there would be no reflexivity – although the opposite is not the case: people’s understanding would be imperfect even in the absence of reflexivity. Of the two twins, fallibility is the first born. Together, they ensure both a divergence between the participants’ view of reality and the actual state of affairs and a divergence between the participants’ expectations and the actual outcome.

Obviously, I did not discover reflexivity. Others had recognized it before me, often under a different name. Robert Merton wrote about self-fulfilling prophecies and the bandwagon effect, Keynes compared financial markets to a beauty contest where the participants had to guess who would be the most popular choice. But starting from fallibility and reflexivity I focused on a problem area, namely the role of misconceptions and misunderstandings in shaping the course of events that mainstream economics tried to ignore. This has made my interpretation of reality more realistic than the prevailing paradigm.

Among other things, I developed a model of a boom-bust process or bubble which is endogenous to financial markets, not the result of external shocks. According to my theory, financial bubbles are not a purely psychological phenomenon.  They have two components: a trend that prevails in reality and a misinterpretation of that trend. A bubble can develop when the feedback is initially positive in the sense that both the trend and its biased interpretation are mutually reinforced. Eventually the gap between the trend and its biased interpretation grows so wide that it becomes unsustainable. After a twilight period both the bias and the trend are reversed and reinforce each other in the opposite direction. Bubbles are usually asymmetric in shape: booms develop slowly but the bust tends to be sudden and devastating. That is due to the use of leverage: price declines precipitate the forced liquidation of leveraged positions.

Well-formed financial bubbles always follow this pattern but the magnitude and duration of each phase is unpredictable. Moreover the process can be aborted at any stage so that well-formed financial bubbles occur rather infrequently.

At any moment of time there are myriads of feedback loops at work, some of which are positive, others negative. They interact with each other, producing the irregular price patterns that prevail most of the time; but on the rare occasions that bubbles develop to their full potential they tend to overshadow all other influences.

According to my theory financial markets may just as soon produce bubbles as tend toward equilibrium. Since bubbles disrupt financial markets, history has been punctuated by financial crises. Each crisis provoked a regulatory response. That is how central banking and financial regulations have evolved, in step with the markets themselves. Bubbles occur only intermittently but the interplay between markets and regulators is ongoing. Since both market participants and regulators act on the basis of imperfect knowledge the interplay between them is reflexive. Moreover reflexivity and fallibility are not confined to the financial markets; they also characterize other spheres of social life, particularly politics. Indeed, in light of the ongoing interaction between markets and regulators it is quite misleading to study financial markets in isolation. Behind the invisible hand of the market lies the visible hand of politics. Instead of pursuing timeless laws and models we ought to study events in their time bound context.

My interpretation of financial markets differs from the prevailing paradigm in many ways. I emphasize the role of misunderstandings and misconceptions in shaping the course of history. And I treat bubbles as largely unpredictable. The direction and its eventual reversal are predictable; the magnitude and duration of the various phases is not. I contend that taking fallibility as the starting point makes my conceptual framework more realistic. But at a price: the idea that laws or models of universal validity can predict the future must be abandoned.

Until recently, my interpretation of financial markets was either ignored or dismissed by academic economists. All this has changed since the crash of 2008. Reflexivity became recognized but, with the exception of Imperfect Knowledge Economics, the foundations of economic theory have not been subjected to the profound rethinking that I consider necessary. Reflexivity has been accommodated by speaking of multiple equilibria instead of a single one. But that is not enough. The fallibility of market participants, regulators, and economists must also be recognized.  A truly dynamic situation cannot be understood by studying multiple equilibria.  We need to study the process of change.

The euro crisis is particularly instructive in this regard. It demonstrates the role of misconceptions and a lack of understanding in shaping the course of history. The authorities didn’t understand the nature of the euro crisis; they thought it is a fiscal problem while it is more of a banking problem and a problem of competitiveness. And they applied the wrong remedy: you cannot reduce the debt burden by shrinking the economy, only by growing your way out of it. The crisis is still growing because of a failure to understand the dynamics of social change; policy measures that could have worked at one point in time were no longer sufficient by the time they were applied.

——————-

Since the euro crisis is currently exerting an overwhelming influence on the global economy I shall devote the rest of my talk to it. I must start with a warning: the discussion will take us beyond the confines of economic theory into politics and the dynamics of social change. But my conceptual framework based on the twin pillars of fallibility and reflexivity still applies. Reflexivity doesn’t always manifest itself in the form of bubbles. The reflexive interplay between imperfect markets and imperfect authorities goes on all the time while bubbles occur only infrequently. This is a rare occasion when the interaction exerts such a large influence that it casts its shadow on the global economy. How could this happen? My answer is that there is a bubble involved, after all, but it is not a financial but a political one. It relates to the political evolution of the European Union and it has led me to the conclusion that the euro crisis threatens to destroy the European Union. Let me explain.

I contend that the European Union itself is like a bubble. In the boom phase the EU was what the psychoanalyst David Tuckett calls a “fantastic object” – unreal but immensely attractive. The EU was the embodiment of an open society –an association of nations founded on the principles of democracy, human rights, and rule of law in which no nation or nationality would have a dominant position.

The process of integration was spearheaded by a small group of far sighted statesmen who practiced what Karl Popper called piecemeal social engineering. They recognized that perfection is unattainable; so they set limited objectives and firm timelines and then mobilized the political will for a small step forward, knowing full well that when they achieved it, its inadequacy would become apparent and require a further step. The process fed on its own success, very much like a financial bubble. That is how the Coal and Steel Community was gradually transformed into the European Union, step by step.

Germany used to be in the forefront of the effort. When the Soviet empire started to disintegrate, Germany’s leaders realized that reunification was possible only in the context of a more united Europe and they were willing to make considerable sacrifices to achieve it.  When it came to bargaining they were willing to contribute a little more and take a little less than the others, thereby facilitating agreement.  At that time, German statesmen used to assert that Germany has no independent foreign policy, only a European one.

The process culminated with the Maastricht Treaty and the introduction of the euro. It was followed by a period of stagnation which, after the crash of 2008, turned into a process of disintegration. The first step was taken by Germany when, after the bankruptcy of Lehman Brothers, Angela Merkel declared that the virtual guarantee extended to other financial institutions should come from each country acting separately, not by Europe acting jointly. It took financial markets more than a year to realize the implication of that declaration, showing that they are not perfect.

The Maastricht Treaty was fundamentally flawed, demonstrating the fallibility of the authorities. Its main weakness was well known to its architects: it established a monetary union without a political union. The architects believed however, that when the need arose the political will could be generated to take the necessary steps towards a political union.

But the euro also had some other defects of which the architects were unaware and which are not fully understood even today. In retrospect it is now clear that the main source of trouble is that the member states of the euro have surrendered to the European Central Bank their rights to create fiat money. They did not realize what that entails – and neither did the European authorities. When the euro was introduced the regulators allowed banks to buy unlimited amounts of government bonds without setting aside any equity capital; and the central bank accepted all government bonds at its discount window on equal terms. Commercial banks found it advantageous to accumulate the bonds of the weaker euro members in order to earn a few extra basis points. That is what caused interest rates to converge which in turn caused competitiveness to diverge. Germany, struggling with the burdens of reunification, undertook structural reforms and became more competitive. Other countries enjoyed housing and consumption booms on the back of cheap credit, making them less competitive. Then came the crash of 2008 which created conditions that were far removed from those prescribed by the Maastricht Treaty. Many governments had to shift bank liabilities on to their own balance sheets and engage in massive deficit spending. These countries found themselves in the position of a third world country that had become heavily indebted in a currency that it did not control. Due to the divergence in economic performance Europe became divided between creditor and debtor countries. This is having far reaching political implications to which I will revert.

It took some time for the financial markets to discover that government bonds which had been considered riskless are subject to speculative attack and may actually default; but when they did, risk premiums rose dramatically. This rendered commercial banks whose balance sheets were loaded with those bonds potentially insolvent. And that constituted the two main components of the problem confronting us today: a sovereign debt crisis and a banking crisis which are closely interlinked.

The eurozone is now repeating what had often happened in the global financial system. There is a close parallel between the euro crisis and the international banking crisis that erupted in 1982. Then the international financial authorities did whatever was necessary to protect the banking system: they inflicted hardship on the periphery in order to protect the center. Now Germany and the other creditor countries are unknowingly playing the same role. The details differ but the idea is the same: the creditors are in effect shifting the burden of adjustment on to the debtor countries and avoiding their own responsibility for the imbalances. Interestingly, the terms “center” and “periphery” have crept into usage almost unnoticed. Just as in the 1980’s all the blame and burden is falling on the “periphery” and the responsibility of the “center” has never been properly acknowledged.  Yet in the euro crisis the responsibility of the center is even greater than it was in 1982. The “center” is responsible for designing a flawed system, enacting flawed treaties, pursuing flawed policies and always doing too little too late. In the 1980’s Latin America suffered a lost decade; a similar fate now awaits Europe. That is the responsibility that Germany and the other creditor countries need to acknowledge. But there is now sign of this happening.

The European authorities had little understanding of what was happening. They were prepared to deal with fiscal problems but only Greece qualified as a fiscal crisis; the rest of Europe suffered from a banking crisis and a divergence in competitiveness which gave rise to a balance of payments crisis. The authorities did not even understand the nature of the problem, let alone see a solution. So they tried to buy time.

Usually that works. Financial panics subside and the authorities realize a profit on their intervention. But not this time because the financial problems were reinforced by a process of political disintegration. While the European Union was being created, the leadership was in the forefront of further integration; but after the outbreak of the financial crisis the authorities became wedded to preserving the status quo. This has forced all those who consider the status quo unsustainable or intolerable into an anti-European posture. That is the political dynamic that makes the disintegration of the European Union just as self-reinforcing as its creation has been.  That is the political bubble I was talking about.

At the onset of the crisis a breakup of the euro was inconceivable: the assets and liabilities denominated in a common currency were so intermingled that a breakup would have led to an uncontrollable meltdown. But as the crisis progressed the financial system has been progressively reordered along national lines. This trend has gathered momentum in recent months. The Long Term Refinancing Operation (LTRO) undertaken by the European Central Bank enabled Spanish and Italian banks to engage in a very profitable and low risk arbitrage by buying the bonds of their own countries. And other investors have been actively divesting themselves of the sovereign debt of the periphery countries.

If this continued for a few more years a break-up of the euro would become possible without a meltdown – the omelet could be unscrambled – but it would leave the central banks of the creditor countries with large claims against the central banks of the debtor countries which would be difficult to collect. This is due to an arcane problem in the euro clearing system called Target2. In contrast to the clearing system of the Federal Reserve, which is settled annually, Target2 accumulates the imbalances. This did not create a problem as long as the interbank system was functioning because the banks settled the imbalances themselves through the interbank market. But the interbank market has not functioned properly since 2007 and the banks relied increasingly on the Target system. And since the summer of 2011 there has been increasing capital flight from the weaker countries. So the imbalances grew exponentially. By the end of March this year the Bundesbank had claims of some 660 billion euros against the central banks of the periphery countries.

The Bundesbank has become aware of the potential danger. It is now engaged in a campaign against the indefinite expansion of the money supply and it has started taking measures to limit the losses it would sustain in case of a breakup. This is creating a self-fulfilling prophecy. Once the Bundesbank starts guarding against a breakup everybody will have to do the same.

This is already happening. Financial institutions are increasingly reordering their European exposure along national lines just in case the region splits apart. Banks give preference to shedding assets outside their national borders and risk managers try to match assets and liabilities within national borders rather than within the eurozone as a whole. The indirect effect of this asset-liability matching is to reinforce the deleveraging process and to reduce the availability of credit, particularly to the small and medium enterprises which are the main source of employment.

So the crisis is getting ever deeper. Tensions in financial markets have risen to new highs as shown by the historic low yield on Bunds. Even more telling is the fact that the yield on British 10 year bonds has never been lower in its 300 year history while the risk premium on Spanish bonds is at a new high.

The real economy of the eurozone is declining while Germany is still booming. This means that the divergence is getting wider. The political and social dynamics are also working toward disintegration. Public opinion as expressed in recent election results is increasingly opposed to austerity and this trend is likely to grow until the policy is reversed. So something has to give.

In my judgment the authorities have a three months’ window during which they could still correct their mistakes and reverse the current trends. By the authorities I mean mainly the German government and the Bundesbank because in a crisis the creditors are in the driver’s seat and nothing can be done without German support.

I expect that the Greek public will be sufficiently frightened by the prospect of expulsion from the European Union that it will give a narrow majority of seats to a coalition that is ready to abide by the current agreement. But no government can meet the conditions so that the Greek crisis is liable to come to a climax in the fall. By that time the German economy will also be weakening so that Chancellor Merkel will find it even more difficult than today to persuade the German public to accept any additional European responsibilities. That is what creates a three months’ window.

Correcting the mistakes and reversing the trend would require some extraordinary policy measures to bring conditions back closer to normal, and bring relief to the financial markets and the banking system. These measures must, however, conform to the existing treaties. The treaties could then be revised in a calmer atmosphere so that the current imbalances will not recur. It is difficult but not impossible to design some extraordinary measures that would meet these tough requirements. They would have to tackle simultaneously the banking problem and the problem of excessive government debt, because these problems are interlinked. Addressing one without the other, as in the past, will not work.

Banks need a European deposit insurance scheme in order to stem the capital flight. They also need direct financing by the European Stability Mechanism (ESM) which has to go hand-in-hand with eurozone-wide supervision and regulation. The heavily indebted countries need relief on their financing costs. There are various ways to provide it but they all need the active support of the Bundesbank and the German government.

That is where the blockage is. The authorities are working feverishly to come up with a set of proposals in time for the European summit at the end of this month. Based on the current newspaper reports the measures they will propose will cover all the bases I mentioned but they will offer only the minimum on which the various parties can agree while what is needed is a convincing commitment to reverse the trend. That means the measures will again offer some temporary relief but the trends will continue. But we are at an inflection point.  After the expiration of the three months’ window the markets will continue to demand more but the authorities will not be able to meet their demands.

It is impossible to predict the eventual outcome. As mentioned before, the gradual reordering of the financial system along national lines could make an orderly breakup of the euro possible in a few years’ time and, if it were not for the social and political dynamics, one could imagine a common market without a common currency. But the trends are clearly non-linear and an earlier breakup is bound to be disorderly. It would almost certainly lead to a collapse of the Schengen Treaty, the common market, and the European Union itself. (It should be remembered that there is an exit mechanism for the European Union but not for the euro.) Unenforceable claims and unsettled grievances would leave Europe worse off than it was at the outset when the project of a united Europe was conceived.

But the likelihood is that the euro will survive because a breakup would be devastating not only for the periphery but also for Germany. It would leave Germany with large unenforceable claims against the periphery countries. The Bundesbank alone will have over a trillion euros of claims arising out of Target2 by the end of this year, in addition to all the intergovernmental obligations. And a return to the Deutschemark would likely price Germany out of its export markets – not to mention the political consequences. So Germany is likely to do what is necessary to preserve the euro – but nothing more. That would result in a eurozone dominated by Germany in which the divergence between the creditor and debtor countries would continue to widen and the periphery would turn into permanently depressed areas in need of constant transfer of payments. That would turn the European Union into something very different from what it was when it was a “fantastic object” that fired peoples imagination. It would be a German empire with the periphery as the hinterland.

I believe most of us would find that objectionable but I have a great deal of sympathy with Germany in its present predicament. The German public cannot understand why a policy of structural reforms and fiscal austerity that worked for Germany a decade ago will not work Europe today. Germany then could enjoy an export led recovery but the eurozone today is caught in a deflationary debt trap. The German public does not see any deflation at home; on the contrary, wages are rising and there are vacancies for skilled jobs which are eagerly snapped up by immigrants from other European countries. Reluctance to invest abroad and the influx of flight capital are fueling a real estate boom. Exports may be slowing but employment is still rising. In these circumstances it would require an extraordinary effort by the German government to convince the German public to embrace the extraordinary measures that would be necessary to reverse the current trend. And they have only a three months’ window in which to do it.

We need to do whatever we can to convince Germany to show leadership and preserve the European Union as the fantastic object that it used to be. The future of Europe depends on it.

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And from todays’s New York Times: “In the United States, the ease of borrowing has not made it politically easier to increase the pace of spending. Instead, there is the possibility of “Taxmageddon,” the threat that the unwillingness of politicians to compromise could lead to a combination of big automatic spending cuts and tax increases in 2013 that could devastate economic growth. All this is taking place in the midst of an election campaign that is widely expected to be the nastiest ever.

Moreover, the consensus that financial regulation should be strengthened and standardized has evaporated. In Europe and the United States, banks say that institutions across the Atlantic have unfair advantages, and regulators complain that the other continent has not taken the needed steps.

In the United States, a major push by the banks to weaken rules may or may not have been badly damaged by the multibillion-dollar trading loss suffered recently by JPMorgan Chase. But many in Congress, primarily but not exclusively Republicans, have gone back to the old belief that it was excessive government regulation that created the problem.

The widespread pessimism could dissipate as rapidly as it accumulated. Some surprisingly good economic news in the United States and China would help. More important would be for Europe’s leaders to reach agreement on a course of action that offered hope for recovery in the most stricken areas of the Continent while assuring that the common financial system would have the support of common institutions if needed. Europe has previously managed to cobble together something when disaster appeared to loom, and perhaps it could do so again.

Germany — the country that would have to pick up most of the bill to rescue its neighbors — could decide that not spending the money created greater dangers. The United States could find ways to help out despite fiscal pressures and Congressional hostility to foreign aid. A new consensus on common bank regulation could emerge. But, for now at least, the outlook is far darker than it seemed to be only a couple of months ago.”

www.nytimes.com/2012/06/03/business/in-economic-deluge-a-world-thats-unable-to-bail-together.html?nl=todaysheadlines&emc=edit_th_20120603

NEWS ANALYSIS

In Economic Deluge, a World That’s Unable to Bail Together

By 
Published: June 2, 2012

Less than four years ago, with the world’s financial system in danger of collapsing, major countries managed to come together on a coordinated course that averted a global depression.

Central banks pumped vast amounts of cash into economies, and banks were bailed out, with vows that they would be subject to stronger regulation.

By early 2009, financial markets had bottomed out and begun strong recoveries. Economies were slower to follow; by last year, slow growth seemed to be the global pattern, spurring hope that the crisis had passed.

But within the last few weeks, much of that hope seems to have faded.

In Europe, the crisis has grown worse, not better, and thedisputes among European leaders have intensified as much of the Continent appears to have drifted into a newrecession. In China, growth remains robust by Western standards. But concern is rising over the possible end of a property boom that had been fueled in part by local government borrowing and spending.

In the United States, which had been an oasis of relative calm with a growing economy and rising employment, job growth in May, reported Friday, was a puny 69,000. To make the outlook even gloomier, earlier numbers were revised lower. That capped a series of three disappointing monthly reports.

Moreover, there seems to be little willingness — or perhaps lit-tle ability — for the major countries to act together again. Squabbles have grown, some countries are in fiscal distress, and others face daunting domestic problems. The European situation is the most pressing. Banks are under pressure in many countries, for a combination of reasons. They did not raise as much capital as they might have when markets were more buoyant last year. In some cases, they appear to have been slow to recognize their real estate loan losses.


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Posted on Sustainabilitank.info on May 17th, 2012
by Pincas Jawetz (pj@sustainabilitank.info)

There is ‘no need to fear a more federal Europe’

Europe needs to rediscover its élan and purpose or we will sleepwalk into disintegration and disunity – warns MEP and ALDE group leader

11/05/2012

There is ‘no need to fear a more federal Europe.’

by Guy Verhofstadt

Europe needs to rediscover its élan and purpose or we will sleepwalk into disintegration and disunity – warns MEP and ALDE group leader

The French and Greek elections last weekend both delivered a body blow to Europe’s austerity drive designed to rein in national over-spending and reduce the enormous debt mountains that have been accumulating over the past 30 years or more. That Francois Hollande picked up on the anti-austerity theme was probably as much to do with pragmatic politics as ideology. He knows very well that he will not be able to keep all his policy commitments from the campaign trail.

France is not Greece, but it does not have any laurels to rest on either. It was recently downgraded by one rating agency, has high youth unemployment at 25 per cent and a budget that has not been balanced in three decades. That the people voted for a candidate promising a brighter future, reversing pension reforms, creating thousands of new jobs and re-negotiating Europe’s fiscal compact is little surprise – but may shortly be rudely confronted by reality.

At least Hollande is a democrat and a good European. Nicolas Sarkozy was too when he took up office. His interventions in the European Parliament during the French Presidency of the European Union could not be faulted by federalists. And his energy and dynamism were deployed in the common interest. That is until he found himself facing likely defeat to his socialist challenger. He then turned abruptly to the right in a vain effort to woo the voters of Marine Le Pen. Time and again, EU leaders who experiment with populist messages have only served to strengthen – rather than weaken – the hand of the initiators of such messages. In the Netherlands, Finland, Greece and elsewhere – populist, racist and extremist parties have all benefitted from such heightened rhetoric. Why vote for a copy when you can vote for the original?

At the other end of the Mediterranean, the Greek elections delivered an anarchic result in which the two main parties rightly got punished for the decades of corruption and clientilism. But the anti-establishment parties that have reaped the benefit and filled the vacuum have largely vented their anger against the EU and international financial institutions that have imposed tough austerity measures in return for bailing them out from certain bankruptcy. The result leaves no party in Greece able to form a government and everyone promising to voters what cannot be delivered.

So the beleaguered Greek citizen continues to suffer from an inept and self-serving political class that now counts neo-Nazis among its ranks. On the other side of the spectrum is a new far left party, Syriza, which has blatantly and opportunistically capitalised on the country’s woes and the tough adjustment plan imposed by external creditors. It is disingenuous of the party leader to pretend he can tear up the bailout conditions, so painfully negotiated over the last two years, and offer a painless alternative.

The tendency of politicians in both France and Greece to blame foreigners – Brussels bureaucrats or third country migrants – for their country’s travails is a telling indicator that the construction of Europe over the last 60 years still remains a fragile structure that can be so easily and quickly overturned by irresponsible and populist rhetoric – leading to a recrudescence of the kind of nationalism that led us into two world wars, in the first half of last century. Growing Euroscepticism across member states must be countered by a radical renewal of those who are convinced Europeans. We cannot afford to become complacent or indifferent to events that are now shaping public opinion. Europe needs to rediscover its élan and purpose or we will sleepwalk to disintegration and disunity.

Ending the current economic crisis must be everyone’s top priority. No stone must be left unturned in finding a solution, even if that means further pooling of sovereignty. Germany for instance is currently deaf to some practical solutions, such as a European debt redemption fund – which would combine discipline with solidarity – because it fears a loss of sovereignty and accepting responsibility for other people’s debt. But the alternative – never-ending taxpayer funded bailouts – is surely worse.

It is too simplistic and economically nonsensical to argue that austerity is wrong and growth is good. They are two sides of the same coin. Governments cannot invest in growth if they are paying huge interest rates on their borrowing to cover their debts. Annual deficits need to be reined in by reducing unnecessary expenditure so that the resources subsequently liberated can be invested in productive jobs and growth strategies. Some countries have more to do than others in this regard but the rules agreed by European leaders and recently enshrined in a political pact on budgetary discipline remain sensible for long-term budgetary planning.

In this week when we commemorate the speech on May 9, 1950, by French foreign minister, Robert Schuman. The words launched the idea of European integration and pooled sovereignty. His message remains as relevant now as it did then. Europe will not stand still. It will either collapse under the weight of growing nationalism and scepticism or it will recover its sense of purpose, agree to make a qualitative leap in integration in response to the crisis and therefore offer the next generation the kind of peace and stability that we have enjoyed over the past half century. It is not enough to hope that the latter scenario will prevail for there are forces actively working to destroy it. There is no need to fear a more federal Europe, but every reason to embrace it.

Guy Verhofstadt MEP is leader of the Alliance of Liberals and Democrats for Europe group in the European Parliament

 www.alde.eu/press/press-and-relea…

[This article has been also published on PSblicserviceeurope.com and www.EUobserver.com ]

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Posted on Sustainabilitank.info on May 13th, 2012
by Pincas Jawetz (pj@sustainabilitank.info)

Greek Tragedy.

By ARIANNA HUFFINGTON
Published, The New York Times as Opinion: May 12, 2012

{please note – she writes this on Mothers’ Day Weekend – and she knows how to write – then she must have inherited as well some genes from her unsuccessful father attempts at owning media. Clearly – for the Greeks it is all in the family – and  EU is not family.}

——

As I follow the modern Greek tragedy unfolding in Europe, I flash back to the 18 years I spent in Athens, walking to school in Plaka (the old part of the city), on the same streets that have recently been filled with protesters and violent clashes.

When I was growing up, my family was a tiny microcosm of the current Greek economy. We were heavily in debt; my father’s repeated attempts to own a newspaper ended in failure and bankruptcy. Eventually, my mother took my sister and me and left him. We all lived in Athens and we continued to see my father, though we had our own one-bedroom apartment. (It wasn’t the bankruptcy that got to my mom in the end, but the philandering; “I don’t want you interfering in my private life,” my father had told her when she complained.)

Further austerity was coming, but my mother was clear about one thing: she would cut back on everything except our education and good, healthy food. She owned two dresses and never spent anything on herself. I remember her selling her last pair of little gold earrings. She borrowed from anyone she could, so that her two daughters could fulfill their dreams of a good education — me at Cambridge, and my sister at the Royal Academy of Dramatic Art in London. At the time, Greek girls still offered dowries to be married. My mother used to tell me, “Your education is your dowry.”

As I contemplate the statistics — especially the 54 percent unemployment rate among young Greeks — I think of all the stories behind this appalling data. All the dreams dashed. All the promise unfulfilled. And all the guilt, shame and fear that so often go hand in hand with intractable unemployment and little hope for a better future.

The punitive path of austerity and relentless economic contraction is, not surprisingly, likely to lead to further stagnation in 2013 and cannot be allowed to continue. And as last week’s election results show, the Greek people are not going to allow it to continue; they will instead demand change through either the ballot box or violence in the streets — or some combination of both.

The dangers of violent protest are obvious. But there are dangers in the ballot box, too: an extreme right-wing anti-immigration party received almost 7 percent of the vote, while Pasok, the establishment party of the left, lost 119 seats in Parliament in a humiliating third-place finish. If the European Central Bank does not abandon its destructive obsession with austerity, Greece will have few options but to leave the euro zone. This would be fraught with its own dangers, of course, but the European Union has left Greece with few sustainable alternatives.

Argentina, which defaulted and restructured beginning in 2001, offers a point of comparison. The austerity crowd warned that Argentina would collapse if it stopped pegging the peso to the dollar and defaulted on its debt. There are many differences between Argentina and Greece. But Argentina’s default was followed by a few short months of economic crisis and then many years of steady economic growth — a dramatically different direction than the one Greece is now taking toward a potentially endless path of contraction that is destroying millions of lives and crippling the indomitable Greek spirit.

Yes, the Greeks acted irresponsibly before the economic collapse — the same way my father had acted irresponsibly in his private and professional life. But that is not reason to punish the children, to destroy their future as part of a remedy for a past for which they bear no responsibility.

I spent many nights last summer in Syntagma Square, directly across from the Greek Parliament. The protesting crowd was mixed, full of young people and old, self-employed, unemployed, activists, pensioners. Millions of outraged Greeks — who famously relish connection, expansiveness, intimacy — used social media to connect with the rest of the country and the world; those in the square itself connected and organized the old-fashioned way, face-to-face.

Everywhere waiters, taxi drivers, salespeople, storekeepers, people at the table next to you at dinner, were talking about the same thing. They were — and still are — giving voice to a desire for more say in their own future, a future with more choices than those on offer from the European Central Bank.

When George Papandreou, who was prime minister at the time but resigned last November, visited The Huffington Post newsroom, he expressed the same feelings: “People think they’re being punished unjustly, because they feel they weren’t to blame for this crisis,” he said.

Greece, like my mother, has always been devoted above all else to its children. When the future of those children is diminished, the future — and life — of the country will be diminished, too.

My favorite picture from the protests shows a young man pumping his fist at a line of riot police officers while his mother stands beside him, holding his jacket, to make sure he doesn’t catch a cold. If Greece stays on its current dead-end path of austerity-fueled recession, the children will revolt, and the parents will be right there beside them, cheering them on and watching protectively over them.

And if having a future means leaving the euro, that’s most likely what the Greeks will choose. They invented democracy, and now it’s time to rekindle that Greek spirit of innovation and ingenuity — before economic trouble generates further despair and its dangerous progeny in the streets and in the ballot box.

——-

Arianna Huffington is President and editor in chief of The Huffington Post Media Group, and author, most recently, of “Third World America.”

=======================================

Recent elections in France and Greece pose significant challenges to the strict economic austerity policies Germany has called for in response to the eurozone sovereign debt crisis. Still, Germany has resolutely rebuffed any efforts to alter the European fiscal compact agreed to late last year, explains Council on Foreign Relation’s Sebastian Mallaby. “There’s a battle coming up between Hollande and his European partners as to quite what a growth agenda might mean,” he says. At the same time, the political situation in Greece is “more potentially cataclysmic in its consequences,” Mallaby argues, because it could not only signal a Greek exit from the eurozone, but also undermine European financial institutions and facilitate further sovereign debt contagion.

Voters in Greece rejected the country’s mainstream political parties, and, by extension, the latest EU-IMF bailout. In France, voters elected François Hollande to implement pro-growth policies in a worsening economic climate.What are the implications of these recent elections on EU efforts to resolve the eurozone debt crisis?

In the case of France, what François Hollande has done by defeating current President Nicolas Sarkozy is basically to put on the agenda a “growth pact.”

The question is how to define that rebalancing of European policies away from the austerity formula that has driven it so far.

We suggest – read some of the material that goes into the RioDialogues, throw out the books on Economics 101, and start formulating new economic policies that bring the interest in FUTURE GENERATIONS into your present CURRENT ACCOUNT policies. Oh Well! we know it is hard to create change when under pressure – but talk please to the mothers of Greece as depicted by Arianna Huffington.

###

Posted on Sustainabilitank.info on May 13th, 2012
by Pincas Jawetz (pj@sustainabilitank.info)

The RioDialogues can provide new ideas to a World that tries on anew the clothes of Jean Renoir’s old Europe of the 30s. We see a future of Resource Wars, of Societal Financial Aristocracy, and stand-up of the societal Financial Oppressed.

The RIO+20 meetings are met by a city of hotel sharks that makes it difficult to attend – not for the government delegates – but for civil society that has the ideas. The alternative is to stay home and send instead your computer to Rio. In Renoir’s World there were no computers so you had to watch flesh and blood acting in front of you. Not important how you do it – but please activate your mind and see the path we are on.

===================================

Michael T. Klare | Oil Wars on the Horizon
Michael T. Klare, TomDispatch
Klare writes: “The seeds of energy conflicts and war sprouting in so many places simultaneously suggest that we are entering a new period in which key state actors will be more inclined to employ force – or the threat of force – to gain control over valuable deposits of oil and natural gas. In other words, we’re now on a planet heading into energy overdrive.”
READ MORE

Goldman Sachs: Blood in the Water
Bethany McLean, Vanity Fair
McLean writes: “The op-ed heard round the world – Greg Smith’s scathing New York Times attack on Goldman Sachs, his employer of nearly 12 years – dealt another blow to the firm’s reeling reputation. Now the questions are louder than ever: Will C.E.O. Lloyd Blankfein have to go? Who might succeed him? And does it matter?”
READ MORE

Spain’s ‘Indignants’ Return to the Streets
Al Jazeera
Al Jazeera reports: “Spain’s ‘indignants’ are taking to the streets in 80 cities and towns to decry economic injustice in a show of strength one year after the birth of their movement shook the political establishment.”
READ MORE

—————————–

Above are choices made by Reader Supported News of 12 May 12 PM. But here comes a review of an old Renoir film that ties it all up for us in its modern version.

Will the world just watch the film or call up to action to avoid irretrievable loss?

Jean Renoir’s Timely Lessons for Europe
By A. O. SCOTT in the New York Times of May 13, 2012

Jean Renoir directed the classic “Grand Illusion” (1937) starring Pierre Fresnay, left, and Erich Von Stroheim.

Renoir’s “Grand Illusion,” from 1937 (and now newly restored), may have lessons for a Europe bitterly divided at present.

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Posted on Sustainabilitank.info on April 21st, 2012
by Pincas Jawetz (pj@sustainabilitank.info)

The news from the elections in France: At a time of crisis in the economy right is wrong and the large majority of the populus say it is left to the needed help in rather quiet ways.

Messieur Holande will replace Messieur Sarcozy and Mr. Romney will not replace Mr. Obama.

Further, 2012 will see more switches from right to left and blocking of right trying to take leadership from left.

Above is contagious and will spread over both ends of the Atlantic.

The Sunday April 22, 2012 – first round results in France are:

Exit polls from the French presidential elections show Socialist candidate Francois Hollande with 28.4% of the vote and President Nicolas Sarkozy with 25.5%, French officials announced Sunday.

A presidential candidate must receive more than 50% of the vote to win office. If no one claims a majority in the first round of voting, the top two vote-getters advance to a second round of voting. The runoff would take place May 6.

From the total of 10 candidates – In addition to Sarkozy and Hollande, candidates that got significant results were:

Marine Le Pen on the extreme right with 20%, Jean-Luc Melenchon on the extreme left with 11.7%, and centrist Francois Bayrou with 8.5%.

Considering that the Le Pen vote was mainly from the working class conservatives they are not expected to transfer their vote automatically to Mr. Sarcozy who represents the bourgeois – rich. This leaves Holande as the best alternative for all those that did not vote Sarcozy in the first round.

The strong showing by the left and anger on the political extremes seemed to reflect a desire for change in France after 17 years of centrist, conservative presidents. And it could continue an anti-incumbency trend that began with the economic crisis in Western Europe, where center-right governments dominate from Britain to Spain to Germany.

It may also represent the first stirrings of a challenge to the German-dominated narrative of the euro crisis, which holds that public debt and runaway spending are the main culprits and that austerity must precede growth. Over the weekend, the Dutch government was left tottering after failing to gain a majority in support of austerity measures, and demonstrators in the Czech Republic turned out in the greatest numbers since 1989 to protest a tax increase and budget cuts.

The French vote “is a reaction against austerity, and austerity is you,” Mr. Hollande’s campaign manager, Pierre Moscovici, said to the leader of Mr. Sarkozy’s party, Jean-François Copé.

But the vote was also about an electorate that has grown increasingly disenchanted with politics and the political class.


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Posted on Sustainabilitank.info on April 9th, 2012
by Pincas Jawetz (pj@sustainabilitank.info)

Der Standard of Austria of April 4, 2012, continues a stream of information about Shale-Gas development North of Vienna – in the Wein-gardens of Poysdorf.

WEINVIERTEL –  Kein Ende im Schiefergas-Krieg.

by ROSA WINKLER-HERMADEN, 04. April 2012

Geheime Bohrungen, gefährliches Fracking und ein Landeschef im Vorwahlkampf: Warum die Bürger dem Frieden mit der OMV nicht trauen.

please see the full April 4, 2012 article at –

derstandard.at/1332323983885/Weinviertel-Kein-Ende-im-Schiefergas-Krieg

The original article was of   December 17, 2011, and we posted it following a meeting of Eurosolar Austria.

=================================================

(c) DiePresse

vergrößern (means enlarge the map)

Bedeutung der „Bruderschaft“ nimmt ab.

——

Like all the rest of Europe, Austria switched from oil to natural gas. This is a less polluting energy carrier and emits less CO2, but then – where do you buy the gas?

From the Netherlands – that is OK, or what about North Africa, Russia, Central Asia, and that means dependence on sources that may be friendly today but may use political pressure tomorrow?  The import of the gas via pipelines or huge boats of liquefied gas, means also serious outflow of Euro, dollars, or whatever National currency you have – not very good at times of budding recession.

Further – bringing the gas in by ship requires the building of high pressure unloading stations that people do not consider safe in their backyards;  pipelines depend very much on the countries in transit, and a dispute relations of the Ukraine and the Russian Federation had serious impact on the gas supplied to the European Union.  The Austrian OEMV got involved in plans for the Nabucco pipeline from Central Asia via Turkey to Austria, and found that Russia will retaliate by directing the planned South Stream pipeline not to touch Austrian land. The recent announcement by OEMV of huge finds of Shale-gas, just North North-East of  Vienna, must be viewed in above context.

A small, integrated oil-shale operation has been conducted at Puertollano since about 1922 by a French company, Sociedad Mimora y Metalurgica de Penarroya, hereinafter referred to as “Penarroya”, but only during WWII have the potentialities of the Spanish oil-shale deposits been recognized.

Empresa Nacional “Calvo Sotelo” do Combustibles y Lubricantes, hereinafter designated as “Calvo Sotelo,” which was created in 1942 by the National Industrial Institute of Spain to produce liquid fuels from oil shales, has made marked progress in the design and construction of a complete oil-shale plant at Puertollano. Penarroya is mainly a coal-mining company, and the oil-shale operations were on a small scale of approximately 220 tons a day in October 1947. It is an integrated operation comprising oil-shale mining and retorting and shale-oil refining. Motor gasoline, Diesel fuel oil, light burner fuel oil, lubricants, paraffin wax, cresols, and ammonium sulfate were manufactured.

The problem is in the nature of the finding. Shale is a stone – it contains hydrocarbons in a polymeric form called Kerogen. When heated in a retort the kerogen breaks down and yields oil and gas. In 1959 I watched this being done in above-ground retorts at the Puertollano plant, the Ciudad Real region of Spain. The governmental Calvo Sotelo company was doing this with lubricants as the prized product. The plant was planned still during WWII by the Franco government, and became a reality only after the war with the help of French engineering companies. The original idea was to produce liquid fuels as a substitute for the petroleum that was hard to obtain during the war years. The Puertollano plant was dismantled, and sold for scrap metal in 1968, as by then Petroleum was cheap and plentiful on the global market. With the first energy constraint of 1972-1973 there was general interest in oil-shales but the  Spanish experience was history by that time.  Brazil picked up with a company called Petrosix,  and in the US The Oil Shale Corporation was formed, with competition from Paraho, The Occidental Company, and Exxon.


The Brazilian Oil Company Petrobras started oil shale processing activities in 1953 by developing Petrosix technology for extracting oil from oil shale of the Irati formation.
A 5.5 metres (18 ft) inside diameter semi-works retort (the Irati Profile Plant) with capacity of 2,400 tons per day, was brought on line in 1972, and began limited commercial operation in 1980. The first retort that used the Petrosix technology was a 0.2 meters (0.7 ft) internal diameter retort pilot plant started in 1982. It was followed by a 2 metres (6.6 ft) retort demonstration plant in 1984. A 11 meters (36 ft) retort was brought into service in December 1991, and commercial production started in 1992. At present, the company operates two retorts which process 8,500 tons of oil shale daily.

The Petrosix 11 metres (36 ft) vertical shaft retort is the world’s largest operational surface oil shale pyrolysis reactor. It was designed by Cameron Engineers of the US. The retort has the upper pyrolysis section and lower shale coke cooling section. The retort capacity is 6,200 tons of oil shale per day, and it yields a nominal daily output of 3,870 barrels of shale oil (i.e., 550 tons of oil, approximately 1 ton of oil per 11 tons of shale), as well as 132 tons of oil shale gas, 50 tons of liquefied oil shale gas, and 82 tons of sulfur.

Petrosix – as per Qian, Jialin, Wang Jianqiu (2006-11-07) – he said at the “World oil shale retorting technologies” (PDF) – International Oil Shale Conference. AmmanJordan by Jordanian Natural Resources Authority –  it is one of five technologies of shale oil extraction, which is currently in commercial use.

It is an above-ground retorting technology, which uses externally generated hot gas for the oil shale pyrolysis (decomposition by heat). After mining, the shale is transported by trucks to a crusher and screens, where it is reduced to particles (lump shale). These particles are between 12 millimetres (0.5 in) and 75 millimetres (3.0 in) and have an approximately parallelepipedic shape. These particles are transported on a belt to a vertical cylindrical vessel, where the shale is heated up to about 500 °C (932 °F) for pyrolysis. Oil shale enters through the top of the retort while hot gases are injected into the middle of the retort. The oil shale is heated by the gases as it moves down. As a result, the kerogen in the shale decomposes to yield oil vapor and more gas. Cold gas is injected into the bottom of the retort to cool and recover heat from the spent shale.

Cooled spent shale is discharged through a water seal with drag conveyor below the retort. Oil mist and cooled gases are removed through the top of the retort and enter a wet electrostatic precipitator where the oil droplets are coalesced and collected. The gas from the precipitator is compressed and split into three parts.

One part of the compressed retort gas is heated in a furnace to 600 °C (1,112 °F) and recirculated back to the middle of the retort for heating and pyrolyzing the oil shale, and another part is circulated cold into the bottom of the retort, where it cools down the spent shale, heats up itself, and ascends into the pyrolysis section as a supplementary heat source for heating the oil shale. The third part undergoes further cooling for light oil (naphtha) and water removal and then sent to the gas treatment unit, where fuel gas and liquefied petroleum gas (LPG) are produced and sulfur recovered. Above tells us that this above ground retorting of the shale is done so that oil is the outcome and the by-product gasses are used to provide the energy for the process. One major problem is what to do with the heavy metals rich spent shale that cannot be discarded without damaging neighboring undergound water or rivers.

One further drawback of this process is that the potential heat from the combustion of the char contained in the shale is not utilized.  Also, oil shale particles smaller than 12 millimetres (0.5 in) can not be processed in the Petrosix retort. These fines may account for 10 to 30 per cent of the crushed feed. The above process was similar to the process used by the Spanish Calvo Sotelo company at Puertollano, and the Oil Shale Corporation method used in Colorado. A TOSCO II system, the reworked US Oil Shale Corporation technology, used a rotating drum and Alumina balls in the retort and the  spent shale is transferred to a furnace where residue-carbon is burned off to provide reheating of the balls.
The main advantages of the Tosco system are the relatively high throughput rates achieved inproportion to the size of equipment, and the production of high-BTU off-gas since there is no dilution thereof by combustion products. However, one serious disadvantage of the Tosco process has been just how to separate the alumina bals lfrom the spent shale.

As a result of the 1972-1973 energy crisis, the United States got interested in oil shales as a strategic fuel and I found myself involved first with TOSCO, then with the Hudson Institute in formulating what became the only Energy Policy the US ever had – that was the government funded “THE SYNFUELS CORPORATION” which allowed private companies to try to develop commercial technologies. Needles to say – the money was spent by the oil companies but no tangible results were returned to the government.

{My last involvement with oil shale technology was when I was contracted to write the issue paper on the use of shales for the 1981 UN Conference on NEW and RENEWABLE SOURCES OF ENERGY at Nairobi. Oil Shales, coal liquids and gases were the “NEW” sources of Energy at the UN – The Canadian tar sands and Venezuela’s heavy crudes were not part of the conference discussions.}

Wikipedia posted: “The Synthetic Fuels Corporation was a U.S. government-funded corporation established in 1980 by the Synthetic Fuels Corporation Act to create a financial bridge for the development and construction of commercial synthetic fuel manufacturing plants (such as coal gasification) that would produce alternatives to imported fossil fuels. The Great Plains coal gasification plant in Beulah, ND, still producing natural gas and sequestering carbon in 2009 , was built with the support of the Department of Energy and applied for further support by this corporation, partly as a result of efforts by Reagan’s Energy Secretary James B. Edwards. The corporation was abolished in 1985.

Oil Shales were part of these sponsored corporations as promoted during the Gerald Ford Presidency 1974-1977. The 1980 – “the Synthetic Fuels Corporation Act” was then passed under President Carter and eventually killed under President Reagan. Whatever the policy – it was still a pro-petroleum policy.

The Colony Shale Oil Project was an oil shale development project at the Piceance Basin near Parachute CreekColorado. The project consisted of an oil shale mine and pilot-scale shale oil plant, which used the TOSCO II retorting technology, developed by Tosco Corporation. Over time the project was developed by a consortium of different companies until it was terminated by Exxon on 2 May 1982 a day which is known amongst locals as “Black Sunday”.

Shale Oil History at Parachute Creek, Colorado:

The project started in 1964 when Tosco, Standard Oil of Ohio, and Cleveland Cliffs Iron Company formed the Colony Development joint venture.[4] The aim of the newly formed joint venture was to develop the Colony Oil Shale Project and to commercialize the TOSCO II technology. Starting in 1965 the consortium operated a shale oil pilot plant and in 1968 the Colony Development started preparatons to build a commercial-scale plant.[5]

In 1969 Atlantic Richfield Company joined the project acquiring part of Tosco’s stake.[5][6] However the commercial project was delayed by economic uncertainties and then resurrected in the 1970s after the Arab oil embargo. In 1972 the consortium stopped the pilot plant and the development of the commercial plant was suspended in November 1974 when more detailed economic studies indicated a more than three times higher cost than previously anticipated.[4][5][7][8]

In 1974 Ashland Oil and Shell Oil Company joined the project.[7][9] In the late 1970s Standard Oil of Ohio, Cleveland Cliffs Iron Company, Shell and Ashaland Oil sold their shares to Atlantic Richfield Company.[7][10][11] As a result of these transactions Tosco owned 40% of shares and Atlantic Richfield Company owned 60% of shares in the project.

In 1980 Atlantic Richfield Company sold its share to Exxon for $300 million.[6] In 1981 the Colony Development started a construction of the commercial scale shale oil plant.[3] On 2 May 1982 Exxon announced the termination of the project because of low oil-prices and increased expenses laying off more than 2,000 workers resulting in the date becoming known among locals as “Black Sunday”.[1][2][3] According to the shareholders agreement in a case of project termination Exxon had an obligation to buy out Tosco’s shares. It paid $380 million worth of compensation.[6]

During its existence the project produced 270 thousand barrels (43×103 m3) of shale oil.[4]

I felt obliged to talk first about the above-ground retorting of the oil-shale as this taught us about problems that will occur OUT-OF-SIGHT if one works underground as well.
The dislodgement of heavy metal compounds and the poisoning of water resources is to be expected – no surprise thereof.

Others, like the Schlumberger Corporation started to eye the Shale Gas & Liquids production in situ – thus avoiding the mess above-ground that made for easy criticism. But doing it underground – who will see that? The idea was – in situ retorting that involves heating the oil shale while it is still underground, and then pumping the resulting liquid to the surface.

To the Americans it sounded at first like a great idea: While oil shale is found in many places worldwide, by far the largest deposits in the world are found in the United States in the Green River Formation, which covers portions of Colorado, Utah, and Wyoming. Estimates of the oil resource in place within the Green River Formation range from 1.2 to 1.8 trillion barrels. Not all resources in place are recoverable; however, even a moderate estimate of800 billion barrels of recoverable oil from oil shale in the Green River Formation is three times greater than the proven oil reserves of Saudi Arabia. Present U.S. demand for petroleum products is about 20 million barrels per day. If oil shale could be used to meet a quarter of that demand, the estimated 800 billion barrels of recoverable oil from the Green River Formation would last for more than 400 years. In theory – for those pushing for the continuation on the dependence on an oil economy – this was a great idea. In practice it did not work – this because despite the great fires underground only very little oil came out above ground – and those were still the days that the industry was looking for oil and was not interested in developing sources of gas that had the potential to compete with their oil refineries.

For those interested in more about the US search for new feeds to the petroleum refinery – here a link to a RAND Corporation study:  http://ostseis.anl.gov/guide/oilshale/

But things change and the US has learned to use gas – this by learning it from the European experience.

So, now gas is in demand and gas can be obtained from these underground shales with us not seeing how it is done – and that is very important to realize!

WE DO NOT HEAR THUS OF SHALE OIL BUT OF SHALE GAS. WE DO NOT HEAR OF RETORTING BUT OF HYDRAULIC FRACTURING – FRACKING – IN EFFECT WE HEAR OF ROSY FUTURES BUT DO NOT HEAR HOW THIS IS ATTAINED.

THE PRESS IS FULL WITH ARTICLES ABOUT GAS COMING OUT WITH DRINKING WATER – SO YOU CAN LIGHT A FIRE WITH YOUR CIGARETTE LIGHTER APPLIED TO YOUR HOME DRINKING WATER TAP. WE HEAR OF CHEMICALS COMING OUT WITH THAT WATER – BUT WE DO NOT HEAR WHAT IS PUT IN WITH THE INFLOW TO THE THIS GAS MINING PIPE. WE HEAR ONLY OF THE OUTFLOW – THUS WE HAVE NO UNDERSTANDING OF THE UNDERGROUND PROCESS – IS IT HYDRAULIC, CHEMICAL, or THERMAL?

The US IS FULL WITH THE SO CALLED FRACKING TECHNOLOGY TO RELEASE GAS FROM SHALE, AND NOW IT SEEMS AUSTRIA IS LUCKY AS WELL – GAS WAS FOUND!

======================================

OMV findet riesiges Gasfeld in Niederösterreich.

Gas für mehr als 30 Jahre: Im Norden von Niederösterreich sollen gewaltige Erdgasmengen schlummern. Die OMV sucht nach Wegen, sie zu fördern.

The KURIER, LETZTES UPDATE AM 05.12.2011.

Poysdorf ist vor allem durch seine Weine – insbesondere den DAC – bekannt. Die Stadt im nö. Weinviertel könnte demnächst aber schon ein ganz anderes Image bekommen: Denn die OMV AG will rund um die Weinstadt Gas fördern. Nicht konventionelles Erdgas, sondern Shale-Gas, deutsch: Schiefergas. Dabei handelt es sich um natürliches Erdgas, das in Tonsteinen entsteht und gespeichert wird. Seine Gewinnung ist technologisch sehr anspruchsvoll, aber durch die steigenden Gaspreise zunehmend rentabel.

Das Gasvorkommen soll dort derart groß sein, dass der österreichische Inlandsbedarf auf lange Zeit – Insider sprechen von 30 Jahren und mehr – zu 100 Prozent abgedeckt werden könnte.

“Ja, das Shale-Gas-Vorkommen wird dort als sehr mächtig eingeschätzt. Bis wir aber so weit sind, dass wir das Gas auch fördern können, dauert es noch einige Jahre. Abgesehen davon muss die Förderung sowohl technisch möglich als auch wirtschaftlich sein”, bestätigte am Dienstag eine OMV-Sprecherin.

vergrößern (enlagement)

Bedeutung der „Bruderschaft“ nimmt ab.

The OEMV company, intends to start first drilling experiments at Poysdorf and Herrnbaumgarten already February 2012 and aims at commercial production by 2014. The two mayors of the above named locations seem to go along with these plans and expect windfall of profits from the oil company.

The way OEMV has explained the project to the local people it says that the fracking process is a hydraulic pressure attack against walls of shale that stand between us and pockets of gas which they call shale gas rather then Natural Gas. I wonder if anyone has asked the oil people to explain the difference in clear terms. They also say that chemicals are needed in order to avoid biological processes that lead to the closing up of the pipes and state that they will not use pesticide chemicals but natural means. This is not clear to us and we wonder what other events will occur undergroup besides the application of pressure in mechanical ways. What chemical reactions, or thermal reactions, are intended and what organic chemicals and heavy metals are expected to be found in the returning water and in the effluents that will reach the underground water.

It seems that Poland, Germany, and France were also looking at production of shale-gas, but while in Poland there is high enthusiasm by a people that are struggling to disengage themselves from the dependence on Russian gas – a highly inflamed political and economic issue, in France the government has decided not to proceed to extract the gas. The protest from an environmentally conscious population  led to this stand by the government.

The gas production in Austria is intended at above two locations in the Wine-Quarter (Vineviertel) outside Vienna with some of the local people, led by local officials of the Green Party, state that the region lives from tourism, Wine, and ambiance and if known as the Gas-Quarter (Gasviertel) all this will be lost.

December 2 and 3, 2011 papers printed the news of a press conference in the Vine-Quarter as in:

diepresse.com/home/wirtschaft/economist/713891/Schiefergas-fuer-30-Jahre-OMV-will-nur-oekologisch-foerdern

diepresse.com/home/wirtschaft/international/717100/Der-Gasstrategie-der-OMV-droht-ein-herber-Rueckschlag

kurier.at/wirtschaft/4460260-die-omv-gibt-schiefer-gas.php

and today – December 17, 2011, the Wiener Zeitung had another series of three articles on the subject – both as related to Austria and Poland.

www.wienerzeitung.at/nachrichten/wirtschaft/oesterreich/419491_Es-heisst-ja-schliesslich-Weinviertel-und-nicht-Gasviertel.html

“It is, after all, wine district and not gas-quarters” – By Christian Roesner

  • Poysdorf and Mr. Baumgarten will take place in 2012 drilling.

It also mentions that Fritz Gall, head of Nonmuseums in  Baumgarten: said “Fossil energy is not the official line of Austria in terms of energy policy.” Gall is about to establish a platform and invite independent experts to the local population to offer also other perspectives than those of OMV.

 www.wienerzeitung.at/nachrichten/…

Ein Totenkopf gegen das Aufreißen: Frankreich gilt nach Polen als das Land mit dem höchsten Schiefergasvorkommen in Europa. Doch nach vielen Demonstrationen hat Paris im Sommer den Abbau von Schiefergas mittels hydraulischem Fracturing verboten.

Ein Totenkopf gegen das Aufreißen: Frankreich gilt nach Polen als das Land mit dem höchsten Schiefergasvorkommen in Europa. Doch nach vielen Demonstrationen hat Paris im Sommer den Abbau von Schiefergas mittels hydraulischem Fracturing verboten.

Huge shale gas reserves make Poland independent from Russia

Freedom, equality, gas

  • The price could be high for environmental damage.
  • Shale gas is the so-called “Game Changer” for Europe?

———-

 www.wienerzeitung.at/nachrichten/…

Drill deep cracks in the earth  – but only for 80 years.

By Eva Stanzl

  • Shale gas would quadruple natural gas deposits in Europe or tripled.
——–
People do worry about the effects of the gas production on the environment and things get worse when groups like EUROSOLAR Austria, get angree at this because they believe that there is no need to follow the dictum of the oil industry in order to stay dependent on oil and gas when renewable energy is possible and the sun is a main supplier.

Why let OEMV spend 130 million Euro, to just start these experimental drillings when the government provides only for 50 million Euro for the safer whole renewable energy yearly allowance? Investing in Renewables seems rather a safer way of detaching from fossil fuels – even in economic terms – not just environmental.
Thursday December 15, 2011, The monthly discussion table of the Vienna EUROSOLAR group had the time dedicated to Shale Gas – this being an exception as the group deals with renewables. This exception was obviously prompted by the worries that the shale gas project could derail the interest in renewables by creating in the minds of some of the people that this false saviour could answer the need for more energy independence – as it is felt seemingly in Poland.
Ing. Herbert Eberhart brought along the GASLAND documentary of the International WOW Company that showed the effects of shale oil production in the US.
The film talks about the Green River shale area in Wyoming, the old area of the attempt to produce Shale Oil, and moves to the Chesapeake area, to Pennsylvania’s Marcellus Shale up to New York State and the endangered Croton River water system that supplies the New York City water. We lean about the Cabot Oil & Gas Company and Halliburton – the company that was under the leadership of Vice President Dick Cheney.  Under Mr. Cheney’s days at the White House laws were changed and Federal Lands in the West opened to exploitation for oil and gas by private companies. It turned out that things were as in a song that said: “YOUR LAND – MY LAND – GASLAND” – and people were left in unhealthy conditions because of the effects of this drilling for gas.
What attracted my attention was a hearing in US Congress where the gas producing companies refused to divulge the chemicals they were using in those pipes and personally I was left with the uncertainty that perhaps we do not even know what actually is being done underground. The analysis of water from the home taps in the area of production shows the presence of some 596 chemicals including Naphthalene, Methyl Pyridine etc. –  as these are probably not chemicals used as inputs – it means they are results of breakdown of the Kerogene – thus reminding me of the spent shale from above ground retorting and this is an old NO! NO!
Important to note that the same companies working in the US are now lining up to work also in Europe – and Poland was their port of entree. Will Halliburton be as well the technological outfit that will be used by the Austrian OEMV?
From the Financial Times of December 17, 2011, we learn:

“The recent revelation that PetroChina successfully extracted natural gas from shale formations in China’s Sichuan Basin has confirmed the commercial viability of hydraulic fracturing, or “fracking”, in the country. The news also confirmed the major export opportunity that has emerged for the growing number of American companies that produce the array of equipment, chemicals and technologies that will be needed to exploit China’s vast shale gas reserves. At an estimated 1,275 trillion cubic feet, these reserves comprise the world’s largest source.”

“Chinese shale gas developments herald major US industrial export opportunities,” and “the companies with the know how are the American companies – oil field service majors like Baker Hughes, Halliburton, and National Oilwell Varco as well as ITT’s water treatment spin-off, Xylem. Barclays Capital oilfield services analyst, James West, expects US companies like these will add a combined USD 8 to 10bn in shale gas-related equipment and services economic activity over the next year.”

Will the results look like what one seen is GASLAND?

The Tursday evening event at EUROSOLAR turned out to be a five hours affair. After the 90 minutes documentary came the actual meeting of EUROSOLAR with a guest presentation by Green Member of Parliament of Lower Austria, Mrs. Amrita Enzinger who is active in bringing to the public’s attention the dangers inherent in the extraction of the shale gas as experienced in the United States. Lower Austria is not the county in Wyoming that has only 600 residents that was mentioned in the documentary – and that is why the issue deserves a more serious go-through then an agreement with two mayors that might be ill advised in their effort to bring some fast money to their area and forfeiting the future of the area.

The moderator of the evening was energy autarky proponent,businessman Hermann Mentil, former Member of Parliament and  present was also a specialist on energy from Poland.
The meeting was followed by a very interested Q&A period.

============================================================================================

Wiener Zeitung

19. Dezember 2011

Schlagwortsuche

Riesige Schiefergasvorräte machen Polen unabhängig von Russland

Freiheit, Gleichheit, Gas

  • Der Preis dafür könnten hohe Umweltschäden sein.
  • Ist Schiefergas der sogenannte “Game Changer” für Europa?

Wien/Warschau. (wak) Na Zdrowie – auf die Gesundheit! Auf die Unabhängigkeit. In Polen wird derzeit ein Glas nach dem anderen des nationalen Wodkas Ma… weiter

Tiefe Risse in die Erde bohren – aber nur für 80 Jahre

  • Schiefergas würde Erdgasvorkommen in Europa verdrei- oder vervierfachen.

Wien.OMV-Chef Gerhard Roiss will im Weinviertel vorhandene Schiefergas-Vorräte gewinnen, sofern es “ökologisch vertretbar” sei, wie er betont. Sein Fo… weiter

“Es heißt ja schließlich Weinviertel und nicht Gasviertel”

  • In Poysdorf und Herrnbaumgarten sollen 2012 Probebohrungen stattfinden.

Wien. “Als wir zum ersten Mal vom Schiefergasvorkommen in unserer Region hörten, haben wir gegoogelt und diese furchtbaren Infos gefunden, die uns und… weiter

###

Posted on Sustainabilitank.info on January 27th, 2012
by Pincas Jawetz (pj@sustainabilitank.info)

The New York Times OP-ED contributor from The World Economic Forum, Davos, Switzerland

At Davos, Debating Capitalism’s Future

By  Ed Miliband –  a member of the British Parliament and the leader of the Labour Party.
Published: January 26, 2012

IS 20th-century capitalism failing 21st-century society? Members of the global elite debated that unusual question on Wednesday at the annual World Economic Forum.

There was a time, not long ago, when such a debate would have been held only among the protesters who annually shelter in igloos farther down the Alpine slopes. So it is encouraging that more than three years since the global financial crisis, a belated process of soul-searching has begun in search of the right lessons to learn from it.

In Britain, members of the Conservative-led government — not least the prime minister, David Cameron — have echoed the Labour Party’s call for a more responsible capitalism.

There is a great difference, however, between being willing to talk about an issue and being ready to act.

It is a difference between those who still believe that all governments can do is get out of the way and those who believe there is a real role for governments in first reviving our economies, and then setting the right rules for future success. The challenge therefore is not just to capitalism but also to politics.

At the Group of 20 summit in London three years ago, Prime Minister Gordon Brown and President Obama led concerted action to guide the world economy from the brink. Three years later, some governments are engaging in a short-sighted fiscal protectionism that can only lead to stunted growth.

If we learned anything from the 1930s, it was that governments cannot shrug their shoulders and watch as their own people are consigned to unemployment. I find it tragic and astonishing that some governments need to learn this lesson again.

Nor should we forget the causes of the current growth and debt crisis as we seek to put our economies on a more sustainable footing.

Both the United States and Britain suffered because their economies were overly reliant on the financial sector’s artificial profits; living standards for the many worsened while the economic rewards skewed to the top 1 percent; a capitalist model encouraged short-term decision-making oriented toward quarterly profits rather than long-term health; and vested interests — from giant banks to media moguls —were deemed too big to fail or too powerful to challenge.

We need to recognize that the trickle-down promise of conservative theorists has turned into a gravity-defying reality in which wealth has flowed upward disproportionately and, too often, undeservedly. To address properly the squeeze in middle-class incomes on both sides of the Atlantic requires fresh thinking from governments about how people train for their working lives and what a living wage should be.

Governments can set better — not necessarily more — rules to encourage productive businesses that invest, invent, train, make and sell real products and services. We need rules that discourage the predatory behavior of those seeking the fast buck through hostile takeovers and asset-stripping that do not have the interests of the shareholders, the employees or the economy at heart.  In Britain, the Labour Party is considering how we can raise the bar for corporate takeovers so that companies’ futures are not determined by just a handful of speculators.

And governments must remember they are elected to serve the people, not the powerful lobbies who can pay for access or influence.

Too often the real enemies of market capitalism are some of the leading beneficiaries of the current model, which favors price-gouging cartels and consumer exploitation.

In Britain, airlines need to be more upfront about  the true cost of their fares, and pension firms cannot continue to sign up customers for products that can chip away at their retirement income through exorbitant management fees.

As President Obama noted in his State of the Union address on Tuesday, it is neither socially nor economically sustainable for the wealthiest and most powerful to avoid paying their fair share. I support proposals for a financial transactions tax levied equally on the major trading centers from Hong Kong and Singapore to Wall Street and the City of London. The British government needs to show more leadership on this issue in Europe — and all members of G-20 need to help make it happen.

Britain loses billions of pounds in revenues because of outdated rules that allow our richest citizens to keep their money in off-shore tax havens. Tax authorities need to know about income and wealth hidden behind front companies, trusts and other complex financial products. If these rules cannot be changed by international agreement, progressive governments should go ahead and do it themselves.

As President Obama said in his State of the Union address this week, it is “common sense” to ask a billionaire to pay, proportionally, at least as much as his secretary in taxes. Indeed, in Davos this week, I will look around the room and ask myself who pays taxes at a higher rate — those eating the soup or those serving it?

In my country, I believe that changing the rules of capitalism will mean a change of government. But more generally, it will require a change in what citizens expect and ask of politics. The question is not so much whether 20th-century capitalism is failing 21st-century society but whether politics can rise to the challenge of changing a flawed economic model.

============================


George Soros’s essay in the forthcoming edition of the New York Review of Books: www.nybooks.com/articles/archives/2012/feb/23/how-save-euro.
The essay is adapted from a speech he delivered at the opening of the World Economic Forum in Davos.

All best from Michael Vachon

How to Save the Euro

George Soros

The upcoming issue of The New York Review of Books.

My new book, Financial Turmoil in Europe and the United States, tries to explain and, to the extent possible, predict the outcome of the euro crisis. It follows the same pattern as my other books: it contains an updated version of my conceptual approach and the application of that approach to a particular situation, and it presents a real-time experiment to test the validity of my interpretation. Its account is not complete because the crisis is still ongoing.

We remain in the acute phase of the crisis; the prospect of a meltdown of the global financial system has not been removed. In my book, I proposed a plan that would bring immediate relief to global financial markets but it has not been adopted.

My proposal is to use the European Financial Stability Facility (EFSF), and its successor the European Stability Mechanism (ESM), to insure the European Central Bank (ECB) against the solvency risk on any newly issued Italian or Spanish treasury bills they may buy from commercial banks. Banks could then hold those bills as the equivalent of cash, enabling Italy and Spain to refinance their debt at close to 1 percent. Italy, for instance, would see its average cost of borrowing decline rather than increase from the current 4.3 percent. This would put their debt on a sustainable course and protect them against the threat of an impending Greek default. I call this the Padoa-Schioppa plan, in memory of my friend who helped stabilize Italy’s finances in the 1990s and who inspired the proposal. The plan is rather complicated, but it is both legally and technically sound. I describe it in detail in my book.

The European financial authorities rejected this plan in favor of the Long-Term Refinancing Operation (LTRO) of the European Central Bank, which provides unlimited amounts of liquidity to European banks—not to states themselves—for up to three years. That allows Italian and Spanish banks to buy the bonds of their own country and engage in a very profitable “carry trade”—in which one borrows at low interest to buy something that will pay higher interest—in those bonds at practically no risk because if the country defaulted the banks would be insolvent anyhow.

The difference between the two schemes is that mine would provide an instant reduction in interest costs to governments while the one actually adopted has kept the countries and their banks hovering on the edge of a potential insolvency. I am not sure whether the authorities have deliberately prolonged the crisis atmosphere in order to maintain pressure on heavily indebted countries or whether they were driven to their course of action by divergent views that they could not reconcile in any other way. As a disciple of Karl Popper, I ought to opt for the second alternative. Which interpretation is correct is not inconsequential, because the Padoa-Schioppa plan is still available and could be implemented at any time as long as the remaining funds of the EFSF are not otherwise committed.

Either way, it is Germany that dictates European policy because at times of crisis the creditors are in the driver’s seat. The trouble is that the cuts in government expenditures that Germany wants to impose on other countries will push Europe into a deflationary debt trap. Reducing budget deficits will put both wages and profits under downward pressure, the economies will contract, and tax revenues will fall. So the debt burden, which is a ratio of the accumulated debt to the GDP, will actually rise, requiring further budget cuts, setting in motion a vicious circle.

To be sure, I am not accusing Germany of acting in bad faith. It genuinely believes in the policies it is advocating. Germany is the most successful economy in Europe. Why should not the rest of Europe be like it? But it is pursuing an impossibility. In a closed system like the euro clearing system, everybody cannot be a creditor at the same time. The fact that a counterproductive policy is being imposed by Germany creates a very dangerous political dynamic. Instead of bringing the member countries closer together it will drive them to mutual recriminations. There is a real danger that the euro will undermine the political cohesion of the European Union.

The evolution of the European Union is following a course that greatly resembles a sequence of boom and bust or a financial bubble. That is no accident. Both processes are “reflexive,” that is, as I have argued elsewhere, they are largely driven by mistakes and misconceptions.

In the boom phase the European Union was what the British psychologist David Tuckett calls a “fantastic  object”—an unreal but attractive object of desire. To my mind, it represented the embodiment of an open society—another fantastic object. It was an association of nations founded on the principles of democracy, human rights, and the rule of law that is not dominated by any nation or nationality. Its creation was a feat of piecemeal social engineering led by a group of farsighted statesmen who understood that the fantastic object itself was not within their reach. They set limited objectives and firm timelines and then mobilized the political will for a small step forward, knowing full well that when they accomplished it, its inadequacy would become apparent and require a further step.

That is how the European Coal and Steel Community was gradually transformed into the European Union, step by step. During the boom period Germany was the main driving force. When the Soviet empire started to fall apart, Germany’s leaders realized that reunification of their country was possible only in a more united Europe. They needed the political support of other European powers, and they were willing to make considerable sacrifices to obtain it. When it came to bargaining they were willing to contribute a little more and take a little less than the others, thereby facilitating agreement. At that time, German statesmen used to assert that Germany had no independent foreign policy, only a European policy. The process—the boom, if you will—culminated with the Maastricht Treaty in 1992 and the introduction of the euro in 2002. It was followed by a period of stagnation that turned into a process of disintegration after the crash of 2008.

The euro was an incomplete currency and its architects knew it. The Maastricht Treaty established a monetary union without a political union. The euro boasted a common central bank to provide liquidity, but it lacked a common treasury that would be able to deal with solvency risk in times of crisis. The architects had good reason to believe, however, that when the time came further steps would be taken toward a political union. But the euro also had some other defects of which the architects were unaware and that are not fully understood even today. These defects contributed to setting in motion a process of disintegration.

The fathers of the euro relied on an interpretation of financial markets that proved its inadequacy in the crash of 2008. They believed, in particular, that only the public sector is capable of producing unacceptable economic imbalances; the invisible hand of the market would correct the imbalances produced by markets. In addition, they believed that the safeguards they introduced against public sector imbalances were adequate. Consequently, they treated government bonds as riskless assets that banks could buy and hold without allocating any capital reserves against them.

When the euro was introduced, the ECB treated the government bonds of all member states as equal. This gave banks an incentive to gorge themselves on the bonds of the weaker countries in order to earn a few extra basis points, since the yields on those bonds were slightly higher. It also caused interest rates to converge. That, in turn, caused economic performance to diverge. Germany, struggling with the burdens of reunification, undertook structural reforms, principally in its labor markets, and became more competitive. Other countries, benefiting from lower interest rates, enjoyed a housing boom that made them less competitive. That is how the introduction of the euro caused the divergence in competitiveness that is now so difficult to correct. The banks were weighed down with the government bonds of less competitive countries that turned from riskless assets into the riskiest ones.

The tipping point was reached when a newly elected Greek government revealed that the previous government had cheated and the national deficit was much bigger than had been announced. The Greek crisis revealed the gravest defect in the Maastricht Treaty: it has no provisions for correcting errors in the euro’s design. There is neither a mechanism for enforcing payment by member states of the European debt nor an exit mechanism from the euro; and member countries cannot resort to printing money. The statutes of the ECB strictly prohibit it from lending to member states, although it lends to banks. So it was left to the other member states to come to Greece’s rescue.

Unfortunately the European authorities had little understanding of how financial markets really work. Far from combining all the available knowledge in the market’s movements, as economic theory claims, financial markets are ruled by impressions and emotions and they abhor uncertainty. To bring a financial crisis under control requires firm leadership and ample financial resources. But Germany did not want to become the deep pocket for bad debtors. Consequently Europe always did too little too late and the Greek crisis snowballed. The bonds of other heavily indebted countries such as Italy and Spain were hit by contagion—i.e., in view of the failure in Greece they had to pay higher yields. The European banks suffered losses that were not recognized on their balance sheets.

Germany aggravated the situation by imposing draconian conditions and insisting that Greece should pay penalty rates on the loans in the rescue package that Germany and other states provided. The Greek economy collapsed, capital fled, and Greece repeatedly failed to meet the conditions of the rescue package. Eventually Greece became patently insolvent. Germany then further destabilized the situation by insisting on private sector participation in the rescue. This pushed the risk premiums on Italian and Spanish bonds through the roof and endangered the solvency of the banking system. The authorities then ordered the European banking system to be recapitalized. This was the coup de grâce. It created a powerful incentive for the banks to shrink their balance sheets by calling in loans and getting rid of risky government bonds, rather than selling shares at a discount.

That is where we are today. The credit crunch started to make its effect felt on the real economy in the last quarter of 2011. The ECB then started to reduce interest rates and aggressively expand its balance sheet by buying government bonds in the open market. The ECB’s LTRO facility provided relief to the banking system but left Italian and Spanish bonds precariously balanced between the sustainable and the unsustainable.

What lies ahead? Economic deterioration and political and social disintegration will mutually reinforce each other. During the boom phase the political leadership was in the forefront of further integration; now the European leaders are trying to protect a status quo that is clearly untenable. Treaties and laws that were meant to be stepping stones have turned into immovable rocks. I have in mind Article 123 of the Lisbon Treaty, which prohibits the ECB from lending money directly to member states. The German authorities, notably the Constitutional Court and the Bundesbank, are dead set on enforcing rules that have proved to be unworkable. For instance, the Bundesbank’s narrow interpretation of Article 123 prevented Germany from contributing its Special Drawing Rights to a rescue effort by the G20. This is the path to disintegration. Those who find the status quo intolerable and are actively looking for change are driven to anti-European and xenophobic extremism. What is happening today in Hungary—where a far-right party is demanding that Hungary leave the EU—is a precursor of what is in store.

The outlook is truly dismal but there must be a way to avoid it. After all, history is not predetermined. I can see an alternative. It is to rediscover the European Union as the “fantastic object” that used to be so alluring when it was only an idea. That fantastic object was almost within reach until we lost our way. The authorities forgot that they are fallible and started to cling to the status quo as if it were sacrosanct. The European Union as a reality bears little resemblance to the fantastic object that used to be so alluring. It is undemocratic to the point where the electorate is disaffected and it is ungovernable to the point where it cannot deal with the crisis that it has created.

These are the defects that need to be fixed. That should not be impossible. All we need to do is to reassert the principles of open society and recognize that the prevailing order is not cast in stone and rules are in need of improvement. We need to find a European solution for the euro crisis because national solutions would lead to the dissolution of the European Union, and that would be catastrophic; but we must also change the status quo. That is the kind of program that could inspire the silent majority that is disaffected and disoriented but at heart still pro-European.

When I look around the world I see people aspiring to open society. I see it in the Arab Spring, in various African countries; I see stirrings in Russia, and as far away as Burma and Malayasia. Why not in Europe?

To be a little more specific, let me suggest the outlines of a European solution to the euro crisis. It involves a delicate two-phase maneuver, similar to the one that got us out of the crash of 2008. When a car is skidding, you first have to turn the steering wheel in the direction of the skid, and only after you have regained control can you correct your direction. In this case, you must first impose strict fiscal discipline on the deficit countries and encourage structural reforms; but then you must find some stimulus to get you out of the deflationary vicious circle— because structural reforms alone will not do it. The stimulus will have to come from the European Union and it will have to be guaranteed jointly and severally. It is likely to involve eurobonds in one guise or another. It is important, however, to spell out the solution in advance. Without a clear game plan Europe will remain mired in a larger vicious circle in which economic decline and political disintegration mutually reinforce each other.

###

Posted on Sustainabilitank.info on January 6th, 2012
by Pincas Jawetz (pj@sustainabilitank.info)

We are happy with this article – as it presents an honest description of the failures since Copenhagen – the wasted two years of Cancun and Durban that in effect killed the issue all-together .

The empty UN Durban Platform is nothing but the Kings Clothes made up of no-cloth.

What the article does not say is that RIO+20 would be more successful if Brazil took it away from the UN and handed its management to a number of concerned people as in effect it was done in 1992 when Mr. Morris Strong managed somehow, single handedly, to maneuver the deliberations, and come up with results that every person in the know recognizes as the HIGH POINT for SUSTAINABLE DEVELOPMENT. From 1992 it was only down-hill. Copenhagen allowed for a moment of hope, but now we see that no green twig resulted from that effort.

Rio 2012 must thus start from scratch and be handled in a totally novel way. It is impossible to come up with a global system that reduces our dependence on  fossil carbon as long as we allow veto-power to salesmen of oil. In UN wisdom Durban will be followed by Qatar rather then as we expected Seoul. With all our respect for Abu Dhabi and Qatar, as the most enlightened oil based economies – we nevertheless understand that even those most enlightened oil exporters nevertheless make their money from oil – so doing what is needed is not in their perceived interest.

We suggest the article we post here has in it the description of urgency that could help the task before the RIO+20 crew.

Please also note the term “supranational” that must replace the UN adored MULTILATERALISM. Global problems must be dealt with globally in ways that cannot give veto power to governments. The term DEMOCRACY as used by the writer, we assume addresses the people and not their mostly undemocratic governments. The UN was created to handle efficiently military situations in order to prevent wars. Global environmental problems are problems in a different quantum range and when you read that 40,000 prople were drowned by a flood that is global warming related, you need more then talk to the government in  order to send relief. You must actually, as an example,  start changing your life-styles right here at home – in the US or in Europe.

=========================================

AFTER DURBAN: IT MUST BE CREATED A SUPRANATIONAL DEMOCRATIC CLIMATE AUTHORITY.


Josep Xercavins i Valls*
it was related to us on January 6, 2012 via www.other-net.info and we assume this is a George Soros Foundation backed outlet.

One more year, Durban 2011, adds even a bigger failure to the one already accumulated since Copenhagen where, analyzed from the current perspective, it makes clear that more than a battle against the climatic crisis was lost.

The Kyoto Protocol, entering into force late (in 2005) and in extremis (strategic interstate exchanges forced the Ratification of Russia), now, one year before its first period of compromises finishes – the very close 2012 end , it has been frozen, if not completely murdered {that is at Durban – www.SustainabiliTank.info editorial comment}.
The only multilateral instrument proposed that had as a goal a quantified mitigation of the emissions (absolutely insufficient, why not to say), will stop having goals and any objectives and will hibernate (maybe, sorry for the irony, in order to not contribute anymore to the global warming of the planetary tensions’ sum).

Instead –  a supposed new Durban Platform will begin the elaboration of… it is better if we read literally the text, because it is not to be missed:

“2. Also decides to launch a process to develop a protocol, another legal instrument or a legal outcome under the Convention applicable to all Parties, through a subsidiary body under the Convention hereby established and to be known as the Ad Hoc Working Group on the Durban Platform for Enhanced Action; to which the article 4 of the same document is added.”

“4. Decides that the Ad Hoc Working Group on the Durban Platform for Enhanced Action shall complete its work as early as possible but no later than 2015 in order to Adopt this protocol, legal instrument or a legal outcome at the twenty-first session of the Conference of the parties and for it to come into effect and be Implemented from 2020!”

Which leads us, inevitably, to total and absolute desperation.
Why? What the background of all these can be? What are the interpretations and main conclusions that we can obtain from it?

It is clear, legally, the Kyoto Protocol, taking in consideration the international treaties law cannot easily disappear, but replaced for another one. It cannot disappear, so they froze it without any consideration: it has been extended without any new objective, goal or mission, etc. And even some states are cheek enough to get out of it, explicitly, in order to avoid the low “penalty” that would obtain, now, by not achieving its reduction goals. Result: outrageous!

And frozen until when?, so until 2015, year that taking the “Article 4”,  just literally as cited, from the Durban Platform a new one will be approved; because the calculations are a fact: the 21st COP (Conference of the Parties of the United Nations Framework Convention on Climate Change) will take place in 2015 (no more no less, and taking in consideration the previous experiences, it can be much more, isn’t it?).

And is it for sure that the result will be another treaty? The final negotiation, even represented as another business show, leads to a drawn up of article 2, also previously cited, from what we can obtain any strange thing (another legal instrument or one legal outcome) in which case the existence of similarities with a serious and rigorous international treaty would be only a “coincidence”.

But wait for it:  –  According to the Article 4 from this Durban Platform, whatever that ends up being obtained in 2015 or in…, it will not enter into force before 2020.
Then, if in order to ensure, according to the IPCC, that the average surface temperature in the earth would not increase more than 2 ? C more, it would have to and it has to be reduced, at least, by the developed countries, a reduction of from 20% to 40% of the emissions of 1990; so now nothing will be reduced, except of what a conscious and decent state would reduce by its own convictions.

The 2 o 4 ? C more, are suggested –  and the fact that our grandsons will live in a planet very different of the current one is now for sure!

And taking all these in consideration what should be done, what should be set out, what should be mobilize from the world citizens with historical conscience (past and above all future) of humanity?

So bringing to the world a Worldwide Climate Democratic Governance System (and most important, supranational) that once analyzed the crisis based on the IPCC reports, and taking in consideration the different state situations and the Rio principles accepted by everybody in theory, takes, as a new Supranational Democratic Climate Authority, the mandatory decisions of mitigation and monitoring that each state of the world, depending of their levels of responsibility and capacities, should start achieving already, as soon as possible.

Apart of the climate crisis we would be finally facing the main current problem of multilateralism: its inability of taking decision. Legitimae and even reasonable interests, analyzed from each country’s perspective, are nowadays incompatible with the humanity interests as a whole that lives, and would like to keep living, on the earth planet that we know.

Shouldn’t we take advantage of the celebration of Rio +20 in order to begin all this?
—————————–
*Senior Lecturer in BarcelonaTech (Universidad Politècnica de Catalunya). President of the “project association World Democratic Governance, WDGpa”: “Catalan aplicating Organization to the World Federalist Movement WFM”

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Posted on Sustainabilitank.info on December 12th, 2011
by Pincas Jawetz (pj@sustainabilitank.info)

The “Monday After” the papers asked: Was the European Summit a “Fiasko” or a “Quality Jump?” The papers also wonder about the effectiveness of the “Durban Platform” having noted the strong involvement of the EU 27 in the Durban Conference fight. The Minister says it ended with a breakthrough – others say it was a “Mogelpackung.”

By the way – I happen personally to know know what a “Mogelpackung” is. Back years ago in New York some character sold me what I thought was a video-camera, but in reality it was just the box filled with trash. Surely I could have tried to accuse him of fraud but I preferred to condemn myself to a form of self-punishment for having been so brain weak – laughed it off and wrote off my loss on my self-education bill.  That was easy then, but what should an European State do now? Global 2000 NGO spokesman Wahlmueller said simply that another year in the war against climate change was just lost. We think he is right.

What happened in Brussels was indeed a “Tour de Force” of the Merkozy motor (Mme. Merkel and Herr Sarkozy) leading to the political exit of Mr. Cameron.  Yes, English will continue to be the diplomatic language of the evolving new European Union, but the UK is free to sail off to the Anglo-Saxon bloc led by the US – that is if the US can get its act together and lead again!

To the travails of the British Islands we attach an article from today’s New York Times – this just to say that the problems with the UK are  also internal.  This will be our only borrowed article of this posting – all the other material is of our own making, and as  we decided to write this up as we realized that we are not the only ones to think the way we do.
In effect at  an off the record meeting at the Vienna Diplomatic Academy  we heard that in Brussels it is understood that going it alone, the individual 27, do not amount to much.

In the real world of the 21st century it seems that as Thomas Friedman observed – the Globalized World is Flat – HOT, FLAT, and CROWDED. We add to this that it is important as well to think about how you draw the flat Map of the World. The realistic way is to put the Americas in the center of the map with the Pacific Ocean to the West – the left – and the Atlantic Ocean to the East – the right – with the Northern Hemisphere that includes among other States, the US and China on top – the North.

This maps shows the Trans-Pacific connection of the US to Japan, Australia and Indonesia, and the Trans-Atlantic connection to Europe and Africa.  In this map European Russia is in the periphery, but Asian Russia shows up closer.

A different map is the Euro-centric map. This map keeps Europe and Africa in the center with what the Europeans called the Western Hemisphere – the Americas – to the West – or left – and the huge Asian mass – all of it – to the East or right. The interesting thing is that on this map you see that Europe is just a small part at the West End of the Eurasian land-mass.

The history we learned in school was written by Europeans, and we never were given the true notion that in the last few hundred years it was the European tail that wagged the big Asian dog. We must now relearn our history and realize that the future belongs to big Asia and Europe could have an impact only if it unites and forgets some of the past grandeur, when small European States, Spain, Portugal, France, the netherlands, the British, Belgium, Denmark, later on Italy, Germany, even Austria, having developed their navies and rented  armies,  competed as colonial powers, and made inroads starting out from the coasts of that landmass. But even then – Europe was just an archipelago of small States with the British living on an actual island off the coast of Europe. And you know what? The colonies gone, this same picture stood on, though now, when the size of markets translates into economic power, these European economic islands are shrinking in size. Also, the former colonial powers that still have overseas possessions or linkages, create additional difficulties to their potential to create an integrated Europe. Denmark for instance, joined the EU without Greenland joining as well. Others, like France, the UK, the Netherlands, Spain and Portugal had to find also ways to deal with their overseas possessions and linkages to their Francophone community or the British Commonwealth.

This last Friday, the unnatural division of the EU into 17 EURO-ZONE States and 10 Non-Euro States proved untenable and a much higher level of integration was suggested at least for the EURO-ZONE to be implemented with the agreement of the non-Euro States that will be called as well to contribute to the economic safety of the laggard States. Everybody agrees that the EURO idea was premature and showed up half backed, but now if the EURO laggards are not helped the whole global economy might collapse. A much higher level of integration is needed and the start is by calling for fiscal integration to back up the Euro-spending. After a lot of haggling 26 out of the 27 did bend to allow for the loss of some of their National decision making powers. But is it enough? The British opted out, the Netherlands and the Czech Republic showed unhappiness, so did the Hungarians, but in the end it was only the UK that did not vote in the positive and they may find out that the rest of the EU might now try to live without the UK as an active participant. Considering that what was decided upon will turn out to be insufficient, it may thus come to be that the UK will not be able to find its way back in = specially as 58% of the population might instinctively accept the notion that it will be to their advantage to leave the thinking Euro-ship.

But did the British lay people look at the Durban scene? That mob of 27 Environment Ministers that did not add up to a seat at the table with the China-India-US big polluters and nay-sayers of the UNFCCC event. In effect the EU 27 ended up being in alliance with over 100 of the smaller UN fray – the Small Island States, the Least Developed States and parts of Africa. Brazil and South Africa, even though they were not in full alignment with the other BASIC States or the US, Japan, Korea, Malaysia, Indonesia, Korea … the other leading developing economies were still in the lead and the 27 Europeans were tripping over each other in trying to prove that they are on the side of the good and thoughtful. Oh well!
The final result was not satisfying at all and one could have imagined a united Europe with clear power to muscle its way to more concrete results – not just something that boils down to an agreement to meet again.

Kyoto is dead for all practical purposes with Canada, Japan, Russia, New Zealand, joining the US on the sidelines – so it is disingenuous to say that the individual EU States saved the day.

Please see the internal debate now in the UK:


Partner in British Coalition Criticizes Cameron’s Veto on Europe Treaty.

By 
Published: December 11, 2011, Printed in the New York TimesMonday,  December 12, 2011.
LONDON — Serious cracks appeared in Britain‘ s coalition government on Sunday, when Deputy Prime Minister Nick Clegg, a Liberal Democrat, broke with the government line and said he was “bitterly disappointed” at the outcome of last week’s European summit meeting.

Mr. Clegg told the BBC that the decision by Prime Minister David Cameron, a Conservative, to veto proposed European treaty changes left Britain in danger of being “isolated and marginalized” in Europe. He added that if he had been in charge, “of course things would have been different.”

Mr. Cameron vetoed the proposals early Friday after seeking, and failing to secure, safeguards he said were vital for the health of London’s financial sector. But with the 26 other members of the European Union either agreeing to the proposed plan outright or saying they would put the matter before their Parliaments, Mr. Cameron’s veto left Britain alone on the margins at a time of great upheaval on the Continent, with the European Union struggling to resolve its financial crisis.

On Friday, Mr. Clegg appeared to support Mr. Cameron’s decision, although he warned the Conservative Party’s anti-Europe wing against being too triumphant about the problems facing the European Union. But his stance hardened over the weekend, and on Sunday he appeared to have backtracked, or at least tried to finesse his explanation to show that was in line with his party’s pro-Europe principles.

In fact, Mr. Clegg told the BBC that when Mr. Cameron called him at 4 a.m. Friday with the news that Britain had vetoed the plan: “I said this was bad for Britain. I made it clear that it was untenable for me to welcome it.”

Mr. Clegg has already lost the confidence of many Liberal Democrats by appearing to betray the party’s position when he has supported the government on other issues, like increasing the amount of tuition colleges can charge.

After the summit meeting, many prominent Liberal Democrats went further than Mr. Clegg.

A former party leader, Paddy Ashdown, described Mr. Cameron’s veto as a “catastrophically bad move” and said it would do nothing to shield London’s financial district, the City, from future European regulations. “In the name of protecting the City, we have made it more vulnerable,” he said.

Lord Ashdown also warned that the move had alienated Europe in a way that would haunt the United Kingdom.

“The anti-European prejudice of some in the Tory party,” he said, “has now created anti-British prejudice in Europe.”

Mr. Clegg, a former member of the European Parliament, said he would now “fight, fight and fight again” to make sure Britain remained an influential force inside the European Union. He said he would resist “tooth and nail” efforts by some Conservatives to take the country completely out of the union, particularly since the United States has found Britain a useful conduit to Europe.

“A Britain that leaves the E.U. will be considered irrelevant by Washington and a pygmy in the world, when I want us to stand tall in the world,” he said.

Mr. Clegg criticized Conservatives who had hailed Mr. Cameron as a “British bulldog” for his tough line on Europe.

“There’s nothing bulldog about Britain hovering somewhere in the mid-Atlantic, not standing tall in Europe, not being taken seriously in Washington,” he said.

To which one Conservative member of Parliament, Mark Pritchard, retorted, “Better to be a British bulldog than a Brussels poodle,” The Associated Press reported.

Mr. Cameron, meanwhile, was welcomed as a hero by his party’s anti-Europe right wing. “Up Eurs,” was the headline in Rupert Murdoch’s populist, anti-European tabloid newspaper, The Sun, along with a photograph of Mr. Cameron in a Churchillian bowler hat, holding two fingers up to Europe — the equivalent of an American middle finger.

“He did what I would have expected Margaret Thatcher to have done,” Andrew Rosindell, a Conservative member of Parliament, said approvingly.

But Kenneth Clarke, the Justice secretary and the Conservatives’ most prominent pro-Europe member, said in a radio interview that Mr. Cameron’s veto was a “disappointing, very surprising outcome.” He said he would be listening carefully to the prime minister’s statement in Parliament on the matter on Monday.

As upset as he is, Mr. Clegg said he did not want the coalition government to collapse.

“It would be even more damaging for us as a country if the coalition government was to fall apart,” he said. “That would cause economic disaster for the country at a time of great economic uncertainty.”

Related:

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Posted on Sustainabilitank.info on December 7th, 2011
by Pincas Jawetz (pj@sustainabilitank.info)

Last night, in a private conversation Desertec came up and this sent me to look up the internet this morning and found that since the Israeli papers and the Club of Rome article, and things we picked up ourselves back in 2005,  the subject is very much alive and may be doing for the development of countries with arid space more then it is being dreamt up at the UN. In a nut-shell – with eventual loss of oil money income the countries of the desert will turn to exporting the sun and the sooner they start doing this the better off they will be.

Every year, each square kilometre of desert receives solar energy equivalent to 1.5 million barrels of oil. Multiplying by the area of deserts worldwide, this is several hundred times as much energy as the world uses in a year.

There are also significant amounts of wind energy in desert regions (see Sahara Wind).

Less than 1% of the world’s deserts, if covered with concentrating solar power plants, could produce as much electricity as the world now uses.

To bring the topic back to our website – we post here some of the many links we found with google’s help using the word Desertec:

  1. Desertec to start work on first solar plant in 2012 | Reuters

    www.reuters.com/…/us-desertec-morocco-idUSTRE79S2912011102…

    29 Oct 2011 – FRANKFURT (Reuters) – Desertec, the world’s most ambitious solar power project, is to start building its first power plant next year, a 500 

  2. Desertec Begins: 500 MW Moroccan Solar in 2012 | Green Prophet

    1 Nov 2011 – I remember when Desertec was dismissed as a wild idea that would never happen, just the pipe dream of the international network of scientists 

    3.  Desertec renewable energy project begins in Morocco, Egypt next (we honestly hope that this one is still in Egypt’s future)
    15 Nov 2011 – Morocco is set to be the starting location for a 400 billion euro renewable energy “Desertec” project. By 2050, the project is intended to satisfy 

and:

 cleantechnica.com/2011/11/01/dese…

 atlismta.org/online-journals/huma…

 www.guardian.co.uk/environment/in…

 www.treehugger.com/renewable-ener…

 blogs.ft.com/energy-source/2010/0…

 en.wikipedia.org/wiki/Trans-Medit…

 commons.wikimedia.org/wiki/Catego…

 www.azimuthproject.org/azimuth/sh…

 www.desertec.org/        http://www.desertec.org/news/          http://dii-eumena.com/

 www.desertec-india.org.in/          http://www.desertec-southamerica.org/

——————————————————————————————————————————————————

Desertec-UK is part of the www.stopclimatechaos.org/ coalition

Stop Climate Chaos

 www.trec-uk.org.uk/

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Posted on Sustainabilitank.info on November 13th, 2011
by Pincas Jawetz (pj@sustainabilitank.info)

Fareed’s Take: Only China can save Europe

By Fareed Zakaria, CNN, November 11, 2011

The European crisis that you’ve been reading about in the paper is worth watching carefully. In fact, it has now morphed into something much bigger than a European crisis – it could batter the entire global economy, which is pretty fragile anyway.

You’ve read a lot about Greece, but the problem in Europe is Italy. Greece is a nano-state; it makes up about 2% of the European Union’s gross domestic product. Italy, on the other hand, is one of the seven largest economies in the world. Its debts are greater than those of Spain, Portugal, Ireland and Greece combined. It has long been governed in an almost cartoonishly bad manner. Italy is too big to fail but might also be too big to bail. Even Germany might not be able to credibly bail it out along with all the other troubled countries. So what can be done?

I don’t think the leading proposals will work – creating Eurobonds or giving Brussels broader power to tax. They’re simply not going to happen. Governments oppose it and people oppose it. And anyway, creating a tighter European Union will take ten years. Markets needs reassurance now.

So I have a proposal: We need a big bazooka. Facing a similar crisis in 2008, then-Treasury Secretary Henry Paulson talked about the need for a sum of money large enough to scare markets into submission. A bazooka. But the problem is this: All of the EU combined doesn’t have one big enough. So who has the kind of money Italy needs?

Take a guess? They have $3 trillion in foreign exchange reserves. Yup, China. In fact, today, 10 trillion dollars of foreign exchange reserves are sitting around across the globe. That is the only pile of money large enough from which a bazooka could be fashioned.

The International Monetary Fund could go to the leading holders of such reserves – China, but also Japan, Brazil and Saudi Arabia – and ask for a $750 billion line of credit. The IMF would then extend that credit to the troubled EU economies, but insist on closely monitoring economic reforms, granting funds only as restructuring occurs. That credit line would more than cover the borrowing costs of both Italy and Spain for two years. The IMF terms would ensure that the two nations remained under pressure to reform and set up conditions for growth.

Now, the Chinese would have to devote at least half the funds. What’s in it for them? A new global role. This could be the spur to giving China a much larger say at the IMF. In fact, it might be necessary to make clear that Christine Lagarde would be the last non-Chinese head of the organization.

In a world awash in debt, power shifts to creditors. After World War I, European nations were battered by debts, and Germany was battered by reparation payments. The only country that could provide credit was the United States.

For America, providing desperately needed cash to Europe was its entry into the councils of power, a process that ultimately brought a powerful new player inside the global tent.

Today’s crisis is China’s opportunity to become a “responsible stakeholder” in the global system. If this doesn’t happen, hold on to your seat because we’re in for a rough ride.

For more of my thoughts throughout the week, I invite you to follow me on Facebook and Twitter and to visit the Global Public Square every day. Also, for more of my takes, click here.

======================================================

APEC currently has 21 members, including most countries with a coastline on the Pacific Ocean.

APEC member economies shown in green

APEC Members account for approximately 40% of the world’s population, approximately 54% of the world’s trade.

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Posted on Sustainabilitank.info on November 13th, 2011
by Pincas Jawetz (pj@sustainabilitank.info)

Europe’s real problem: Lack of growth

By Fareed Zakaria, CNN, written November 10, 2011 – posted November 13, 2011.

I was in Germany this week and the mood there is pretty grim: Europe is facing its most severe challenge since 1945. If the Greek crisis morphs into an Italian crisis – Italy being too large to bail out – the entire structure of post-World War II Europe could unravel.

Finally, European leaders seem to recognize that their strategy of kicking the can down the road has not worked. The result will not be a dramatic solution – that is not how Europe works – but, more likely, a series of steps that together will be more comprehensive than anything done before. But they will not address Europe’s core problem: a lack of growth.

The Europeans – by which I mean the Germans – are trying to find some solution to this crisis that will not let countries like Greece and Italy off the hook. Germans feel these countries need to feel the pressure – only then will they reform their budgets and their habits. So the solutions will be complex – trying to stop a crisis while not bailing out these countries entirely.

The real problem – however – is not so much that Greece has been unwilling to make sacrifices. It has made many. But Greece’s budget numbers look bleak because its growth forecast looks bleak. It needs to address a much larger question of competitiveness. What can the Greek economy do to attract capital and investment? And at what wage levels? These are questions most European countries will need to answer to fully solve their problems.

Italy’s economy has not grown for an entire decade. No debt restructuring will work if it stays stagnant for another decade.

Even Germany is not immune, with an average growth rate of only 1.5%. German officials know that with a declining population, in five to seven years the country is likely to grow at an annual rate of just 1%. That’s not much of an engine for Europe.

Europe needs a crisis agenda to get out of its bind, but beyond that it needs a growth agenda, which involves radical reform. The fact is that Western economies – with high wages, generous middle-class subsidies and complex regulations and taxes – have become sclerotic. Now they face pressures from three fronts: demography (an aging population), technology (which has allowed companies to do much more with fewer people) and globalization (which has allowed manufacturing and services to locate across the world).

If Europe – and, for that matter, the United States – cannot adjust to this new landscape, it might escape this storm only to enter another.

For more on this, read my column in The Washington Post. For more of my thoughts throughout the week, I invite you to follow me on Facebook and Twitter and to bookmark the Global Public Square. Also, for more of my takes, click here.

OP-ED CONTRIBUTOR to The New York Time MAURIZIO VIROLI – November 11, 2011.

Can Italy Put Berlusconi Behind It?

Silvio Berlusconi will fall, but his hold on Italy will remain until the country can undergo a moral awakening.

———–

OP-ED COLUMNIST to The New York Times, November 11, 2011, Paul Krugman:

Legends of the Fail.

With Italy following Greece off a cliff, it’s hard to see how the euro can survive. Now that the euro project is on the rocks, what lessons should we draw?

————-

Greece and Italy Seek a Solution From Technocrats

By RACHEL DONADIO

The question in both countries is whether the new leaders can succeed where their predecessors failed and dislodge the entrenched cultures of political patronage.

———–

Sovereign Debt of Euro Zone Turning Sour

By LIZ ALDERMAN and SUSANNE CRAIG

The debt crisis was fed by governments that borrowed too much, regulators that let banks treat the bonds as without risk and investors who viewed the bonds of all countries as solid.

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Posted on Sustainabilitank.info on November 6th, 2011
by Pincas Jawetz (pj@sustainabilitank.info)

Greece and Israel in a Changing Region
Wednesday, November 16, 2011, 16:00
Senate Hall, Feldman Conference Center, Building 301, Bar-Ilan University

Chair: Prof. Efraim Inbar, BESA Center
Dr. Aristotle Tziampiris, University of Piraeus
Hellenic-Israeli Strategic Cooperation in the Eastern Mediterranean
Prof. Amikam Nachmani, BESA Center
Greece and Israel: The Third Chance
Prof. Athanassios Platias, University of Piraeus
Strategic Development in the Eastern Mediterranean

This event will be held in English and is open to the public


Faculty of Social Sciences
Department of Political Studies

besa.center@mail.biu.ac.il, 03-531-8959
www.besacenter.org

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Posted on Sustainabilitank.info on October 25th, 2011
by Pincas Jawetz (pj@sustainabilitank.info)

openDemocracy is pleased to announce its support as a partner for the 2011 Club de Madrid annual conference entitled Digital Technologies for 21st Century Democracy next month. The conference, to be held at the Waldorf Astoria Hotel in New York City on November 8th and 9th, brings together more than 40 democratic former heads of state to discuss the impact of communication technologies and social media on democratic development worldwide.

The day and a half conference brings together an impressive list of names to analyse how information and network technologies are influencing and changing the world. It aims to take an “in-depth look at the opportunities and challenges posed by the increasingly complex relationships between governments, citizens and communication technologies – particularly as we aim for greater liberties and democracies that deliver.”

The Club de Madrid – an independent non profit organisation composed of more than 80 democratic former Presidents and Prime Ministers – will bring together political and business leaders, policy makers and scholars to the event. The full list of speakers, which includes openDemocracy founder Anthony Barnett, is detailed on the Club de Madrid website: www.clubmadrid.org/2011conference/?page_id=973

For further information about the conference and for instructions for press accreditation visit www.clubmadrid.org/2011conference.

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Posted on Sustainabilitank.info on October 6th, 2011
by Pincas Jawetz (pj@sustainabilitank.info)

From: Emma Ruby-Sachs – www.Avaaz.org  —-  avaaz at avaaz.org

The World vs Wall Street.

Thousands of Americans have non-violently occupied Wall St — an epicentre of global financial power and corruption. They are the latest ray of light in a new movement for social justice that is catching fire from Madrid to Jerusalem to NY, but they need our help to succeed.

The protesters are calling for real democracy that serves the people instead of corrupt interests who have captured the government. But they are under severe pressure from authorities, and the media is dismissing them as a small group of young extremists. If millions of us from across the world stand with them, we’ll boost their resolve and show the media that they represent a massive global movement for change.

This year could be our century’s 1968, but this time it must be a movement of all citizens, not just a few. Click to join the call for real democracy — a giant live counter of every one of us who signs the petition will be erected in the center of the occupation in New York, and live webcasted on the petition page:

www.avaaz.org/en/the_world_vs_wall_st/?vl

The Wall Street protests, and others emerging across the US and the world are the latest chapter in this year’s global people power story. In Egypt, people took over Tahrir Square and toppled their dictator. In India, one man’s fast brought millions onto the streets and the government to its knees — winning real action to end corruption. For months, Greek citizens relentlessly protested unfair cuts to public spending. In Spain, thousands of “indignados” defied a ban on pre-election demonstrations and mounted a protest camp in Sol square to speak out against political corruption and the government’s handling of the economic crisis. And this summer across Israel, people have built “tent cities” to protest against the rising costs of housing and for social justice.

From a distance, these national stories of dissent may seem disconnected. But when you look closely, it’s undeniable that a common thread is slowly weaving its way across the planet — people are worn down by a global economic crisis and have had enough of bad government and even worse policies devised by the corporations that pull their strings. Right now, their is a symphony for change echoing across the world.

Let’s join and build this movement today and bring all of our national stories together behind each country’s call for real democracy.  Avaaz will bring a giant live counter to the tent city in New York:

www.avaaz.org/en/the_world_vs_wall_st/?vl

In every uprising, from Cairo to New York, the call for an accountable government that serves the people is clear, and our global community has backed that people power across the world wherever it has broken out. We know how powerful we are when we unite across borders with one voice. It’s time for an end to captured leaders who answer to the richest tiny few, it’s time for a global movement for real leadership, real accountability and real democracy.

With hope,
the Avaaz team

————————–

SOURCES:

Demonstrations in Spain protest political parties and economic crisis (Washington Post)
www.washingtonpost.com/world/demonstrations-in-spanish-protest-political-parties-crisis-handling/2011/05/19/AFIYS86G_gallery.html#photo=1

Israel uprising: Beginning of an end (Press TV)
www.presstv.ir/detail/191558.html”>http://www.presstv.ir/detail/191558.html

Greece protests austerity measures (Washington Post)
www.washingtonpost.com/blogs/blogpost/post/greece-protest-austerity-measures-live-video/2011/06/28/AGIfF6oH_blog.html

Occupy Wall St – online resources for the occupation
occupywallst.org/

Occupy Wall St primer (Washington Post)
www.washingtonpost.com/blogs/ezra-klein/post/occupy-wall-street-a-primer

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Posted on Sustainabilitank.info on September 17th, 2011
by Pincas Jawetz (pj@sustainabilitank.info)

Occupy Wall Street Begins Tomorrow, September 17th, 2011.

By Laura Marcinek, Bloomberg, 16 September 2011.

Please see RSN Events Page for more information about Occupy Wall Street.  http://www.readersupportednews.org/news-section2/345-justice/7456-occupy-wall-street-begins-tomorrow-september-17th

Wall Street firms will be the target of a nonviolent demonstration in which organizers say they want 20,000 people to participate with tents, kitchens and “peaceful barricades.”

Dubbed “#OccupyWallStreet,” the goal of the protest in lower Manhattan is to get President Barack Obama to establish a commission to end “the influence money has over our representatives in Washington,” according to the website of Adbusters, a group promoting the demonstration. Organizers plan to start on Sept. 17 and want participants to “occupy” the area for “a few months,” according to the website.
“People have a right to protest, and if they want to protest, we’ll be happy to make sure they have locations to do it,” New York City Mayor Michael Bloomberg said yesterday at a press conference. “As long as they do it where other people’s rights are respected, this is the place where people can speak their minds, and that’s what makes New York New York.”
The New York City Police Department is aware of the protest and is “planning accordingly,” Paul Browne, a spokesman for the department, said in an e-mail.
NYSE Euronext, Deutsche Bank AG and Bank of New York Mellon Corp. are among firms with operations in the area. Bank of America Corp., JPMorgan Chase & Co., Morgan Stanley and Citigroup Inc. are among financial firms whose main offices aren’t on Wall Street.
Rich Adamonis, a spokesman for the NYSE, Duncan King of Deutsche Bank, and Bank of New York’s Ron Gruendl declined to comment on the demonstration.
A New Orleans-style jazz band led a rally against Wall Street yesterday from a dais in downtown San Francisco.
Protests also are planned for financial districts in Madrid, Milan, London and Paris, according to a bulletin from the National Cybersecurity and Communications Integration Center obtained by Bloomberg News. The NCCIC is part of the Department of Homeland Security. Chris Ortman, an agency spokesman, confirmed the bulletin’s authenticity.
The mayor is the founder and majority owner of Bloomberg News parent Bloomberg LP.
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Also –

According to reports Friday, Geithner ignored a March 2009 order that asked the Treasury Department to consider dissolving Citigroup, one of the nation’s largest financial services companies. Citigroup was among the worst hit by the financial crisis in 2008, and needed billions in bailout money to stay afloat.

new book by Pulitzer Prize-winning author Ron Suskind reveals that Treasury Secretary Timothy Geithner ignored a direct order from President Obama for the reconstruction of major banks during the financial crisis.

Many have criticized the Obama administration — and Geithner, the former president of the New York Federal Reserve, specifically — of being too focused on helping the banking industry after the recession. Critics on both the left and right argue that the government should not have bailed out banks that submarined the economy after issuing bad mortgages.

According to The Associated Press
, Obama acknowledged the Citigroup incident in an interview with Suskind. Obama tried to downplay his reaction upon discovering that Geithner had ignored his request, saying, “Agitated may be too strong a word.”

Obama went on to blame the slow-moving machinations of the federal government, saying, “the speed with which the bureaucracy could exercise my decision was slower than I wanted.”

For his part, Geithner told Suskind that “I don’t slow walk the president on anything.”

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An investigative reporter, Suskind won a Pulitzer Prize in 1995 while working for the Wall Street Journal.

His other books include “The Way of the World” (2008), which focused on national security, and “The Price of Loyalty” (2004). That best-seller was an account of the Bush administration and its first treasury   secretary, Paul O’Neill, that includes what became a widely cited remark by then-Vice President Dick Cheney: “Reagan proved that deficits don’t matter.”

Suskind’s 1998 book, “A Hope Unseen,” grew out of the series of articles that won him a Pulitzer for feature writing.

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Our comment – most financial and economics officials working in the Administration were connected in the past to Citibank/Citigroup. There is not much daylight coming through between them.

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Also,

from – WROCLAW, Poland — The United States has long been considered a financial adviser to the rest of the world. But these days, American officials come carrying baggage.

Financial officials from the United States, once called “the committee to save the world” after the Asian crisis in the 1990s, now find themselves uttering apologies for the harm caused to the world by the 2008 financial crisis and coating their advice to European nations with the knowing nod of the battle-hardened.

The change in tone was on display here on Friday when Treasury Secretary Timothy F. Geithner made an unusual appearance at a meeting of euro zone finance ministries. Mr. Geithner had been invited to offer some advice on fixing Europe’s sovereign debt and banking problems.

European leaders, who have been slow to react to the root causes of the problem, emerged from the meeting dismissive of Mr. Geithner’s ideas and, in some cases, even of the idea that the United States was in a position to give out such pointers.

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We found on internet the call:
September 17,2011 – Occupy Wall Street (Testify – Rage Against The Machine) http://www.youtube.com/watch?v=z8hxdc16hWw


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Posted on Sustainabilitank.info on September 9th, 2011
by Pincas Jawetz (pj@sustainabilitank.info)

You cannot leave the EURO but you can be expelled from the EURO says a
European Central Bank Legal Study from 2009. The Spanish European
Commissioner lashes out at Germany and The Netherlands leaders of the
CORE EUROZONE States that invoked recently this sort of ideas.

a. Brussels: ‘No one can leave the euro’ – 08/09/2011 17:34:05
—————————————————————————-
The European Commission has insisted that no member of the eurozone can
leave the single currency. However, a European Central Bank legal study
from 2009 argues that while voluntary withdrawal is legally not possible,
expulsion remains “conceivable”.

euobserver.com/9/113563

=======================

b.  Spanish commissioner lashes out at core eurozone states –
09/09/2011 09:18:14
—————————————————————————-
Spain’s European commissioner has lashed out at core eurozone states in the
wake of suggestions from the Netherlands and Germany that heavily indebted
members of the single currency could be booted out of the club.

euobserver.com/19/113568

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The International Herald Tribune as distributed in Europe – on September 6, 2011 had two large front page articles dealing with the Euro zone that make it clear that the deep belief is that Europe willl not solve its problems without looking like the USA. So – to solve the EUROZONE there must be a structural change that will bring the EU to have something like the US Constitution that replaced the weak Articles of Confederation that were not enough as it was shown by the civil war and the demise of the initial union of the 13.

The articles are:

(1)  the News Analysis – “To Break Logjam, E.U. veers towards U.S. model” – by Louise Story and Matthew Saltmarsh.

(2) from Paris – “Euro Zone admonished to act with one voice” – by Liz Alderman and James Kanter.

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Posted on Sustainabilitank.info on June 28th, 2011
by Pincas Jawetz (pj@sustainabilitank.info)

This lady replaces her country-man the disgraced Dominique Gaston André StraussKahn. She got prepared for the job while handling Euro’s crisis with Greece which is indeed the crises of Europe’s banks that are over-exposed to debt of the members of the EU.

The news these days in Europe is China’s move to buy Euro-debt and thus buy up European assets as well. This makes China a growing player in Europe’s financial system, as they already are in Latin America and Africa, not talking about the US itself. China will thus play the role of the IMF directly, and by gaining increasing power at the IMF as well.

China does this for many reasons but it is not the least of these reasons its Attempt to strengthen the world financial boat just to make sure that european banks do not go under. China needs them in order to keep growing worldwide while develop its own country internally.

With Ms. Lagarde’s appointment for 5 years, and doing what is needed while backing EU laggards, it seems just reasonable that next time around, or even at next year’s election of a new head of the World Bank, the major emerging States might feel strong enough to pick a choice that is different from what the old Transatlantic Alliance heads of State have in their   traditional minds formed at San Francisco in 1945 and later at Lake Success on Long Island, just outside New York City.

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Posted on Sustainabilitank.info on June 7th, 2011
by Pincas Jawetz (pj@sustainabilitank.info)

The World Economic Forum on Europe and Central Asia will be held in Vienna, on Tuesday, Wednesday and Thursday June 7-9, 2011.

Vienna, Austria: venue for Euro World Economic Forum

Above is the Vienna venue for the WEF meeting – the place will be surrounded by security forces to make it sure the place does not turn into a demonstrators haven. Vienna just survived attacks by German hooligans that came over to accompany the German soccer team playing the Austrians. Papers called them neo-Nazis making the Hitler salute. But those were just one segment of a possible barrage by protesters invoking financial reasons for disaffection with the EU, the US, and the results of government sponsored capitalism. Seattle comes to mind of what Vienna might look in a few days.

So, Schengen or no Schengen Austria took note of Denmark closing its borders for immigration reasons and closed its borders as well for Global Economics reasons as per this conference. In the Europe of today – what this means is that vehicles at border crossings will form long lines and have delays with border police checking papers. Same at airports, train crossings and boat landings. What do you do with those crossing on foot on village roads? Oh well – solutions will be found for them too and the idea of a united Europe is out the window because of mutual mistrust. How do you decide that someone is unwanted? Do you check their tatoos or haircuts? Do you have a policy discussion with them or take the example from Turkey and look up past records that made them deny to former Austrian Foreign Minister Ursula Plassnik her job as head of the OSCE – Organization for Security and Co-operation in Europe.

Will they let in UN Secretary General Ban Ki Moon, if he decides to show up, considering his leniency on UN member States positions on Human Rights? He will have declared his running for reappointment to his position for a new term by the beginning of the week and might indeed find this conference as a good venue for a revisit. He was years ago Korea’s Ambassador to Vienna and has friendly relations to Austria.

The Kronen Zeitung of Sunday June 5th carries two revealing pieces of “Readers Mail” that stress the difference between Denmark and Austria. In both cases the argument goes that Denmark is closing its borders in order to safeguard its own citizens from the effects of migration caused by the events in the Arab World, in the Austrian case this happens always – the Austrian taxpayers’ money is used in order to safeguard foreign political and economic leaders and nothing is done when the issue is the security of the Austrian citizen. This comment hides the fact that Austria is suffering from bands of EU citizens from Eastern countries that come to enrich themselves from break-ins here but nothing is done to check their entree. Oh well, what do you do with the fiction of this Union?

The above mention of the closing of Austria’s borders officially is because of the  June meeting of the World Economic Forum will convene more than 500 leaders from business, government and civil society to discuss policies and reforms aimed at their views of rebalancing the global economy.

The diverse yet highly interdependent economies of Europe and Central Asia have reached a critical juncture, according to experts at the World Economic Forum.

While the advanced economies of the European Union are experiencing fiscal austerity and slower growth, emerging economies further east and in Central Asia are grappling with the pressures of rapid growth.

In addition to these regional challenges, Europe and Central Asia must respond to far-reaching global events such as the ‘Arab Spring’ and the earthquake in Japan.

The objective of the Vienna meeting is set out in the statement from the European Commission’s Communication on Innovation Union: “Europe’s competitiveness, our capacity to create millions of new jobs to replace those lost in the financial crisis and, overall, our future standard of living depend on our ability to drive innovation in products, services, business and social processes and models,” it says.

Will the Washington of President Obama push for a similar meeting between the USA and the fast growing economies of Latin America – the backyard in the Western Hemisphere ?

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The Underground open protests are being organized:

Attack WEF summit in Vienna, Austria, June 2011!
Smash imperialism and all its institutions!

please see: cpgml-news.blogspot.com/2011/06/a…

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