European Politico-economics QA Mega-thread - Page 418

The free flow of data across the Atlantic, the lifeblood of modern business dealings, faces an uncertain future, despite a belated, high-level deal between European and U.S. officials this week.

Restive regulators in Europe are gearing up to enforce tough privacy laws and further court challenges await, activists say.

The breakdown of the main framework for providing legal cover for cross-border data transfers has companies large and small racing to find workable alternatives. These range from stricter data-handling policies to new technologies or paying to lease datcenters based in Europe.

Companies, facing renewed threats by privacy regulators,

find themselves on legal thin ice with many of the existing procedures for managing cross-border data flows, experts say.

Google, Facebook and other big Internet services which transfer mountains of data globally are likely to be the first targets in any regulatory crackdown, they said.

Hailed as a "Privacy Shield" by European Union and U.S. negotiators who reached the new cross-border data sharing agreement, the deal faces a labyrinthine approval process before the new rules have any chance of coming into force.

"Once it becomes available, businesses will want to be cautious about signing up to Privacy Shield given the potential legal challenges that special interest groups have already suggested they will be considering," cautioned Marc Dautlich, a partner with Pinsent Masons in London.

TOUGH ON PRIVACY

Cross-border data transfers are used in many industries for sharing employee information, when consumer data is shared to complete credit card, travel or e-commerce transactions, or to target advertising based on customer preferences.

Since 2000, up to 4,500 U.S. companies had come to count on a simple set of rules, dubbed Safe Harbour, allowing them to self-certify they complied with privacy principles for personal data transfers from Europe to the United States. Many other firms, especially fast-growing start-ups, did nothing to comply.

In October, the European Court of Justice threw out Safe Harbour. In a landmark decision, it ruled the mechanism provided inadequate protections under European privacy laws against the sorts of spying by U.S. intelligence agencies revealed by former NSA contractor Edward Snowden in 2013.

Independent-minded national privacy regulators say they need to know more details about the so-called "Privacy Shield" but many openly doubt the agreement can bridge the gulf between the two continents' privacy practices.

"Transfers to the U.S. cannot take place on the basis of the invalidated Safe Harbour decision. EU data protection authorities will therefore deal with related cases and complaints on a case-by-case basis," Europe's national privacy regulators said in a joint statement on Wednesday.

The data commission for Schleswig-Holstein, Germany's most northern state, said it was prepared to take action on national data protection rules if citizens file complaints.

The regulator warned in October that firms found in violation of German data protection rules could face fines up to 300,000 euros ($335,000). Across the region, multi-million euro fines could be imposed on offenders and commercial transfers of personal data prohibited, privacy experts say.

It’s an unforgiving world, according to Bank of England Governor Mark Carney. Mario Draghi would probably be inclined to agree.

As the European Central Bank president pumps billions of euros of stimulus into the economy every month, he’s seeing continued euro-area expansion and a slow decline in unemployment. But he’s also faces outside forces including an emerging market-led slowdown and an oil-price slump that threaten to drag inflation back below zero.

That’s all combining to make for a gloomy outlook -- the European Commission just cut its 2016 forecasts -- and means Draghi, who is required to look at price stability, is again reconsidering stimulus mere months after upping his efforts. While data this week will probably show the euro-region economy grew for an 11th quarter at the end of 2015, the pace is modest, and not enough to offset the global disinflationary pressures afflicting the region.

“Domestic demand is OK, it’s the external environment which is not providing that big a boost,” said Marco Valli, chief euro-area economist at UniCredit Bank AG in Milan. “That is not going to change rapidly anytime soon.”

The 19-nation region probably grew 0.3 percent in the fourth quarter, according to economists surveyed by Bloomberg. Growth in 2015 is predicted at 1.5 percent, the best full-year performance since 2011.

Growth of this kind “must be considered normal in the current climate,” said Karsten Junius, chief economist at Bank J Safra Sarasin in Zurich. “The euro area has an inflation problem, not a growth problem.”

Still, maintaining even that limited quarterly pace could be a struggle: economic confidence slipped at the start of the year and a composite Purchasing Managers Index fell to a four-month low in January. The Stoxx 600 Index has fallen more than 13 percent this year and the Sentix investor confidence index dropped to the lowest in more than a year in February.
In addition to global restraints, the euro area is contending with domestic issues, including high levels of debt in some countries and the refugee crisis. The ECB wants governments to do more structural reforms to help strengthen the fundamentals of the economy.

Central banks such as the ECB are “expected to do way too much,” Mohamed El-Erian, chief economic adviser at Allianz SE and a Bloomberg View columnist, said on Bloomberg television on Friday. “Central banks cannot lift the economy on their own and we know that there are lots of costs and risks, collateral damage, of relying just on central banks.”

The European Commission on Thursday cut its 2016 growth prediction to 1.7 percent from 1.8 percent and said Germany, France and Italy -- the region’s largest economies -- will all perform worse than predicted just three months ago. It sees inflation of just 0.5 percent this year.

NATO will weigh calls for a naval mission in the eastern Mediterranean Sea to police refugee streams as a fresh exodus from Syria adds to European leaders’ desperation.

Such a mission, proposed by Germany and Turkey, would thrust the 28-nation alliance into the humanitarian trauma aggravated by the Russian-backed offensive by Syrian troops that drove thousands out of Aleppo and toward Turkey.
“We will take very seriously a request from Turkey and other allies to look into what NATO can do to help them cope with and deal with the crisis,” North Atlantic Treaty Organization Secretary General Jens Stoltenberg told reporters in Brussels on Tuesday.

NATO is confronted with Russian intervention in the Middle East -- including airspace violations over Turkey, an alliance member -- after reinforcing its eastern European defenses in response to the Kremlin’s annexation of Crimea and fomenting rebellion in Ukraine in 2014.

Merkel’s Challenge

Allied warships now on a counter-terrorism mission in the Mediterranean and anti-piracy patrols off the coast of Somalia could be reassigned to monitor and potentially go after human traffickers in the Aegean Sea between Greece and Turkey.

A naval mission, to be discussed Wednesday and Thursday at a meeting of defense ministers in Brussels, is controversial. It could produce unpleasant images of NATO sailors and soldiers herding refugee children behind barbed wire, handing a propaganda victory to Islamic radicals and the alliance’s detractors in the Kremlin.

With her political standing in jeopardy as German public opinion turns against her open-arms approach, German Chancellor Angela Merkel went to Ankara on Monday with limited European leverage to persuade Turkey to house more refugees on its soil instead of pointing them toward western Europe.

Stoltenberg said naval patrols would fit into “reassurance measures” to shield Turkey from the war in neighboring Syria that already include Patriot air-defense missiles and air surveillance over Turkish territory and the coast.

U.S. Ambassador to NATO Douglas Lute called on European Union governments to take the lead on civilian emergency management, with the alliance confined to offering backup. He said military planners will draw up options.

“This is fundamentally an issue that should be addressed a couple miles from here at EU headquarters, but it doesn’t mean NATO can’t assist,” Lute told reporters.

Greece's central bank chief on Wednesday called for the completion of the country's first bailout review, warning that a projected economic recovery in the second half of the year was still fragile.

"The projection for an economic recovery in the second half is subject to risks," Stournaras told lawmakers during a parliamentary committee meeting.

"The mistakes of the past that led to a dead-end must be prevented. Every time there is a failure to conclude the review sentiment gets worse," he said.

Greek Prime Minister Alexis Tsipras said on Wednesday he was ready to talk to protesting farmers over pension reform, but said the broader system still needed to be overhauled to safeguard its viability.

Tsipras, addressing a session of his cabinet, said his government acknowledged that, in its present form, the pensions package could create burdens on sections of the population which needed to be reassessed.

"We are already doing that with self-employed ... we are aspiring to do the same with farmers, provided they want to sit down to dialogue to find a solution," Tsipras said.

Thousands of farmers have been blockading motorways across the country for three weeks over reforms, which call on them to pay higher social security contributions and taxes. They are planning to take their demonstration to central Athens on Feb. 12.

Finance ministers from the 19 European nations that use the euro gather in Brussels on Thursday to discuss yet another stalled Greek bailout review. The meeting comes as the nation’s stocks have fallen for seven consecutive days, sending equities to a 26-year low, and as mounting European criticism of Greece’s handling of a refugee crisis threatens to unravel the European Union’s passport-free travel zone.

Greek creditors, including the European Commission, The European Central Bank and the International Monetary Fund, have to assess if the cash-strapped country is upholding the requirements prescribed in an 86 billion-euro ($96.7 billion) bailout it won last year. These institutions need to sign off on a review of the bailout before more funding can be released and debt relief talks can begin.

Here are answers to some of the most frequently asked questions about Greece:

Why is the Greek bailout review stalled, again?

Under the latest bailout agreement, Prime Minister Alexis Tsipras’s government has to overhaul the country’s pension system and income-tax code, propose new belt-tightening measures so that it achieves a budget surplus before interest payments equal to 3.5 percent of Greek gross domestic product over the medium term, and create a new privatization fund. The list required to complete this bailout review would be a tall order for any government, let alone for a coalition that promised to put an end to austerity and relies on a wafer-thin parliamentary majority of three seats.

What are bailout authorities up to on Greece’s program?

Greece is in the middle of the first overall program review of its bailout deal. The commission, the IMF and the ECB are working with officials in Athens to see if Greece is keeping up with its requirements and to set out the next targets for unlocking aid. The European Stability Mechanism, the euro-area’s firewall fund, is also taking part. Jeroen Dijsselbloem, who runs the meetings of the euro-area finance ministers, said it could take weeks to sort out.

What’s the political situation in Greece?

After two defections in November which left the governing coalition with a slim three-seat majority, Tsipras is trying to satisfy creditor demands for additional savings from the pension system, keep his pledge not to cut primary pensions any further, and deal with a popular backlash against his proposals to raise mandatory social-security contributions for farmers, employers and white collar workers. At the same time, opposition parties have ruled out offering any support, while the latest opinion polls show that the conservative main opposition New Democracy party has regained the lead from the ruling Syriza party for the first time in almost two years.

The scale of protests against the government has sparked renewed doubts about Greece’s ability and willingness to deliver on its bailout commitments.

How does the real economy look?

Greece’s central bank predicts that the economy contracted by 0.2 percent last year. The European Commission’s estimates gross domestic product in 2015 was unchanged, and sees a 0.7 percent contraction for 2016. The impact of last year’s turmoil and capital controls has been much less severe than expected, though Bank of Greece governor Yannis Stournaras said Wednesday that economic output in 2015 would have been as much as 15 billion euros greater had it not been for the prolonged quarrel between Tsipras and euro-area member states over terms of the bailout.

Stournaras said that a delay on the completion of the bailout review would weigh on the country’s economic recovery prospects this year. Greek government notes are the worst performing of all sovereign securities tracked by Bloomberg’s World Bond Indexes this year and the Athens Stock Exchange has been the worst performing of all primary equity gauges tracked by Bloomberg. Banks have been hit particularly hard, losing more than half of their market value.

Why are creditors asking Greece to make pension cuts?

Greece has almost 2.7 million pensioners and the average gross pension for retirees is about 960 euros per month, Labor ministry data show. The sum total of pensioners and unemployed is higher than the 3.7 million currently working in Greece, according to the latest Labor Force Survey published by the Hellenic Statistical Authority.
Last year, the state spent 22.7 percent of its ordinary budget to plug the hole in pension funds, according to the country’s Parliamentary Budget Office. The non-partisan office said in a report published last month that public expenditure for pensions equals 14.9 percent of Greece’s gross domestic product, versus an average of 7.9 percent among member states in the Organisation for Economic Cooperation and Development.

What are the creditors’ biggest issues?

Pensions, fiscal projections, public administration and Greece’s privatization fund. The first two are closely linked, with Greece needing to show it will be able to meet its bailout budget targets based on expected revenues, spending needs and economic growth. Greece has proposed collecting more taxes to make sure its pension numbers balance, while the EU says that could hurt economic growth by punishing employers. Tsipras also needs to fend off allegations of corrupt appointment practices. An EU official told reporters this week that some Greek ministries have made disappointing hires that aren’t in line with the bailout commitments and have “decreased happiness” with the program.

How much money is on the line?

The exact size of Greece’s next aid disbursement will depend on when it’s released and what future obligations are due. Creditors want Greece to have enough cash to make near-term debt payments to the IMF, ECB and government contractors. But they don’t want to give Greece so much room that it stops taking bailout requirements seriously. Current expectations are in the 4 billion- to 6 billion-euro range, enough to get through the first half of the summer but not through a big payment due in August.

On February 11 2016 14:57 iPlaY.NettleS wrote:
Migrant arrivals in Jan 16' seven times higher than Jan 15'.
76,000 in 2016 vs 11,000 2015.
Your move Europe...

http://www.zerohedge.com/news/2016-02-10/stunning-chart-shows-how-quickly-europes-refugee-crisis-accelerating