Global Economic News
World Bank To Try End Run Around Kyoto Collapse, Impose Global Fuel Taxes
June 6 (EIRNS)With the Kyoto Protocol cap on greenhouse gas emissions expiring in 2012, and virtually no chance to renew or expand the green fascist agenda at the current IPCC Bonn Conference or anytime soon, the World Bank wants to impose a levy on shipping and jet fuels. The Bank's climate nazi Andrew Steer said: "We are looking at carbon emissions-based sources ... including bunker (shipping) fuels and aviation fuels, that would be internationally coordinated albeit nationally collected."
Steer acknowledged that climate talks have essentially collapsed, and that "an overall deal is not really on the cards right now," speaking on the sidelines of a new round of climate talks from June 6-17 in Bonn, Germany. The EU already plans a levy on the emissions of most flights that land or depart from Europe, beginning January 2012, regardless of airline, a measure the head of the International Air Transport Association (IATA, the association of nearly all the airlines) declared to be illegal on June 5.
Santander's Disaster Bond Offering Flops
June 10 (EIRNS)Now it is out in the open that the Inter-Alpha Group's Banco Santander is a dangerous investment, and leads the pack of European banks about to go down the drain along with the rest of the Inter-Alpha banking system. According to the Wall Street Journal, "A crack opened in Europe's credit markets last week that could portend deeper trouble for the region's banks and governments."
The crack is in fact a canyon. Last week an EU1 billion bond offering by Banco Santander SA flopped, leaving fellow Inter-Alpha banks Commerzbank and Société Générale, as well as Her Majesty's HSBC Holdings PLC, who managed the bond offering, "holding the bag" for EU500 million they could not sell. Other banks initially involved in the Santander bond issue jumped ship when they saw it was going badly; but the Inter-Alpha "brothers" got stuck with the trash. One source described it as a "disaster." By Friday this afternoon Bloomberg.com was reporting that the cost of insuring bonds sold by Santander rose to their highest level in three months.
The failure is directly related to the financial disasters that are lurking on the books of Spanish cities and regions. This offering was in fact a "covered bond" backed by debt the bank holds of regional and local governments across Spain. Despite offering to pay a high interest rate and receiving a triple-A rating from Moody's, Santander only managed to sell half the bonds.
The head of the opposition PP party, Mariano Rajoy, last week charged that there was a hidden deficit of EU7 billion on the books of just one region, Castilla-La Mancha, and that his party was calling for an audit of all the regional books. This so alarmed the Spanish government, that President Zapatero called Rajoy, demanding that he display "prudence, seriousness, and responsibility"i.e., shut upin light of how the markets might respond.
Commenting on Santander's "disaster," a well-informed financial specialist contacted by EIR in Europe said that Santander's troubles are the talk of the town everywhere in the European financial sector. Santander, he confirmed, is totally connected to the cajas (savings banks) and the cajas, Santander, and the State are all interconnected and it's all on the verge of general implosion.
EuroMetals Attack EU Deindustrialization Policies
June 7 (EIRNS)In a lengthy interview with the European Energy Review published yesterday, Robert Jan Jeekel, energy policy spokesman of the Eurometals federation, attacked the European Commission's climate policy for causing the deindustrialization of the continent: "The EU's inward-looking unilateral climate policy is endangering our industry. Many of our factories are closing, and investments in the EU have come to a standstill. Yet the European Commission is continuing to use its artificial and flawed macro-economic models as a basis for decision-making. Even our global competitors are asking what on Earth the EU is doing."
The existing Emissions Trading System (ETS) and the new Roadmap 2050 plan, presented in March, for the "decarbonization" of Europe's industries, is making electricity so expensive that production cannot be continued here, Jeekel said. Already, the cost of electricity per ton of aluminum, which is $645 on the so-called free-market "world scale," is $1,195 dollar per ton in Germany. Production is migrating to other parts of the world which don't have these excessively discriminating, climate-related regulations as the EU. Europe is losing jobs massively: In the non-ferrous metals industries alone, the future of 400,000 jobs is at stake, Jeekel warned.
"As I see it," Jeekel added, "the fact that EU emissions were reduced because smelters have already been closed and investments put on hold, can hardly be called a success for EU policy. Or are we following a policy of deindustrialization in the EU?"
Industrial representatives have tried to talk to the EU Commission about its dangerous nonsense, "but they have simply ignored all protests"; instead they told the protesting industry that "cost impacts" were "negligible," and that if there were problems, the Eurocrats simply expect national governments to compensate industry. But the governments have no money to compensate industry, said Jeekel: "Many government budgets have already been spent. They saved the banks with that money, so there may be little left for us. If support does not come, it could spell the end of the EU's production of aluminum and other non-ferrous metals. Once a smelter closes, it never comes back. The process is irreversible, given the current investment climate in the EU."