Economy & Finance

Tiffany: + 25.8% profit and renew the NY flagship

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Tiffany-Co

TIFFANY

The jeweler Tiffany stores the second quarter with profits of $ 144.7 million, an increase of 25.8% compared to the same period of 2017.

In the three months ended July 31, revenues amounted to 1.08 billion dollars, an increase of 12%. The biggest growth concerns the Asia-Pacific, the second most important market, which recorded a + 28%. In Japan, Tiffany scored a + 11% while in the Americas (first market) the increase in sales was 8%. Europe is at the bottom with a 5% increase (-1% in comparable stores).

In the quarter, earnings per share were $ 1.17, while analysts expected $ 1.01 and a turnover of 1.04 billion.

The listed company in New York has revised upward the earnings estimates for the fiscal year end (January 31, 2019), which now rose from 4.5-4.7 dollars per share to 4.65-4.8 dollars . The forecast is based on a hypothesis of revenue growth at a rate between 5% and 9%.

Commenting on the results, CEO Alessandro Bogliolo recalled that Tiffany is preparing to renovate the iconic New York flagship building, on the corner of 57th Street and Fifth Avenue, open since 1940. In granite and limestone, with influences Art Déco and steel doors, is characterized by a bronze sculpture depicting Atlas carrying a watch on the shoulders (in the picture).

Work to create a new luxury shopping experience for brand loyalists should start in the spring of 2019 and finish in the fourth quarter of 2021.

During the renewal, Tiffany will temporarily expand the retail area in the adjacent space, formerly Niketown (6 East 57th street). The planned capital expenditure is equal to a percentage between 1% and 2% of annual revenues for three years, from the fiscal year that begins on February 1, 2019 (approximately 250 million dollars, assuming revenues in line with last year exercise, amounting to $ 4.2 billion).

Kathy Kiefer

 

 

 

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Greece: Meaningful Economic Reforms Could Come Through BRICS And Russia?

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brics-leaders-photo-courtesy-of-apec

 

The sounds of champagne decorking and exuberant cheers among Syriza volunteers, supportive voters, and their struggling-but-comfortable socialist middle-class base within the intelligentsia and literati, could be heard across Athens’ cafes in the clean areas of town. Election results were finalized this evening in Greece, with a clear Syriza victory.

But anyone expecting any meaningful change for Greece should hold their breath until the new government makes (or fails to make) the right relationship with Russia, Turkey, and BRICS.  The politics of the aesthetic and the symbol, substituting for actual program and platform, is big in Europe.  That includes that of the ‘radical’ left, which has for a long time been used within Euro-Communist strains in Europe to maintain the same old status quo.  Maybe this time will be different.  Maybe not.  But again, this will hinge mostly on their attitude towards Russia, Turkey, and the BRICS New Development Bank.Greek Elections

Sunday’s snap parliamentary elections in Greece have resulted in a solid victory for the so-called coalition of the radical left, Syriza party. This is the result which many Greeks but also Russia had hoped for and, in its own way, supported.  Likewise, the pro-Russian and “anti-EU sanction” party of France, the National Front, has echoed this desire to see the radical left coalition take the election [1].  This is another country to join Hungary – with a decidedly right-wing ruling party – in opposing the sanctions on Russia, the first of three of which are scheduled to expire this coming March.

Likewise, the change of discourse gives a popular mandate which Europe can use, especially if it spreads to Spain through Podemos, to justify any needed change of direction regarding anti-Russian sanctions, and amicable resolution of the ongoing conflict in Ukraine.  The legitimating mythos of democracy is an important one in Europe, and European elites who favor either stability or Eurasian integration now have another chip to bring to the bargaining table in their ongoing struggle with the pro-US European Atlanticist elites.

The position and direction of Greece in the EU is critical, and the Syriza position that its government would not support sanctions on Russia marks a significant turning point.  How or in what way this will come to fruition in the coming weeks and months, however, remains to be seen.  Last summer, before increased US pressure on Europe, at least nine EU countries had signaled they were willing to block further sanctions against Russia [2].  A day later, they voted to go ahead with them.

The Kremlin’s political support on the tactical level within Europe is generally rooted in anti-EU and Euro-sceptic parties and movements, tending to be of the Right in Northern and Eastern Europe, and Leftist in Southern Europe.  This is therefore important at least on the point about sanctions and the conflict in Ukraine.

But there is more.  The outcome of this election is key, but not so much for ideological reasons. Syriza leader and winning candidate Alexis Tsipras’ public statements, and the new Syriza platform were nothing for dedicated anti-capitalists – or even EU reformers – to be particularly excited about [3] .

The language used to describe the less-than-reformist platform of the Syriza Party is more radical than the actual, or rather literal, meaning of the program would seem to justify [4].  Absent is a call to nationalize any industries, let alone key industries, or industries of scale.  There is a ‘promise’ to create a paltry 300,000 new jobs, in a country of 11 million people and an official unemployment rate of 26% [5].  Along with other critical industries presently in private and foreign hands, today Greece is the second largest gold mining country in Europe, and is projected to have the capacity to overtake Finland (the largest) in 2016 [6].

Why is there no call from Syriza to nationalize this critical industry (or any other industry)?  Greece ought to have among the largest – or at least fastest growing – supplies of gold in their central bank in their neighborhood, and eventually in all of Europe.  They could almost mine themselves out of debt, but they do not own their own gold mines and yet are in massive debt – paper money, printed on Brussels’ dictates, of which gold makes only a fraction of, is ‘lent’ to Greece, which it must repay through terms that are impossible.  If Greece owned its own gold, depositing the gold in their central bank, it could ‘Grexit’ tomorrow, and print Drachma’s.  It could ‘money multiply’, or monetize the gold, setting the value of the Drachma on a 3-1 ratio with the Euro, but holding one Euro worth of gold for every 100, 500, or even 1000 Drachma’s printed.

This move would provide plenty of liquidity, and a sovereign Greece would in relative time be able to re-industrialize along an import-substitution basis (ISI), choose their own trade partners, and, with this gold and productive capacity, even become a regional hegemon in their own right, between strong Turkey and weak Italy.  This type of fractional reserve banking, solidly based in a precious metal, would be opposed to the monetization of foreign currency reserves – followed by endless and unjustifiable central bank emissions.  Even at those figures it would be more conservative than what the EU presently does.  As Sir Mervyn King, former Governor of the Bank of England once said “Textbooks assume that money is exogenous”… “In the United Kingdom, money is endogenous” [7]. We can add that this is true of the whole western banking establishment as well.

But what about Greek’s Central Bank anyhow?  Well, there really isn’t a sovereign institution in Greece like a central bank to put that gold into.  To the extent that there is one, it is privately owned as an S.A share company (S.A Corp) similar to the Federal Reserve in the US [8].  But in fact, there is another even bigger problem, for Greece here, and Syriza’s platform and program doesn’t address either one of them.

The S.A Corp that exists parading as the ‘Bank of Greece’, is in fact primarily just an oversight committee that regulates Euro-dollar emissions to other private banks in Greece based on the consumer price index.  Its actual role was so superfluous, that they also put the ‘Bank of Greece’ in charge of regulating insurance companies.  In actual fact, the Bank of Greece’s role as a central bank was superseded by the European Central Bank (ECB) in 2001 [ibid.].

One cannot iterate enough what a massive problem this is for Greece.  The lack of their own central bank, let alone one that is not publicly owned and operated as a socialized utility, is a double problem which Syriza has no programmatic answer for.  This guarantees continued subservience and vassalage to the EU, and without a way of working at least around this problem (and still staying in the EU), by building a program of national development around a relationship with the BRICS New Development Bank (NDB), Russia, and Turkey – then Syriza will not be able to come through on its campaign promises.  That may seem like politics as usual, but for Greece, it will mean something monumental.

In fact Syriza’s win may have been too big for its own good, with a less sweeping victory, it would have had to form a government with the New Democracy party, and would be able to play the pass the buck game of parliamentary politics.

Let us assume a probable enough course, and put aside anything ‘extraordinary’ like socialization of key industries, and a nationalized central bank.  Now, if or when Syriza fails to resolve Greece’s sovereign debt crisis and the related solvency issues, by failing to make a better relationship with Russia and BRICS, then the Greek masses will experience a massive cultural shift in terms of their relationship with the nominally (or aesthetically apparent) “radical” left.

That new relationship will be a decidedly bad one, and workerist, anti-capitalist and Euro-skeptic politics will only find expression through  rising Anarchist,  but also Social-Nationalist parties like Golden Dawn.  Golden Dawn itself received 6.3% of the vote, with 17 seats in parliament.  This means that about one out of every nineteen people voted for the purportedly ‘far right’ Golden Dawn.  The GD, interestingly, calls both for nationalization of the gold industry, as well as other major industries, and the central bank [9].  Those are among the real economic changes that would liberate Greece, and yet on the left, only the Communist Party (KKE) of Greece holds a similar position [10].

That only the most radical parties have the most sensible and honest solutions to Greece’s present problem, presents a special problem for Greece.  In Toynbee’s Study of History he develops the concept of civilizations going through stages of growth and later disintegration, as well as abortive and failed civilizations. It would seem that a hallmark of a disintegrating, abortive, or failed civilization is when the most sensible solutions are entirely marginalized and only held by those on the radical fringes.  To make things worse, the GD and the KKE exist on such extreme ends of the present political compass, and notionally reify the now mythical construct of ‘communism vs. fascism’ that is of gigantic significance in Greece, making any joint efforts on these practical matters probably impossible.

It is interesting then that while entirely ignoring the gaping problems of the magnificently deficient Syriza platform, that some of the call for a leftist victory was to challenge the specter of the rising ‘fascism’ of Golden Dawn.  But if they were really concerned about rising ‘fascism’, then they would realize that ‘fascism’ succeeds when social-democratic parties of the ostensible ‘left’ are seen as complicit with the bankers and the foreign or international elites.  But such complicity is precisely what Syriza will not only be accused of, but will objectively be guilty of, if they do not do one of two things: make a ‘Grexit’, or make a deal with BRICS including an energy deal with Russia and Turkey.

There are a few ways that the new Greek government may think it can game the emergent multi-polar system – but this assumes they can make any decisions on a sovereign basis.

Syriza is likely planning to go into further debt but spend the money differently.  In this scenario they think they can leverage the threat of going along with the Russia-Turkish gas line (Southstream 2.0/Nabucco Revisited) in order to get permission from the Troika (European Commission, International Monetary Fund, European Central Bank) to use more debt in order to mitigate austerity.  Likewise, the US and EU are thinking here that after jerking Turkey and Russia around on a gas deal with Greece, they can keep Greece loyal in the end, give them some of what they want while frustrating the Russian plan.  Let’s set aside that this is an extremely short term painting over of rust, or kicking the can down the road, or whatever analogy you prefer, and will backfire in a few short years.

This will mean a readjustment plan that will focus on higher taxes on the small merchants, and even larger local chains like Veropoulos markets.  This will push them to the brink of destruction. This will favor both big foreign companies, and for a very short while, regular wage earners. This will be justified on the notion that increased wages will result in increased spending, and because the major foreign corporations will not be challenged by the EU/Corporate friendly Syriza coalition (in this hypothetical scenario).  This will be aimed at justifying higher import tariffs on the perishable and durable consumer goods they buy in bulk, in order to pay for the foreign debt, which means small businesses will have to buy the things they sell at higher costs.  Few will cry many tears for Veropoulos, but similar to the French economy until the early 90′s, most of the retail transactions are carried about by non-franchised ‘mom and pop’ stores.  This will likely push them all into the hands of Golden Dawn.

Also, these small stores will be taxed higher, justified on their increase in sales we will be told is possible due to a tapering of either unemployment or wage deflation.

But in fact there will be wage deflation, which is why these small businesses won’t likely see an increase in sales, even though their new tariffs and taxes will be politically justified on precisely that.

Why?  Because the EU and the ECB is going to push for quantitative easing – yes QE for the EU.  It is almost just too eerie that this revolves around Greece. The problems in Greece today by and large are a result exactly of the ECB dumping its problems onto Greece, when it defrauded Greece by making it responsible for the repackaged junk bonds it acquired from the US back in 2008.

And the way the US was able to repackage those ultimately was through its own QE1.  This, as we all remember, printed at least a trillion dollars backed up by nothing, creating another asset bubble, further devaluing the dollar, and did not resolve the US’s chronic economic problems – though the rich did get richer [11].

As Bloomberg’s Jana Randow reports just last Thursday,” ECB President Mario Draghi overcame opposition on the central bank’s Governing Council on Jan. 22 and unveiled a plan to buy government bonds as part of an asset-purchase program worth about 1.1 trillion Euros ($1.3 trillion). The prospect for stimulus sent the euro tumbling earlier in the month to its lowest level against the dollar in a decade […] Fed-style QE in Europe will need to overcome both practical and political challenges. Companies get most of their funding from bank loans rather than selling bonds, which is more common in the U.S. That makes European financial markets smaller and much less liquid.” [12]

But certainly, Syriza won’t go for that, right? Wrong – in fact their whole ‘recovery’ plan relies on it.  “Tsipras has pledged to persuade the ECB and the euro region to write down the value of their Greek debt holdings so that he can boost public spending and create jobs. He said this week that excluding Greece from the QE program would be punishing a country that already suffered years of austerity.”, writes Marcus Bensasson and Nikos Chrysoloras just last Friday [13].

On Syriza’s own website, page of the platform, they clearly say for themselves:

“ We call for immediate action in the popular decision, and a strong negotiating mandate to: …

*Agreement on “European New Deal”, with public investment for the development and funding from the European Investment Bank.

*Quantitative easing by the European Central Bank, with direct purchase of government bonds.” [14]

Tsipras, however, must know that a write down violates the ECB’s own rules.  Or maybe there is another agreement to be made?  As unlikely as it seems, we will have to wait and see. What we know already is that Tsipras has been saying that Greece represents a unique case, and has resorted to special pleading (as an aside, then, what will Podemos of Spain say?).

It’s a mess, and if the correct geopolitical orientation towards BRICS is not made without further serious delay, then it will simply cause more and more layers of society to become disaffected entirely with any kind of “Social-Democracy 2.0″ and even ‘the left’ itself.  Again,  only the stand-out Golden Dawn brand will be able to capture the politically willing, with the KKE struggling to distance itself from the similarly branded Syriza.

This will set the stage for a civil war or a military coup unless there is a geopolitical refoundation.  Such a military coup may not be the worst scenario for Greece in such a worst case, provided that  it is aimed at a real national renewal.

That would mean by definition that it is outside of the control of the Troika, involves nationalization of the major industries, and that it follows the model of popular anti-colonial and anti-capitalist , pro-social(ist) nationalist military coups like Chavez’s first Bolivarian attempt in Venezuela, Otelo Saraiva de Carvalho’s Carnation Revolution in Portugal, Gaddafi’s Green Revolution in Egypt, or Nasser’s 23 July Revolution in Egypt.

For a number of reasons including the culture of Greek’s military, in the sphere of aesthetics, references, and language, such a coup is more likely to have the trappings of the ‘far-right’, while outside of the super-structural sphere its progressive character will rest upon its actual social and economic program.  This will entirely muddle the political discourse, and the old-new-left and the old-left outside of Greece may be prone to oppose it quite vocally.  Inside of Greece, in this scenario, the left will already have been mostly discredited, thanks to Syriza.

Still, these are all very painful and difficult processes, which still very easily can be avoided.  So, what is one possibly that doesn’t signal a Grexit, but which can relieve the real pressure on Greece without relying on the stupidity of placing liquidity ahead of solvency?

A geopolitical refoundation and reorientation for Greece can solve much of this.  First, we must recall that when Gazprom announced the cancellation of the South Stream line last month, what they actually did was declare a new project into being which works with Turkey [15].  This line goes through to the border with Greece.  This places Greece in a prime position as the first point of entry of Russian-Turkish gas into the whole EU system.  This gives them leverage they never had before, as well as the opportunity to extract transit fees, and more.  Furthermore, this geopolitically and geostrategically brings Greece not only closer to Russia, but to its longtime rival (but actually long-time partner), Turkey.

Moreover, why couldn’t Greece play by the rules as they are written and maintain its S.A corporation posing as a ‘central bank’ under ECB control, but found a second bank, state owned, of its own?  They would only need to initially ascribe to it functions which legally, technically, did not violate the ECB’s control over the ‘Bank of Greece’.

That Syriza might do all of this, is not unreasonable, and in fact it seems quite possible.  There is indeed evidence that this can happen.

This possibility entirely turns on its head the whole Syriza-Greece story.  And yet it is admitted that the ECB probably should look favourably on a Syriza win as it has promised against a Grexit, and so it likely does.  There is also the part about taking Russia and Turkey along for a frustrating ride along the course of playing at energy routes.  Moreover the penetration of the ETUC (European Trade Union Confederation) into the ranks of Greek organized labor limits and influences the possibilities of Syriza to act more decisively, and so acts as another level of control of Brussels upon Greece, ‘from the left’ [16].   All of this adds to existing evidence that the EU and the Troika considers Syriza to be its own social-pressure control valve upon the Greek masses.

But still we are confronted with a thickening plot that would explain why Russia and the pro-Russia parties, regardless of political orientation on the compass, have uniformly supported a Syriza victory.  One thing we know for sure is that the Russians are quite adept, serious strategists and long term planners, who use a whole array of strategic tools borrowing from game theory and more.  They know something.

We must we recall that the Syriza party has called the Greek joining of the sanctions against Russia “catastrophic for Greek agriculture,”.  They accused the foreign policy of the present government as being stuck in a Cold War mentality, and following the dictates of Brussels and Washington.  This might all just be talk, but it’s perhaps more likely to be a cipher.  Syriza has openly criticized EU deference to the Neo-Nazi and US backed coup in Ukraine.

A geopolitical refoundation seems to be one way that it can avoid the fate of Bulgaria, who suffered long under EU threats and seems, at least for now, to have reneged on its commitment to build South Stream.  Greece and Turkey already do several billion Euros a year in trade, and there are no EU provisions that could interfere with the ‘South Stream 2.0′ that stealthily makes its way into Europe dressed in the attire of ‘Nabucco Revisited’.  The structure of related Turkish energy companies doesn’t violate the terms of the EU’s Third Energy Package of 2009.

So far, we have the groundwork laid for a very interesting Russian plan with Greece.  One can only wonder, if this is true, at the level of secret and stealth assurances and dealings that the Russian FSB has made with elements of the Greek military and intelligence apparatus, and how this could have been conducted under the radar of the CIA, NSA, MI6, and their European proxies.

What we mentioned in the above was the possibility of Syriza establishing in Greece a sovereign bank, under a different name.  In fact, in the Syriza platform, is an interesting development.  Indeed, it’s the New Development Bank – not the one the BRICS has founded as a rival to the IMF, but one which Syriza seeks to establish in Greece [17].  That’s a strange choice of words then, isn’t it?  In a realignment scenario, Greece establishes ‘a’ New Development Bank to an act as the interface with the actual New Development Bank of BRICS.

Ideally, Greece is allowed to have its debt ‘written down’ by the ECB, or restructured in a creative way that also involves aid from the BRICS’ New Development Bank which interfaces with Greece’s ‘New Development Bank’.

In this best case scenario, it works out well for the Eurasian Economic Union (EEU) and the European Union, as well as Greece.  There are really many ways to skin this cat, there are any number of arrangements that Russia and China can make with an EU that begins to emerge from the shadows of US control.  Indeed, these can have the same remunerative value (or better!) than what Greece ostensibly owes to the EU.  Peaceful integration with the rest of Europe and Eurasia is one of Russia’s long term strategic and developmental goals, one which the US has tried to frustrate with the coup it staged in Ukraine a year ago.  In a strange way then, what happens in Greece may very well be intimately connected to what happens on the battlefield in Ukraine and Syria.

Of course, we cannot forget that in many ways this debt is a fiction, and can be mostly erased, and the Greek economy can be built up today.  Greece just has to say to the present EU doctrines and the old guard what Nuland said to the EU.  Hit the delete button and watch all those 0′s which weigh so heavily on the computer screens at the central banks offices just disappear.

The US is the main obstacle for anything normal to happen between Europe, Greece, and Russia.  The election of Syriza may prove to be a major turning point, but how things will play out remains to be seen. Despite what the EU’s old guard, in service of the US, had in mind for Greece with its Syriza trick – Syriza’s Greece working with Russia and BRICS may just end up being the upset that flips the whole script.

Joaquin Flores is an American expat living in Belgrade. He is a full-time analyst at the Center for Syncretic Studies, a public geostrategic think-tank. His expertise encompasses Eastern Europe, Eurasia, and he has a strong proficiency in Middle East affairs. Flores is particularly adept at analyzing the psychology of the propaganda wars. He is a political scientist educated at California State University. In the US, he worked for a number of years as a labor union organizer, chief negotiator, and strategist for a major trade union federation.

The statements, views, and opinions expressed in this article are solely those of the author and do not necessarily represent those of EMerging Equity.

Greece: The dangerous game

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Eurogroup President Jeroen Dijsselbloem visits Athens

Greece: The dangerous game

Greece’s new prime minister has until the end of the month

to reach a deal on the country’s debt

European officials and governments are much more anxious about the Greek drama than they are admitting publicly. They fear a miscalculation in the weeks ahead could precipitate a full-blown crisis.

The past week has witnessed the opening tense and abrasive rounds. Nerves have been left frayed. The new radical-left Greek government said it would no longer negotiate with the troika: officials from the International Monetary Fund (IMF), the European Union (EU) and the European Central Bank (ECB).

That did not go down well with European officials.

Greece’s government also said it would refuse new loans from the EU and the IMF. That raised the question of how it would finance itself.

Ministers also began working on plans to raise the minimum wage and that led to concerns that Athens was no longer sticking to the terms of its bailout agreement.

“Start Quote

A majority of voters in a eurozone country have rejected the terms of a bailout agreement authored in Brussels and Berlin”

End Quote

Then it was announced that the new government had hired the financial advisory firm Lazard to negotiate a big cut in Greece’s debt.

It led the German chancellor Angela Merkel to issue a terse statement: “I do not envisage fresh debt cancellation”.

By the end of the first week, the new Greek prime minister, Alexis Tsipras, decided he needed to offer some reassurances. “No side,” he said, “is seeking conflict, and it has never been our intention to act unilaterally on Greek debt.”

Greece, he said, would not renege on its debt.

None of that disguises the fundamental rift.

Looking for allies

A majority of voters in a eurozone country have rejected the terms of a bailout agreement authored in Brussels and Berlin. What is at stake here is not just the fate of Greece and whether it stays in the eurozone, but the authority of Germany to define the narrative in Europe and in the eurozone.

This week the real negotiations begin. Both Mr Tsipras and his finance minister, Yanis Varoufakis, start trips looking for allies. Mr Tsipras will visit Rome on Tuesday and Paris on Wednesday, but there are no plans to visit Berlin.

There is urgency to these talks. Greece’s bailout agreement expires on 28 February. If it is not extended, the European Central Bank would have to stop lending Greece money. Also, Athens would not get 7.2 billion euros, the next tranche of bailout money, without a review of its reform programme being completed.

The new government has boldly said it would not accept new IMF-EU loans, prompting questions over how long its finances would last without a deal.

So what is Alexis Tsipras’s strategy and can it work?

Firstly, his government wants to negotiate directly with European governments and not through EU officials. They are making their initial pitch to Paris and Rome, because they believe those governments are more sympathetic to Mr Tsipras’s argument that austerity has been a disaster for Europe.

Berlin will be wary of any hints at concessions that undermine the existing bailout agreements.

Mr Tsipras will argue that Greece’s debt levels at 175% of GDP are unsustainable. Although some European officials pretended otherwise, most of Europe’s leaders knew that to be true. However, Athens will face significant resistance to any write-down of Greek debt. Angela Merkel has made it clear: “There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece’s debts”.

Spanish anti-austerity party Podemos has been gaining traction in recent weeks

The German voters also seem determined to resist any further concessions. 76% oppose any reduction in Greek debt. The Finns, the Dutch, the Spanish – to name just a few countries -are not open to writing off any Greek debt.

Complex negotiations

The best that Athens could expect would be for its existing bailout agreement to be extended. There might also be a willingness to push back the maturity of some of its debt and perhaps to tie debt repayments more closely to growth.

All of that would lower the cost to Greece, but Germany would only consider these steps if the new government sticks to the reforms agreed under the existing bailout programme.

And that goes to the heart of why this will be such a complex negotiation. Syriza came to power in Greece by saying that the bailout conditions had broken the Greek economy and caused a humanitarian crisis.

Already the new finance minister has stopped the privatisation of two ports and is moving to increase the minimum wage and rehire some public sector workers. If all the new government’s plans are implemented, they would amount to a 13.5 billion euro stimulus programme and that would clearly breach the existing bailout agreement.

‘Elections change nothing’

The head of the group which manages the eurozone, Jeroen Dijsselbloem, has warned “taking unilateral steps or ignoring previous arrangements is not the way forward”.

Alexis Tsipras believes the existing deal is a disaster and says he has a democratic mandate to demand changes. And this exposes democracy’s limits within the European Union. The German finance minister Wolfgang Schaeuble says: “Elections change nothing. There are rules”.

The president of the European Commission Jean-Claude Juncker said “there can be no democratic choice against the European treaties. One cannot exit the euro without leaving the EU”.

But Greek voters and their hardship cannot simply be ignored. It risks only strengthening the anti-establishment parties elsewhere in Europe, many of which are sceptical of the whole European project.

Greece’s new prime minister has said he would halt plans to privatise the ports of Piraeus and Thessaloniki

So there is a clear incentive to reach a deal. It might just be possible to extend the maturity of Greek debt and to link the servicing of the debt to growth and to soften some of the existing bailout terms in exchange for a commitment to further structural reforms.

Fear of ‘Red Spring’

But here’s the problem: Alexis Tsipras will have to sell any agreement to his voters. On the campaign trail, he promised that his first day in office would mark the beginning of the end of austerity. He promised too that the country’s debts would be reduced. At the very least he will have to demonstrate he has eased austerity.

Angela Merkel and other leaders will not just be mindful of voters unwilling to make any further concessions to the Greeks. They will be fearful that if they help Athens, other eurozone countries will come looking for help with their debt or their austerity programmes.

Spain, in particular, will play hardball. It faces an electoral challenge from Podemos, a similar party to Syriza. On Saturday, its leader Pablo Iglesias said “the wind of change is starting to blow in Europe”.

The Spanish prime minister, Mariano Rajoy, will not accept anything which strengthens the radical left in Spain. And Europe’s leaders will be wary of giving any encouragement to a so-called “Red Spring”.

European leaders will do everything they can to keep Greece in the eurozone. Whatever they might say publicly, they would be fearful that a Greek exit would be the start of unpredictable events that would shake the EU and undermine the eurozone.

Officials will also want a deal, because the current crisis lays bare some of the fault lines in Europe today. There is an undeniable north/south divide in the eurozone. There is a growing revolt against the German remedy for the crisis. Without some compromise, there is the chance of that opposition testing the unity of the eurozone.

It is why one senior EU official said these next few weeks will be as serious as anything that occurred in the dark days of 2011 and 2012.

Kathy Kiefer

 

Op-Ed: Greek finance minister demands new game

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31_greece2_r_w
Jeroen Dijseelbloem ,Yanis Varoufakis

Athens – The meeting between Yanis Varoufakis, the new Greek finance minister, with the finance chief of the eurogroup, Jeroen Dijseelbloem, ended in a very tense press conference.

Varoufakis announced that he would not negotiate with the Troika, the European Central Bank(ECB), the International Monetary Fund(IMF) and the European Union(EU). He rejected the entire idea of extending the bailout. For his part, Dijsselbloem rejected any “unilateral” moves pending Greece’s next deadline February 28 to negotiate an extension of the bailout. In effect Varoufakis has decided that he will not play the old game in which the rules are all in favor of the Troika, and Greece is in effect forced to accept whatever crumbs the Troika decides to give them or else lose funding altogether. Why continue playing such a losing game?Perhaps, the EU leaders are not aware that Varoufakis has co-authored a textbook on Game Theory with a new edition coming out right now.

The Greek government is continuing to talk with EU leaders and after Vourafakis’ shock, the next move is to assure everyone that everything will be OK that satisfactory negotiations can go ahead. Prime minister Tsipras phoned the chief of the European Central Bank to assure him that Greece sought an agreement. An anonymous official said:“The discussion was conducted in a good spirit and it was confirmed that there’s a willingness to find a mutually beneficial solution for Greece and for Europe.”Tsipras has also said that he never intended to act unilaterally and that he was certain that Greece and its creditors will ultimately reach an agreement. I fail to see how the decision not to negotiate with the Troika or seek an extension of the present bailout is not a unilateral action. He also pledged to pay back Greece’s debt to the Troika of creditors. How he can do this while also keeping a campaign promise to write off some of the debt is difficult to fathom. Perhaps, there is no rule about telling the truth in this game but surely that is true of political games in general.

The mechanism by which negotiations will take place have not been established. Varoufakis said only that it would be through EU leaders rather than the Troika. Varoufakis seems to be acting on that idea as he met with the French finance minister, Michael Sapin, in Paris only to travel on to London the next day. Tsipras after visiting Cyprus, will join Varoufakis in Rome and then will meet with European Commission President Jean-Claude Juncker as president Holland of France on Wednesday. The two are on a whirlwind tour to gain support for their move to get the new game rolling. France and Italy may become allies in helping set up new negotiations as they both oppose the austerity rules imposed and demanded by countries such as Germany. However, neither country agrees to a “haircut” or writing off part of the Greek debt as Varoufakis and Tsipras have demanded. The Greek Economy Minister Georgios Stathakis claimed that Greek debt repayments should be linked to its economic growth as a means of keeping its payments under control. Greece will face about $11 billion US in repayments this summer.

Troika officials continue their threats against Greece. Erkki Liikanen pointed out that Greek banks — already facing huge problems as well as precipitous declines in the value of their stocks — will be cut off from funding if there is no deal reached by February 28. In order for about 7 billion euros in funds to be released as part of the bailout, an agreement must also be reached by the same date. Without more funds Greece will not likely be able to meet the 10 billion euros in repayments scheduled for the summer. Varoufakis says Greece will continue issuing short-term treasury bills even though it already reached the 15 billion euro limit agreed to with the Troika. The Greek government obviously does not accept that agreement. Greek banking stocks already fell 40 percent since the elections last Sunday. Neither Varoufakis nor Tsipras are scheduled to visit Berlin or Frankfurt. They are opponents in this game.

The Troika refuse to accept that the game has changed at all. The old rules and conditions must obtain even if it forces Greece to Grexit. Tsipras appears to believe that his opponents led by the Germans are bluffing. Several German groups have warned Tsipras what will happen if he does not negotiate with the Troika for an agreement by February 28th. The Institute of German Economic Research (IW) says that a clear mechanism must be put in place to force Greece out of the euro zone if it fails to comply with the reforms agreed to: “Financial support must be cut off if Greece does not comply with its reform commitments. If Greece is going to take a tough line, then Europe will take a tough line as well.”Another group ZEW research said that EU authorities should emphasize that they are willing to let a Greek default run its course rather than cave to pressure. The EU should make it clear that they will not be blackmailed. Jürgen Matthes, IW’s international director, claims Europe should punish any violators of euro zone austerity policies so that discipline will be maintained: “We have set up a crisis prevention strategy that relies on conditionality. If this is not enforced in the Greek case, everybody will say they want the same thing. Syriza succeeded in selling an illusion that Greece can end the reforms and stop paying the debt, and still stay in the euro. This is impossible. If they do that the European Central Bank cannot accept collateral guaranteed by the Greek government. This will force the Greeks to return to the drachma and that will cause massive disruption. There will a government default, corporate defaults and bank defaults. The financial system will simply break down.” .Those are the rules, according to the Troika supporters and we will continue to play that game not a different one with new rules established by Syriza. German Finance Minister Wolfgang Schaueble said he was just sick of defending his position:“We have given exceptional help to Greece. I must say emphatically that German taxpayers have handed over a great deal. In contrast to 2010, the financial markets have faith in the eurozone. We face no risk of contagion, so nobody should think we can be put under pressure easily. We are relaxed.”In other words if you are not going to play our game you had better take your players out of our euro zone because ours is the only game here.

Tsipras and Vourafakis may be able to convince other European leaders that the old game led by Germany is outdated and failing and actually threatening European growth. Vourafakis’ complaints and policies are supported by standard Keynesian theory and also by many eminent liberal economists such as Paul Krugman. Perhaps Greece can gain enough support to create a new game. However, it is more likely that unless Syriza caves it will end up in a Grexit. So far Syriza has not revealed what its game plan is if a Grexit happens.

Kathy Kiefer

MILAN EXPO 2015 – green economy

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MILAN EXPO 2015 – green economy

What is meant by a “Green Economy”?

The green economy is defined as an economy that results in reducing environmental risks and ecological scarcities, and that aims for sustainable development without degrading the environment. It is closely related with ecological economics, but has a more politically applied focus. A UNEP Green Economy Report argues “that to be green, an economy must not only be efficient, but also fair. Fairness implies recognizing global and country level equity dimensions, particularly in assuring a just transition to an economy that is low- carbon, resource efficient, and socially inclusive.”

A green economy is also a methodology of economics that supports the harmonious interaction between humans and nature and attempts to meet the needs of both simultaneously. The green economic theories encompass a wide range of ideas all dealing with the interconnected relationship between people and the environment. Green economists assert that the basis for all economic decisions should be in some way tied to the ecosystem.

Green economists perceive nature as being extremely valuable and seek to maintain it. Supporters of this branch of economics are concerned with the environment and believe that actions should be taken to protect nature and encourage the positive co-existence of both humans and nature. Emphasis is placed on creating value through quality rather than on accumulating material items and money.

A feature distinguishing it from prior economic regimes is the direct valuation of natural capital and ecological services as having economic value and a full cost accounting regime in which costs externalized onto society via ecosystems are reliably traced back to, and accounted for as liabilities of, the entity that does the harm or neglects an asset.

Green Sticker and eco-label practices have emerged as consumer facing measurements of friendliness to the environment and sustainable development. Many industries are starting to adopt these standards as a viable way to promote their greening practices in a globalizing economy. Green economy and the related field of ecological economics share many of their perspectives with feminist economics, including the focus on sustainability, nature, justice and core values.

Green economy is becoming one of the main economic development strategies worldwide. Combining tradition and innovation, sustainability and quality, its production model is a way to achieve competitiveness. Investing in eco-technologies enables firms to undertake productions with higher value added and to acquire positions of leadership internationally in a sector whose economic and technologic potential is very high.

This is why a green economy is the object of several private industrial enterprises in all advanced countries, where the shortage of natural resources, the production of energy from renewable sources and the recycling of production and consumption waste have by now become topical; therefore it is precisely from environment preservation that the development and the re-launch of economy must start, so as to ensure its sustainability. Green economy seems to be a promising way to get out of the economic crisis and to attain stability.

I have found that 2014/2015 is the “European year of green economy”: the European Union has the goal to increase the number of jobs related to the environment, by supporting businesses in their transition towards a green economy which enables them to compete globally. In Europe nine firms out of ten have so far resorted at least one measure to improve energy or resources efficiency, thereby obtaining energy and materials saving and remarkable waste reduction.

The Green economy plays an essential role for economic development, both for the important contribution it makes to production and employment and for its integration with the rest of the industrial system; it may amount to a chance for relaunching our competitiveness.

In Europe, Italy is technologically in the lead in the energy efficiency sector, which currently counts over 300,000 firms and 3 million workers. Its promotion should be directed to the most promising and innovative industrialised sectors. For instance, the electric sector, which has experienced exceptional development from renewable sources, has obtained incentives that are among the highest in Europe (10,7 billion euros until 2013). The most relevant contribution to the reduction of environmental impact and of the use of fossil fuels has so far come from the development of energy generation from renewable sources, notably in this sector.

The scenario is positive in terms of competitiveness: 17.5% of the businesses which have invested in green technologies export, whereas the percentage is only 10% for non-green businesses. This result can be ascribed to the higher efficiency of production processes, to the consequent reduction of costs and to the improvement of the quality of products and services offered. Benefits can be seen in employment as well: as much as 38% of recruitments in 2013 come in fact from firms that invest in green technologies and these are again the businesses that recruit the highest number of youth below 30.

A leading role for green economy is played by the territory and by the various small and medium businesses that have been so cunning and ready as to invest in eco-technologies in order to generate innovations related mainly to renewable sources and to energy saving, to waste reduction and to limitation in the use of materials and water. Such businesses, especially those of the chemical sector (the one which drives Italian businesses to the top of the European lists of green economy with 41% of businesses that have invested in sustainable technologies and production processes and reduced its environmental impact), textile and clothing, automotive, food, wood and furniture, are in charge of the green reconversion of the Italian production system.

Innovation and quality have been the answer to the economic global crisis for small and medium businesses, because the higher efficiency that they imply has stimulated home and foreign demand, so leading to an increase in GNP and in the number of jobs.

Expo 2015 will be an opportunity to present the development of a model based on green economy, where it is advisable to invest at all levels, from energy to mobility to consumption, in order to get out of the deep economic crisis. The industrial system, composed of very flexible and innovative small and medium businesses, can integrate new technologies in products that can provide green solutions to the actual problems of consumers. By adopting this production model can increase the qualitative profile of processes and products so as to catch new business opportunities and to re new consumers and new markets, not only in Italy but also abroad.

Kathy Kiefer

EXPO MILAN – 2015 Nutrition: energy to the world

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EXPO MILAN – 2015  

Nutrition: energy to the world

The protagonists of the food chain, farmers, experts on nutrition, food companies and logistics wonder how to provide healthy and safe food to the world population that will be reach 9 billion people by the year 2050.

The present production system, the storage and the consumption of food doesn’t meet the present and the future world needs. What we eat is the consequence of the history of the human kind and reminds us about the importance that some kinds of food have had for the development of many cultures such as the wheat in Europe, the corn in Mexico, the rice in Asia and the millet in Africa.

Every community has its own food habits that are affected by the environmental, weather and cultural conditions: in some poor countries they always eat the same type of food since it can easily grow and meals can’t vary since it would be too expensive. That produces a lack of vitamins and proteins and all the precious nutritive substances that make a healthy organism.

We can talk about food sustainability nowadays that is making all suitable choices that reduce the impact on the environment and protect the human rights. The nutrition of modern human beings contains very few nutrients, tastes and diversity so we must go back to our traditions and culture in order to offer a sustainable diet with a low environmental impact aimed at protecting the bio-diversities and that can be appreciated from the cultural and economic point of view, safe and healthy so that natural and human resources can be saved.

It is quite possible that a great many people today are confused about what “food sustainability” means.  This is partially due to the fact that our current food system in the US is extremely broken and also because there are so many conflicting ideas out there so I will share my definition and hope that it sheds a brighter light on the matter.

What exactly do we mean by ‘sustainable’ food?

There are many different views as to what constitutes a ‘sustainable’ food system, and what falls within the scope of the term ‘sustainability’. Strictly speaking sustainability implies the use of resources at rates that do not exceed the capacity of the Earth to replace them. For food, a sustainable system might be seen as encompassing a range of issues such as security of the supply of food, health, safety, affordability, quality, a strong food industry in terms of jobs and growth and, at the same time, environmental sustainability, in terms of issues such as climate change, biodiversity, water and soil quality.

A truly sustainable food system is one which nurtures the people, the animals, the land, the community and the environment.  (1) People – enough nutritious healthy food for everyone & fair wages for workers; (2) Animals – humane treatment from birth to slaughter including natural diets; (3) Land – with the proper care, land can be enhanced by farming and become more bio-diverse.  Animals if raised correctly can fertilize the land instead of pollute it; (4) Community – keeping $$ in the local community, providing jobs; and (5) Environment – growing locally and seasonally eliminates the need for polluting chemicals and transportation.

A recent study conducted by the Center for International Energy and Environmental Policy at the University of Texas at Austin calculated that 16% of the energy consumed in the US was used to produce food, but that 25% of food produced is wasted each year.  This energy lost is actually worth more than our US off shore drilling!  Now isn’t that a giant unsustainable kick in the pants when we have an increasing population going hungry, getting sick and climate change may be at the tipping point?!?!

We are currently at such a critical time in our food system.  Since the industrial revolution, we have been operating under the assumption that bigger is better for business.  The government subsidizes the wrong crops on a mass scale so that the food which ends up in our super markets is super cheap, but is stripped of nutrients.  You truly get what you pay for!  Our population is getting sicker and sicker.  Obesity, diabetes, cancer and allergy rates are at an all-time high and it is expected that within the next few years, each child born will have a 25% chance of getting childhood diabetes.

I think people often forget that the food that we eat is our fuel.  It is what keeps us operating in tip-top shape, and if we get the right fuel, there becomes very little need for medicine.  I am a BIG believer that solving our food issues would also solve our healthcare issues.  I see people spend insane amounts of money on cars and the top quality fuel for them, but then they go and eat the cheapest most unhealthy foods and drive to their next doctor’s appointment.  We need to start sustaining our own health, and if we do it right, the animals, the land, the community and the environment will follow right along!

Why talk about Sustainable Food?

Food is essential to life. It also forms an important part of our cultural identity, and plays an important role in the economy. People are aware that the food they eat is an important factor affecting their health, but what is less well known is the impact producing and consuming food has on the world’s resources. Alongside the cars we drive and the energy we use to heat our houses, the food we produce and consume has a significant impact on the environment through, for example, greenhouse gas emissions, the use of land and water resources, pollution, depletion of phosphorus, and the impact of chemical products such as herbicides and pesticides.

A growing number of analyses question the long-term sustainability of the current trends in the production and consumption of food.  A leading advisory committee on the future of agriculture, made up of experts from EU Member States (known as the EU Standing Committee on Agriculture Research (SCAR) concluded in their latest report that:

Many of today´s food production systems compromise the capacity of Earth to produce food in the future. Globally, and in many regions including Europe, food production is exceeding environmental limits or is close to doing so. Nitrogen synthesis exceeds the planetary boundary by factor of four and phosphorus use has reached the planetary boundary. Land use change and land degradation, and the dependence on fossil energy contribute about one- fourth of Greenhouse Gas emissions. Agriculture, including fisheries, is the single largest driver of biodiversity loss. Regionally, water extracted by irrigation exceeds the replenishment of the resource.

Food impacts almost every component of our lives. The production, processing, packaging, and transportation of the majority of our food are highly dependent on the use of fossil fuels and chemical fertilizers. These can greatly harm our health and the health of the environment. In response, a move towards sustainable food has become an important component of public and environment health.

The CDC envisions a food system that provides healthy, sustainable choices, minimizes environmental impacts, and serves as a model for the broader public health community. It is up to you, as a purchaser and consumer, to consider the impact of food from seed to table. Choosing local, healthy, environmentally responsible food helps promote personal health as well as the overall health of the community.

Plant good food thoughts, grow good food choices!

Sustainable food systems operate in a cycle of sustainable production and support. Farmers can make their food more sustainable by limiting pesticide use and treating their animals humanely and responsibly. Consumers can cast their votes for these healthier and more sustainable foods when they choose to support these farms. Choosing foods that are produced close to home also reduces the impact of our food system on the environment by reducing the distance food travels from farm to table.

It is recommended that we all choose food that: (1) Does not harm the environment; (2) Supports and preserves rural communities; (3) Is healthy and nutritious to eat; (4) Respects farm animals; (5) Provides farmers with a fair wage; (6) Is free of added toxins; (7) Is grown in the local community; and (8) Does not harm the health of farm workers.

A healthy and natural diet must provide the organism with the suitable nutrients and respect the nature and the environment: that’s why the world will meet in Milan, at the Milan Expo 2015.

Kathy Kiefer

 

 

Here’s How Semantic Sidetracking Distracts Us From Reality.

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Here’s How Semantic Sidetracking Distracts Us From Reality.

 

“SIDETRACKING”:
 The Great Houdini said: “What the eyes see and the ears hear, the mind believes.” He was right, because the images and sounds are able to draw our attention and make us focus on some details while neglecting others that are cunningly kept in dim light by those who want to manage the scenario.

Noam Chomsky, the father of the creativity of language, as described by the New York Times as “the greatest living intellectual”, explains through ten rules how to mystify reality.

The premise is that the major media is in the hands of the great economic and financial powers who are interested in filtering only certain messages.

1) The strategy of distraction is paramount for large lobby in order to keep the public’s attention focused on unimportant matters, so to get the ordinary citizen to take an interest in facts that are actually insignificant. For example, the extreme concentration on a few facts of certain new stories (Bruno Vespa is a master).

2) The principle of the problem-solution-problem: you invent a problem at the table, to cause a reaction from the public, with the aim that this is the principal of the measures that you wish to accept. An example? Put forward to the population by emphasizing the existence of epidemics such as the avian flu creating unjustified alarmism, with the aim of selling drugs that would otherwise remain unused.

3) The strategy of gradualism. To accept a measure that is unacceptable, just apply it gradually to an eye dropper for consecutive years.  It is in this way that radically new (neo-liberal) socio-economic conditions were imposed during the decades of the 80’s and 90’s: the minimal state, privatization, precariousness, flexibility, mass unemployment, wages can no longer ensure decent incomes, with many more changes that would have resulted in a revolution if they had been applied only once.

4) The strategy of deferral. Another way to accept an unpopular decision is to present it as “painful and necessary”, gaining public acceptance, at the time, for future application. Speaking continually spreads the acceptance of the “necessary” austerity measures as if there were a different economic policy.

5) Contact the public as if were talking to a child. The more you try to deceive the viewer, the more you tend to use a childish tone. For example, several programs broadcast the generalist notion. The reason being?   According to suggestibility, if there is someone that is addressing a person as if he were 12 years of age, you will begin to answer without much critical sense, as a child of 12 years of age would do.

6) Focus on the emotional aspect much that on reflection. In fact, the emotion often wreaks havoc with the rational part of the individual, making it more easily influenced.

7) Keep the public in ignorance and mediocrity. For example, few know what the Bilderberg Group and the Trilateral Commission are and what they actually do. And many will continue to be ignorant about it, unless they are directed to the Internet.

8) Imposing behavior patterns. Check certified or approved individuals are much easier than managing thinking individuals. The models imposed by advertising are functional in this project.

9) The self-blame. In practice, we tend to make people believe that the individual himself is the sole cause of their failures and their own misfortune. So, instead of provoking a rebellion against an economic system that has reduced the margins, the individual underestimates, and even decreased in value, you autoflagella.  For example, the young, who can’t find work, were defined from time to time, nerds, “losers”, choosy, or “big babies”. In practice, it is their fault that they can’t find work, not the system.

10) The media point to known individuals (through surveys, behavioral studies, feedback from operations scientifically programmed without the user-reader-viewer knowing anything about it) more than they know themselves, and this means that, in most cases, the system exerts a greater power over the public, far greater than on which the same citizen exerts on himself.

It is a very useful handbook. I’d suggest you keep that in mind, especially in difficult times like these.

Alessandro Sicuro

by sure-com America