The leaders of the International Monetary Fund, the World Bank and the World Trade Organisation on Friday issued a warning about the economic and social risks of austerity programmes in a "call to action" designed to boost growth and fight protectionism.
Expressing concern about the weakness of economic activity and risen gunemployment, the IMF's Christine Lagarde, the World Bank's Robert Zoellick and the WTO's Pascal Lamy joined the heads of eight other multilateral and regional institutions in calling for policies to create jobs, tackle inequality and green the global economy.
"The world faces significant and urgent challenges that weigh heavily on prospects for future growth and on the cohesion of our societies," said the statement by the global issues group of the World Economic Forum. It was published ahead of the forum's annual meeting in Davos next week, amid concerns that 2012 will see the global economy flirt with recession as a result of the eurozone crisis.
"Our shared objective is the strengthening of growth, employment and the quality of life in every part of the world," said the statement. "But entering 2012, we worry about: decelerating global growth and rising uncertainty; high unemployment, especially youth unemployment, with all its negative economic and social consequences; potential resort to inward-looking protectionist policies."
In addition to Lagarde, Zoellick and Lamy, the signatories were Mark Carney of the Financial Stability Board, Margaret Chan of the World Health Organization, Angel Gurría of the Organisation for Economic Co-operation and Development, Donald Kaberuka of the African Development Bank, Haruhiko Kuroda of the Asian Development Bank, Luis Alberto Moreno of the Inter-American Development Bank, Josette Sheeran of the United Nations World Food Programme, and Juan Somavia of the International Labour Organisation. The forum said it was the first time the heads of the world's major institutions had come together in such a way.
Reflecting the IMF's concern about over-aggressive deficit reduction programmes, the joint statement said governments should "manage fiscal consolidation to promote rather than reduce prospects for growth and employment. It should be applied in a socially responsible manner."
The 11-strong group said it wanted to see a comprehensive action plan that could be agreed and implemented at the meeting of the G20 gathering of developed and developing nations in Mexico in June.
"We call on leaders to devote the necessary political energy to deliver concrete actions to exit the crisis and boost growth. Every country, working through its regional economic organisations and development banks and through the international financial and UN institutions, has a role to play."
While acknowledging that the global economy faced severe challenges, the action plan said momentum could be regained by increasing spending on infrastructure and by "beginning to realise the promise of a greener economy". To do so, the world would need an open trading system, resilient cross-border finance, sustainable government finances, determined and coordinated structural reforms and measures to address inequalities in all countries.
In the short term, the 11 leaders said the two most important challenges were to solve the sovereign debt and banking crisis and to restart growth. It urged the implementation of new, tougher regulations for finance and the rapid recapitalisation of banks where necessary.
With more than 200 million people currently unemployed around the world, the call to action said policymakers should "address youth and long-term unemployment to provide decent work prospects, along with country-specific structural reforms that are fairly implemented to achieve faster growth. Through dialogue, labour market reforms can be agreed that can both raise employment levels and ease fiscal adjustment."
It added: "Boosting jobs and investing in human capital is the most promising way of tackling inequality. We support the work of the ILO and others in assisting governments to examine realistic policy options, including cost-effective social policies to cushion the most vulnerable from adversity. Investment should target skills and education and thus equip people for the future.
"Rising inequality calls for heightened consideration of more inclusive models of growth. We must deliver tangible improvements in material living standards and greater social cohesion."
The call for action urged governments to resist the temptation to resort to trade barriers in an attempt to safeguard jobs. "Countries must reaffirm that none will resort to growth-destroying protectionism and demonstrate that trade restrictions introduced in response to the economic crisis will be rolled back."
The Guardian
A confidential Franco-German paper, seen by the Daily Telegraph, reveals that the financial transaction tax is seen in Berlin and Paris as the first step to giving the EU a new power to "coordinate" taxation.
The secret text also links existing European Commission proposals on energy taxation and a common method for calculating corporate tax to the push for new EU powers, heralding a major battle over sovereignty this spring.
"European institutions and member states should accelerate the process of tax co-ordination," the Franco-German paper argues. "In particular the negotiation of the European Commission proposals on energy tax directive, common consolidated corporate tax base and common system of financial transaction tax should be accelerated."
The taxation blueprint has reinforced British fears about the direction that the EU is being pushed in by the eurozone crisis and sets the scene for a new confrontation with David Cameron at a European summit in two weeks.
The Prime Minister has vowed to veto the European "Tobin Tax" and his "red line" will be underlined by the Franco-German proposals which highlights the financial levy as the thin end of the wedge on EU taxation powers.
"In order to set the stage for enhanced tax co-ordination, France and Germany express their support for the European Commission's proposal on a common system of financial transaction tax," the paper said.
In order to push the EU towards greater tax "harmonisation", Germany and France will, later this month, announce proposals to harmonise their corporate tax rates.
Britain has been always hostile to commission plans for an energy tax directive and a "common consolidated corporate tax base" because both are seen as eroding national sovereignty opening the door giving to the EU setting taxation rates.
EU officials have said that the Franco-German push will give a new lease of life to Brussels for new energy taxes that will set higher minimum road and heating fuel duties based on carbon emissions.
British and other European industries are concerned that the legislation will lead to increases in the level of duty on red diesel, damaging competitiveness during a recession.
Eurogas, which represents the European gas industry, concerned because the commission proposals would set a minimum tax rates for natural gas at "eight and half-fold higher than the current levels".
Douglas Carswell, the Conservative MP for Clacton, said that tax competition "is a vital way of ensuring dynamism and competitiveness" and that Mr Cameron must block any attempts to stop Britain using lower taxation rates to win investment.
"Tax harmonisation would create even more euro-sclerosis," he said. "Tax harmonisation between France and Germany is a mutual suicide pact, Britain should have no part of it."
Nigel Farage, the leader of Ukip, said: "This move will either force Cameron to cave in to their demands, or drive Britain out of the EU for good. Which is it that they want?".
The Telegraph
Tehran has "high suspicion" that assassins used intelligence obtained from the IAEA, Security Council sanctions list to identify nuclear scientists, "carry out malicious acts," UN envoy says.
UNITED NATIONS - Iran charged on Thursday that assassins who killed an Iranian nuclear scientist in Tehran last week may have used information obtained from the United Nations.
Mostafa Ahmadi-Roshan, 32, was killed by a motorbike hitman who put a magnetic bomb on his car on a street during the morning rush hour on Jan. 11. Iran, at odds with Western governments over its nuclear program, has accused US and Israeli agents of being behind the killing.
Iran's deputy UN ambassador Eshagh Al Habib said there was a "high suspicion that ... terrorist circles used the intelligence obtained from United Nations bodies, including the sanctions list of the Security Council and interviews carried out by IAEA (International Atomic Energy Agency) with our nuclear scientists, to identify and carry out their malicious acts."
Ahmadi-Roshan recently met with IAEA inspectors, Al Habib told the Security Council, "a fact that indicates that these UN agencies may have played a role in leaking information on Iran's nuclear facilities and scientist."
He also accused the world body of failing to observe secrecy over its inspections of nuclear facilities.
UN spokesman Martin Nesirky said he was looking into the allegations. The Vienna-based IAEA is the UN nuclear watchdog and has played a key role in trying to determine whether Tehran's atomic program has military dimensions.
The murder of Ahmadi-Roshan was the fifth daylight attack in two years on technical experts involved in Iran's nuclear program, which Western countries believe is aimed at producing an atomic weapon but Tehran says is for peaceful purposes.
The United States has denied involvement in the killing and has condemned it, as has UN Secretary-General Ban Ki-moon. An Israeli minister also said this week that Iran's charges of Israeli involvement were "completely baseless."
The Security Council has imposed four rounds of sanctions on Iran over its nuclear activities. Its list of sanctioned individuals does not include Ahmadi-Roshan, but does name another scientist, Fereydoun Abbasi-Davani, wounded in a Tehran car bomb blast in November, 2010.
Al Habib, addressing a Security Council debate on justice and the rule of law, said it was "odd" that the council had said nothing about attacks on Iranian scientists. "Is it the wayto advance the rule of law at the international level?" he asked.
Jerusalem Post
Joseph Herrin (01-18-2012)
Europe and America Sinking Together
The image above was taken from an article posted on Financial Times on July 4th of 2011. The article was titled America and Europe Sinking Together. Following is an excerpt:
In Washington they are arguing about a debt ceiling; in Brussels they are staring into a debt abyss. But the basic problem is the same. Both the US and the European Union have public finances that are out of control and political systems that are too dysfunctional to fix the problem. America and Europe are in the same sinking boat...
[Source: http://www.ft.com/article]
This rather prescient article used the metaphor of a sinking ship to describe the impending economic ruin of the United States and Europe. Little did the author suspect that this parable would be duplicated before the world in stunning fashion seven months later when the cruise liner Costa Concordia ran aground and foundered. There are many, even among the worldly and non-Christian members of society who have discerned a parable in this catastrophe. This morning a brother forwarded me a link to an article posted yesterday on the Wall Street Journal’s website.
JANUARY 17, 2012
What Is Europe Sinking About?
The shipwreck of a cruise liner is a metaphor for a continent.
By BRET STEPHENS
The Lord works in mysterious ways, or so it is often said. But in an era when few can read His signs, those signs have a way of becoming a bit more obvious. Like 45-10. Or how about another Titanic-type event, right on the eve of the 100th anniversary of the first one, as a way of prefiguring some great European disaster?
OK, probably better to leave Him out of it. But as metaphors go, Friday night's tragic-ridiculous shipwreck of a cruise liner off the Italian coast is an apt one for a continent in which nine countries had their credit ratings downgraded earlier that same day. Even the biggest ship can founder in calm waters if the captain is negligent. Even a rescue operation 50 feet from shore can turn into a fiasco if nobody has conducted a drill and the crew have no idea how to steer a lifeboat.
When the hors d'oeuvres are listing hard to starboard and the waiters tell you nothing's wrong, something's terribly wrong.
That last detail—from passenger accounts of the accident—reminded me of listening to European Council President Herman Van Rompuy in New York last fall, explaining that Greece would never default, that the euro zone's financial position was not a serious cause for alarm, and that the main thing was to prevent further outbursts of market irrationalism. In other words, it wasn't the ship that was sinking, in Mr. Van Rompuy's view, it was just that the passengers had an odd way of occasionally going berserk.
[Source: http://online.wsj.com/article]
It is truly amazing to me to find this article on the Wall Street Journal website. Christ’s saying is true:
Luke 16:8
For the sons of this world are wiser in their generation than the sons of light.
The church continues apace proclaiming a prosperity gospel while many in the world are recognizing that the party is about to come to a sudden end. The Concordia Wreck is quite obviously a sign of great financial and political trouble coming to the world. It would be hard to construct a more fitting metaphor of the foundering of nations. Following is an diagram of the Costa Concordia showing the names assigned to the various deck levels.
Translating these nation names to English, they are: Sweden, Greece, Great Britain, Portugal, Germany, Austria, Poland, Spain, France, Ireland, Italy, Belgium, and The Netherlands. This ship was clearly designed to convey a message of unity (corcord) among nations. The United States enters the picture by virtue of the parent company, Carnival Cruise Lines, being a British and American corporation. What happens in Europe clearly has an impact upon America.
Art, a brother in Christ who has the New Wineskin blog, posted the following comment to yesterday’s post:
It is no coincidence that the ship went down just as several major bond rating agencies (such as Standard and Poor's) were downgrading the sovereign (i.e., national) debt of several European countries (but not all), raising their borrowing costs and driving yet another wedge between them.
The first press release regarding those downgrades was issued by S&P at 4:36 PM Eastern Standard Time, which was 10:36PM Central European Time (i.e., in Italy).
The Concordia had hit a granite outcrop off Giglio Island slightly less than an hour prior to that, at 9:42 PM European Central Time.
[End Quote]
God is certainly giving a sign of impending disaster. The nations will be shaken. Even secular sources of news and commentary have made the connection to this event and the conditions in Europe and the United States. This is attested to by the following politcial cartoons.
The Concordia is renamed Euro in this cartoon, indicating that the Euro is soon to fail as a monetary system. This will set the stage for a new, global monetary system to be put in place, plans for which have already been put in place.
September 9, 2009
United Nations Proposes New "Global Currency"
By Declan McCullagh
(AP)
The United Nations would like the dollar, euro, yen, and other national currencies to be succeeded by a new "global currency."
That recommendation appears in a U.N. report released this week, which suggests the dollar's outsize role in international finance has ended -- and says that it's time to invent a successor currency that would be managed by a "Global Reserve Bank."
[Source: http://www.cbsnews.com/article]
It is interesting to note that the date of the report above is 9/9/9, a number mentioned yesterday in the post on the Concordia disaster. The Concordia wreck occurred 99 years and 9 months after the wreck of the Titanic. In the same post it was mentioned that the number 9 in Scripture is “THE NUMBER OF FINALITY OR JUDGMENT.”
This is another political cartoon. Angela Merkel of Germany and Nicolas Sarkozy of France are shown atop the sinking Eurozone ship while Monti, the leader of Italy is desperately clinging to the side of the ship.
This political cartoon makes a correlation to Obama saving himself from the sinking ship of America even as the captain of the Concordia abandoned ship while passengers were still aboard.
Here is a further twist on this idea that emphasizes Congress’s role in causing America to founder. People of God, we would do well to pay heed to the signs that are being given. Even the world is taking note, though I doubt too many are actually taking any steps that will prove beneficial in surviving the coming economic collapse and resulting political turmoil.
Are you truly prepared to weather what is to come? What will you do when the dollar is devalued, and your wealth ends up at the bottom of the ocean? Have you already divested yourself from an attachment to the world’s goods and possessions? Are you walking as a true disciple of Christ? You do not want to have attachments to that which God is testifying will soon sink beneath the waves. It is those who are free from entanglements that will find it easiest to extricate themselves from the wreckage.
II Timothy 2:3-7
Suffer hardship with me, as a good soldier of Christ Yahshua. No soldier in active service entangles himself in the affairs of everyday life, so that he may please the one who enlisted him as a soldier... Consider what I say, for the Lord will give you understanding in everything.
Have you learned to walk by faith, being directed by the Spirit, and confident of God’s provision and care for your life? Do you have the assurance that there will be corn supplied to you in a time of famine? Those who do not have faith in God will be swept up in the panic that follows the sinking of the world economic system.
Do not say to yourself that it will not happen. Very few gave any credence at all to the thought that financial systems would be rocked in 2008. Nevertheless, the world faced a tremendous calamity with one crisis following hard on another. Major financial companies like Bear Stearns, Merrill Lynch, and Lehman Brothers became insolvent. AIG, the world’s largest insurance company faced imminent collapse. Home values that had been rising at double digit rates year over year suddenly tanked. In the ensuing years millions lost their homes to foreclosure. Millions more lost their jobs as the economy contracted and businesses failed.
Now, four years later, nothing has improved. State after state has faced a severe budgetary crisis. The Federal government has continued only by increasing debt load to “titanic” levels. The weight of all of this debt must soon pull the ship of state under water.
What should you do seeing that Yahweh is giving testimony to the catastrophic things soon to occur? First, do not place your confidence in leaders who do not walk in the ways of God, who do not have compassion for the people they are elected to serve. They are hirelings. When they see danger come, they will flee. Place your trust and confidence in God. What He tells you to do, you must do, and that without delay. Get your house in order. Free yourself from worldly entanglements lest you be unable to escape the coming ruin.
If you have yet to accept the cost of being Christ’s disciple, there is no time to lose. To be Christ’s disciple you must yield yourself to His leadership. You must lay aside self-governance and surrender to be governed by Christ. He must be the One who determines what you do with your time, money, and possessions.
Luke 14:33
"So then, none of you can be My disciple who does not give up all his own possessions.”
I Corinthians 6:19-20
Or do you not know that... you are not your own? For you have been bought with a price...
In the aftermath of the Concordia disaster it became known that the people had not been prepared for an emergency. The ship’s captain had not carried out rescue drills. Overconfidence gave rise to complacency. The ship had sailed (nearly) the same route many times. There had never before been a need to abandon ship or use lifeboats. The ship seemed exceptionally solid. She appeared to be able to remain floating for the imaginable future. No one, from captain to passengers, anticipated that this magnificent vessel would soon have a huge breach in her hull and quickly fill up with water and capsize.
Even after the damage was done, the captain refused to acknowledge what had occurred. It was passengers on board who reportedly contacted land based authorities with their cell phones to be the first to report a crisis.
Do not wait for the leaders of your nation to tell you a crisis is at hand. Do not look to them to tell you how to safely respond to what is to come. You will suffer loss if you do. Press into God. Seek His mind. Ask Him what He would have you do, and you must do this in all things. Do not just ask God how to survive economic and political turmoil. You must ask Him what He would have you to do in all things.
Psalms 146:3-10
Don't put your trust in princes, each a son of man in whom there is no help. His spirit departs, and he returns to the earth. In that very day, his thoughts perish. Happy is he who has the God of Jacob for his help, whose hope is in Yahweh, his God: Who made heaven and earth, the sea, and all that is in them; Who keeps truth forever; Who executes justice for the oppressed; Who gives food to the hungry. Yahweh frees the prisoners. Yahweh opens the eyes of the blind. Yahweh raises up those who are bowed down. Yahweh loves the righteous. Yahweh preserves the foreigners. He upholds the fatherless and widow, but the way of the wicked he turns upside down. Yahweh will reign forever; Your God, O Zion, to all generations. Praise Yah!
CAIRO - Radioactive material has been stolen from a nuclear power station on Egypt's Mediterranean coast that was the site of violent protests last week, state-run Al-Ahramnewspaper reported on Thursday.
A safe containing radioactive material at the Dabaa nuclear power plant was seized while another safe containing radioactive material was broken open and part of its contents taken, the newspaper said.
The government has alerted security authorities and asked that specialised teams help in the search for the stolen material, Al-Ahram reported.
More than a dozen people were wounded last weekwhen military police tried to disperse hundreds of Egyptian protesters demanding the relocation of the Dabaa plant, which is still under construction.
Plant staff have refused to go to the site because of the deterioration in the security situation there, Al-Ahramsaid.
About 500 Egyptians rallied in front of the plant last weekto demand that the project be terminated, with some saying they had lost their land on the plant's site.
Soldiers and the protesters hurled stones at each other and exchanged gunfire after the protesters demolished a wall surrounding the site, a security source and witnesses said.
Jerusalem Post
