December 29, 2011
year on year data
| Germany: | |||||
| Jan | 15th | 2012 | Germany’s National Debt Burden Fell to 79% of GDP Last Year, FAZ Reports (Bloomberg) | ||
| Jan | 2nd | 2012 | # | Employment in Germany increased to over 41 million (Wirtschaftsblatt) | |
| Dec | 29th | 2011 | # | Upsurge reduces German deficit 51 bn € (Reuters) | |
| Greece: | |||||
| Jan | 16th | 2012 | Construction slump continues in September (Athensnews) | ||
| Jan | 10th | 2012 | GREECE DEC CONSUMER PRICE INDEX Y/Y: 2.4% V 2.7%E; CPI EU HARMONIZED Y/Y: 2.2% V 2.7%E (via @trader1806) | ||
| Jan | 9th | 2012 | Greece collected 49.9 bln euros in taxes in 2011, 1.7% down on 2010 despite hikes. Apparently, they call it expansionary austerity. (via @NickMalkoutsis) | ||
| Dec | 31st | 2011 | TABLE-Greek Oct retail sales drop 10.8 pct y/y (Reuters) | ||
| Italy: | |||||
| Jan | 11th | 2012 | Italians drawing money out of banks: private sector deposits fell 0.7 pct year on year in November, according to Bank of Italy (via @ChrisAdamsMKTS) | ||
| Jan | 2nd | 2012 | car sales -10.8% y/y. Sale of used cars +0.59% (via @AlbertoNardelli) | ||
| Jan | 2nd | 2012 | Italy public deficit down | ||
| Belgium: | |||||
| Jan | 2nd | 2012 | * | Savings shifted from big to small (deredactie.be) | |
| France: | |||||
| Jan | 4th | 2012 | RTRS: French Consumer Spending (Nov) Y/Y -2.1% vs. Exp. -1.8% (Prev. -0.9%, Rev. to -1.0%) (via @FGoria) | ||
| Slovakia: | |||||
| Jan | 2nd | 2012 | RTRS: Slovakia's 2011 fiscal gap seen below 4.9 pct/GDP plan (via @FGoria) | ||
| Ireland: | |||||
| Jan | 10th | 2012 | Manufacturing production shrinks | ||
| Portugal: | |||||
| Jan | 16th | 2012 | Portugal's grey economy grows amid austerity: study | ||
| Finland: | |||||
| Jan | 24th | 2012 | Debt crisis hits Finland's growth | ||
| Eurozone: | |||||
| Jan | 4th | 2012 | Euro-Zone Private Sector Shrinks | ||
| Jan | 2nd | 2012 | Eurozone manufacturing decline persists, PMI survey says | ||
| Apr | 4th | 2012 | Graphic: Eurozone retail sales | ||
| Poland: | |||||
| Jan | 20th | 2012 | Polish central banker Chojna-Duch: 2011 GDP growth at 4%+ Dec output data 'very positive'. Poland largely escaped '08 recession alone in EU (via @lindayueh) | ||
| UK: | |||||
| Jan | 24th | 2012 | UK debt passes £1 trillion for the first time | ||
| * = Dutch, # = German language |
December 27, 2011
ESM (Events after Dec 9th 2011)
| Mar | 24th | 2012 | # | Merkel and Schäuble ready to enhance ESM # (Wirtschaftsblatt) | |
| Jan | 24th | 2012 | # | EU countries agree upon an earlier ESM implementation #(Ger ) | |
| Dec | 15th | 2011 | * | Disagreement among Euro countries implementing new treaty *(dutch link) | |
| Dec | 14th | 2011 | German finance minister Schäuble proposes introduction of ESM 2012 instead of 2013 | ||
| Dec | 14th | 2011 | According to media reports vote on ESM by German FDP party members will not get required number of votes. Final result to be expected on Friday Dec. 16th | ||
| Dec | 13th | 2011 | Merkel Rejects Raising Lending Limit For ESM-Govt Lawmaker | ||
| # = German language | |||||
| * = Dutch |
EFSF (events after Dec 9th 2011)
| Mar | 31st | 2012 | European Central Bank urges more resources for IMF | ||
| Mar | 29th | 2012 | Euro zone agrees to boost rescue capacity | ||
| Jan | 19th | 2012 | EU's bailout fund capacity can be adjusted by governors-draft | ||
| Jan | 8th | 2012 | EFSF's Regling wants to up investor guarantees: report | ||
| Jan | 5th | 2012 | EFSF places €3bln. bond in support of Ireland and Portugal. BONDS MATURING ON 4 FEBRUARY 2015. Yield for investors of 1.770 %. (via @Schuldensuehner) | ||
| Jan | 4th | 2012 | EFSF 3-YR BONDS SAID TO YIELD ABOUT 45 BPS OVER SWAPS. Means it yields 1,8%, 150bps over the German equivalent. (via @Schuldensuehner) | ||
| Jan | 3rd | 2012 | EFSF Bailout Fund plans €3bln three-year bond sale after S&P said in dec it may lose its AAA rating. (via @Schuldensuehner) | ||
| Dec | 20th | 2012 | # | Fitch also threatens EFSF with downgrade (german link) | |
| Dec | 20th | 2012 | Fitch says EFSF AAA rating depends on France remaining AAA. (via @lindayueh) | ||
| Dec | 17th | 2011 | Juncker Expects EU to Meet Deadline on Channeling Loans to IMF | ||
| Dec | 16th | 2011 | EFSF's Regling says may need about EUR 100bln for second Greek programme (via @FGoria) | ||
| Dec | 16th | 2011 | EFSF's Regling says around EUR 600bln of uncommitted funds already available to fight debt crisis (via @FGoria) | ||
| Dec | 16th | 2011 | Slovakia's Miklos says ideal that combined EFSF,ESM capacity stays at €500bln, but debate about a boost reasonable in case situation worsens (via @FGoria) | ||
| Dec | 15th | 2011 | * | Japan again purchases EFSF bonds - 260 bn(?)€ (dutch link) | |
| Dec | 15th | 2011 | * | DNBs Knot: enlarge EFSF with at least 1 tn € (dutch link) | |
| Dec | 13th | 2011 | * | EFSF bonds attractive: 2bn for 0,222% (dutch link) | |
| Dec | 13th | 2011 | * | De Jager: EFSF can only work with budget discipline (dutch link) | |
| *= Dutch , #=German language |
IMF (developments after Dec 9th 2011)
Dec 19th Britain, the IMF, and the world's richest beggar (No UK participation)
Dec 19th Factbox: Pledges of loans to IMF after December 9 EU summit
Dec 17th Germany: Opposition parties SPD+Greens support Bundesbank president Weidmann (german link)
Dec 15th Russia wants to contribute 20 bn $ to IMF (dutch link)
Dec 15th IMF loan unlikely after remarks from Bernanke (german link)
Dec 15th Russia wants to contribute 20 bn $ to IMF (dutch link)
Dec 14th Bundesbank rejects financing of states via IMF (german link)
Dec 12th Bundesbank chief Weidmann wants German parliament to vote on 45 bn contribution to IMF
Dec 19th Factbox: Pledges of loans to IMF after December 9 EU summit
Dec 17th Germany: Opposition parties SPD+Greens support Bundesbank president Weidmann (german link)
Dec 15th Russia wants to contribute 20 bn $ to IMF (dutch link)
Dec 15th IMF loan unlikely after remarks from Bernanke (german link)
Dec 15th Russia wants to contribute 20 bn $ to IMF (dutch link)
Dec 14th Bundesbank rejects financing of states via IMF (german link)
Dec 12th Bundesbank chief Weidmann wants German parliament to vote on 45 bn contribution to IMF
December 26, 2011
CPB: "Financial transaction tax not efficient"
article date: Dec 21st 2011
AMSTERDAM: A tax on financial transactions as proposed by the European Commission is not contributing to a more stable financial system and is less efficient than other taxes on the financial sector the CPB is suggesting in a finding. The transaction tax would be susceptible for evasion and could lead to new more complex forms of finance the planning bureau assumes.
A VAT on financial services, a bank tax or a tax on financial activity would be more efficient the CPB says in a finding that was made by request of the cabinet.
The tax on financial transactions was originally intended to counter speculation with flash capital. The tax puts a fee of 0,1% on stock transactions and 0,01% on transactions of derivates.
The European Commission gave in September of this year its OK to this tax which would according to EC numbers deliver more than 55 bn Euro per annum.
That amount is according to CPB realistic , "but it could also be half of it or double"
The proposal of a transaction tax is supported by the EC, France and Germany whereas the Netherlands and the UK are skeptical.
The transaction tax will not contribute to a more stable sector because this kind of tax doesn't tackle the excessive risks in the financial sector. The transaction tax makes "high frequency trading" (HFT) unattractive for financial institutions in the EU. This automated trade uses algorithms to react to price movements but can according to politicians destabilize the financial system.
The CPB points also to unwanted side effects of the transaction tax such as higher cost for the companies , costs for insurance companies and for pension funds which would have to pay more to cover their valuta- and interest risk.
dutch source:
CPB: Financiele transactietaks niet efficient'
AMSTERDAM: A tax on financial transactions as proposed by the European Commission is not contributing to a more stable financial system and is less efficient than other taxes on the financial sector the CPB is suggesting in a finding. The transaction tax would be susceptible for evasion and could lead to new more complex forms of finance the planning bureau assumes.
A VAT on financial services, a bank tax or a tax on financial activity would be more efficient the CPB says in a finding that was made by request of the cabinet.
The tax on financial transactions was originally intended to counter speculation with flash capital. The tax puts a fee of 0,1% on stock transactions and 0,01% on transactions of derivates.
The European Commission gave in September of this year its OK to this tax which would according to EC numbers deliver more than 55 bn Euro per annum.
That amount is according to CPB realistic , "but it could also be half of it or double"
The proposal of a transaction tax is supported by the EC, France and Germany whereas the Netherlands and the UK are skeptical.
The transaction tax will not contribute to a more stable sector because this kind of tax doesn't tackle the excessive risks in the financial sector. The transaction tax makes "high frequency trading" (HFT) unattractive for financial institutions in the EU. This automated trade uses algorithms to react to price movements but can according to politicians destabilize the financial system.
The CPB points also to unwanted side effects of the transaction tax such as higher cost for the companies , costs for insurance companies and for pension funds which would have to pay more to cover their valuta- and interest risk.
dutch source:
CPB: Financiele transactietaks niet efficient'
Schäuble: fight the causes of crisis
Schäuble: oorzaken van crisis bestrijden
Schäuble: fight the causes of crisis
Austerity and tougher control of the European budget rules are according to Germany, Netherlands and Finland still the best ways to fight the cancerous debt crisis. That came out on Friday after a meeting between finance ministers of those three countries, Wolfgang Schäuble, Jan Kees de Jager and Jutta Urpilainen.
"we have to solve problems by fighting the root causes", Mr Schäuble said. Therefore we need changes in European treaties, he repeated the position of the German government. Germany is pressuring for a long time for treaty changes will allow tougher controls on national budgets.
Schäuble: fight the causes of crisis
Austerity and tougher control of the European budget rules are according to Germany, Netherlands and Finland still the best ways to fight the cancerous debt crisis. That came out on Friday after a meeting between finance ministers of those three countries, Wolfgang Schäuble, Jan Kees de Jager and Jutta Urpilainen.
"we have to solve problems by fighting the root causes", Mr Schäuble said. Therefore we need changes in European treaties, he repeated the position of the German government. Germany is pressuring for a long time for treaty changes will allow tougher controls on national budgets.
Further the agreed measures for the enhancement of the EFSF for the EZ countries must be implemented fast. De Jager and Urpilainen insisted during the common press conference on a bigger role of the International Monetary Fund (IMF) in the fight of the debt crisis. Schäuble did not react to that.
Berlin, Helsinki and The hague to strengthen IMF
Berlin, Helsinki und Den Haag treiben IWF-Stärkung voran
Berlin, Helsinki and The hague to strengthen IMF
Berlin, Helsinki and The hague to strengthen IMF
German finance minister Wolfgang Schäuble (CDU) has discussed a stronger supply of funding of the International Monetary Fund to fight the debt crisis at a meeting with the Finnish finance minister Jutta Urpilainen and the Dutch finance minister Jan Kees de Jager. "We have discussed ways of improvement of the IMF funding, including bilateral credits to the IMF or a general raise of funding", the three ministers declared in a written statement after the meeting in Berlin. It is necessary to erect a "firewall" Urpilainen declared. "Today we agreed that one option to achieve that goal is to strengthen the role of thee IMF" she said. De Jager shared this view. "We are in support of a stronger role of the IMF" he declared. De Jager said, this could be achieved by bilateral loans or by using special drawing rights. Schäuble did not comment on that issue.
The German finance minister hinted possible changes at the Euro safety umbrella ESM. "If we progress towards a union of stability one shall see how that would adapt to the ESM treaty (???=> source wary)"
Schäuble reiterated further decisions for a solution of the crisis are now inevitable. "We completely agree in question that we now really have to take decisions in order to solve the critical situation at the fincial markets", he said. The European heads of state and heads of governments would make decisions at their meeting on Dec. 9th, "to ban the danger that out of the nervousness of the financial markets severe harm of the real economy would arise"
The German finance minister hinted possible changes at the Euro safety umbrella ESM. "If we progress towards a union of stability one shall see how that would adapt to the ESM treaty (???=> source wary)"
Schäuble reiterated further decisions for a solution of the crisis are now inevitable. "We completely agree in question that we now really have to take decisions in order to solve the critical situation at the fincial markets", he said. The European heads of state and heads of governments would make decisions at their meeting on Dec. 9th, "to ban the danger that out of the nervousness of the financial markets severe harm of the real economy would arise"
Germany and France have already announced to come forward with proposals for limited treaty changes that will allow interventions in budgets of deficit sinners. Schäuble again endorsed such changes on Friday and opined the protocol No 14 of the lisbon treaty could be used "as basis to enhance the monetary union towards a stability union". All measures must be directed towards a solution of the problems within those individual countries.
Schäuble also said that next Tuesday the eurogroup would decide upon a report of the so called troika of IMF, European central bank (ECB) and EU-commission about the next trance for Greece. Upon a question of a stronger role of thee ECB in the crisis he reiterated, "that we all see the independence of the ECB as a critical prerequisite for the stability of the common currency" It was not discussed about the policy of the ECB at this meeting. "That's not the task of finance ministers"
Urpilainen reiterated from a Finnish viewpoint the enhancement of the efficiency of the EFSF has highest priority but she didn't rule out a bigger role of the ECB als LOLR. "If nothing else remains then we can think about a strengthening of the role of the ECB", reiterated the Finnish finance minister. At once she categorically ruled out common eurobonds.
The handling of the euro crisis must be quicker
Nov. 25th
De aanpak van de eurocrisis moet sneller
The handling of the euro crisis must be quicker
Dutch PM Mark Rutte wants that the handling of the euro crisis will be accelerated.
The Netherlands will therefore "step on it" Mr Rutte said Friday in a press conference after the weekly council of ministers. Rutte sees that it "moves difficultly" between France and Germany.
The handling of the euro crisis must be quicker
Dutch PM Mark Rutte wants that the handling of the euro crisis will be accelerated.
The Netherlands will therefore "step on it" Mr Rutte said Friday in a press conference after the weekly council of ministers. Rutte sees that it "moves difficultly" between France and Germany.
The Netherlands have a good relations with Berlin and Paris according to him but also with London and therefore it can play a role in the consultations. Rutte is playing that role along with his finance minister Jan Kees de Jager and his undersecretary Ben Knapen of European issues "very very intensively. Our by our", according to the prime minister.
Rutte would like the execution of agreements made at the last eurotop summit of end October to speed up and does his best with suggestions "which could build a bridge between the positions of France and Germany"
In the French-German disagreement about the bigger role of the European central bank he remains neutral. "The ECB is independent. Just in a general sense The Netherlands isn't a friend of monetary finance"
De Jager: „If you have savings, spend them“
Nov 21th (article date 16th)
De Jager: "Als je geld hebt, geef het uit" (dut)
De Jager: "Als je geld hebt, geef het uit" (dut)
De jager: „If you have savings, spend them“
(dutch Finance)Minister De Jager calls on dutch citizens to withdraw their savings and to spend it. This is the best way to stimulate the economy according to him.
„if you have money spend it“ This statement was given by De Jager in Ruttes rapport (a political TV Q&As). He reacted with this upon assumptions the government should not take austerity measures during times of crisis. „The best thing is that private investors stimulate the market“
Dutch economy is shrinking
The central bureau for statistics published yesterday that the dutch economy is developing towards a recession. In the third quarter the economy shrunk 0,3% and for the next quarter the bureau expects also no growth.
Buffer of 6 Bn
According to the finance minister there is still a buffer of roundabout 6 Bn Euro before extra austerity measures have to taken. De Jager doesn't want the state debt to increase further because that is harmful for the trust in the dutch economy.
The results of lost trust
If trust decreases it will be more expensive for the government to lend money. Also can a worse performing economy deter investors.
Solution for the euro crisis
Minister de Jager stated further that he still believes in a solution for the euro crisis. „There are no easy solutions. They will go along with pain for countries but also for ourselves“ according to de Jager.
British research institute investigates return of guilder on behalf of PVV
Brits bureau doet gulden-onderzoek PVV (dut)
The british research institute Lombard Street Research will do some research for the PVV (dut. Party of Geert Wilders) what are the consequences for the Netherlands if it was to exit the Eurozone. The institute in London will not only study the return to the dutch guilder but also the introduction of a new common currency only for the northern states of Europe (the "neuro") . This was announced on Monday by PVV party frontrunner Mr Wilders. The study will be completed beginning of next year.
Lombard Street Research is an institute specialized in macroeconomic questions. The chairman Mr Charles Dumas is known to be a supporter of releasing the Greeks out of the Eurozone.
If out of this research the conclusion is drawn that a return to the guilder would deliver the most on the long run then PVV chairman Wilders will hold a referendum.
"Gigantic costs"
According to the CPB is the abolishment of the euro and the introduction of national currencies connected to enormous costs . It would harm the prosperity so the CPB concludes in its book "Europe in crisis" ... (Rest is already said in previous article)
Latest developments:
Apr 18th 2012 Second opinion on Lombard Street Research's report 'The Netherlands and the euro'
Apr 02nd 2012 Opinion: Euro Was Flawed at Birth and Should Break Apart Now
Mar 10th 2012 The euro zone crisis: A Dutch exit?
Mar 06th 2012 Netherlands: Wilders’ arguments for leaving the euro
LSR: Netherlands and the Euro - summary report final (25 pages, pdf, eng)
Mar 05th 2012 Dutch Freedom Party pushes euro exit as €2.4 trillion rescue bill looms
The british research institute Lombard Street Research will do some research for the PVV (dut. Party of Geert Wilders) what are the consequences for the Netherlands if it was to exit the Eurozone. The institute in London will not only study the return to the dutch guilder but also the introduction of a new common currency only for the northern states of Europe (the "neuro") . This was announced on Monday by PVV party frontrunner Mr Wilders. The study will be completed beginning of next year.
Lombard Street Research is an institute specialized in macroeconomic questions. The chairman Mr Charles Dumas is known to be a supporter of releasing the Greeks out of the Eurozone.
If out of this research the conclusion is drawn that a return to the guilder would deliver the most on the long run then PVV chairman Wilders will hold a referendum.
"Gigantic costs"
According to the CPB is the abolishment of the euro and the introduction of national currencies connected to enormous costs . It would harm the prosperity so the CPB concludes in its book "Europe in crisis" ... (Rest is already said in previous article)
Latest developments:
Apr 18th 2012 Second opinion on Lombard Street Research's report 'The Netherlands and the euro'
Apr 02nd 2012 Opinion: Euro Was Flawed at Birth and Should Break Apart Now
Mar 10th 2012 The euro zone crisis: A Dutch exit?
Mar 06th 2012 Netherlands: Wilders’ arguments for leaving the euro
LSR: Netherlands and the Euro - summary report final (25 pages, pdf, eng)
Mar 05th 2012 Dutch Freedom Party pushes euro exit as €2.4 trillion rescue bill looms
CPB: little extra prosperity by Euro
Nov 20th:
CPB: weinig extra welvaart door euro (dut)
CPB: little extra prosperity by Euro
The introduction of the Euro brought the Netherlands just little extra prosperity.That conclusion was drawn by the CPB , the dutch bureau for central planning (an advice body for the govt) in the book titled: "Europe in crisis". The advantage of the Euro is roundabout a weeks wage of a years income (other sources quote about +-500€)
The free trade within Europe did bring Netherlands much more profit of about one month wage. This advantage is ever increasing. so it is written by the CPB.
The researchers warn of a break up of the Eurozone. The costs for that would be gigantic and would harm the prosperity.
The CPB states that it would be beneficial if there were more rights transferred to European authorities.
CPB: weinig extra welvaart door euro (dut)
CPB: little extra prosperity by Euro
The introduction of the Euro brought the Netherlands just little extra prosperity.That conclusion was drawn by the CPB , the dutch bureau for central planning (an advice body for the govt) in the book titled: "Europe in crisis". The advantage of the Euro is roundabout a weeks wage of a years income (other sources quote about +-500€)
The free trade within Europe did bring Netherlands much more profit of about one month wage. This advantage is ever increasing. so it is written by the CPB.
The researchers warn of a break up of the Eurozone. The costs for that would be gigantic and would harm the prosperity.
The CPB states that it would be beneficial if there were more rights transferred to European authorities.
ECB and IMF looking for crisis solutions
'ECB en IMF onderzoeken crisismaatregelen' (by @mathijsbouman /twitter)
ECB and IMF looking for crisis solutions
The European Central Bank (ECB) and the international monetary fund (IMF) are doing research concerning possibilities to combat the debt crisis mutually. That was reported by press agency Reuters today.
According to sources both institutions talked about possibilities of the ECB to lend money to the IMF. This to ensure that the fund has enough resources to keep also of larger European economies out of the fire. With that construction the restriction of financing the sovereign debts of countries by the ECB can be circumvented. According to those sources the plans haven not left the drawing board. "For the time being it is just a idea" one of them stated.
France
Among economists there is a growing call for a bigger role for the ECB in the struggle to overcome the crisis. Also France would like to see that the
unlimited funds of the central bank would be used to calm the unrest on the markets. According to them this can be realized through providing the EFSF with a banking license in order to make it possible to lend money from the ECB. The EC and Germany however resolutely rejecting this bigger role for the time being. They think the governments must resolve the crisis by themselves by reforming their economies and to sort out their budgets. The central bank does momentarily intervene in the bond market in an attempt to prevent that the interest rates for coutries to pay over their debt to get out of hand. The ECB has always emphasized however that the interventions were restricted in time and scale.
ECB and IMF looking for crisis solutions
The European Central Bank (ECB) and the international monetary fund (IMF) are doing research concerning possibilities to combat the debt crisis mutually. That was reported by press agency Reuters today.
According to sources both institutions talked about possibilities of the ECB to lend money to the IMF. This to ensure that the fund has enough resources to keep also of larger European economies out of the fire. With that construction the restriction of financing the sovereign debts of countries by the ECB can be circumvented. According to those sources the plans haven not left the drawing board. "For the time being it is just a idea" one of them stated.
France
Among economists there is a growing call for a bigger role for the ECB in the struggle to overcome the crisis. Also France would like to see that the
unlimited funds of the central bank would be used to calm the unrest on the markets. According to them this can be realized through providing the EFSF with a banking license in order to make it possible to lend money from the ECB. The EC and Germany however resolutely rejecting this bigger role for the time being. They think the governments must resolve the crisis by themselves by reforming their economies and to sort out their budgets. The central bank does momentarily intervene in the bond market in an attempt to prevent that the interest rates for coutries to pay over their debt to get out of hand. The ECB has always emphasized however that the interventions were restricted in time and scale.
The coup of Knot (president dutch central bank)
Dec 22nd De poets van Knot (via @mootzcom)
The coup of Knot (president dutch central bank)
Klas Knot the president of the (dutch central bank) Nederlandsche Bank delivered the cabinet a unpleasant Christmas surprise. De Nederlandsche Bank usually good for a vast transfer of profit to the treasury has decided not to give an interim-dividend to the state this year. Big bad luck for the governments finances: minister De Jager had to declare a bad news of 575 million € less close to the years ending.
The profit warning which was issued by DNB has to do with all the misery of the eurozone. DNB recons seriously with a lower profit or even a loss due to the crisis. DNB is part of the structure of European Central Banks and the ECB has put big risks on itself by purchasing sovereign bonds of the Euro area and by providing credit lines to struggling banks. Already a year ago the ECB warned European finance ministers that losses can be suffered by those actions. DNB chooses for not taking risks and does not transfer any dividend to its only shareholder the dutch state.
Bad luck for De Jager, not alone because of the effect on the budget deficit which is going to be higher than estimated. If DNB is definitely dismissing the dividend for 2011 De Jager cannot longer hold up the story that the dutch involvement in credit providing for problem countries in the Euro area is providing loads of money to the treasury.
And there is something else. De relationship between the former president of DNB, Nout Wellink, and minister De Jager has cooled off the last cuple of years. Nevertheless the dividends of the DNB under Wellink were steady „nice suprises“ for the treasury. Once Wellink held back a part of the profit: in 1998 in order to purchase the painting „Victory Boogie Woogie“ of Piet Mondriaan for the dutch public at the event of the farewell to the dutch guilder.
On Juli 1st Klaas Knot took office as new president of DNB. Knot came „from outside“ the cabinet assured and he was supposedly enhancing the relationship between the central bank and the ministry. Knot would be closer to the ministry and in the press he was referred to as „trustee“ of De Jager.
If De Jager and Rutte counted on that: within half a year Knot has made clear twice that he is cut from the same cloth as every central banker. First he brought an unpleasant surprise to the cabinet by warning of the risks for banking stability connected with the huge mortgage debt in the Netherlands at the beginning of November. Knot has chosen intentionally for the hypersensitive subject of mortgage rate deduct ability (>from IRS obligations) to demonstrate his independence from politics.
Now De Jager has miscalculated a second time. Knot is following the line of Wellink and the ECB concerning the debt crisis of the Eurozone. The governments should not think that they can put the costs of it on the central banks. And if the dutch government won't provide more cash for the EFSF the DNB will send a profit warning to The Hague. Via a U-turn of a possible loss of the central bank the financial misery will finally arrive at the treasury.
Only relief for the cabinet: the expected dividend of the DNB is a technicality which will produce less fuzz than the announcement of direct support to Greece. But it still is 575 million Euro.
The coup of Knot (president dutch central bank)
Klas Knot the president of the (dutch central bank) Nederlandsche Bank delivered the cabinet a unpleasant Christmas surprise. De Nederlandsche Bank usually good for a vast transfer of profit to the treasury has decided not to give an interim-dividend to the state this year. Big bad luck for the governments finances: minister De Jager had to declare a bad news of 575 million € less close to the years ending.
The profit warning which was issued by DNB has to do with all the misery of the eurozone. DNB recons seriously with a lower profit or even a loss due to the crisis. DNB is part of the structure of European Central Banks and the ECB has put big risks on itself by purchasing sovereign bonds of the Euro area and by providing credit lines to struggling banks. Already a year ago the ECB warned European finance ministers that losses can be suffered by those actions. DNB chooses for not taking risks and does not transfer any dividend to its only shareholder the dutch state.
Bad luck for De Jager, not alone because of the effect on the budget deficit which is going to be higher than estimated. If DNB is definitely dismissing the dividend for 2011 De Jager cannot longer hold up the story that the dutch involvement in credit providing for problem countries in the Euro area is providing loads of money to the treasury.
And there is something else. De relationship between the former president of DNB, Nout Wellink, and minister De Jager has cooled off the last cuple of years. Nevertheless the dividends of the DNB under Wellink were steady „nice suprises“ for the treasury. Once Wellink held back a part of the profit: in 1998 in order to purchase the painting „Victory Boogie Woogie“ of Piet Mondriaan for the dutch public at the event of the farewell to the dutch guilder.
On Juli 1st Klaas Knot took office as new president of DNB. Knot came „from outside“ the cabinet assured and he was supposedly enhancing the relationship between the central bank and the ministry. Knot would be closer to the ministry and in the press he was referred to as „trustee“ of De Jager.
If De Jager and Rutte counted on that: within half a year Knot has made clear twice that he is cut from the same cloth as every central banker. First he brought an unpleasant surprise to the cabinet by warning of the risks for banking stability connected with the huge mortgage debt in the Netherlands at the beginning of November. Knot has chosen intentionally for the hypersensitive subject of mortgage rate deduct ability (>from IRS obligations) to demonstrate his independence from politics.
Now De Jager has miscalculated a second time. Knot is following the line of Wellink and the ECB concerning the debt crisis of the Eurozone. The governments should not think that they can put the costs of it on the central banks. And if the dutch government won't provide more cash for the EFSF the DNB will send a profit warning to The Hague. Via a U-turn of a possible loss of the central bank the financial misery will finally arrive at the treasury.
Only relief for the cabinet: the expected dividend of the DNB is a technicality which will produce less fuzz than the announcement of direct support to Greece. But it still is 575 million Euro.
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