EU chief warns 'democracy could disappear' in Greece, Spain and Portugal

By Jason Groves
Last updated at 8:24 AM on 15th June 2010

Read more: http://www.dailymail.co.uk/news/worldnews/article-1286480/EU-chief-warns-democracy-disappear-Greece-Spain-Portugal.html#ixzz0qyWzPU5r

Democracy could ‘collapse’ in Greece, Spain and Portugal unless urgent action is taken to tackle the debt crisis, the head of the European Commission has warned.

In an extraordinary briefing to trade union chiefs last week, Commission President Jose Manuel Barroso set out an ‘apocalyptic’ vision in which crisis-hit countries in southern Europe could fall victim to military coups or popular uprisings as interest rates soar and public services collapse because their governments run out of money.

The stark warning came as it emerged that EU chiefs have begun work on an emergency bailout package for Spain which is likely to run into hundreds of billions of pounds.

Read more: http://www.dailymail.co.uk/news/worldnews/article-1286480/EU-chief-warns-democracy-disappear-Greece-Spain-Portugal.html#ixzz0qyWikDk8

Dictatorships: An end to democracy in Europe could see a return of figures ruling dictatorships. General Franco was dictator of Spain until 1975; Georgios Papadopoulos led a military junta until 1973; and Antonio de Oliveira Salazar ruled as Portugese president until 1968

Read more: http://www.dailymail.co.uk/news/worldnews/article-1286480/EU-chief-warns-democracy-disappear-Greece-Spain-Portugal.html#ixzz0qyXS7EfR

BP was a founding member of the U.S. Climate Action Partnership (USCAP), a lobby dedicated to passing a cap-and-trade

http://www.washingtonexaminer.com/politics/Once-a-government-pet-BP-now-a-capitalist-tool-95942659.html

...

There’s a problem: BP was a founding member of the U.S. Climate Action Partnership (USCAP), a lobby dedicated to passing a cap-and-trade bill. As the nation’s largest producer of natural gas, BP saw many ways to profit from climate legislation, notably by persuading Congress to provide subsidies to coal-fired power plants that switched to gas.

In February, BP quit USCAP without giving much of a reason beyond saying the company could lobby more effectively on its own than in a coalition that is increasingly dominated by power companies. Theymade out particularly well in the House’s climate bill, while natural gas producers suffered.

But two months later, BP signed off on Kerry’s Senate climate bill, which was hardly a capitalist concoction. One provision BP explicitly backed, according to Congressional Quarterly and other media reports: a higher gas tax. The money would be earmarked for building more highways, thus inducing more driving and more gasoline consumption.

Elsewhere in the green arena, BP has lobbied for and profited from subsidies for biofuels and solar energy, two products that cannot break even without government support. Lobbying records show the company backing solar subsidies including federal funding for solar research. The U.S. Export-Import Bank, a federal agency, is currently financing a BP solar energy project in Argentina.

Ex-Im has also put up taxpayer cash to finance construction of the 1,094-mile Baku-Tbilisi-Ceyhan pipeline carrying oil from the Caspian Sea to Ceyhan, Turkey—again, profiting BP.

Lobbying records also show BP lobbying on Obama’s stimulus bill and Bush’s Wall Street bailout. You can guess the oil giant wasn’t in league with the Cato Institute or Ron Paul on those.

BP has more Democratic lobbyists than Republicans. It employs the Podesta Group, co-founded by John Podesta, Obama’s transition director and confidant. Other BP troops on K Street include Michael Berman, a former top aide to Vice President Walter Mondale; Steven Champlin, former executive director of the House Democratic Caucus; and Matthew LaRocco, who worked in Bill Clinton’s Interior Department and whose father was a Democratic congressman. Former Republican staffers, such as Reagan alumnus Ken Duberstein, also lobby for BP, but there’s no truth to Democratic portrayals of the oil company as
an arm of the GOP.

Two patterns have emerged during Obama’s presidency: 1) Big business increasingly seeks profits through more government, and 2) Obama nonetheless paints opponents of his intervention as industry shills. BP is just the latest example of this tawdry sleight of hand.

Once a government pet, BP now a capitalist tool.


Timothy P. Carney is The Washington Examiner's lobbying editor. His K Street column appears on Wednesdays.


Follow Timothy P. Carney on Twitter

Sign up for Timothy P. Carney's weekly K-Street email digest

Read more at the Washington Examiner: http://www.washingtonexaminer.com/politics/Once-a-government-pet-BP-now-a-capitalist-tool-95942659.html#ixzz0qyV48aPS

Bill Gross : “debt super cycle.”

U.S.’s $13 Trillion Debt Poised to Overtake GDP

By Garfield Reynolds and Wes Goodman

June 4 (Bloomberg) -- President Barack Obama is poised to increase the U.S. debt to a level that exceeds the value of the nation’s annual economic output, a step toward what Bill Gross called a “debt super cycle.”

http://www.bloomberg.com/apps/news?pid=20601109&sid=aa0cI64Gx.4E&pos=15

The CHART OF THE DAY tracks U.S. gross domestic product and the government’s total debt, which rose past $13 trillion for the first time this month. The amount owed will surpass GDP in 2012, based on forecasts by the International Monetary Fund. The lower panel shows U.S. annual GDP growth as tracked by the IMF, which projects the world’s largest economy to expand at a slower pace than the 3.2 percent average during the past five decades.

“Over the long term, interest rates on government debt will likely have to rise to attract investors,” said Hiroki Shimazu, a market economist in Tokyo at Nikko Cordial Securities Inc., a unit of Japan’s third-largest publicly traded bank. “That will be a big burden on the government and the people.”

Gross, who runs the world’s largest mutual fund at Pacific Investment Management Co. in Newport Beach, California, said in his June outlook report that “the debt super cycle trend” suggests U.S. economic growth won’t be enough to support the borrowings “if real interest rates were ever to go up instead of down.”

Dan Fuss, who manages the Loomis Sayles Bond Fund, which beat 94 percent of competitors the past year, said last week that he sold all of his Treasury bonds because of prospects interest rates will rise as the U.S. borrows unprecedented amounts. Obama is borrowing record amounts to fund spending programs to help the economy recover from its longest recession since the 1930s.

“The incremental borrower of funds in the U.S. capital markets is rapidly becoming the U.S. Treasury,” Boston-based Fuss said. “Do you really want to buy the debt of the biggest issuer?”

To contact the reporters on this story: Garfield Reynolds in Sydney at greynolds1@bloomberg.net; Wes Goodman in Singapore at wgoodman@bloomberg.net.

Last Updated: June 4, 2010 05:06 EDT

http://www.bloomberg.com/apps/news?pid=20601109&sid=aa0cI64Gx.4E&pos=15

Rating Cut by Fitch on Wealthiest U.S. State

Saturday, June 5, 2010

Rating Cut by Fitch on Wealthiest U.S. State

http://www.economicpolicyjournal.com/2010/06/rating-cut-by-fitch-on-wealthiest-us.html

Connecticut is preparing to borrow $956 million to close a budget gap in the fiscal year beginning July 1, after borrowing money last year to cover a deficit of $947.6 million. Not good. Fitch has reduced the states credit rating from AA+ to AA.

“The downgrade reflects the state’s reduced financial flexibility, illustrated by its reliance on sizable debt issuances during the current biennium to close operating gaps in the context of already high liabilities,” Fitch said.

Connecticut is the wealthiest state on a per capita basis with personal income of $54,397 in 2009, according to Department of Commerce.

http://www.economicpolicyjournal.com/2010/06/rating-cut-by-fitch-on-wealthiest-us.html

Hungary : Can you say domino ?

Hungary's deficit talk rattles financial markets

Jun 4, 1:54 PM (ET)

http://apnews.myway.com/article/20100604/D9G4JRR80.html

BUDAPEST, Hungary (AP) - Hungary's currency, bonds and stock market reeled Friday as the new government tried to reassure investors that it was not about to slide into a Greek-type crisis despite official comments that the economy was in serious trouble.

Fears that the economic peril could spread weighed heavily on the euro. The currency dropped below $1.20 for the first time in more than four years, falling to as little as $1.1994 in late European trading before edging back up to $1.2006. That was its lowest level since March 2006.

On Thursday, Lajos Kosa, deputy chairman of the governing Fidesz party, said Hungary was facing a Greece-like financial meltdown. And former Fidesz finance minister Mihaly Varga said the deficit could reach 7-7.5 percent of GDP, about twice as much as planned for 2010 by the previous government.

The new government was sworn in Saturday and its talk about a massively revised budget gap was eerily similar to the situation in Greece. There, the 2009 deficit went from a planned 3.7 of GDP to 13.6 percent of GDP by year's end and led to the financial crisis, which saw Greece get a euro110 million ($134.95 million) rescue package from the European Union and the International Monetary Fund to save it from bankruptcy.

International markets reacted quickly to the parallels drawn between Hungary and Greece, evidence that concerns about budget deficits in Europe continued to worry the markets.

http://apnews.myway.com/article/20100604/D9G4JRR80.html