The Great Debate UK

from The Great Debate:

Islamophobia and a German central banker

How do you reconcile the traditions of many Muslim immigrants with the freedoms and values of 21st century Western Europe?

It's a question that has led to periodic outbursts of vigorous debate from France to Holland and Switzerland. In Germany, the discussion has been relatively subdued. Until now.

Why? A passage in a book considered so unsettling that its author, Thilo Sarrazin, was forced to resign from the board of Germany's central bank this month, provides part of the answer.

Criticism of Islam and Muslim immigrants, he writes, is wrongly seen to "equal Islamophobia which equals racism which equals anti-Semitism which equals right-wing radicalism which equals national socialism (Nazism)." In a country deeply ashamed of its 1933-1945 Nazi past, that's enough to mute debate.

from Breakingviews:

Europe risks corporate derivatives loophole

Europe's corporate treasurers can pop open the champagne. After much lobbying, they have won an exemption from new European Commission rules forcing over-the-counter derivative trades to be centrally cleared. But the decision could create a loophole that allows companies to take on big positions and pose a systemic threat.

The G20 group of leading nations last year agreed that all derivative trades should, where possible, be moved onto clearing houses. The thinking was that central clearing spreads risk, reducing the chance that the failure of a single large counterparty can drag down the financial system.

from MacroScope:

Investment week: Punch drunk and hard to startle

This week’s rehashing of European banking concerns – related variously to the Basel III impact on German banks, the ongoing morass re Anglo Irish Bank or any other scare story you want to exhume -- provided the latest excuse for a global markets wobble as September kicked off. Yet, with some justified head-scratching over what really was new to the world this week as opposed to last week, price moves showed little conviction. Most losses were quickly recouped and decibel level of the commentariat, still frantically competing to warn you of the next disaster, toned down.

boxerThe world’s major sovereigns and banks have big financial problems, no doubt, and Europe more than its fair share. The rescues of the Spring did not provide a silver bullet and genuine repair will likely take a painfully-long time. But we’ve also had a lot of time to adequately discount these risks and the marketplace at large is already positioned extremely cautiously. That's why the idea of sudden, blind panic on these long-running sagas seems just a little OTT – especially against a relatively stable, if bruised, economic backdrop. The bigger issue many investors are grappling with is the growing difficulty in making money in a hyper-cautious, low-growth environment. Ask Stanley Druckenmiller. If he threw in the towel because money-making conditions are just lousy, then you can be sure others see the same. Anecdotally at least, pressurised hedge funds – who faced rising redemptions through the summer – are ultra-cautious about open positions and seem quick to cut and run on even the slightest gain, long or short. (A bit like continually shouting 'bank!' on reaching £100 pounds on The Weakest Link!) Big institutional funds, meantime, are sufficiently uncertain about the market and economic direction that many are already keen to lock down for the remainder of the year and are hugging benchmarks to preserve whatever capital they have without resorting to zero-yielding cash or barely-more-attractive TBonds. U.S. midterms in November only add the caution. In short, it will take a pretty major positive or negative surprise to truly set these markets alight and there is every chance we won’t get a decisive one for some time.  We already have historically high vol and caution – but relative steady, unspectacular conditions for all that. The smart money may simply be tempted to buy or sell any hysterical extremes. Is may even be possible that some are tempted to foster a long-absent patience gene?

from The Great Debate:

A painful holiday’s end for Europe

Europe's long summer holiday still has a week to run but this year's reentry will bring with it evidence that very little progress has been made on the issues that threaten to rend the currency union and upend the global economy.

Despite waving the stress-test magic wand over its banks in late July the same problems continue to grow unchecked: a euro zone periphery that can't compete, may not be able to pay its debts and so may bring down with them the very banks that have been pronounced healthy.

from FaithWorld:

Strong support to outlaw face veils as France prepares to vote ban

France's plan to ban full face veils, which comes up for a vote in the National Assembly on Tuesday, enjoys 82% popular support in the country, according to a new poll by the Pew Research Center’s Global Attitudes Project. Its neighbours also approve -- 71% of those polled in Germany, 62% in Britain and 59% in Spain agreed that there should be laws prohibiting the Muslim veils known as niqabs and burqas in public. burqa 1(Photo: French woman fined for wearing a niqab while driving outside court in Nantes June 28, 2010/Stephane Mahe)

The poll, conducted from April 7 to May 8, did not range further afield, but reports from other countries show support there as well. The lower house of the Belgian parliament has voted for a ban, which should be approved by the Senate after the summer. In the Netherlands, several bills to ban full veils in certain sectors such as schools and public service are in preparation. Switzerland's justice minister has suggested the cantons there should pass partial bans but make exceptions for visiting Muslim tourists (the wives of rich sheikhs visiting their bankers in Zurich or Geneva?)

False dawn or risk recovery?

-Jane Foley is research director at Forex.com. The opinions expressed are her own.-

What began at the start of the year with an acknowledgement from Greece that it had been living way beyond its means soon turned into a more universal re-appraisal of the risks of sovereign default.

from The Great Debate:

Europe’s speculator full Employment Act

Far from setting a trap for the "wolfpack," Europe's $1 trillion bailout package amounts to a full employment act for speculators, or should that be the reality-based community, for the foreseeable future.

Hoping to tame markets it accused of "wolfpack behavior," the European Union on Monday unveiled a 750 billion euro package intended to avert a rolling sovereign debt crisis that has engulfed Greece and threatens to spread widely among the weaker euro zone countries.

German elections bring forward a possible stalemate situation for EMU

-Jane Foley is research director at Forex.com. The opinions expressed are her own.-

Next month’s UK general election is not the only one of significance in Europe. There is the possibility that the German regional elections in North Rhine-Westphalia on May 9 could result in the end of the CDU/FDP government’s majority in the upper house of parliament.

Subject of Europe set to trip Liberal Democrat Nick Clegg

Photo

Jane Foley- Jane Foley is research director at Forex.com. The opinions expressed are her own. -

Over the past week the British electorate has taken a shine to Liberal Democrat leader Nick Clegg.

from Global News Journal:

EU to tackle gender pay inequality

By Sangeeta Shastry

EU Justice Commissioner Viviane Reding

EU Justice Commissioner Viviane Reding

Men are still paid more than women in Europe but the European Union is promising to narrow the gap.

The executive European Commission set out its plans to address the pay gap between men and women at a news conference to coincide with International Women's Day, saying women were on average earning only 82 percent of male rates in the EU.

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