STUPIDITIES OF ECOFIN

In ECOFIN’s meeting, the stupid Greek Presidency welcomed the final adoption of the Bank Recovery and Resolution Directive. “Together with two other key texts recently approved by the European Parliament (the Single Resolution Mechanism and the recast Directive on Deposit Guarantee Schemes), the BRRD completes the legislative work underpinning the Banking Union and constitutes a very important achievement in restoring confidence in the EU’s banks after the recent financial crisis”. “Establishing these common rules for a clear and comprehensive bank recovery and resolution regime, the BRRD is crucial for ensuring long term financial and economic stability, and for reducing the potential costs of possible future financial crises for public funding and for taxpayers”, saidJohn Stournaras, Greek Minister of Depression, George Orwell’s Miniplenty.BANKING UNION IS A STUPID SOCIALISTIC SCHEME TO FORCE THE CAPITAL TO GO TO THE FOUR PIGSEurokleptocrats create a stupid banking union to socialize the debts of banks of PIGS. The next step will be the introduction of stupid eurobonds. By the time France is hit by the crisis, Merkel will no longer be able to refuse this stupid demand.  Basil Venitis,venitis@gmail.com,http://venitism.blogspot.com,@VenitisThis development will ultimately lead to a stupid system that has little in common with a market economy. ECB and ESM will then direct the flow of capital into countries where it no longer wants to go. This will result in growth losses throughout Europe, and money will continue to be thrown out the window of PIGS. Furthermore, it will create considerable discord because it makes closely allied countries into creditors and debtors.During the working breakfast, Finance Ministers welcomed the new French Minister of Finance, Michel SAPIN, and the Vice President Sim KALLAS now covering ECOFIN business. The usual debrief on the Eurogroup and the economic situation followed on the basis of the Commission’s spring economic forecast. MERKEL AND BARROSO, BONNIE AND CLYDE OF EUROPE!Merkel and Barroso are the Bonnie and Clyde of Europe, robbing banks!  Breaking with previous EU practice that depositors' savings are sacrosanct, EU now robs depositors.  That infuriates depositors in eurozone's weaker economies and investors fearing a precedent that could reignite market turmoil.  Robbing depositors is definitely a no-no. If you can do this once, you can do it again.  Eurozone has deteriorated to a robber of depositors.BAILIN ROBS DEPOSITORS IN COLD BLOOD!NEW EU LAW CYPRUSES YOUR BANK ACCOUNTS!The bailin mechanism will stabilize a failing institution so that it can continue to provide essential services, without the need for bailout by public funds. Recapitalization through the write-down of liabilities and their conversion to equity will allow the institution to continue as a going concern, avoid the disruption to the financial system that would be caused by stopping or interrupting its critical services, and give the authorities time to reorganize it or wind down parts is what is called bail-in.In short, if a bank needs to resort to bailin, authorities will first bailin all shareholders and will then follow a pre-determined order. Shareholders and other creditors who invest in bank capital (such as holders of convertible bonds and junior bonds) will bear losses first.Deposits under €100,000 will never be touched: they are entirely protected at all times.Deposits of natural persons and SMEs above  €100,000 will1) benefit from a preferential treatment (depositor preference) ensuring that they do not suffer any loss before other unsecured creditors (so they are at the very bottom of the bail-in hierarchy) and2) Member States can choose to use certain flexibilities to exclude them fully.The outcome of the compromise supports a regime which, to the furthest extent possible, places the responsibility of covering bank losses on private investors in banks and the banking sector as a whole.In some cases, in particular in the context of a systemic crisis, it may be necessary to depart from that principle and allow for the use of public funds to finance bank resolution. There is the necessary flexibility in the compromise text to do that.SHIFTING LOSSES OF GERMAN AND FRENCH BANKS TO THE FOUR MISERABLE PIGS!Economic confidence is often the most fragile of things. Whether anything happens torobbing depositors,Fourth Reichhas fired a shot across every Europeandepositor. Given that interest rates already pay a derisory return,thanks to Quantitative Easing, ordinary savers may prefer keeping notes under themattressto risking a bank depositrobbery. AEurokleptocraticmafiahas left contagion risk stalking Eurozone.Large investorswho found Cyprus an attractive climate for business have already set their eyes on otheroffshore centers. The future prosperity of Europe is increasingly being held hostage by amafiaof Eurokletocratsrooted in denial. Their tragically deluded solution is more Europe,despite a democratic deficit, vast swathes of unemployment,and a lost generation of young jobless citizens.The Council discussed the proposal to amend the Parent Subsidiaries Directive (2011/96/EU), which aims at addressing tax avoidance by parent companies and subsidiaries in different Member States, by countering the double non-taxation of corporate groups deriving from hybrid loan arrangements. This rule is included in the first part of the Commission’s amending proposal, after its splitting on the basis of a Presidency compromise package aimed at closing the ‘hybrid loan mismatch’ loopholes, generating important losses of revenues in our countries and thus taking a tangible step forward in the fight against tax fraud and tax avoidance. The remaining part of the amending proposal deals with common anti-abuse provisions for the proper functioning of the Directive. “After today’s constructive discussions, the Council is close to an agreement on this important file and we have asked experts to examine the text as necessary in order to reach this agreement by the ECOFIN in June”, underlined Stournaras.An ECB bazooka cannot restore competitiveness to PIGS, but would only encourage profligacy, kleptocracy, and metastasis of the cancer of socialism. European Stability Mechanism (ESM) is a joke. ESM’s finances depend on the very same countries that it is supposed to bail out. This isn’t stability, but a Ponzi scheme!The Single Resolution Mechanism (SRM) givesthe commission ultimate authority over the eurozone’s ten thousand banks, with responsibility to pull the plug on a shaky lender and the authority to overrule its home state.Merkel says: In my view, this proposal gives the commission powers it does not possess according to current EU treaties.Schäuble warns EU to respect the limits of the law or risk major turbulence.  Barnier hoodwinks Fourth Reich cannot afford to wait for treaty change, which is typically an arduous process that can take years. Barroso wants the resolution regime, commanding three hundred staff, to begin from January 2015.Fourth Reich’s economic catastrophe is unfolding so slowly that it has come to seem like business as usual. Socialists managed to convince ECB to bring out the bazooka, in other words, undertake massive purchases of government bonds to resolve the crisis. Furthermore, the Council exchanged views on the proposal for a stupid Directive on Financial Transaction Tax (FTT), - on the basis of a stupid Presidency note on the current state of play and a joint statement by Ministers of Member States participating in enhanced cooperation in the area of FTT. Stournaras stressed that the Greek Presidency is ready to carry forward work on this basis.Never before, the stupidity of the European Commission was as prevalent as with FTT!  It’s now obvious that EC is the #1 enemy of Europeans and must be abolished. The stupid financial transaction tax (FTT) is a euthanasia pill for financial markets.  Since eleven Eurozone countries adopted this stupid tax, all major financial institutions of these countries move to Zurich and New York. Basil Venitis,venitis@gmail.com,http://venitism.blogspot.com,@VenitisBrussels has declared a war against London by imposing FTT on transactions of FTT-zone financial institutions brokered in London, the financial center of Europe!  This is a good reason for Britons to vote for brexit.  This is it!  Britons are mad as hell, and they cannot it take it from EU anymore.  Barroso should take FTT and shove it!As requested by the 11 Member States that proceed with thisstupid tax, the proposed Directive mirrors the scope and objectives of the original stupid FTT proposal put forward by the Commission in September 2011. The stupid approach of taxing all transactions with an established link to the FTT-zone is maintained, as are the rates of 0.1% for shares and bonds and 0.01% for derivatives. As always, the rates will be astronomically raised later.  Don’t forget VAT started at 5% and now is at 23%!Whenever the European Commission (EC) does something very stupid, it calls it smart.  Smart has become a European euphemism for very stupid!  EC declares FTT is very smart!  Jose Barroso hoodwinks that when applied by the 11 Member States, this Financial Transaction Tax is expected to deliver revenues of 30-35 billion euros a year.No way Jose!  FTT will deliver losses of one trillion euros! 90% of all major financial institutions of these countries will move to Zurich and New York. The European Commission has issued new proposals on a financial transaction tax, making it crystal clear that financial institutions in member states such as the United Kingdom, outside the FTT zone, can and will be taxed.

According to the commission proposal the tax will be due if any party to the transaction is established in a participating member state, regardless of where the transaction takes place. This is the case both if a financial institution engaged in the transaction is, itself, established in the FTT-zone, or if it is acting on behalf of a party established in that jurisdiction.

Eleven nations have already signed up to participate in a tax on financial transactions and will proceed by the enhanced cooperation mechanism. Britain and 15 other members of the European Union will not introduce the tax. We now have it in black and white that the commission wants to tax financial institutions in the UK even though they are not within the FTT zone.

The commission proposal is clearly targeted to tax financial services in the City of London even though the UK government does not want to be one of the participating member states. This is a deliberate assault on the City of London. The UK government will have no say on this tax system but businesses within its borders will have burdened by this FTT. The commission obviously ignores the American cry of no taxation without representation – they have ignored the lessons of history and will in time face rebellion.

This tax will help push financial services outside the EU altogether, to New York, Switzerland, and other growing financial centers around the globe. This proposal is to introduce a financial transaction tax just in EU. However, we live in a global economy, if we become uncompetitive through taxation or regulation, people simply move their businesses elsewhere. To do this would be an act of Kamikaze economics.

These novel and unilateral theories of tax jurisdiction are both unprecedented and inconsistent with existing norms of international tax law and long standing treaty commitments. There is a high risk that their adoption could lead to double and multiple taxation, a deterioration of international tax co-operation and trade protectionism.Allied to EU financial regulation, this financial transaction tax will do a lot of damage to London.  What is happening here is the EU is taking an opportunity to bash the financial sector, and doing it in the most crude and harmful way. Another important issue here is the crucial rate of taxation.  This taxation is just the beginning, because the FTT tax rate will be ratcheted up over the coming years to squeeze more money from the financial services industry.As far as the Commission’s in-depth reviews of macroeconomic imbalances in the Member States published in March are concerned, the Council adopted conclusions, in which it underscores the need for policy action and commitment to structural reforms in all countries faced with macroeconomic imbalances, especially those affecting the smooth functioning of the Euro-area, and invites the Commission to present well-focused and consistent recommendations to address these.Moreover, the stupid Presidency and the Commission debriefed the Council on the main outcomes of the G20 Finance Ministers and Central Bank Governors meeting, and the annual spring meetings of the IMF and the World Bank that took place in Washington D.C. from 10 to 13 April.In the margins of the ECOFIN, two important meetings took place: The annual European Investment Bank (EIB) governors’ meeting and the Ministerial Dialogue with Candidate Countries, where the Economics and Finance Ministers of the EU met their counterparts from the candidate countries – Turkey, Vardaska, Montenegro and Serbia – for their 16th economic policy dialogue.
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