GENEVA, SWITZERLAND – An arms embargo will remain but other sanctions against Myanmar/Burma have been lifted by the European Union, to take effect the week of 30 April, the EU announced 23 April.The easing comes as a result of the Burmese parliament re-opening and other signs that the repressive regime is serious about opening up the country and improving its human rights record.
Switzerland, whose own sanctions match closely those of the EU, has not yet announced if it will make a similar move. The Swiss began sanctions 12 years ago because of human rights abuses, and it tightened these in 2006.
Longer term solutions sought. to absorb immigrants
BERN, SWITZERLAND – The Swiss government’s announcement late Wednesday 18 April that it will temporarily cap the number of workers allowed from the European Union-8 States, has prompted several reactions outside the country, which reflect a mix of concerns. But within Switzerland it’s the additional measures to seek longer term solutions to deal with migration that will be debated.
The Federal Council says a quota of 2,000 B residence permits for 12 months will be revived starting 1 May, for workers from the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia. Switzerland had quotas but suspended them 1 May 2011. The government will decide before May 2013 if the quotas will remain in place for the following 12 months.
Agreement with EU allows quotas for transition period that ends in May 2014
By 31 May 2014 the quotas will be lifted permanently, under the terms of the Swiss-EU greement on the free movement of persons (AFM), says Bern, although some EU officials appear to interpret the agreement differently, according to media reports.
The stated rationale for the move is that the safeguard clause in the Agreement on the free movement of persons (AFM) allows Switzerland to unilaterally re-introduce quotas for the EU-8 countries until 2014, “provided that in a given year the number of residence permits and/or short-term residence permits for job seekers from the EU/EFTA States exceeds the average of the previous three years by at least 10 percent.”
The conditions were fulfilled for category B permits, says Bern, from May 2011 through April 2012: the quota could legally be implemented if more than 2,283 B residence permits were issued during that time. More than 6,000 were issued.
The conditions were not, however, met for L permits, and no quota is being implemented there.
B permits are granted, Bern notes, “to persons who possess an employment contract in Switzerland that is valid for more than a year or for an unlimited period, and to individuals who are self-employed. Short residence permits of category L are granted to foreign workers whose employment contract is valid for up to one year.”
EU-8 leaders and some EU politicians unhappy
BERN, SWITZERLAND – Swiss exports rose slightly in February and imports fell, but the picture is not as rosy as it seems because the improvement is largely due to Leap Year. Exports rose by 1.2 percent for the month, compared to a year earlier, but when adjusted for the additional day in 2012, they fell by 3.9 percent. There was no change at all from January.
The watch industry once again kept the overall picture looking good, with a 20 percent increase in exports compared to a year earlier, while the machining and electronics industry fell by 15 percent.
Trade with the European Union fell in both directions.
Switzerland at the end of February had a trade surplus of CHF2.7 billion.
EU, Japan and US China officially open trade dispute with China over rare minerals
GENEVA, SWITZERLAND – The seven-year old battle between the USA and the European Union over possible subsidies for Boeing appears no closer to resolution following Monday’s decision by the WTO (World Trade Organization) to uphold its previous decision that Boeing did indeed receive illegal government subsidies. Both sides are calling the decision a victory and the tussle is widely expected to continue.
The WTO “court” or appellate body, ruled that from 1989 to 2006 the federal government and several states had indeed subsidized aircraft manufacturer Boeing, but it calculated the amount as $5.3 billion rather than the $19.1b that the EU has argued was spent, to the detriment of its own Airbus company. The appellate body reviewed a number of contentious issues that include tax rate reductions and benefits from research for the US Department of Defense and Nasa, the space programme. (WTO: summary of key findings)
Obama argues that China is hoarding essential technology materials
Tuesday 13 March a new trade dispute that has been brewing was officially opened at the WTO in Geneva by the EU, Japan and the US. The three countries separately filed “requests for consultation”, WTO parlance for opening a dispute, covering restrictions on exports from China of various forms of rare earths, tungsten and molybdenum.
US President Barack Obama fired the opening salvo by making a widely publicized speech Tuesday in the White House Rose Garden, addressing the issue of fair trade.
“We’re bringing a new trade case against China – and we’re being joined by Japan and some of our European allies. This case involves something called rare earth materials, which are used by American manufacturers to make high-tech products like advanced batteries that power everything from hybrid cars to cell phones.
“We want our companies building those products right here in America. But to do that, American manufacturers need to have access to rare earth materials – which China supplies. Now, if China would simply let the market work on its own, we’d have no objections. But their policies currently are preventing that from happening. And they go against the very rules that China agreed to follow.”
China holds a large to very large share of the Earth’s supplies of a number of rare earth materials, several of which are considered essential for technology. AP reported, and it was widely carried by newspapers, that Obama’s speech signals that the new WTO is part of what he sees as a larger field of unfair trade practices by China.
China’s official news agency Xinhua reports that
“the Chinese Ministry of Commerce said in a statement posted on its website that it will properly deal with the issue. China, the statement said, has no intention of protecting domestic industries by distorting its foreign trade.
“Earlier in the day, Chinese Minister of Industry and Information Technology Miao Wei told Xinhua that the Chinese side would prepare to defend itself if a complaint was filed with the WTO. Miao said China’s rare earth export policy is drawn up out of concern for the development of resources and environmental damage. Some rare earth metals would last only 20 years if China does not stop excessive mining, Miao added.
“China’s rare earth export restriction was not targeted at any specific country, nor was it a kind of trade protectionism, the minister said.”
Background, OECD paper for the WTO on limiting exports of strategic raw materials
GENEVA, SWITZERLAND – A tax on European financial transactions is under discussion in Brussels Monday 12 March by European Union leaders, and although it doesn’t look like it will be adopted soon, the tax is sparking speculation about its potential impact. Switzerland’s parliament said in 2011 it would not adopt a similar tax, so the impact on Switzerland as a financial centre is one of the debated issues.
Shoring up ailing economies is high on European political agendas and one of the proposed solutions is the tax, which has strong support from unions and several civic groups and is supported by Austria, Finland, France, Germany, Greece, Italy, and Spain, but staunchly opposed by Belgium, Ireland, the UK and Sweden.
The tax’s supporters are calling for the EU to adopt it for three main reasons: the financial sector should pay a fair share of the burden caused by the crisis they triggered, say proponents; the increase in revenue will relaunch the economy; it will curb speculation.
Market Watch (background paper, Market Watch) interviews a number of people in the marketplace who argue that Switzerland, if it doesn’t have the tax, will attract new business, but only if it scraps its own stamp tax.
Swiss Parliament, Bern
BERN, SWITZERLAND – The lower house of the Swiss parliament Monday 5 March voted strongly in favour of an amended US-Swiss tax treaty, 116-52, thus backing a vote by the upper house in December 2011.
Some foreign media coverage of the vote implies that the treaty is designed to help out 11 Swiss banks under investigation by the US Justice Department for illegally assisting Americans in the US to hide money offshore from the IRS, the tax arm of the US.
But the treaty was in fact agreed to in June 2011 by both governments. Credit Suisse announced in June 2011 that it was being investigated by the US Department of Justice and the cantonal bank in Basel nearly a year ago, while other banks, whose names were announced only in January 2012, apparently became aware of the investigations late in 2011.
The revised treaty grew out of negotiations that had been going on since the 2009 debacle where the Swiss government approved UBS turning over data on thousands of bank clients as part of a deal with the US.
The death of banking secrecy greatly exaggerated?
The right-wing UDC has been vocal in opposing the treaty, arguing that it signals the death of banking secrecy and is financial suicide, while some Swiss-German media have been making dire predictions for months, often reported as news from unnamed sources, about the impact of such a vote. Both have been picked up widely outside Switzerland as a sign that the treaty signals the end of banking secrecy, a view not held by many middle of the road politicians and the government, as well as the Bankers Association, which 22 February came out in favour of a regulation that would require offshore banking clients to make tax self-declarations. RTS, public broadcasting, says there has been a significant shift in banking secrecy since 2009, but Switzerland continues to support it as part of a broader respect for privacy. Today’s vote, it notes, should allow US-Swiss talks over American investigations into Swiss banks to move ahead.
The treaty is designed to replace a 1996 treaty, currently in effect. Both provide for judicial assistance in cases of tax fraud, but the new treaty defines the framework for this more precisely and admits tax evasion as well as fraud, in some cases, as grounds for a request for assistance.
Tax evasion is a crime, but not a penal offense in Switzerland, whose list of allowable tax deductions is far shorter than those of the IRS, and evasion has until now not been accepted as grounds for assistance.
New agreement amended in November
The June agreement was amended in November after a parliamentary commission recommended, 7-3, that this addition be made: it allows for group requests covering several financial accounts to be made together and, significantly, bank data could be given to US authorities without the US first providing a name and account number, although this assistance would be provided in a very limited number of cases. The change was initially expected to face stiff opposition in Parliament, but in the end it passed with a strong majority.
Switzerland and the US have been discussing, in separate talks, the case of the 11 Swiss banks under investigation by the US Department of Justice. The Swiss government in late January approved the delivery of coded bank data to the US as a goodwill gesture, with President Eveline Widmer-Schlumpf noting that the data could be decoded once the two countries reach a “global agreement”: “We will only decode when we have found a solution with the United States on all the banks that are under discussion.”
UK, Germany should revise part of agreements with Swiss, says EU tax head
European Union Tax Commissioner Algirdas Semeta said in a letter to Denmark’s prime minister 5 March that the UK and Germany will need to revise part of the tax agreements they have negotiated with Switzerland since last summer. Bloomberg reports that “when countries make bilateral tax agreements with other nations, EU policy calls for them to leave out any areas covered by a common European framework, Semeta said. In the case of savings income, the bloc has existing information-exchange rules and is working on additional measures related to interest payments, ownership stakes and the 27-nation EU’s relationship with Switzerland, he said.”
Semeta’s remarks were more positive than earlier EU threats to sue Switzerland for working out bilateral deals with two of its member countries.
Background story, GenevaLunch, “Swiss government raises the ante for banks, other countries”, 22 February 2012
Greeks bonds out as collateral
GENEVA, SWITZERLAND – Portugal will get the nice euros 14 billion of the 78bn allotted to it as part of a european bailout package. The country’s spending cuts and ability to stay on target for reducing its debt were reviewed by a team that visited Monday, from the three agencies providing the funding, the European Union, the European Central Bank and the IMF.
ECB also announced that it will not accept Greek bonds as collateral for loans; the refusal to accept Greek debt for borrowing is upsetting others in the financial world who say it will make it even more difficult for Greece to climb out of its financial mess.
BERN, SWITZERLAND – The Swiss government announced the first phase of a strategy “for a credible, tax-compliant and competitive Swiss financial centre” Wednesday 22 February. The statement for the first time puts the emphasis on future offshore clients stating they are tax-compliant at home before an account will be opened.
The Federal Council says it has asked the Federal Finance Department to draw up the details of the strategy and it expects to announce a series of concrete steps by September 2012. Today’s statement provides an outline of what is to come.
The first step must be to settle past tax problems, says Bern, “in particular cases of clients living abroad whose assets have not been correctly taxed.” Existing clients’ assets will have to be “regularized” from a “tax viewpoint, thereby lowering the legal risks for banks”.
This will be followed by a three-prong programme that focuses on international cooperation and future taxation of investment income and capital gains for offshore accounts:
- International withholding tax agreements, beyond those negotiated with Germany and the UK: Bern calls this “an effective means of taxing taxpayers in accordance with the regulations of their country of domicile while safeguarding their privacy”. It notes that some issues “have not yet been fully resolved, [but] there is international interest in this approach”.
- Improved administrative and mutual assistance based on international standards as laid out in double taxation agreements (DTAs). Serious tax crimes and money laundering investigations will be more closely linked, but the key part of this will be the new Tax Administrative Assistance Act, out for public consultation until April. It replaces an ordinance that has been in place since October 2010, implemented quickly so that Switzerland could comply with an OECD deadline to observe its standards. The new law, Bern announced earlier, “assumes the basic features of the provisions of the ordinance. It contains the principle that administrative assistance will be provided exclusively upon request in individual cases. Switzerland will not provide any administrative assistance in the case of requests based on stolen data. Unlike the ordinance, which covers only administrative assistance in accordance with double taxation agreements, the Act also governs administrative assistance based on other agreements which make provision for the exchange of information relating to tax matters, for example the agreement on the taxation of savings income with the EU. The appeal procedure is to be streamlined and the deadlines shortened.”
- Tougher due diligence requirements for banks to more effectively prevent them from accepting untaxed assets; foreign clients will be required “to make a declaration on the fulfillment of their tax obligations”.
Switzerland manages the largest amount of private offshore funds in the world, 27 percent. The Swiss argue their share is more the result of financial management skills than banking secrecy and the new government strategy is banking on this. The Swiss have nevertheless found it hard to shake off the old cliche that the country is a tax haven (according to OECD definitions it is not, although Tax Justice Network views it differently), in a world where wealth management is rapidly changing.
Boston Consulting publishes an annual report on worldwide private assets under management and in May 2012 it noted that in the previous year these assets had grown by 8 percent to a record $121.8 trillion. It issued a press release noting that:
“‘Offshore private banking remains a tumultuous part of the business,’ said Anna Zakrzewski, a BCG principal and a coauthor of the report. ‘The relative importance of offshore centers is changing rapidly. Some are benefiting from continued asset growth, while others are suffering large asset outflows, with wealth being repatriated to onshore banks, transferred to other offshore centers, redirected into nonfinancial investments, or simply spent at a faster rate.’
“For most clients, however, the core value proposition of offshore banking remains, Zakrzewski said. ‘Offshore wealth managers offer a sense of stability and security that these clients cannot find in their home countries. Other clients value the expertise or access to certain investments provided by offshore private banks. To continue to grow, offshore wealth managers will need to adapt to the changes imposed by the push for greater transparency while accentuating their strengths in areas that remain extremely relevant to clients around the world.’”
Switzerland’s announcement comes at a time when media have been speculating whether the country and the US are reaching an agreement over a fine a group of 11 Swiss banks would pay, linked to US accusations they helped American citizens and residents hide money offshore in an effort to evade taxes. (Ed. note: The announcement was covered by Business Week/Bloomberg, Reuters, Wall St Journal)
The strategy outline was welcomed Wednesday by the Swiss Bankers Association, which notes that “the SBA has been working on risk-based codes of conduct that impose on banks due diligence measures, in a similar way to the well-established Swiss approach to combating money laundering.” The group cautions, however, some aspects could backfire. “The codes of conduct will stipulate a risk-based approach whereby it makes sense for banks to obtain a declaration from clients about their tax situation (“self declaration”) if they have indications that the clients have not complied with their tax obligations. However, the SBA rejects a systematic duty of self-declaration as it has no credibility abroad, is unlikely to become an international standard, does not provide a solution for assets already deposed in Switzerland and casts suspicion over all clients.”
The group also argues that “it is important that in Switzerland not only banks but also all financial intermediaries be required to implement these new provisions. In addition, Switzerland must make every effort to ensure that other financial centres also resolutely commit themselves to tax compliance and take appropriate measures involving locally based financial intermediaries.”
Britain, France, Germany, Italy Spain: US citizens’ bank data in exchange for US reporting some of their citizens’ bank accounts
Overseas Americans already caught in crosshairs
GENEVA, SWITZERLAND – A proposed deal that is being hailed by the six countries involved as a step forward in their fight against international tax evasion ironically borrows from a Swiss solution proposed as part of new double taxation treaties. In both cases data on foreign citizens is not turned over directly to the other government by financial institutions. Instead, the banks would hand data on foreign clients to their own governments, which would pass it on.
The US and EU-5 proposal comes as Swiss and US negotiators grapple with differing interpretations of a pending a new tax treaty. Strict Swiss data protection laws have been a sticking point. The Swiss have insisted they will not accept “fishing expeditions” but will accept bulk requests where tax fraud or evasion is shown to be likely.
Switzerland proposed for its recently negotiated double taxation treaties with Germany and the UK that Swiss banks collect withholding taxes that the Swiss government will then pay to these countries. Their citizens can elect to declare the assets and get the withholding tax back or cede it to their governments if they do not want to declare their accounts.
The news of the six nation proposal came at the same time 8 February as the publication of 355 pages of regulations for Fatca, new US legislation designed to fight tax evasion.
EC applauds government to government approach
Europolitics reports that the European Commission was happy with the news.
“The European Commission issued a statement applauding these arrangements: ‘Thanks to this intergovernmental approach – the only one conceivable for now because it is rapid – to the exchange of tax information, the extra administrative costs, compliance costs and legal impediments (related to data protection) that financial institutions in the EU would have experienced will be considerably reduced’. The financial sector itself has estimated at US$100 million the extra costs for a multinational European bank as a result of implementation of the new legislation.
“For the Commission, which opened the debate on FATCA with Washington in April 2011, any EU member state should now be able to adopt this government-to-government approach to information exchange by concluding ‘coordinated bilateral agreements’ with the United States. Washington is considering developing other partnerships with third countries.”
Automatic data handover part of the likely new deal, but reciprocal
The new agreement between the US and Britain, France, Germany, Italy and Spain would see financial data for all Americans automatically handed by these countries to the IRS, the US tax arm.
In return, the US would hand over data, too, but, in addition, the other countries’ financial institutions would benefit from being included in a group registration with the IRS. The result: complying with Fatca would be far less expensive.
The US argues the new arrangement would lower the cost of implementing Fatca—and that it will at the same time bring the other governments information about bank accounts held in the US by some of their own citizens, those with offshore accounts.
Significantly, too, “the Fatca partner [country] would not be required to terminate the account of a recalcitrant account holder”, an American who did not report account information to the IRS, according to the US Treasury.
The reporting requirements and burdens would not be the same: the US is asking for all US accounts to be reported because it is the only country besides Eritrea to tax its citizens on the basis of citizenship rather than residence. The five European countries would be given data only on their citizens who have US accounts but who are resident in the home country.
Ed. note: Eritrea was condemned in 2009 and again in December 2011 by United Nations Security Council resolution 2023, for destabilizing the Horn of Africa region. Eritrea is sanctioned in part for its diaspora tax, used for military purposes. The US voted in favour of the sanctions. The only other country, according to Wikipedia, that has a citizenship-based tax system as opposed to residence system, was the Philippines, but it changed to a residence system in 1995.
Fatca: data privacy concerns circumvented by reporting to banks’ own governments
Fatca, the Foreign Account Tax Compliance Act, is a US law that went into effect in March 2010 but which is only gradually being implemented. It requires foreign financial institutions (FFI’s) to report to the US government US accounts, according to the US Treasury Department’s press release on the six-nation proposed agreement Wednesday 8 February.
Fatca’s implementation has been rescheduled several times and it has been the subject of much heated debate in the financial industry. The US Treasury Department in its press release concedes that Fatca “has raised a number of issues, including that FFIs established in these countries may not be able to comply with the reporting, withholding and account closure requirements because of legal restrictions.”
Data protection laws have been part of this debate in the UK, for example.
Questions have also been raised about the legitimacy of the American government writing laws that apply to non-US businesses, the FFIs, outside the US.
Fatca and Americans living outside the US: not tax evaders
US expatriates have voiced a number of concerns about Fatca, starting with its failure to distinguish between Americans in the US with offshore accounts and Americans who are resident, particularly long-term, overseas.
American Citizens Abroad (ACA), a Geneva-based international non-profit organization, in 2011 and after public debate in town hall meetings, called for the outright repeal of Fatca, saying it “destroys lives and the US economy”.
Growing number of Americans in Switzerland refused regular bank accounts
A Town Hall meeting of Americans in Geneva Wednesday 8 February called for a show of hands of those who have been turned down for a bank account in the past year: an estimated 50 percent said yes, and afterwards some people admitted privately they haven’t told their banks they are American for fear their accounts will be closed.
The US is currently investigating 11 Swiss banks for aiding wealthy Americans based in the US to evade taxes. More importantly, for Americans who live in Switzerland, Swiss banks, like those elsewhere, are preparing for Fatca, and US clients may be viewed as a liability.
ACA has been gathering growing evidence that US residents abroad, even if they file taxes, are being refused bank accounts and that financial institutions are beginning to divest themselves of US securities.
The New York Times in an article published 9 February says “Fatca has also been criticized by American expatriates because it imposes new reporting requirements. Some have said it makes Americans less attractive as clients for financial institutions, raising the cost of doing business overseas. Those criticisms were not addressed in the proposed rules.”
Tax evasion effort tacked onto jobs bill
Fatca was passed by the US Congress to little fanfare in 2010, tacked onto a much larger jobs bill called the Hire Act. President Barack Obama when he signed it, made reference to four of the five parts of the Hire Act, never mentioning the foreign tax compliance section. The IRS web page devoted to Hire initially failed to mention Fatca as well (Hire Act (pdf).
The US Treasury Department press release yesterday mentions that the five Fatca partners of the US would look at “certain accounts” as part of the agreement.
The law itself is more precise, stating that FFIs will be obliged “in the case of any United States account maintained by such institution, to report on an annual basis” several pieces of information:
“(A) The name, address, and TIN of each account holder
which is a specified United States person and, in the case of any account holder which is a United States owned foreign entity, the name, address, and TIN of each substantial United States owner of such entity.
(B) The account number.
(C) The account balance or value (determined at such time and in such manner as the Secretary may provide).
(D) Except to the extent provided by the Secretary, the gross receipts and gross withdrawals or payments from the account (determined for such period and in such manner as the Secretary may provide).”
It defines a US account: “In general.—The term ‘United States account’ means any financial account which is held by one or more
specified United States persons or United States owned foreign entities.” The exception is an individual whose aggregate accounts at one financial institution, including for example retirement accounts, are under CHF50,000 in a given year.
Muehleberg nuclear power plant, peaceful protestors in 2011 (photo:©2011 Herbi Ditl on flickr)
BERN, SWITZERLAND – A European Union team of specialists has given the all-clear to Switzerland’s nuclear reactors for resistance, reviewing them on 37 points established in the wake of Japan’s Fukushima accident in 2011, but he Swiss government says it wants further reviews on 8 additional points.
The IFSN (Federal Inspectorate for Nuclear Safety) says it will not wait for the EU report to be concluded, but it including several points in a review the Swiss body wants to complete by June 2012. Key among them: knowing more precisely the core’s seismic resistance for each reactor. The IFSN in particular notes that the Wohlensee dam’s ability to withstand the kind of major earthquake that occurs every 10,000 years. It invited the Muehleberg nuclear centre in April to show proof of this by 30 November 2011, but it has not yet provided this and the IFSN is now demanding that the information be provided by 31 January 2012, as well as information on the seismic resistant of the emergency stoppage system.
The European Union’s list of safety checks focuses on earthquakes, floods, extreme meteorological conditions, electrical failure and crisis management. Switzerland is calling for further reviews to ensure the safety of rivers and streams below all the dams linked to nuclear plants
GENEVA, SWITZERLAND – The Financial Times wondered Sunday if the UK will drop out of the European Union, but most media weren’t willing to take it quite that far. Europe was nevertheless adjusting this weekend to a new set of relations after Britain vetoed a new EU treaty that would bind the members more closely financially. The UK was the only one of the 27 member countries to do so. UK Prime Minister David Cameron goes before parliament Monday 12 December to explain why he vetoed the treaty. He said after last week’s vote that it left the financial services industry unprotected.
Ireland has said it will start bilateral talks with London soon, with the Irish Times reporting that “The Government intends to launch an intensive diplomatic engagement with Britain to ensure London is not left isolated as a result of its refusal to agree strict new fiscal rules in the European Union.”
Links to other sites: Guardian, Irish Times, Le Monde interview with Nicolas Sarkozy (Fr), Telegraph
Switzerland: equal work, but not equal pay
BERN, SWITZERLAND – The Swiss government 5-6 December took part in European Union best practice discussions in Berlin covering how to eliminate salary differences between men and women.
It was invited to join the discussions, hosted by Germany, and present its Logib software, a self-check software programme that the Swiss Confederation uses and which can be used easily, internally, by companies of at least 50 employees.
Germany and Luxembourg are using the software, as are companies in Switzerland that have government contracts.
Swiss companies have shown less enthusiasm, the federal government noted in mid-November, with only 20 companies signing up for a salary review programme.
Recent figures published by the Swiss Justice and Police Department show that men continue to earn nearly 20 percent more than women for equal work.
Photo: Shangrila Farms, Yunnan Province, China
BERN, SWITZERLAND – “Switzerland’s free trade agreement negotiations with China are in a rather early stage but they are well underway” following the third round of talks between the two countries, Swiss Ambassador and Delegate for Trade Agreements Christian Etter has told GenevaLunch.
Switzerland, which has a trade surplus with China despite the former’s small size, has taken a European lead in working out a free trade agreement (FTA) with Asia’s giant economy since the two signed a Memorandum of Understanding 28 January 2011, says Swiss President Micheline Calmy-Rey.
“It shows we’re not afraid,” she said, smiling, at a press conference in Geneva 28 November. She was treating it lightly, but Switzerland is keen to keep the negotiations moving, particularly in the wake of a slowdown in negotiations between China and Iceland and China and Norway.
Both sides have said they would like the talks to move swiftly.
EU’s Almunia says stable trade framework is the way forward
The comments come as the European Union’s anti-trust boss called for less bickering and a better trade framework between the EU and China, at the EU-China Forum held in Brussels this week, organized by the Friends of Europe. Joaquın Almunia is quoted by Dow-Jones 29 November as saying that “everything linked with intellectual property rights, innovation, know-how, is not well-solved in our relations, we are discussing with our Chinese partners but I don’t find we have a stable framework to benefit from both sides of our common understanding.” He added that “playing this same kind of game means these pressures, these intensities will increase.”
Swiss-China trade picks up while Swiss-EU trade slows
Switzerland is China’s ninth largest trading partner in Europe, with the smaller country having a trade surplus for 2011 of CHF2.13 billion by the end of October. China is Switzerland’s largest trading partner in Asia. During the first 10 months of the year Switzerland’s exports to China grew by 26.2 percent, while imports from China slipped by 3.3 percent.
China is Europe’s largest trading partner and its trade surplus with Europe is €160-€180 billion in 2011, according to the Wall St Journal.
Trade has been stagnant between the EU and Switzerland during the first 10 months of the year, with exports to the EU down 0.5 percent and imports up 3.1 percent.
Iceland was the first European country to start FTA negotiations with China but its talks have cooled down, with Iceland’s application to join the European Union. Negotiations began formally in July 2010; EU membership would exclude implementing a separate FTA with China.
And talks with Norway have slowed down since China expressed its displeasure over the 2010 Nobel Peace Prize being awarded to Chinese dissident Liu Xiaobo.
Third round of negotiations covered hefty list of topics
The latest round of talks in the free trade negotiations between Switzerland and China took place in Montreux 8-10 November. The talks were launched in Davos in January, with talks held once in Bern and once in Beijing.
The two teams in Montreux held expert level discussions and exchanged information on respective regulatory systems and FTA-practices covering several areas: trade in goods, trade in services, rules of origin, customs procedures and trade facilitation, technical barriers to trade (TBT) and sanitary and phytosanitary measures (SPS), trade remedies, intellectual property rights, competition and dispute settlement.
The heads of of the two delegations and experts discussed investment promotion, cooperation on trade and sustainable development, and cooperation on government procurement, and agreed on follow-up work in all areas.
The fourth round of negotiations are expected to take place in China in early 2012.
Background
- World Trade Organization, most recent trade policy review for China, June 2010
- EU / China Partnership and Cooperation Agreement
GENEVA, SWITZERLAND – Nineteen of the 22 members of the Arab League voted Sunday 27 November for sanctions against Syrian President Bashar al-Assad and his government, effective immediately. The sanctions include travel bans, freezing government assets and end to Arab investments and dealings with Syria’s central bank.
The sanctions come as the number of deaths in Syria is widely reported to have topped 3,500 during more than eight months of fighting. The US and the European Union (and Switzerland) already have sanctions in place.
Reuters notes that “the Arab League has for decades avoided imposing sanctions its members but has been spurred into action by the scale of bloodshed during Syria’s crackdown and by the failure by Damascus to implement an Arab peace plan. The Arab peace plan called for sending in Arab monitors, withdrawing Syrian troops from residential areas and starting talks between the government and opposition. Damascus ignored several Arab League deadlines.”
The League is calling on the United Nations to adopt similar sanctions.
But the New York Times reported Sunday that the impact of the sanctions could be limited: ”
“Analysts said they expected the impact of the sanctions to be limited, in large part because Syria’s largest trading partners will not participate. Economists estimate that about 50 percent of Syrian trade is with the Arab world, but the largest chunk of that is with its immediate neighbors, including Iraq, Lebanon and Jordan.
“Iraq abstained and Lebanon ‘disassociated’ itself from the vote, Mr. Jassem said. Both countries said they would not enforce the sanctions, and Jordan has issued mixed signals.”
China’s Xinhua news agency cites Syrian state news reports that Syrians took to the streets in protest after the news of the sanctions was announced.
Links to other sites: Aljazeera, BBC, Ria Novosti, Xinhua
BERN, SWITZERLAND – Swiss consumers are gloomy about the economy, with confidence falling over jobs and the economy in general, to -24 from July’s -17. The figures show lower consumer sentiment than in the EU, where surveys registered -20.2 in October, although the cutoff date for surveys, which are done monthly, is slightly earlier than Switzerland’s.
Somewhat surprisingly, the federal government’s quarterly consumer sentiment survey shows that, despite falling confidence overall, Swiss consumers remain positive about their own financial situations and about their future savings, with no change from their sentiments in July’s survey.
BERN, SWITZERLAND – Greece is the latest country to consider a bilateral tax agreement with Switzerland, a move that will not please everyone in the European Community. Bern announced Thursday afternoon that “State Secretary Michael Ambühl and Ilias Plaskovitis, the general secretary in the Greek Ministry of Finance, conducted talks on a possible tax agreement between Switzerland and Greece. Both parties discussed the possibility of a tax agreement like the ones Switzerland signed a few weeks ago with Germany and the United Kingdom.”
Bern notes that “the aim is to regularize the assets held by Greek taxpayers in Swiss bank accounts in the past as well as to introduce a tax at source on future investment income. Switzerland would forward the tax revenue to the Greek authorities on an anonymous basis. In addition, mutual market access for financial services should be improved.”
The two governments will now need to decide if they are opening negotiations. But Greece, with its just-announced EU bailout, could be under pressure from the EU, which is not entirely happy with Switzerland’s agreements with individual EU countries, according to PwC’s bimonthly “EU Tax Newsletter” in September. “It is widely believed in Brussels that the European Commission’s President Barroso and the EU’s Tax Commissioner Semeta have missed out on an opportunity to make the case for European integration / the “Community” method and publicly oppose the bilateral agreements by Germany and the UK, as they objectively undermine the EU’s position vis-à-vis Switzerland regarding tax fraud and tax avoidance and harmful tax competition (EU-wide Code of Conduct on Business Taxation), and talks with the US regarding Fatca [foreign ], wrote Bob van der Made, PwC Netherlands.
European leaders meet in Brussels to save Greece and the euro - Photo: The Council of the European Union
GENEVA, SWITZERLAND – The leaders of the 17 eurozone countries reached an agreement in the early hours of Thursday 27 October to deal with the growing economic crisis.
Stock markets are being watched closely by analysts of the situation, for market reactions; in early trading in Europe and in Asia markets were moving up, and by 09:00 Swiss time the euro was trading $1.40 higher.
Three key ingredients of the deal are:
- write off half of Greece’s sovereign debt
- ensure that Europe’s banks are better capitalized to be able to face any future government loan defaults
- raise the eurozone’s bailout fund to $1.4 trillion.
Additionally, governance of the eurozone will be tightened and the role of the European Central Bank is under review.
Further details of the agreement, reached after difficult negotiations, will be hammered out later.
Le Monde in France refers to the “forceps” deal which will increase social costs for its employers. Banks will be recapitalized to the tune of $106 billion, amid fears voiced by banks that they will be less competitive as a result.
The news was greeted in Switzerland mainly with relief that the ministerial meeting which closed at 04:00 had resulted in an agreement after weeks of talks, and with hopes that calming the crisis will at the least ease pressure on the over-valued Swiss franc. TSR public television refers to it as a last-chance summit.
Links to other sites: BBC, Financial Times, Le Monde (Fr)
Swiss exports, imports (Source: Swiss Statistical Office, 20.10.11)
BERN, SWITZERLAND – Swiss exports and imports continued to expand in the first nine months of 2011, but with the rate of growth slowing down steadily and “losing strength” and reflecting the state of the world economy, the Swiss Statistical Office said Thursday morning in a press release.
Exports grew by 2.4 percent from January to September, CHF147 billion, with growth in the first two quarters but a decline in the third.
The growth was achieved despite falling prices, down 10.7 percent in real terms, although without including pharmaceuticals, prices fell by 7 percent.
Imports rose in the first nine months but by a weak 1 percent.
Switzerland showed a positive trade balance from January to September of CHF16.7b, a one-year 14.7 percent increase. A CHF17b surplus with Asia offset the CHF16.3b deficit with the European Union.
A bright spot: orders from Italy, France and Germany rose by 4 percent in September.
GENEVA, SWITZERLAND – Former Unkrainian Prime Minister Yulia Tymochenko was handed a seven-year prison sentence Tuesday 11 October, found guilty of criminally abusing her power, in particular of losing large amounts of money in a natural gas deal with Russia. Tymochenko was one of the heroes of the Orange Revolution in 2004 who fought the regime of Victor Yanukovych, widely considered to be tainted by fraud. Tymochenko then lost the presidency in a close race in 2010, to Yanukovych, in a climate coloured by economic discontent.
The judge also ordered her to back the millions lost by the state in the gas deal, and told her she cannot run for political office for three years after completing her prison term.
The trial has been heavily criticized as politically motivated in the West, with Catherine Ashton, European Union foreign minister warning Kiev within two hours of the verdict of “profound implications” for Ukraine and its integration into the EU, if the sentence is upheld.
Parliament in Bern: Steady influx of foreigners could have impact on Swiss parliamentary elections 23 October
BERN, SWITZERLAND – The number of foreigners from European Union (EU) countries grew by 4 percent between the end of August 2010 and 2011, while other foreigners increased by 0.8 percent.
Foreigners now make up 22.3 percent of the Swiss population, new figures released 10 October by the Swiss Statistical Office show.
The new figure is one of the highest in Europe and is likely to play a role in parliamentary elections 23 October, with the right-wing UDC’s campaign “Stop massive immigration” running parallel to the elections. The issue of how to integrate foreigners and limit the number of immigrants is cropping up in other countries: David Cameron, UK prime minister, announced stiffer rules Monday 10 October, reviving the polemic in Britain.
The total number of resident foreigners in Switzerland 31 August was 1,751,301, with 1.3 million of those from the EU.
The greatest increases came from: Kosovo (+17,864), Germany (+14,395), Portugal (+9,816), France (+4,388) and Great Britain (+2m,365). The Kosovo jump is deceptive, however, since most of these were already in Switzerland but they became Kosovar citizens after the country became independent in February 2008. The shift is visible when the countries were numbers have fallen are counted: Serbia (-19,910), Bosnia-Herzegovinia (-1,079), Croatia (-977), Sri Lanka (-944) and Turkey (-264).
Italians remain the largest group of foreigners resident in Switzerland, followed closely by Germans and Portuguese.
NEUCHATEL, SWITZERLAND – Swiss unemployment for the second quarter of 2011 fell to 3.6 percent from 4.2 percent in Q2 2010, using the ILO (International Labour Organization) definition, the Swiss government said 29 September. The number of employed persons rose by 2.6 during the same period.
The figures compare to the EU’s unemployment rate, which fell slightly from 9.6% to 9.4%.
BERN, SWITZERLAND – Swiss officials, like those in the European Union, say they must wait for a new United Nations resolution before allowing financial institutions to release frozen assets of Libyan dictator Muammar Qaddafi and his entourage, but several countries are meeting in Doha today, 24 August, to discuss an emergency request for $2.5 from Libya’s National Transitional Council.
The UN Security Council’s resolution in early 2011 to block Qaddafi assets led to an estimated $100 billion being frozen, in several countries, according to the Financial Times, which lists the US as the largest holder, at $37b, and the US $12, with Germany holding another $7.3b.
The exact amount frozen in Switzerland has not been confirmed by the Swiss government, but it is likely to be a fraction of the total blocked, possibly less than CHF1 billion, according to earlier figures released by the government. Libya withdrew much of the money it had in Swiss banks and other financial institutions in 2008 after Hannibal Qaddafi, the younger son of Muammar, was arrested at a Geneva hotel for attacking one of his employees.
GENEVA, SWITZERLAND – The US will not intervene militarily and Europe is pushing for a UN condemnation of the Syrian government’s crackdown on its citizens, now in its third day, which included the deaths of a reported 100 people in the city of Hama Sunday 31 July alone. Chinese news agency Xinhua quotes Syrian state media as saying the army has not entered Hama while negotiations continue, and that state media show gunmen killing Syrian security forces.
A late-night session of the UN Security Council in New York Monday 1 August failed to bring about an agreement on condemning the violence, but some diplomats say progress is being made, although China and Russia still fear that a condemnation could lead to military intervention.
Cucumbers: when will we learn to love them again?
GENEVA, SWITZERLAND – “It’s the bean sprouts”, the source of the E. coli outbreak in Germany, Reinhard Burger, Germany’s head of infectious diseases programme, said Friday morning 10 June. The actual sprouts that are behind what the WHO labels the “the unusual enteroaggregative verocytotoxin-producing Escherichia coli (EAggEC VTEC) O104:H4 bacterium” have not yet been pinpointed.
Germany’s Federal Institute for Risk Assessment and Food Safety and the Robert Koch-Institute will publish a joint press release Friday.
The number of new infections has been falling in recent days, but E.coli itself has killed 6 people in Germany and the HUS complication has killed 26, with an additional death in Sweden, according to WHO worldwide figures for the outbreak. In total, 2,909 people have been infected.
The European Union said Tuesday it would set aside €210 million for farmers touched by the outbreak, but a European farmers organization, Colos, says the losses are reaching €400m a week. Spanish farmers, the largest fruit and vegetable producers in Europe, calculate they have lost €200m in business since the start of the outbreak at the end of April, and German farmers say they have lost €60m, according to news agency AFP/TSR (Fr).
Muehleberg peaceful anti-nuclear protest in May (©2011 Herbi Ditl, flickr.com/photos/herbivore)
Update 2 19:20 BERN, SWITZERLAND – The Swiss ruling seven-member Federal Council Wednesday afternoon voted to end the country’s nuclear energy programme by 2034. The decision requires approval by Parliament.
Five existing nuclear power stations will be closed as their licenses, which will not be renewed, come to an end.
Europe finalizes nuclear station “stress tests”
The European Union, also Wednesday afternoon, put the finishing touches on its stress tests programme for nuclear facilities, to test their ability to withstand terrorist attacks and natural disasters. “The tests, which follow two months of wrangling, will also address resilience to more common threats such as forest fires, transport accidents and the loss of electrical power supplies,” reports The Guardian in the UK. Tests must begin by 1 June.
Switzerland’s Federal Council, in setting out its new 2050 energy strategy, will look to guarantee that the country’s energy needs are met through a combination of:
- greater economies through more efficient use of energy supplies
- developing hydraulic power and renewable energy supplies
- as needed, producing combustible gas for electricity
- imports.
The government has noted the urgent need to rapidly develop electricity networks and to increase energy research.
The WWF promptly issued a statement congratulating the government on its decision but noting that the parliament could take this a step further when it votes 8 June, in particular in setting an earlier date of 2029 to end the nuclear programme, pointing out that several environmental groups recommended this to the government in early May, outlining their reasons.
The council said Wednesday afternoon in its statement that it sees no reason to advance the date, and that recent checks on the safety of the plants shows they are very secure. The plants have a 50 year life and will come to the end of their terms in 2019, for Beznau, 2022 for Beznau II and Mueleberg , 2029 for Goesgen and 2034 for Leibstadt.
Switzerland is happy to stay out of the EU
BERN, SWITZERLAND – Swiss President Micheline Calmy-Rey told a group of foreign journalists 20 May that the Swiss do not want to join the European Union anytime soon. It is now apparent that she was not expressing a personal opinion, but that she was likely aware of the contents of a new report that shows only 19 percent would consider it today and only 37 percent favour closer ties to the EU.
The 2011 report by the Security Academy and Center for Security Studies at the ETH in Zurich, published 24 May, notes in its executive summary that:
“Since the publication of the first ‘Security Survey’ [ed. note: 1993, the year after Switzerland voted against joining the EU], the Swiss have never been as skeptical about the EU as they are this year. Within a year, support for closer relations with the EU or a bid for EU membership has strongly declined by 13 and 12 percentage points respectively. Meanwhile, Switzerland’s economic and political independence has never been more vehemently demanded than this year. Cooperation with the UN is supported by a constant two-thirds majority. International cooperation without institutional commitments compromising Switzerland’s sovereignty is still endorsed by a majority, although support for such a cooperation has slightly decreased.”
94% of Swiss support neutrality
Armed neutrality has backing from the Swiss, but ambivalence about best method
The annual report looks at Swiss attitudes towards political and military autonomy. The solid support by the Swiss for maintaining the country’s neutrality was furthered strengthened in 2011, with 94 percent of the population supporting it. The increase in optimism about Switzerland’s position in the world was sharp, up 15 percent. At the same time, pessimism about the global political situation also increased, 11 percent.
The Swiss are much more ambivalent about the role of the Swiss Army in maintaining neutrality, however, with the population divided over continuing with a citizen militia or scrapping it for a volunteer army, and yet the army retains high marks: “The Swiss consider the armed forces to be necessary and important, the population’s demands for cost cuts have further decreased, the social prestige of a militia career is still high.”
Economy comes out the winner
Former ICRC head Cornelio Sommaruga (1987-99) with Swiss President Micheline Calmy-Rey, guests of the Foreign Press Association in Geneva (photo: ©2011 Song Bin)
Update 24 May GENEVA, SWITZERLAND – The caution that often typifies Swiss politicians’ speech disappeared for a moment Friday night when Swiss President Micheline Calmy-Rey, asked if Switzerland would like to become a member of the European Union, said bluntly and for the first time, according to local journalists, “I have to say no; the majority is not in favour of it.”
The Swiss voted against joining the EU in 1992, but the two have grown closer in the past 20 years, mainly through a web of more than 120 bilateral agreements.
Ed.note: The Swiss “Security report 2011″ published 24 May confirms the president’s point, showing only 19 percent of Swiss backed the idea of joining the EU, in 2011.
EU, Swiss grow closer, want simpler system for agreements, but Swiss will remain outside group
She was fielding questions 20 May during the annual presidential dinner hosted in Geneva by the Foreign Press Association. She had touched on the growing ties between Switzerland and the EU when the question came up.
“Issues are dealt with through bilateral channels”, she noted, without referring directly to 2010 tensions, when EU leaders called for a review of the situation, saying the hefty number of bilateral agreements was becoming unwieldy, just as Switzerland was asking for a third round of negotiations to begin.
“Swiss laws are influenced by EU laws. And the EU says we must take into consideration future European law; we’re discussing it.” Calmy-Rey’s remark Friday night appeared to confirm comments made in February by European Commission President José Manuel Barroso after he met with her. Barroso said at the time that they agreed the system needs to be streamlined, simplified.
Swiss regulations increasingly in line with European
Swiss President Calmy-Rey with EC President José Barroso, February 2011
Switzerland is increasingly adapting regulations and laws to match European-wide ones. Bern announced Friday that importing cars from the EU is likely to become easier soon, for example, with Switzerland preparing to accept European certificates of road-worthiness. It plans to adopt EU standards for fixed child seats and dusk lights on new cars.
Sticky tax issues could have solution “soon”
Asked to elaborate on comments made Thursday in Bern about tax discussions with Britain and Germany, she said “We hope to have solutions soon.”
Calmy-Rey, who is also Switzerland’s foreign minister, met this week with Germany’s foreign minister Guido Westerwelle. Thursday, after their working meetings, she said that “with the withholding tax model, a constructive solution has been found that protects the interests of both sides” and that they hope to finalize an agreement before the summer parliamentary breaks.
Germany and other European countries, notably France and the UK, are seeking ways to collect tax from their citizens’ holdings in Switzerland.
The tax arguments also include accusations by Switzerland’s neighbours that some cantons are offering tax deals to foreigners that smack of illegal subsidies.
IMF job not likely to go to a Swiss
The president laughed at what she called the expected question when the director’s job at the IMF (International Monetary Fund) was mentioned, saying that Switzerland is “realistic enough” to know its chances of putting its candidate in the job are slim.
Calmy-Rey told the group of journalists she is not unhappy with coverage of Switzerland by foreign media, but she wishes that in addition to chocolate and cows they would write more about innovation and research in Switzerland, two areas where the country excels.
Airplanes have made it into the air, with a little help from their governments, other nations argue
GENEVA, SWITZERLAND – The World Trade Organization (WTO) in Geneva has confirmed that an Appellate Body has backed a 2010 WTO decision that $18 billion in subsidies to Airbus by the European Union have been illegal, a decision quickly welcomed by US Trade Representative Ron Kirk.
“The WTO Appellate Body has confirmed without a doubt that Airbus received massive subsidies for more than 40 years and that these subsidies have greatly harmed the United States, including causing Boeing to lose sales and market share in key markets throughout the world. Today’s landmark ruling will significantly benefit the U.S. aerospace industry and American aerospace workers, simply by affirming that there must be fairness and accountability in the global race for aerospace business.”
The WTO’s ruling 18 May did not back the entire earlier decision, The Geneva organization notes in its “summary of key findings”, but it says that “the principal subsidies covered by the ruling include financing arrangements (known as “Launch Aid” or “Member state financing”) provided by France, Germany, Spain, and the UK for the development of the A300, A310, A320, A330/A340, A330-200, A340-500/600, and A380 LCA projects. The ruling also covers certain equity infusions provided by the French and German governments to companies that formed part of the Airbus consortium.”
The summary also adds a reminder that the Airbus decisions are just one side of the battle over what is called Trade in Large Civil Aircraft. “A separate dispute brought by the European Union against the United States for subsidies allegedly provided to Boeing is currently before the Appellate Body. ”
The US has argued against what it sees as direct government handouts while Europe has argued that the US subsidizes Boeing indirectly, by the Pentagon buying only from Boeing, at inflated prices.
The Financial Times described world markets as “sombre” Friday afternoon 6 May despite a recovery from Thursday’s 10 percent price fall for oil, and skittish trading in other markets. The drop in oil prices Thursday was the largest single day decline since the start of the global economic crisis, but a report from the US Labor Department that employment was up prompted oil prices to rise 4.6 percent Friday and other markets to recover somewhat as well.
Reuters reported Thursday that despite the price fall the Opec oil-producing nations were not likely to intervene by changing output. The news agency early Friday, before the recovery was underway, cited an unnamed Opec delegate, “The price had been going too high, to $120 a barrel, which is not good for consumers because it can affect the world economy.”
The swift price movements came on the heels of a presentation Tuesday by the European Union to Russian officials in Moscow of a new EU plan. “The Road Map to a Carbon Neutral Economy by 2050 sets out a strategy for the EU to reduce its greenhouse gas emissions to a mere 20 percent of 1990 levels over the next four decades,” reports the Moscow Times, adding that Russian officials were skeptical but unworried, saying new Asian markets could “pick up the slack” if the EU reduces its needs.
Oil rose from a trading low Friday of $105.15 for Brent crude to a high of $113.40 mid-afternoon before dropping slightly.
Links to other sites: Financial Times, Moscow Times, Reuters
photo: Xavier Haepe / wikipedia (flickr.com/people/vier)
Geneva, Switzerland (GenevaLunch) – The European Union’s frayed edges were showing Tuesday 26 April as governments and their citizens absorbed the newly published figures for sovereign debt and deficits, some worse than expected, while Italy and France called for reforms of Schengen rules in the face of massive immigration from North Africa.
Eurostat, the statistical office for the European Union, published 2010 figures for the euro area and the 27-member area, showing the five countries with the largest deficits (budget spending outstripping revenues) in terms of percentages of GDP (gross domestic product) to be: Ireland (32.4%), Greece (10.5%), the United Kingdom (10.4%), Spain (9.2%) and Portugal (9.1%). Greece had agreed not to let its deficit go deeper than 9 percent, the BBC points out.
Deficits on the whole decreased in 2010 compared to 2009 while debt and GDP increased, says Eurostat.
Five countries above 90%, debt ratio to GDP
Government debt (amount owed long-term by the government) declined as a whole but the debt ratio to GDP remained at significantly high levels for several countries.
“Fourteen Member States had government debt ratios higher than 60% of GDP in 2010: Greece (142.8%), Italy (119.0%), Belgium (96.8%), Ireland (96.2%), Portugal (93.0%), Germany (83.2%), France (81.7%), Hungary (80.2%), the United Kingdom (80.0%), Austria (72.3%), Malta (68.0%), the Netherlands (62.7%), Cyprus (60.8%) and Spain (60.1%).”
US, Swiss debt ratio compared to European ratios
The US debt, by comparison, is about 97 percent of GDP, a fact emphasized by the warning issued by S&P’s 18 April on the federal debt.
Switzerland’s federal debt was about 20 percent of GDP in early 2010, and with communal and cantonal debt added in, it stood at about 40 percent, well below the G20 average (closer to 100) and the average of most of Europe. Reuters, in December 2010, reported that Bern “expects Switzerland’s overall public debt to fall to around 37 percent of gross domestic product according to international standards next year [2011], less then half of the rate predicted by the OECD for the euro zone.”
Government spending decreased in 2010 in the two zones as a whole, while revenues were essentially static: “Government expenditure in the euro area was equivalent to 50.4% of GDP and government revenue to 44.4%. The figures for the EU27 were 50.3% and 44.0% respectively. In both zones, the government expenditure ratio decreased between 2009 and 2010, while the government revenue ratio remained almost unchanged.”
British military spending data questioned
Two countries prompted “reservations”, Romania and Great Britain, the latter for concerns over its reporting of military spending: “Eurostat is expressing a reservation on the quality of the data reported by the United Kingdom, due to uncertainties on the time of recording of military expenditure. The United Kingdom does not record military expenditure on a delivery basis, as required by the relevant Eurostat Decision of 9 March 2006.”
EU figures compared to Switzerland, USA
The warning by S&P’s 18 April on the US federal debt underscored it’s
Schengen rules don’t fit current situation, France and Italy argue
France and Italy, which have been at odds over how to handle large numbers of North Africans flowing across Europe’s southern borders, joined forces Tuesday on the occasion of a French-Italian summit. Leaders Nicolas Sarkozy and Silvio Berlusconi have jointly sent off a letter to Brussels, they said, underscoring their commitment to the Schengen agreement on the free movement of people but insisting that the agreement needs to be reformed.
They did not specify what this would involve, but they cited the exceptional circumstances caused by events in North Africa, according to Le Monde (Fr).
Complete table, by country, from Eurostat
The Greek dilemma, Economist, 26 April 2011
