The ECB’s new checks are seen as the last chance to come clean for the euro zone as the bloc tries to set up a single banking framework, known as banking union. The debate opens amid ebbing political enthusiasm for banking union – originally planned as a three-stage process involving ECB bank supervision, alongside an agency to shut failing banks and a system of deposit guarantees. It would be the boldest step in European integration since the crisis. “We have to find a solution now,” said Michel Barnier, the EU Commissioner in charge of financial regulation, urging faster progress in the slow talks. “The next financial crisis is not going to wait for us.” ANGLO-GERMAN AXIS? In one sign of the divisions, Britain has repeatedly refused to sign off on the first pillar of the banking union framework, allowing the ECB monitor banks. Having earlier agreed, London now wants additional assurances from ministers this week that Britain, which is outside the euro and polices its own banks, will not face interference from the ECB-led euro bloc. Britain is likely to find a sympathetic ear in Berlin, which wants to keep London on side in its push to prevent stricter EU emissions rules to protect its luxury car makers. Before the ECB takes over as supervisor late next year, it will conduct health checks of the roughly 130 banks under its watch. This is the nub of the problem facing finance ministers at the two-day talks. With the euro zone barely out of recession, a failure to put aside money to deal with the problems revealed could rattle fragile investor confidence and compound borrowing difficulties for companies, potentially killing off the meek recovery.
Bershidsky on Europe: Ireland Exiting Bailout
“It is an extremely difficult balance,” Social Democratic Danish Prime Minister Helle Thorning-Schmidt told Reuters in an interview. “We had some reforms that have been seen as quite harsh, but they have also been necessary. “I think we have found the right formula, not to be popular because we have not actually reached that yet, but to do the right thing for the country,” she said. Austria’s Socialists lost votes last month, though they remain the largest party. Italy’s center-left Democratic Party, which now heads a shaky left-right coalition, bled votes to the anti-establishment 5-Star protest movement in a February election and is driven by factional squabbling. In Greece, Ireland and Spain, center-left parties are paying a high electoral price for having supported public pay and pension cuts required by international creditors. FEWER MEMBERS, LESS MONEY In Britain, the opposition Labour party is still distrusted because it presided over a deregulated financial market bonanza that ended in the crash of 2008, wrecking the reputation for economic competence once built by Tony Blair and Gordon Brown. In France, one of the few countries with an absolute center-left parliamentary majority, Socialist President Francois Hollande is deeply unpopular as his government dithers between old-style tax-and-spend policies and half-hearted welfare and labor market reforms, satisfying no one. With the membership and funding of mainstream parties dwindling in many countries, the center-left has rarely kept pace with new vectors of political action via social media and grassroots initiatives. Some of the center-left’s woes may be temporary. When voters tire of center-right governments implementing austerity policies and scandal and attrition in office take their toll, the pendulum may swing back to the mainstream opposition. But the center-left can no longer offer much prospect of a rosier future through state intervention. There are fewer fruits of economic growth to redistribute, globalization continues to exert downward pressure on wages and working conditions in developed countries, and the demographics of ageing societies with shrinking workforces make welfare benefits and pensions ever harder to sustain.
Europe must “finally recognize that it is an immigration continent” and set up “a legal immigration system” along the lines of those functioning in the U.S. and Canada. Shultz called on Germany in particular to let in more refugees: Europe’s most economically powerful nation can afford it, he said. Europe, however, is not likely to soften its immigration policies: Anti-immigrant parties are on the rise throughout the continent. In France, nationalists from the Front National have just won a closely-watched local election, confirming fears that they could emerge as a leading party in the European elections. Though a more open immigration policy could save lives, it is politically unpopular. Banks’ exposure to sovereign debt grows According to the European Central Bank, government bonds account for 10 percent of banks’ assets in Italy and 9.5 percent in Spain, up from 6.8 percent and 6.3 percent respectively in early 2012. In Portugal, banks have increased sovereign debt holdings, too. Banks mainly hold their own governments’ high-yielding paper. Despite recent developments in the sovereign debt markets, government bonds are still considered risk-free and banks are not required to build up reserves against them, so much of the extra liquidity provided by the ECB ends up invested in these securities. The practice, while logical as a series of day-to-day business decisions, is fraught with danger for the euro area’s banking system: Banks in a number of countries have already required bailouts because they held too much overvalued government debt. Richard Branson accused of leaving U.K. for tax reasons A story in the Sunday Times titled “Goodbye Britain, I am a tax exile,” accused billionaire Sir Richard Branson of not paying any U.K. taxes on non-British business operations since moving to his private Caribbean island, Necker, despite Branson’s avowed patriotism and disapproval of tax emigration.
Analysis: Not much left for Europe’s left
Levinson went so far as to shutter the company, destroying its servers entirely. People using my service trusted me to safeguard their online identities and protect their information, Levison wrote in a press release last Wednesday . I simply could not betray that trust. The Lavabit case is the best known example of a company willing to go to extreme lengths in order to protect its customers privacy. Since Lavabit has fallen (as has Silent Circle’s Silent Mail service), many journalists and business people have speculated that foreign e-mail providers might have policies that would theoretically be more resistant to government intrusion,particularly in Europe and especially in Germany and Switzerland , which have strong data protection and privacy laws. But a closer look at German law in particular reveals that a German e-mail provider certainly wouldn’t offer more protectionand wouldlikelyoffer lessthan a similar American e-mail provider. In recent weeks, Ive set up e-mail accounts at two alternative mail services, and I’m considering switching away from Gmail to one or both of these companies as my primary personal e-mail account. ( Heres my PGP key .) While there are many choices out there, were going to focus onone American service (Riseup.net) and one German service (Posteo.de)to better understand what foreign privacy policies state and what their legal requirements actually are. I chose Riseup because it’s a longstanding US-based alternative for the privacy-minded and Posteo because it’s a similarly marketed German alternative .Like nearly every other e-mail provider, both offer POP and IMAP support as well as a webmail interfacebut they’re very different in the promises that they make. Clearly, properly encrypted e-mail offers the best security for messages both in transit and at rest. But as many Ars readers who have acted as informal tech support for their non-techy friends and family can attest, relatively few people are going to be encrypting all their e-mails by default anytime soon. So the next best thing might just be to choose an e-mail provider that will collect as little of your information as possible and will not easily turn over what other information it does have, such as IP logs or even user e-mail accounts themselves. (And yes, you can roll your own mail server or have proper hostingbut a lot people want just turnkey e-mail. Again, think about what your family members use.) In terms of privacy, anything is better than Google, I’d guess, Ralf Bendrath, a senior policy advisor to a German member of the European Parliament, told Ars.