Greece Outside In

Friday, March 29, 2013

Cats comes home to Harlem (and brings The News along)

John Catsimatidis stood on a traffic island in the middle of Harlem, clutched the lapels on his suit jacket and flung it open with mock drama. The Greek-born, billionaire grocery store mogul-cum-mayoral hopeful had come to lead the Daily News on an emotional, three-hour tour of his childhood stomping grounds. BY DOUGLAS FEIDEN NEW YORK DAILY NEWS JOHN CATSIMATIDIS stood on a traffic island in the middle of Harlem, clutched the lapels on his suit jacket and flung it open with mock drama as he tested an unconventional new slogan for his uphill Republican mayoral campaign: “Gotham City has the Batman,” he roared above the din and whir of traffic at Broadway and 136th St.

READ THE ORIGINAL POST AT www.nydailynews.com

Germany Gains as Europe's South Struggles

With Germany increasingly reliant on emerging markets to fuel its export engine, some Europeans worry that Berlin's long-term interests lie not in helping countries such as Greece and Portugal back on their feet, but rather in preventing them from doing further harm.

READ THE ORIGINAL POST AT online.wsj.com

Will Regulations Kill A Vibrant New York State Industry?

Growth is hard to come by these days. But there is a New York industry that is booming: The Greek yogurt industry. The problem, however, is that the growth in this vibrant industry may be ebbing, due to regulations that constrain the supply of milk.

READ THE ORIGINAL POST AT www.forbes.com

François Hollande wants 75% company tax on salaries over 1m euros

French president said he hoped new proposal would push companies to lower executive pay while the economy is suffering

French president François Hollande may have finally found a way to tax the really rich: by making their companies pay.

In a televised interview on Thursday night, he said he wants companies that pay their employees more than €1m (£840,000) to pay 75% tax on those salaries.

The proposed tax, which needs to be approved by parliament, replaces one of Hollande's signature campaign proposals: to tax individuals who earns more than €1m at 75%. That was thrown out by France's highest court.

Hollande said he hoped the new proposal would persuade companies to lower executive pay at a time when France's economy is suffering, unemployment is soaring and employees are being asked to take pay cuts.

While the president reiterated his goal of stopping the rise of unemployment this year and restarting growth, he offered no specific new economic policies. "The tools are there. We need to use them fully," he said on France-2 television.

The new payroll tax would last only two years. Companies already pay payroll taxes that equate to at least a 50% rate.

"What's my idea? It's not to punish," Hollande said. "When so much is asked of employees, can those who are the highest-paid not make this effort for two years?"

Hollande's original plan for a 75% tax on individuals was also conceived as a largely symbolic measure. It was likely to have brought in €100m-€300m – insignificant when set against France's €85bn deficit.

As Hollande's popularity slides, he has struggled to convince the French he is doing enough to boost growth – or redistribute wealth, as his leftist base wants. Going after high earners may win over voters.

French growth has been stagnant for nearly two years and unemployment, rising for 19 months in a row, is at 10.6% – a level not seen since 1999. Consumer confidence slipped again in March after a brief rise this year. The national statistics agency, Insee, found this month that the French are more pessimistic about the economy's prospects for the coming year than any time since the survey began in 1972.

But some may wonder if adding another tax on companies as he is trying to encourage growth is the right message.

Despite the poor economy, Hollande has avoided imposing the deep spending cuts that other European countries such as Greece and Spain have imposed. And he said again on Thursday he would not go down that path – even though France will miss its deficit target of 3% of gross domestic product this year.

"Prolonging austerity will risk not reducing the deficits and bring the certainty of having unpopular governments that populists will eat alive," he said.

France has largely avoided the unrest seen in European countries that are experiencing deep recessions, but the layoffs are piling up and have spawned some protests. On Thursday, about 100 workers from a car factory that PSA Peugeot Citroen wants to close stormed the offices of France's leading business lobby, Medef. Police said dozens were arrested.

READ THE ORIGINAL POST AT www.guardian.co.uk

If You Make More Than $1.3 Million, Watch Out

PARIS — French President Francois Hollande may have finally found a way to tax the really rich: by making their companies pay. In a televised...

READ THE ORIGINAL POST AT www.huffingtonpost.com

Samaras meets Stournaras as Greece prepares for new troika visit

Kathimerini

Samaras meets Stournaras as Greece prepares for new troika visit
Kathimerini
Fearing a worsening climate in the eurozone after the tense negotiations over the Cyprus bailout, Samaras held the talks with the aim of finalizing Greece's position on sackings and transfers in the civil service, how the emergency property tax will be ...

READ THE ORIGINAL POST AT www.ekathimerini.com

Cyprus: lessons from a small disaster | Editorial

In some areas, the handling of this small disaster sets worrying new precedents for the entire bloc; in others it confirms the hold of some very regressive thinking

There was no run on the banks as they reopened in Cyprus, a vacuum that some reporters were left bravely trying to fill for their rolling-news channels. But to focus on Limassol's queues (or lack thereof) would be a mistake. The policies imposed on Nicosia over the past fortnight will have larger consequences beyond a few patient customers. In some areas, the handling of this small disaster (Cyprus is worth a mere 0.2% of eurozone GDP) sets worrying new precedents for the entire bloc; in others it confirms the hold of some very regressive thinking.

Of the precedents, the most striking must be the introduction of capital controls. At Larnaca airport signs have gone up notifying passengers that they cannot take more than €1,000 (£845) out of the country. Bags are reportedly being searched, too. Bank customers cannot withdraw more than €300 on any day. The cashing of cheques is prohibited by the central bank. In a 17-nation monetary bloc, one of whose main purposes is to facilitate the free flow of capital, this is an astonishing new phenomenon. There is a very good reason why Greece, Ireland, Portugal and Spain did not succumb to such policy temptations, despite the distress at their financial institutions: it renders Cyprus less than a full member of the single currency. Savers can put their money in any of the 16 other euro nations and suffer no such restrictions; so why would they stick their euros in a bank in Limassol, rather than Lyons or Leiden? To all intents and purposes, a euro in Cyprus is now worth less than one in Belgium. Finance minister Michalis Sarris may claim that "we are talking about a matter of weeks", but Iceland brought in capital controls in 2008; five years later, it still has them.

In principle, there's nothing wrong with restricting the flow of hot money, despite what the IMF used to say. Limits on withdrawals were surely why there was no stampede on Cypriot banks yesterday. Indeed, it's a shame that the island did not apply them years ago to limit the foreign funds pouring in. But to introduce them now, within a monetary union, is to tear a hole in its very fabric. Imagine if banks in Middlesbrough were no longer honouring cheques or withdrawal slips, even though their counterparts across the UK were still doing so. In the first instance, that would hasten the end of banks in Middlesbrough; in the second, it would undermine the credibility of the UK financial system, and raise questions about why the Bank of England could not support one of its larger towns.

Couple that innovation with the notion that bank depositors now have their money at risk, for arguably the first time since Lehmans fell over. When EU officials let slip that the Cyprus "bail-in" is the template for future sovereign crises, what they mean is that taxpayers should no longer have to pay for bankers' losses. This may have been cheered by some on the free-market right. But it neither describes what has happened in Cyprus, which is still taking a €10bn loan from European taxpayers, nor does it seem much of a principle if applied to half a Mediterranean island. The Troika would hardly gamble this way if a giant like Madrid came under renewed fire. On the other hand, one would hate to be a small saver in a peripheral euro nation at the moment. Pensioners of Slovenia, our thoughts are with you.

Then again, the euro club has made rather an unappealing habit of bullying the weak nations and protecting the strong over this crisis. It is impossible to believe that any big country, no matter how distressed, would be subject to a grab on the insured bank deposits of its people, such as was proposed in Cyprus last week. Which leads to the fourth and final depressing conclusion: the euro area clings on to brutal austerity as its crisis-fighting tool of choice – despite all the evidence that it simply doesn't work. "We saved the banks but are running the risk of losing a generation," said the president of the European parliament this month. The same could be said of the entire euro: the project trundles on, but a lot of people have been cast overboard.