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The Guardian Original article ›
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The Democratic Party's progressive wing and Mr. Biden support the effort by president Trump for $2000 checks to go to American families as direct payment instead of the paltry $600 approved by McConnell in the Senate and Pelosi in the House. The delay in providing relief has hurt Americans working in retail and restaurants, hotels, and travel, tourism, sectors hard hit by the pandemic lockdowns. To make up for the delay and because the pandemic after the second wave looks to be not just for 2020 but for at least the first half of 2021 $2000 is essential for American  families to support themselves. Food insecurity unknown to Americans for most of the twentieth century has returned in ways that are unimaginable. The same is true for southern Europe as pictures of Barcelona in DW,com show. It is high time both the European Commission and the U.S. Congress get their act together. Partisan press is one thing, and debate is the oxygen of society in a democracy, and making ends meet on a day to day basis is another thing.  Working from home remotely one half of society the professionals may not see the other half, yet they are there as the pictures from Barcelona of people collecting metal and other scrap  on streets for sale to buy food in the El Raval neighborhood show, and the pictures of Americans in long lines at food banks show.  ...
Economist Original article ›
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Greek unemployment is up to 11% and this does not reflect the women who are not registering as unemployed. About 100,000 public sector workers will be let go by 2013 as the austeity plan takes effect. The three year reform programme from the IMF, the European Commission and the ECB tries to cut the budget deficit from 13.6% to 2.7% of GDP in a quick three years even as the econmy is shrinking. The criticism of Germany is relatively less, but there is strong resentment in Greece for the IMF program with 60% of Greeks opposing it. And in Germany Merkel faces voter resentment of having to pay for other EU member countries mistakes in the election in North Rhine-Westphalia, where her CDU and FDP coalition faces a tough challenge. Intenationally Merkel is facing tough criticism for waffling as the euro currency faced a serious threat. The whole European Union plan was being put to the test resulting in the size of the bailout growing from $60 billon to $160 billion in a few weeks, many experts calling it ineptitude....
New York Times Original article ›
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Margarethe Vestager brings a candour and forthrightness rare in European politics. As economy minister and deputy prime minister she led the Social Liberal Party in the coalition government in Denmark. The Social Liberal Party is unique in that it is part of left leaning alliance with Social Democrats, yet emphasizes as part of its platform education that encourages the creative development of pupils, and freedom in methods of teaching to encourage creativity. Vestager has increased the scope of the EU investigation to look at the Android system in mobile, and filed formal anti-trust charges against Google. Vestager says about Google, that "the amount of data it controls gives rise to societal challenges." She graduated in Economics from the University of Copenhagen. Her husand is a math teacher. One of her hobbies is knitting elephants, and one of them will be offered for bidding at the Danish Seamen's Church in Brooklyn, where she is speaking on April 19. She brings a fresh breath of air to the functioning of the European Commission in Brussels, often viewed as bureaucratic and slow. ...
Wall Street Journal Original article ›
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The China Banking Regulatory Commission points to dangers of the Non Performing Loans ratio rebounding and serious risks in the financial sector from bad loans. CBRC chairman, Liu Mingkang, points to the risks associated with local-government financing platforms, and the real estate sector and industries with excess capacity, in the 128 page report for 2009 shown on its website. And he points out that fundamental cracks and flaws internationally, that were exposed by the global financial criis of 2008, have still to be resolved. He cites the regulatory issues, "too-big-to-fail" issue for large financial institutions, cross-sector and cross-country risk contagion toxic assets, and the budget deficits facing European countries, as major issues posing systemic risk.
New York Times Original article ›
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Mario Monti, the head of the new Italian government after the resignation of prime minister Berlusconi, taught political economy at Bocconi University in Milan. He is the president of Bocconi University. He spent a decade in Brussels as a member of the European Commission. He was commissioner of internal markets, and then served as commissioner for competition. He is known for antitrust enforcement during his work as EU commissioner of competition. First, blocking the merger of Honeywell and General Electric, and then imposing a fine of $650 million on Microsoft for antitrust violations. He is also the honorary president of Bruegel, an economics research institute in Brussels. Monti is an outsider to Italian politics in Rome and depends on the goodwill of the political parties to implement his program.
Washington Post Original article ›
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The European Union Commission president Manuel Barroso announced a multiyear $15 billion package of loans and grants for the new Ukrainian government on March 4, 2014. No immediate conditions were specified. Barroso said, this is "designed to assist a committed, inclusive and reforms oriented government in rebuilding a stable and prosperous future for Ukraine." This is meant to replace the help offered to the previous pro-Russian government by Russia and now cancelled with the ouster in street protests of that government. The U.S. has offered $1 billion in loan guarantees. For Ukraine this offers the prospect of making a new start under EU and possibly IMF guidance. The needs are estimated at $35 billion in international assistance loans over 2 years by the Ukrainian government, because of the dire state of the Ukrainian economy.
New York Times Original article ›
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Melissa Eddy of the NYT provides this exceptional account of the debate in Germany on national priorities, as the child care educators represented by the Verdi service workers union go on strike for a 10% increase in wages. Workers at entry level jobs in manufacturing represented by strong unions earn the same pay as teachers in child care centers and early childhood education who have many years of experience. The child care education workers are supported by the federal family minister, SDP minister Manuela Schwesig, who says that the additional experience and education upto university level of the child care educators in early childhood education should be recognized. Schwesig said: "We need a debate in Germany on how much we value the work of those who take care of the early education of our children and with young adults." One aspect of the 240,000 child care educators strike has drawn less attention. This is the gender pay gap as a large percentage of educators in childcare centers are women. Equal Pay Day in Berlin was organized for June 5, to call for equal pay for women who have fallen behind in pay. Data from the European Commission in 2014 shows Germany ranks third to last in gender pay equality, with only Estonia and Austria trailing behind, as cited by Deutsche Welle. Schwesig who attended the rally pointed out: "When women, despite equal work and education, earn less than their male colleagues, it is not only unfair. It is wrong." While Germany has moved ahead in quotas for female employees, women in boardrooms, parental leave, this does not help women in critical areas such as early childhood education and elderly care, which suffer from a large pay gap with men working in manufacturing jobs. ...
Wall Street Journal Original article ›
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Efforts by Greece's government officials in October 2011 to meet demands from the IMF, The European Commission and the ECB- collectively referred to as the "troika" in Greece- for 30,000 public sector job cuts. The first step was putting together layoff lists, and effectively create a special labor pool at reduced pay for 12 months, after which those not finding new jobs would be layed off. There is considerable difficulty doing this, as heads of departments are reluctant to do this. There is a constitutional provision that protects public sector workers from layoff in Greece. The troika is insisting on the lists, or across the board cuts in the event lists are not prepared. The 30,000 job cuts are part of job cuts in the public sector which would be a total of 100,000 by 2015.
WSJ Original article ›
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Italy's governing coalition of the Five Star Movement and the Northern League retreats from its plans to raise welfare and pension spending after spending plans leads to loss of investor confidence. Disputes on fiscal discipline with the European Union hurts Italy as ten year bond yields rise from 1.7% to 3.7% after the coalition took office. Italy's GDP declined by 0.5% in the third quarter of 2018 with lower business investment and consumer spending, creating risks of falling into recession. The result is that the coalition government led by Matteo Salvini and De Maio is looking for ways to meet the EU fiscal discipline rules after statements that it would follow its spending plans. Italy's national debt of 2.3 trillion euros is equal to 131% of GDP and perceived as riskier than most other euro countries. Promises made by the coalition government include: allowing retirement at age 62 instead of 67, and intoroducing "citizenship income" or basic welfare of around 780 euros a month for poor and unemployed. These plans are in the budget. Political leaders want to avoid losing face with voters by removing this from the budget. The alternative of the EU opening fiscal disciplinary proceedings against Italy would lead to further loss of investor confidence worsening the economic situation, is also a step Italy wishes to avoid. The EU Commission's view is that the budget plan would increase the structural deficit by $22 billion or 1.2% of GDP. ...
WSJ Original article ›
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In all the coverage on the Indian election the impossible having been accomplished that of going beyond the 244 million voters in the US, beyond the 373 million voters in the European Union. The eligible voters in India 2024 are 640 million and all the counting done on one day was accomplished by the Electoral Commission and tackled under leadership of the team by Rajiv Kumar, a civil servant who earlier served as the Finance Secretary of India. The results show that the elections were free and fair as the results speak for themselves that the opposition parties did better than they expected. What was not told in media coverage in the US and EU/UK was that the Opposition and the current government are at odds on one fundamental issue that a continental country suffering from centuries of colonialism can only create a modern nation with the infrastructure enjoyed by the US, EU, China, if it creates a large enough pool of investment in the trillions of dollars, has a master plan of proven execution, with no leakages from this pool of investment. Leakages from the pool of investment only stopped after 2014, and actions of direct deposits to 400 million bank accounts or rural households was essential. For modernization to succeed another condition that had to be fulfilled was to create even through a pandemic a core of about 500 million of 1.4 billion people of the middle and lower classes who would approach the conditions o the US, EU, China consumer base for industry. This the Modi government has done with all its projects and hard work by adding the 250 million people to the consumer base pulled out of poverty. The task ahead is doing what the US, EU, China as continental nations have done to modernize and industrialize 2024-2035 to build the third largest economy ahead of the EU by 2035 and every state and city in India aspires to this transformation, from the south and northeast to the north and the west.   ...
Wall Street Journal Original article ›
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Ireland's government finally accepts a three year EU bailout package for its banks and public finances of 80 billion euros or $110 billion. Germany's Finance Minister Schauble said that Ireland "will have to meet strict conditions." Ireland's 2 largest banks, Bank of Ireland and Allied Irish, will be forced to downsize, and will have to unload "nonessential assets" such as overseas operations. The IMF will provide about one-third of the loans, the European Financial Stability Facility with its 440 billon euro facility will have the largest part, and the rest of the funds will come from bilateral loans from the UK and Sweden and the EU Commission. The UK's portion is about 7 billon euros. Germany's finance minister, Schauble, told TV brodcaster ZDF, that "one can't be certain this will relieve pressure on other struggling euro members." He was referring to Portugal and Spain.
Washington Post Original article ›
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China, India, Brazil, Mexico, South Africa, Argentina, Saudi Arabia, countries that are part of the G-20 are not part of the G-8. Without the developing countries no real progress can be made on climate change or on emissions control. Climate change was a key focus of this summit in Itlay for the G-8 but with India and China only on the sidelines and acting more as an opposition excluded from the main deliberations the whole climate change agenda had to be shelved. The European countries lose influence in an enlarged summit so the G-8 keeps going along. Sweden holds the rotating Presidency of the EU, so the Swedes are there also. And so is Portugal in away with Manuel Barroso representing the European Commisssion. Except Japan, Asia is not represented, and no country from Africa or Latin America is represented. The European club looks like an anachronism and it is. Merkel and Sarkozy say they know this, but there is too much resistance in Europe to giving up this privilege. When the Guardian reported that Italy may be left out in future meetings of an expanded summit. the Italian press and the Italian prime minister Berlusconi denounced the report. Other countries that lose influence in an expanded arrangement are Canada and Japan. ...
Wall Street Journal Original article ›
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Informed sources say Portugal will require 90 billion euros ($129 billion) in a bailout package from the European Union and the International Monetary Fund. Of this 10 billion euros will be needed in June 2011. Germany's finance minister Schauble, said the austerity program that is part of the bailout will be put together in the next 2-3 weeks with the help of the European Commission, the European Central Bank, and the IMF. The bailout will probably be structured in several phases coming before and after June 5 elections in Portugal. The current Socrates administration and a new administration will share responsibility in negotiations for the deal. The opposition Social Democrats who are front runners supported by 39% of the voters and the CDS party with 7%, both support the current government's bailout request. A Social Democrats-CDS coalition is likely after the June elections. The leader of the Social Democrats, Pedro Coelho, is involved in the negotiations. The crisis came to this point after Portuguese banks-which were among the principal buyers of government debt- decided to stop buying additional governmet debt. This meant the government with low cash reserves had little chance of meeting the 4.9 billion euros in debt repayments in June, after a 4.2 billion euro debt repayment in April. The Portuguese government had preferred a bridge loan from the EU but the EU declined this request, insisting on austerity measures. A recent effort by the Socrates government to get an austerity package was defeated in Parliament, leading to Socrates' resignation. ...
New York Times Original article ›
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About $229 billion, three fourth of Greece's debt, is now held by the European Central Bank, the IMF and the European Commission. This is taxpayer money and the governments are making sure that they get back bailout loans in the form of interest payments. About two thirds of the $177 billion given to Greece as bailout loans since May 2010 actually came back to the ECB, IMF, and the EC, in the form of interest. The ECB is keen on recovering taxpayer money. The money route has been setup with an escrow account in Greece for bailout loans so that interest payments get paid, and this money cannot be used for any other purpose. Banking experts say this is a practice in risk management, and with Greece's poor record in finances the controls have been put in place to recover money the ECB invested in Greek bonds in an effort to calm nervous financial markets and now gets about 10% in annual interest payment. Under earlier debt restructuring for private creditors to Greece a haircut of over 50% on Greek bonds was taken, with the ECB insisting on receiving full payment. If Greece were to repudiate the loans under a new elected government losses would have to be taken by the ECB, IMF, and EC, and by private creditors. The ECB has Greek bonds in the range of $44 billion to $69 billion, and the European Financial Stability Facility $88 billion, by some estimates. Greece's exit from the euro would result in losses on these bonds .for the ECB and the EFSF, ultimately European taxpayers. It would also make the new bonds to private creditors under the restructuring of little value which is why European banks would not favor that outcome. Greece's tax receipts at some point, possibly 2013, would exceed basic operating expenses of the government, at which point a future Greek government might decide to exit the euro and stop interest payments on debt in its best interest....
Economist Original article ›
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Collapse of the easten european economies says the Economist would raise questions about the idea of a united Europe, the idea of the EU itself, and destabilize the euro - as countries in the EU like Ireland and Greece are in just as bad a shape. And in talk of enlargement of the EU will be doomed, and this is true of the western Balkans, TUrkey, and some countries int he former Soviet Union. Politically letting these countries derift could mean they fall for populists and nationalists of the bad type. And there is the serious economic consideration for banks in Austria, Italy and Sweden, which are heavily involved in lending to Eastern Europe. They could see catastrophic losses and put the banking systems of these countries at risk. Sweden has already chosen to help the Baltic Countries, and sees it has its political responsibility, and the whole Baltic region as its home, see link. The Economist suggests a differentiated approach depending on which group of countries in Eastern and Central Europe something that Angela Merkel of Germany also supports. For Ukraine the Economist says its best to let the IMF provide assistance. For the Baltic countries, plus Bulgaria, the Economist advocates an accelerated path to the euro, on the grounds that they are tiny and shouln't affect confidence in the euro. The Baltic countries have a population of 7 million. This approach is not supported by the European Commission or the European Central Bank. For the 4 larger countries, Poland, Czech Republic, Hungary, and Romania, the Economist says the priority should be to prevent further currency collapse, and to rescue the banks responsible for the foreign currency loans that are going bad, with the pain being shared between debtors and the banks, governments of lending and borrowing countries. Financial institutions like the ECB, the IMF, and the European Bank for Reconstruction and Developemnt, and the European Investment Bank should help support the rescue effort. ...
New York Times Original article ›
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Zaragoza a city of 700,000 is the capital of Spain's fastest growing region, and its halfway between Barcelona and Madrid. It has grown rapidly. The arrival of GM here was a big turning point in 1982. The GM plant here can turn out 2000 sub compacts, small minivans and delivery trucks a day, now it is one of 7 GM plants in Europe to suspend production for 2 weeks in October to work off inventories. About 600 of 7000 workers were laid off. Young people here who have never seen anything but good times see this as a big shock. And its a sign of how things across Europe are shaping up. Spain's economy contracted by 0.2% this summer. The European Commission expects the 15 nation eurozone to be flat next year with no growth, but this is an early estimate and may be revised to show a contraction as the economic downturn is just beginning.
BBC News Original article ›
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A general strike is planned in Catalonia, Spain to protest police action preventing a referendum vote on independence called by Mr. Puigdemont, head of the state government. The government in Madrid sees the vote as illegal and could take away the regional government's powers under Article 155 of the Constitution. There are varying reports on how many people voted, with this BBC report saying that Mr. Puigdemont's estimate of 90% of people having voted is inaccurate. BBC News says turnout was relatively low at 42%, weakening Mr. Puigdemont's position. Talks are now taking place with Pedro Sanchez of the opposition Socialist party and Albert Rivera of the centrist Ciudadanos party. Mr. Puigdemont now calls for talks with the Spanish government, and mediation by the EU. The European Commission calls this an "internal matter" for Spain, that should be tackled using the Constitution. Other regions of Spain including Galicia where prime minister Rajoy comes from also suffered under the Franco dictatorship following the Civil War, including his family so that Mr. Rajoy does not represent Madrid so much as the new aspirations of the different regions in Spain to try to write a new chapter in Spanish politics. That chapter shown in a book by Mr. Rajoy on Spain's future clearly shows respect for autonomous regions as the direction for Spain. In Valencia and Catalonia one finds the regional languages used and this is respected under the Constitution. Yet the period under General Franco rankles many in Spain, more so in Catalonia and the Basque region, when the regional language could not be used. As in Scotland smaller parties that were not in government for decades now enjoy more support. Yet it is not clear that all the people of these regions want to permanently break the links with Spain or England under separatist parties that have only recently come to power. This is why the European Union is reticent on this issue.  ...
New York Times Original article ›
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Automobile advertising in the European Union. The European Parliament with a measure sponsored by Chris Davies a british member proposes to require car ads in European Union countries carry tobacco-style label warning of the environmental damage they can lead to. Under this plan 20% of the space or time of an ad has to be devoted to information on a car's fuel consumption and carbon dioxide emissions. as a contributor to global climate change. The European Parliament cannot legislate but it can put pressure on the EU Commission which has lawmaking power. Europeans are taking the global warming issue and climate change as well as the environmental impact much more seriously than Asians and Americans. This has implications in how the gas guzzling vehicles are perceived by the European public. Will Europe be the trend setter in this area, for the Americans, as Americans are shying away from the bigger SUV's in showrooms? It remains to be seen.
Wall Street Journal Original article ›
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Jan Corzine will tell the House Agriculture Committee in hearings today in prepared testimony: "I simply don't know where the money is," and that "there were an extraordinary number of transactions during MF Global's last few days." Trustees looking at MF Global liquidation say about $1.2 billion is missing from customer accounts. MF Global made extraordinary bets on European sovereign debt of Italy, Spain and Portugal and other countries of over $6 billion. He says he reduced the leverage of the firm from 37 to 1 in early 2010 to 30 to 1 in late 2011. He says there were discussions where his strategy was debated and that it was prudent strategy to make these investments. He lobbied the CFTC on the issue of whether there should be a ban on futures firms swapping customer funds for higher yielding assets such as government bonds, because these transactions would benefit futures commission merchants. There are questions of conflicts of interest because CFTC head Gary Gensler and Jan Corzine both worked closely at Goldman Sachs....
POLITICO Original article ›
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The European Union has a massive surplus of $147 billion with the U.S. President Trump is making this an issue in trade negotiations. A 20% tariff on German cars imported into the U.S. is part of the tariff response from the Trump administration. 

To settle this dispute Germany is making new offers with the visit of European Commission president, Jean Claude Juncker, to Washington. France sees little room for compromise as it sees Trump's efforts designed to break European unity by driving a wedge between France and Germany.

Wall Street Journal Original article ›
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Spain's prime minister Mariano Rajoy repeats his request that the $125 billion from the European Financial Stability Facility (EFSF), the eurozone rescue fund, be sent directly to recapitalize Spanish banks, instead of being sent to the Spanish government. Capital markets did not respond positively to the aid announcement and Spain's 10 year bonds yields were close to 7%, one point higher than before the aid announcement. Rajoy told the other leaders at the G-20 summit in Los Cabos, Mexico, that it is necessary "to break the link between risk in the banking sector and the sovereign risk," according to a Spanish official. The European Commission and some EU governments support this, but Germany remains opposed to such a move. Spain paid higher rates on 3.04 billion euros in short term debt financed on June 19, 2012. Spain plans to sell 2 billion euros of two, three and five year bonds on June 21. Part of the problem for investors is the lack of clear accounting and transparency of the total debt of regional governments in Spain, and bad loans at banks, which it is feared could be much larger than the $125 billion in rescue funds from the EFSF. This is a result of the housing and asset bubble in Spain of the last two decades since joining the EU. The $125 billion would take Spanish debt to GDP ratios to 90%, which is lower than Italy's but comes at a time of unemployment at over 25% and a declining GDP, increasing investor uncertainty....
Washington Post Original article ›
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Pearlstein points to the need for the structural changes in the U.S., Europe and China to address the serious imbalances that are at the root of the problem. This process will be painful and mean a short term drag on the economy even if the right actions are taken. The process of unwinding the imbalances will take time. Lower growth in China will be good for the bubble in real estate markets and the reduction in the trade surplus, even though this will reduce imports of European and U.S. machinery. Higher savings in the U.S. and reduction of consumer debt will slow retail sales but this is healthy for longer term growth. The same is true for savings in deficit reduction that will result in more layoffs at the local level. The government needs to have similiar action take place at the banks to end their "extend and pretend" practices and finally write off bad loans in residential and commercial real estate. There is no easy way out, no solutions that can be made without a sharing of the pain. Policy makers around the world have tried to look for painless solutions for years and this may be the end of the road. There is some action that the governments and central banks can take. Pearlstein suggests that the European Central Bank buy up some of the sovereign bonds being dumped on the market even if it means printing money. The Fed, the Bank of Japan and the central bank of China can also swap some of the Treasuries they own for European sovereign bonds. This would give time for the EU leaders to give the European Financial Stability Facility the resources and powers to replace the sovereign bonds with more reliable European bonds. The Fed can take this opportunity to sell some of its huge pile of Treasury bills into the market so that it has more room for action in future years. The U.S. government can move up the spending for infrastructure in years 8, 9, and 10 to the next 2-3 years to give some support to the economy as these changes take place. The spending decisions should be left to an independent Infrastructure Bank. See the related article by Krauthammer in the Washington Post, August 5, 2011, which provides a companion policy prescription for U.S. deficit reduction based on the work done by the Bowles-Simpson Commission and by preserving efficiency and fairness....
Economist Original article ›
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The economics situation in Eastern Europe is looking much better now after the recovery of confidence in the USA and Western Europe with stimulus measures and other steps to ease credit, and the decision at the G20 summit in London in early 2009 to provide a strong line of credit to emerging market economies struggling in this crisis. The European Bank for Reconstruction ad Development sees a 5.2% drop in GDP in 2009 over 2008, and the IMF 4.9% for Eastern European economies. The region varies country by country, with GDP decline forecast for 2009 over the prior year by the IMF showing a modest decline of 0.7% for Poland which is doing well, Czech Republic 3.5%, Hungary 3.3%, Bulgaria 2%. Other countries Lithuania 10%, Ukraine 8% and Russia at 6% decline in GDP for 2009 are hit hardest but thing there are also improving compared to last quarter. The stock market in Poland went up by 40% since the low in February 2009, Hungary by 50%, and Russia by nearly 90%, reflecting this increased confidence. A big difference is in the way the IMF under Dominique Strauss Kahn is operating. WIth the new mandate to help emerging market countries and the new funds from western countries, China and Japan, the IMF is working in cooperation with the European COmmission, the banks, and the national governments in Eastern Europe, to lessen the effects of this crisis. This is afirst for the IMF and aremarkable change. In May 2009 the IMF gave a$21 billion credit line to Poland with no strings attached , the kind of loan it made to Mexico, as aproactive measure to restore confidence. IMF told the Ukraine that a deficit of 4% of GDP was realistic when it released a $2.8 billion tranche recently. Latvia was allowed to run adeficit of 7% for 2009, with a committment to bring this down to 4% in 2010. Another change is that more aid is now given to western banks with souring loans in eastern Europe, so that these banks do not cut back severely or pull out of Eastern European economies. The EBRD has raised $24.5billion to lend to banks and other companies in the region. And $590 million went to UniCredit Italia, an Italina bank heavily exposed to Eastern Europe. Ther EBRD is looking at investing in 12 other western European banks. The Swedes have national schemes too to help the Baltic countries. The political situation is improving also, as the transition to new administration as aresult of voter discontent is being managed wisely. In the Czech Republic acompetent tranisiton government is headed by Jan Fischer, chief statistician, till elections in October 2009. In Hungary the transition government is run by an economist Gordon Bajnai, till an election next spring....
Wall Street Journal Original article ›
Wall Street Journal Original article ›
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Stephen Moore of the WSJ interviews Grover Norquist, head of the advocacy group Americans for Tax Reform. Republicans in Congress and other Republican leaders have signed on to the "no new taxes pledge" promoted by Norquist. There is increasing pressure on Norquist as the media, White House, and executives on Wall Street call for flexible positions from both sides on taxes and spending cuts. Norquist insists that not much has changed. He says that the increase in taxes on the rich is only symbolic and has to be followed up with increasing taxes on the middle class. He cites a Rasmussen poll that shows 75% of Americans believe this. Norquist is convinced that the Democrats with their spending plans are out to take the U.S. in the direction of European economies, the tax increase on the rich would be followed up with a energy tax or a value added tax to pay for unrestrained spending. His solution is for Republicans to pass a bill that extends the current tax rates past January after roughing it through the tax cliff date. Even the sequester option is better than increasing taxes says Norquist, letting the Defense Department make the cuts where appropriate. Norquist does not favor the option of reducing tax loopholes and deductions as a way to increase taxes as proposed by Simpson Bowles commission and Ryan-Romney in the election campaign. ...

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