World View: Europe at Crossroads over Greece

World View: Europe at Crossroads over Greece

This morning’s key headlines from

  • Wells Fargo, Bancorp and other banks charging 300%+ interest for ‘payday loans’
  • Netanyahu’s government in Israel to move to far right
  • New Boeing weapon can target and shut down all electronics
  • Europe is at a crossroads over Greece

Wells Fargo, Bancorp and other banks charging 300%+ interest for ‘payday loans’

Wells Fargo and U.S. Bancorp are among two banks that have are nowcharging 300% interest or more for small short-term loans often calleddirect deposit accounts, as soon as the borrower receives his weeklyor monthly pay. The loans are fairly low risk for the bank, sincethey can recover the loan, plus interest and fees, by directlydebiting the borrowers bank account, and yet the banks are charginginterest rates that are so high as to be in violation of some statelaws. These payday loans are particularly vicious, because the bankstarget them at people who don’t understand interest rates, of whichthere are plenty, and pull them into a vicious cycle where they haveto keep borrowing because each new paycheck keeps getting swallowed upby the bank. Earlier this year, Wells Fargo was fined $175 million fordefrauding for overcharging minorities during the subprime bubble.Banksters continue to search for new ways to increase their milliondollary bonuses. Bloomberg

Netanyahu’s government in Israel to move to far right

Israel’s prime minister Benjamin Netanyahu announced that he will joinforces with his foreign minister, Avigdor Lieberman, in January’selections. Lieberman is often referred to as “ultra-nationalist”because of his inflammatory rhetoric directed at Arabs, including aproposed law that would require Israelis to sign a loyalty oath orhave their citizenship revoked. According to Netanyahu on Thursday: 

We are facing great challenges and this is the timeto unite forces for the sake of Israel. Therefore Likud andYisrael Beitenu [political parties of Netanyahu and Lieberman,respectively] will run together on the same ticket in the nextelections.

We are asking for a mandate from the public to lead Israel againstsecurity threats, above all preventing Iran from arming itselfwith nuclear weapons and the struggle againstterror.

Lieberman himself was a 1978 immigrant from Moldova, and has sought torepresent the more than 1 million immigrants from the former SovietUnion. Al-Jazeera

New Boeing weapon can target and shut down all electronics

Boeing has successfully tested a new weapon, the Counter-ElectronicsHigh Power Microwave Advanced Missile Project (CHAMP), that can targetelectronic devices without harming humans or buildings. A plane canshoot a CHAMPS burst at a compound and immediately shut down allelectronic equipment, including radar stations. The weapon wasdeveloped to counter “passive radar” systems that many countries areadopting to defeat American stealth technology. Business Insider

Europe is at a crossroads over Greece

Officials from the International Monetary Fund (IMF) reported to eurozone financial ministers that Greece’s situation is much worse thanpreviously predicted, and that Greece will badly miss its financialtargets:  “It is clear that Greece is off track and there is nochance they will cut the debt to 120 percent of GDP in 2020 asenvisaged. It will be rather 136 percent, and this would be undera positive scenario of a primary budget surplus, a return toeconomic growth, and privatisation.”

In other words, even in the most unrealistically optimisticassumptions, the austerity measures already committed by Greece willfail by a substantial amount to meet Greece’s commitment to lower itsdebt to 120% of GDP by 2020. If more realistic assumptions areplugged in, the target will be missed by substantially more.

This news comes at a time when the political situations in both Athensand Brussels are in total chaos. In Athens, the coalition of primeminister Antonis Samaras was threatened with collapse, as theDemocratic Left persisted in opposition to the demands of thepublic sector works and raise retirement ages. In Brussels, thequestion of whether Greece would be granted its requested 2-yearpostponement of additional austerity measures was still a subject ofdebate. Furthermore, Wednesday’s IMF report contained further badnews: Granting the 2-year extension would require giving Greece anadditional 30 billion euros in bailout money, not just 20 billionas previous estimated.

As I and other people have been saying for two years, there is nosolution to the problem of Greece’s debt in this generational Crisisera. That is, it’s not that politicians are not clever enough tothink of a solution, and it’s not that they’ve thought of two or threedifferent satisfactory solutions, but can’t agree on which one toimplement. It’s that no solution exists. This has been apparent fortwo years to anyone who does the math.

But now the same thing has become apparent to pretty much everybody,including people who are incapable of doing any math. There will be aEuropean summit meeting for four days over the weekend, with plans forworking sessions day and night. My bet is still that they’ll find away to kick the can down the road a while longer, just allowing theproblem to worsen. But there’s a growing opposition to that,especially from Germany, Finland and the Netherlands, since it’s justmy opinion not likely, that after four days and nights of arguing andhaggling and shouting, the European summit leaders may finallyconclude that they have no choice but to throw Greece under the bus.Reuters and Kathimerini

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