All of a sudden the Austrian Government is waking up to the fact that a country cannot just go on spending money it doesn't have. The mountain of debt is higher than the Grossglockner (Austria's highest mountain) and is becoming more and more difficult to climb. Up to now the country plowed merrily along as if it expected some good fairy to wave a magic wand and make everything Okay again.
The much despised Rating Agencies have sofar rated Austria with their highest positive rating: AAA...
There is now, however the possibility that this may change and panic is breaking out in Vienna.
PURE PANIK IN THE CHANCELLORY is one of the news headlines. Government leaders are falling all over themselves with issuing "Saving Plans"... these are of course strictly in accordance with the political direction of each of the Parties: "Tax the Rich" scream the Socialists, "Increase Retirement Age" suggest the Conservatives. "Sell some Government Properties" suggest others...
Maybe all three suggestions and some others should be not only talked about, but actually implemented.
I am far from a Socialist, but I must agree that what the "Rich" have been able to accomplish with the perfectly legal institution of a "Stiftung" is inexcusable. The amounts of moneys they succeed in depositing there, as well as in Tax free off shore havens, is beyond belief. Why should it be possible for a very rich person to pay, percentage-wise, less tax than a regular earner?
The possibility of retirement at age 58 places a financial strain onto government koffers which is totally unreasonable. Why should a 58 year old, in perfect health, be entitled to a Pension ? Well, they say, we paid into this retirement fund and now we draw from it. The numbers, unfortunately, do not correspond. More and more of the moneys required for pension payments must be drawn from 'General Revenue'...
An unbelievable 10% of all Government spending disappears into the maw of the Austrian Railroad.
There are trains running daily on routes with nary a passenger in them. ( from Bleiburg to Klagenfurt, often observed, 5 railroad cars and 5 passengers is not an efficient way to operate a transportation system.)
The Railroad must be sold to private interests to be operated efficiently.
All the feather bedding demanded and obtained by the Labour Unions simply must be abolished.
Civil Service must be reduced, as must be the number of politicians serving in 4 to 5 levels of Governments.
There are so many other things which "must be done" that this little article would become a book of major proportions.
What does it take to accomplish this?
A democratically elected government with Guts.
Political Parties which do not fight each other to the death, just because they follow different political ideologies. There are pragmatic realities which transcend political ideas.
Every Housewife knows that she can spend only as much money as the family earns, or they soon will be on the dole.
Every businessman knows that he has to watch his "bottom line" and not allow it to slip into the "Red" as otherwise he will face bankruptcy.
Why do Governments not know this simple truth? Because they can always raise Taxes, thereby securing an income without an end... or so they think... They can always borrow money from their own citicens or from other countries... raise taxes and borrow.... both of those are not unlimited sources of funds: The Taxpayer will only remain viable up to a certain limit of taxation, and borrowing has an Interest factor attached to it and the sad truth that borrowed funds must be paid back some time. And if you tell me that a country can always borrow funds from country B to pay back the debt it ows to Country A, then please consider that this is called "Kiting" ... and there too is a limit to how high the "kite" can fly.
Austria, America, Canada, and any other country you may want to name, can, in the long run, only spend what it earns, or, like Greece, it will have to go bankrupt.
The Rating Agencies have Austria under their microscope !
So, as I said at the outset: "There is Pure Panic in the Chancellory"
Hey, can you lend me a Euro ? I'll pay you back some payday.
Bertstravels
Wednesday, November 16, 2011
Tuesday, November 15, 2011
Remember Michel Barnier ???
Michel Barnier is a French politician, serving in the European Union (E.U.) as "Binnenminister"....
Excuse my ignorance, but what does a "Interior Minister" (my translation) actually do?
Well, Michel is heard from every now and then, when he calls for the "Smashing", "Controlling" and now "Curtailing" of the Rating Agencies, Moody's, S&P, and Fitch. In the beginning he wanted them "smashed" (read my eralier Blog) then he became less belligerant and demanded only that they be "controlled" and now he is again on record that these three private companies, operating under the laws of the U.S.A., with offices in the USA, engaged in the reporting of the financial reliability of large Companies, and Countries must be "curtailed".
At first Good Old Barnier screamed that these rating Agencies are a tool of the American Government to undermine the value of the Euro. The fact that a reduction in value of the Euro can only be achieved by the economic activities of European Nations, and that such a reduction in values would make it more and more difficult for American Manufacturers to sell their goods in Europe, would as it is, be counter productive to American interests, made no difference to Barny (as in Rubble).
When, much to the dismay of the Government of the USA, one of these Agencies down graded the American rating from a triple A to a doubleA+ took much of the wind out of Barny's sails, not much was heard from this scatter brain for a while.
Now he has surfaced again in the press. He insists that the "rules of the game" under which rating agencies operate must be substantially altered in Europe. The financial standing of a "European Crisis State"
(such as Greece and Italy and...and...and...) must not be reported for two months.....
For two whole months the truth must be forbidden to be revealed to investors and creditors. For two months we all have to pretend that the financial strength of, say Portugal is in fine shape, and that they deserve a good rating, when it is in fact known by the country itself and the rating agencies that they are close to bankruptcy.... or at least on the way to tough financial times.
Barny wants now to introduce legislation in the EU enabling a falsely rated entity, to be able to sue the rating agency. As all rating Agencies consist of "people", they can, of course, make mistakes. When the USA was downgraded they screamed bloody murder that the assumptions taken by the Agency were wrong.
The Agency simply said: Show it to us where we were wrong and we shall correct the rating. It never happened...
I am certain that if a demonstrably wrongly rated entity sustained damage, and they likely would, if only by the increase in interest payable on their debt, such a Country or company would have the possibility for redress in the international courts.
I can just see a bevy of lawyers gleefully rubbing their hands in anticipation of huge fees in case of such suits.
We all now know from varying reports about the slip-shod manner in which Greece, for instance, was governed. Imagine what might have happened to investors, had they still believed in a good credit rating for this country for an additional two month?
At first "Smashing" then "Controlling" and now "Curtailing" all rating agencies.
I cannot understand what drives Barny. Why is he so afraid that the truth regarding the economic tustworthiness of European Countries is told?
I read nowhere that he complained when S&P downgraded the USA.
But to tell the truth about Europe????
don't you dare.
Bertstravels.
Excuse my ignorance, but what does a "Interior Minister" (my translation) actually do?
Well, Michel is heard from every now and then, when he calls for the "Smashing", "Controlling" and now "Curtailing" of the Rating Agencies, Moody's, S&P, and Fitch. In the beginning he wanted them "smashed" (read my eralier Blog) then he became less belligerant and demanded only that they be "controlled" and now he is again on record that these three private companies, operating under the laws of the U.S.A., with offices in the USA, engaged in the reporting of the financial reliability of large Companies, and Countries must be "curtailed".
At first Good Old Barnier screamed that these rating Agencies are a tool of the American Government to undermine the value of the Euro. The fact that a reduction in value of the Euro can only be achieved by the economic activities of European Nations, and that such a reduction in values would make it more and more difficult for American Manufacturers to sell their goods in Europe, would as it is, be counter productive to American interests, made no difference to Barny (as in Rubble).
When, much to the dismay of the Government of the USA, one of these Agencies down graded the American rating from a triple A to a doubleA+ took much of the wind out of Barny's sails, not much was heard from this scatter brain for a while.
Now he has surfaced again in the press. He insists that the "rules of the game" under which rating agencies operate must be substantially altered in Europe. The financial standing of a "European Crisis State"
(such as Greece and Italy and...and...and...) must not be reported for two months.....
For two whole months the truth must be forbidden to be revealed to investors and creditors. For two months we all have to pretend that the financial strength of, say Portugal is in fine shape, and that they deserve a good rating, when it is in fact known by the country itself and the rating agencies that they are close to bankruptcy.... or at least on the way to tough financial times.
Barny wants now to introduce legislation in the EU enabling a falsely rated entity, to be able to sue the rating agency. As all rating Agencies consist of "people", they can, of course, make mistakes. When the USA was downgraded they screamed bloody murder that the assumptions taken by the Agency were wrong.
The Agency simply said: Show it to us where we were wrong and we shall correct the rating. It never happened...
I am certain that if a demonstrably wrongly rated entity sustained damage, and they likely would, if only by the increase in interest payable on their debt, such a Country or company would have the possibility for redress in the international courts.
I can just see a bevy of lawyers gleefully rubbing their hands in anticipation of huge fees in case of such suits.
We all now know from varying reports about the slip-shod manner in which Greece, for instance, was governed. Imagine what might have happened to investors, had they still believed in a good credit rating for this country for an additional two month?
At first "Smashing" then "Controlling" and now "Curtailing" all rating agencies.
I cannot understand what drives Barny. Why is he so afraid that the truth regarding the economic tustworthiness of European Countries is told?
I read nowhere that he complained when S&P downgraded the USA.
But to tell the truth about Europe????
don't you dare.
Bertstravels.
MY HAND
This is my hand after one month of healing.
It had taken 18 stiches to close the gap.
A good deal of new skin has formed.
The Doctor told me today that it'll be a while before
I can play on the Austrian Volley Ball Team again.
Monday, November 14, 2011
MADISON VIOLET
Lisa MacIsaac (above) and
Brenley MacEachern (below )
from Canada
came to Bleiburg and in front of a full house
of enthusiastic listeners performed a melange of
their own compositions and standards of
the Country, Folk and Pop genre.
A beautiful bass line was layed down
by the third member of this Trio,
Bassist Adrian Lawryshyn.
Tuesday, November 8, 2011
Saturday, November 5, 2011
Late Fall around Bleiburg
...went for a drive in the country side in the hills around Bleiburg.
Although the leaves never turn as bright red as they do in Canada
it's still a pretty sight.
Best when viewed in the large format.
Wednesday, November 2, 2011
CAN YOU BELIEVE THIS ?
There is the ship: It's called TITANIC. The Captain knows that it is heading for a collision with an iceberg.
He gives the order to wake all passengers so they may vote on what is to be done.
Of course they know nothing about operating a ship.
They are all disgruntled and sleepy eyed.
So they flip a coin... some say: "Full Steam Ahead", while the rest opt for "Reverse Engines at Full Power."
Does this sound familiar?
Just replace the "Titanic" with "Greece" .... you got it ?
Pretty dam unbelievable ain't it?
Hand me a Drachma, so I can give the Captain a tip.
bertstravels.
He gives the order to wake all passengers so they may vote on what is to be done.
Of course they know nothing about operating a ship.
They are all disgruntled and sleepy eyed.
So they flip a coin... some say: "Full Steam Ahead", while the rest opt for "Reverse Engines at Full Power."
Does this sound familiar?
Just replace the "Titanic" with "Greece" .... you got it ?
Pretty dam unbelievable ain't it?
Hand me a Drachma, so I can give the Captain a tip.
bertstravels.