A Bold New Labor Call for a ‘Maximum Wage’
By Sam Pizzigati | Too Much | August 26, 2012
The national leader of one of America’s feistiest unions is aiming to expand the economic fairness debate. He’s proposing a cap on incomes at the top that rises only if incomes at the bottom rise first.
With Labor Day fast approaching, what better time to reflect about those Americans who earn the least for their labor? These Americans — workers paid the federal minimum wage — are now taking home just $7.25 an hour.
On paper, minimum wage workers are making exactly what they made in July 2009, the last time the minimum wage bumped up. In reality, minimum wage workers are making less today than they made last year — and the year before that — since inflation has eaten away at their incomes.
And if we go back a few decades, today’s raw deal on the minimum wage gets even rawer. Back in 1968, minimum wage workers took home $1.60 an hour. To make that much today, adjusting for inflation, a minimum wage worker would have to be earning $10.55 an hour.
In effect, minimum wage workers today are taking home almost $7,000 less over the course of a year than minimum wage workers took home in 1968.
Figures like these don’t particularly discomfort our nation’s most powerful. We live in tough times, their argument goes. The small businesses that drive our economy, we’re informed, can’t possibly afford to pay their help any more than they already do.
But the vast majority of our nation’s minimum wage workers don’t labor for Main Street mom-and-pops. They labor for businesses that no average American would ever call small. Two-thirds of America’s low-wage workers, the National Employment Law Project documented last month, work for companies with over 100 employees on their payrolls.
The 50 largest of these low-wage employers are doing just fine, even with the Great Recession. Over the last five years, these 50 corporations — outfits that range from Wal-Mart to Office Depot — have together returned $175 billion to shareholders in dividends or share buybacks.
And the CEOs at these companies last year averaged $9.4 million in personal compensation. A minimum wage worker would have to labor 623 years bring in that kind of pay.
So what can we do to bring some semblance of fairness back into our workplaces? For starters, we obviously need to raise the minimum wage. But some close observers of America’s economic landscape believe we need to do more. A great deal more.
Count Larry Hanley among these more ambitious change agents. Hanley, the president of the Amalgamated Transit Union, sits on the AFL-CIO executive council, the American labor movement’s top decision-making body. Earlier this month, Hanley called for a “maximum wage,” a cap on the compensation that goes to the corporate execs who profit so hugely off low-wage labor.
This maximum, if Hanley had his way, would be defined as a multiple of the pay that goes to a company’s lowest-paid worker. If we had a “maximum wage” set at 100 times that lowest wage, the CEO at a company that paid workers as little as $15,080 — the annual take-home for a minimum wage worker — could waltz off with annual pay no higher than just over $1.5 million.
During World War II, Amalgamated Transit Union president Hanley points out, President Franklin D. Roosevelt called for what amounted to a maximum wage. FDR urged Congress to place a 100 percent tax on income over $25,000 a year, a sum now equal, after inflation, to just over $350,000.
Congress didn’t go along. But FDR did end up winning a 94 percent top tax rate on income over $200,000, a move that would help usher in the greatest years of middle-class prosperity the United States has ever known.
Throughout World War II, FDR enjoyed broad support from within the labor movement — and the general public — for his pay cap notion. Now’s the time, Hanley believes, to put that notion back on the political table. We need, he says, “to start a national discussion about creating a maximum wage law.”
Hanley may just have started that discussion, just in time for Labor Day.
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Wage Cuts hit Millions of US workers
By Patrick Martin | Global Research | August 27, 2012
According to a report by the US Bureau of Labor Statistics, released Friday, millions of American workers who lost their jobs after the Wall Street crash of 2008 have failed to find work, while millions more have gone back to work only after taking substantial wage cuts.
According to the BLS, some 12.9 million workers were displaced from their jobs between January 2009 and December 2011. The BLS study focused on those who had lost jobs they had held for at least three years, who comprised just under half the total, some 6.1 million workers.
Of these 6.1 million workers, 27 percent were still unemployed but looking for work, while 17 percent have stopped looking for work, effectively dropping out of the labor force. Of the 56 percent who had found new jobs, slightly more than half took jobs that paid less than their old jobs. For those who took new jobs with pay cuts, the majority lost 20 percent or more compared to their previous wages, on top of the loss of earnings due to part-time work or reduced overtime.
All told, only 1.1 million out of the 6.1 million workers had been rehired at full-time jobs paying as much or more as they earned before the crash. In other words, of the workers hit hardest by the slump, barely 15 percent have been able to regain a position comparable to what they lost.
There is the starkest contrast between these figures, which give a glimpse of the mass suffering and hardship in the working class, and the conditions facing corporate America, where most large companies are enjoying bumper profits, stock prices are back to the levels before the crash, and CEO salaries and perks have broken all records.
In the midst of this bonanza for profits and CEO pay, the giant corporations have stepped up the assault on working-class living standards, following the example set by the Obama administration in its bailout of General Motors and Chrysler, which slashed wages for new hires by 50 percent and imposed sharp cutbacks on health and pension benefits.
Last week Caterpillar and the International Association of Machinists pushed through a draconian deal at the company’s Joliet, Illinois plant, as the union called off a 14-week strike and engineered acceptance of a contract that cuts real wages by 20 percent over six years, even though the company is making record profits.
A second report released last week showed that median household income has fallen 4.8 percent during the three years of the “recovery” touted by the Obama administration (July 2009 through June 2012), a bigger drop than the 2.6 percent during the two years officially recorded as “recession” (July 2007 through June 2009). Median incomes have fallen most for African Americans (down 11.1 percent) and residents of the Western states, the focal point of the housing market collapse (down 8.5 percent).
Since the official start of the recession, December 2007, median household income has fall 7.2 percent. From 2000 to 2012, over three presidential terms, two of George W. Bush and one of Obama, real incomes in the United States have fallen by 8.1 percent.
This social reality is ignored by both the capitalist parties competing in the 2012 presidential election, and it will go largely unacknowledged at the convention of the Republican Party, which opens Tuesday in Tampa, Florida, and at the similar gathering of the Democrats the following week.
The Republican Party and the Mitt Romney campaign hope, of course, to profit politically from the catastrophic conditions for working people, focusing their fall campaign on key Midwestern and industrial states like Ohio, Wisconsin, Michigan and Pennsylvania.
Their protestations of concern for laid-off factory workers and struggling single mothers are cynical lies, given that the policies advanced by the Republican campaign involve the destruction of the social safety net on which millions of unemployed and impoverished working-class families depend.
The true attitude of the Republicans will be demonstrated behind the scenes at the convention in Tampa, where hundreds of banquets, receptions and other lucrative “private events” will be mounted by corporate and billionaire backers of the Romney campaign. Some 1,500 Romney donors—“Stars” who have raised at least $250,000 and “Stripes” who have raised at least $500,000—will get top-level special treatment.
As the New York Times noted Sunday, when the delegates arrive in Tampa, “hundreds of lobbyists, corporate executives, trade associations and donors will be waiting for them, exploiting legal loopholes – and the fun-house atmosphere – that make each party’s quadrennial conventions a gathering of money and influence unrivaled in politics.”
There are no unemployed or displaced workers among the Republican influence peddlers, nor among their equivalents at the Democratic convention when it assembles the following week in Charlotte, North Carolina.
The Obama campaign is, if anything, even more cynical and false than Romney’s, because it portrays the Democratic incumbent as the defender of working people against Wall Street interests and the wealthy, when the truth is the direct opposite. Obama spearheaded the destruction of jobs and wages with the auto bailout, and helped launch the war on public education that has accounted for the largest single cut in jobs of the past three years: the wiping out of 600,000 jobs of teachers and support workers by state and local governments.
Last week, the Obama administration announced that it was extending its wage freeze for federal government workers, already two years long, for an additional six months, until April 2013, on the pretext that this would help reduce the federal budget deficit. No such considerations, of course, were allowed to affect the colossal Treasury handout of public money in the Wall Street bailout.
The capitalist politicians, like the giant corporations and banks they serve, welcome the growth of unemployment, wage cutting and poverty, because these are central components of a vast transfer of wealth from the working class—and large sections of the middle class—to the super-rich.
As the Federal Reserve Board noted in a report released in June, the real wealth of the average American household plummeted 38.9 percent from 2007 to 2010, essentially wiping out all the gains made by working people over the previous two decades.
This was not merely the result of the collapse in the housing market, which slashed the value of the only sizable asset owned by most workers. It was the direct consequence of decisions made in corporate boardrooms and in Washington to benefit the wealthy at the expense of working people.
These policies will continue and intensify regardless of whether Obama or Romney occupies the White House next year, and whether the Democrats or the Republicans control Congress. The American ruling class is waging war against the jobs, living standards and social conditions of working people, and both the official parties are enlisted on behalf of the financial aristocracy.
This truth was underscored by an interview Obama gave Saturday to the Associated Press, in which he pledged to reach agreement with the Republicans in Congress if he is reelected. “I’m prepared to make a whole range of compromises,” he said, including concessions that would be opposed within his party, because “the American people will have voted.”
In other words, once the election is safely over, the two parties can drop their populist phrases and their pretense of intransigent hostility and get down to business: meeting the demands of their corporate masters to slash the federal deficit by gutting programs like Medicare, Medicaid and Social Security, and enacting new tax breaks for the corporations and the wealthy.
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Egyptian Minister Asks for Direct Flights between Tehran, Cairo
Fars News Agency | August 27, 2012
TEHRAN – Egypt’s Civil Aviation Minister Samir Embaby called for the start of direct flights between Tehran and Cairo due to the two nations’ enthusiasm for making reciprocal visits.
“The measure is necessary due to the eagerness of many Egyptian and Iranian people to make reciprocal visits,” Embaby was quoted by the Egyptian weekly, al-Youm al-Sabe’.
He also underlined that starting direct flights between the two countries would play a vital role for trade and economic ties between Iran and Egypt, and said the economic studies carried out in Iran indicate that 60% of Iranians like to visit different Egyptian cities, partly for religious tourism.
In relevant remarks in June, new Egyptian President Mohammad Mursi also underlined his enthusiasm for the further expansion of ties with Iran, and said relations between Tehran and Cairo will create a strategic balance in the region.
“The issue will create a strategic balance in the region,” Mursi told FNA in June, hours before the final results of the presidential election was announced.
Also in July, Iranian President Mahmoud Ahmadinejad and Mursi, in their first telephone conversation, conferred on the two Muslim countries’ ties and the Non-Aligned Movement (NAM) now underway in Tehran.
President Ahmadinejad said Tehran welcomes close interactions with the Egyptian government and nation, and attaches no limitations to the expansion of ties and cooperation with Cairo.
Ahmadinejad expressed Iran’s preparedness to transfer capabilities, achievements and experiences in various scientific, technological, industrial and economic fields to the Egyptian people.
Mursi is due to travel to Iran on August 30 to attend the NAM summit.
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- Egyptian president heads to China for investment talks (alethonews.wordpress.com)
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Predator Nation: How Financial Criminalization Crashed the Economy, and the Culprits Got Off Scot-Free
By Barry Ritholtz – June 4th, 2012
Charles H. Ferguson, the director of the Oscar-winning documentary Inside Job, now explains how a predator elite took over the country.
He exposes the networks of academic, financial, and political influence, in all recent administrations, that prepared the predators’ path to conquest.
Over the last several decades, the United States has undergone one of the most radical social and economic transformations in its history.
·Finance has become America’s dominant industry, while manufacturing, even for high technology industries, has nearly disappeared.
· The financial sector has become increasingly criminalized, with the widespread fraud that caused the housing bubble going completely unpunished.
· Federal tax collections as a share of GDP are at their lowest level in sixty years, with the wealthy and highly profitable corporations enjoying the greatest tax reductions.
· Most shockingly, the United States, so long the beacon of opportunity for the ambitious poor, has become one of the world’s most unequal and unfair societies.
Ferguson shows how from the Reagan administration forward, both major political parties have become captives of the moneyed elite.
It was the Clinton administration that dismantled the regulatory controls that protected the average citizen from avaricious financiers. It was the Bush team that destroyed the federal revenue base with its grotesquely skewed tax cuts for the rich. And it is the Obama White House that has allowed financial criminals to continue to operate unchecked, even after supposed “reforms” installed after the collapse of 2008.
Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America
Excerpt:
It is no exaggeration to say that since the 1980s, much of the American (and global) financial sector has become criminalized, creating an industry culture that tolerates or even encourages systematic fraud. The behavior that caused the mortgage bubble and financial crisis was a natural outcome and continuation of this pattern, rather than some kind of economic accident.
It is important to understand that this behavior really is seriously criminal. We are not talking about neglecting some bureaucratic formality. We are talking about deliberate concealment of financial transactions that aided terrorism, nuclear weapons proliferation, and large-scale tax evasion; assisting in concealment of criminal assets and activities by others; and directly committing frauds that substantially worsened the worst financial bubbles and crises since the Depression.
None of this conduct was punished in any significant way. On November 7, 2011, the New York Times published an article (Wall Street’s Repeat Violations, Despite Repeated Promises) based on its own review of major banks’ settlements of SEC lawsuits since 1996. The Times’ analysis found fifty-one cases in which major banks had settled cases involving securities fraud, after having previously been caught violating the same law, and then promising the SEC not to do so again. The Times’ list, furthermore, covered only SEC securities fraud cases; it did not include any criminal cases, private lawsuits by victims, cases filed by state attorneys general, or any cases of bribery, money laundering, tax evasion, or illegal asset concealment — all areas in which the banks have numerous and major violations. In Predator Nation, I provide detailed, well-documented accounts of behavior ranging from assisting Enron’s frauds (Citigroup, Merrill Lynch), to fraudulently exploiting the Internet bubble (most of the major investment banks), to using for-profit colleges to exploit government student loan programs (Goldman Sachs), to assisting in money laundering and tax evasion on a large scale (at least eleven banks including UBS, Barclay’s, and Lloyds), to using bribery and artificially complex derivatives to destroy the finances of a county government (JP Morgan Chase), to profiting from Bernard Madoff even while strongly suspecting him to be a fraud (JP Morgan Chase, UBS).
Total fines for all these cases combined appear to be far less than 1 percent of financial sector profits and bonuses during the same period. There have been very few prosecutions and no criminal convictions of large U.S. financial institutions or their senior executives. Where individuals not linked to major banks have committed similar offenses, they have been treated far more harshly.
Given this background, it is difficult to avoid the conclusion that the mortgage bubble and financial crisis were facilitated not only by deregulation but also by the prior twenty years’ tolerance of large scale financial crime. First, the absence of prosecution gradually led to a deeply embedded cultural acceptance of unethical and criminal behavior in finance. And second, it generated a sense of personal impunity; bankers contemplating criminal actions were no longer deterred by threat of prosecution.
And just as the last twenty years of unpunished financial crime constituted a green light for the bubble, so, too, America’s non-response to the bubble and crisis is setting the tone for financial conduct in the future.
The Obama administration has rationalized its failure to prosecute any senior financial executives (literally, not a single one) for bubble-related crimes by saying that while much of Wall Street’s behavior was unwise or unethical, it wasn’t illegal. Here is President Obama at a White House press conference on October 6, 2011:
Well, first on the issue of prosecutions on Wall Street, one of the biggest problems about the collapse of Lehmans [sic] and the subsequent financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn’t necessarily illegal, it was just immoral or inappropriate or reckless….I think part of people’s frustrations, part of my frustration, was a lot of practices that should not have been allowed weren’t necessarily against the law.
The president and senior administration officials (such as Lanny Breuer, head of the Justice Department’s Criminal Division) have portrayed themselves as frustrated and hamstrung — desirous of punishing those responsible for the crisis, but unable to do so because their conduct wasn’t illegal, and/or the federal government lacks sufficient power to sanction them. With apologies for my vulgarity, this is complete horseshit.
When the federal government is really serious about something — preventing another 9/11, or pursuing major organized crime figures — it has many tools at its disposal and often uses them. There are wiretaps and electronic eavesdropping. There are special prosecutors, task forces, and grand juries. When Patty Hearst was kidnapped by the radical Symbionese Liberation Army in 1974, the FBI assigned hundreds of agents to the case.
In organized crime investigations, the FBI and federal prosecutors often start at the bottom in order to get to the top. They use the well established technique of nailing lower-level people and then offering them a deal if they inform on and/or testify about their superiors — whereupon the FBI nails their superiors, and does the same thing to them, until climbing to the top of the tree. There is also the technique of nailing people for what can be proven against them, even if it’s not the main offense. Al Capone was never convicted of bootlegging, large scale corruption, or murder; he was convicted of tax evasion.
In this spirit, here are a few observations about the ethics, legalities, and practicalities of prosecution related to the bubble:
First, much of the bubble was directly, massively criminal.
Second, if you really wanted to get these people, you could. Maybe not all of them, but certainly many. Some bubble-related violations are very clear, with strong written evidence, as my book Predator Nation demonstrates. And if you flipped enough people, some of them would undoubtedly have interesting things to say about what their senior management knew. In fact, there are many techniques, venues, organizations, regulations, and statutes, both civil and criminal, available to investigate these people, punish them, and recover the money they took — if you really wanted to. The federal government has used almost none of them.
Third, the moral argument for punishment is very strong, providing ample justification for erring on the side of aggressive legal pursuit. Whatever portion of banking conduct during the bubble was criminal, it was certainly substantial, and there is no doubt whatsoever that it was utterly, pervasively unethical, designed to defraud in reality if not in law. Since the crisis, the people who caused it have been anything but honest or contrite. They have been evasive, dishonest, and self-justifying, returning as quickly as possible to their unerringly selfish behavior. Their behavior caused enormous damage, both human and economic; the consequences of their wrongdoing are so large as to justify almost any action that could help to prevent another such crisis by creating real deterrence. There would also be intangible but large benefits to raising the general ethical standard of a vital industry, and one whose executives often become high-level government officials.
Given this background, let’s now consider the question of criminal liability, as well as the feasibility of prosecution.
J’Accuse
The list of prosecutable crimes committed during the bubble, the crisis, and aftermath period by financial services firms and senior executives includes: securities fraud (many forms); accounting fraud (many forms); honest services violations (mail fraud statute); bribery; perjury and making false statements to federal investigators; Sarbanes-Oxley violations (certifying accounting statements and financial controls); RICO offenses and criminal antitrust violations; Federal aid disclosure regulations (related to Federal Reserve loans); Personal conduct offenses (many forms: drugs, tax evasion, etc.).
In Predator Nation I consider each of these categories in detail, naming many names and providing many specific examples. But in considering only one category, securities fraud, we already face an embarrassment of riches.
Almost all the prospectuses and sales material on mortgage-backed securities sold from 2005 through 2007 were a compound of falsehoods. But it starts even earlier in the food chain. We also know that mortgage originators committed securities fraud when they misrepresented the characteristics of loan pools, and the nature and extent of their due diligence with regard to them, when they sold pools to securitizers (and accepted financing from them). Most or all of the securitizers (meaning nearly all the investment banks and major banking conglomerates) then committed securities fraud when they misrepresented the characteristics of the loans backing their CDOs, the characteristics of the resulting mortgage-backed securities, and the nature and results of their due diligence in the process of creating those securities. The securitizers also committed securities fraud when they made similar misrepresentations to the insurers of, and sellers of credit default swap (CDS) protection on, those securities.
The executives of both originators and securitizers then committed a separate form of securities fraud in their statements to investors and the public about their companies’ financial condition. They knew that they were engaging in a Ponzi-like fraud that would eventually need to end, and as the bubble peaked and started to collapse, they repeatedly lied about their companies’ financial condition. In some cases they also concealed other material information, such as the extent to which they, themselves, and/or other executives of their firms, were selling or hedging their own stock holdings because they knew that their firms were about to collapse.
Next, several investment banks committed securities fraud when they failed to disclose that they were selling securities that were designed to fail so that the investment banks, and/or their hedge fund clients, could profit by betting on their failure. The Hudson and Timberwolf synthetic CDOs sold by Goldman Sachs, and which were the focus of the Levin Senate subcommittee hearings, provide a very strong basis for prosecution. Goldman’s trading arm had been dragooned into finding and dumping their most dangerous assets to naive institutional investors. Important representations in the Hudson sales material–that assets were not sourced from Goldman’s own inventory — were lies, and they were material lies, since investors had learned to be wary of banks clearing out their own bad inventory. E-mail trails show that top executives closely tracked the garbage disposals and were gleeful at the unloading of the Timberwolf assets — as they should have been, for the assets were nearly worthless within months. There have been no prosecutions.
In some cases, we already have clear evidence of senior executive knowledge of and involvement in these frauds. For example, quarterly presentations to investors are nearly always made by the CEO or CFO of the firm; if lies were told in those presentations, or if material facts were omitted, the responsibility lies with senior management. In some other cases, such as Bear Stearns, we already have evidence from civil lawsuits that very senior executives were directly involved in constructing and selling securities whose prospectuses contained lies and omissions.
The list is long. In chapters three through six of Predator Nation, I survey the financial sector’s behavior during the bubble, and provide dozens of examples of major criminal behavior. Again, there have been no prosecutions.
Related articles
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US arms sales hit record high of $66.3bn in 2011
Press TV – August 27, 2012
The United States’ weapons sales tripled in 2011, reaching to a record high of USD 66.3 billion, with Persian Gulf Arab countries as the main customers, a new Congressional report said.
A new report from the Congressional Research Service said that the country’s weapons sales in 2011 was an “extraordinary increase” over the USD 21.4 billion in deals in 2010.
The report also said that the figure was the largest single-year sales total in the history of US arms sales.
The former high record was in 2009, when the country’s arms exports reached to USD 31bn.
Saudi Arabia was the largest customer of the US arms, as it bought USD 33.4bn worth of weapons, including 84 advanced F-15 fighters, ammunition, missiles and logistics support.
The Kingdom’s arms deal with the US also included dozens of Apache and Black Hawk helicopters and upgrades of 70 of the F-15 fighters in the current fleet.
The United Arab Emirates spent USD 3.49 billion to purchase a Terminal High Altitude Area Defense, which is an advanced anti-missile shield containing radars. The Arab nation also bought 16 Chinook helicopters for USD 939 million.
Oman also spent USD 1.4bn last year to buy 18 F-16 fighters.
Other significant customers for the US arms were India with a USD 4.1bn deal for 10 C-17 transport planes and Taiwan with USD 2bn for Patriot antimissile batteries, that has angered Chinese officials.
Average U.S. Household Has Lost 5% in Annual Income Since Economic “Recovery” Began
By Matt Bewig | AllGov | August 27, 2012
The rich are getting richer, and the poor really are getting poorer. According to a new report, Americans are earning less today on average than they were when the Great Recession, which began in December 2007, ended in June 2009. Using Census Bureau data, economists Gordon Green and John Coder determined that real median household income has actually fallen by 4.8% since the recession’s end. Even more surprisingly, they found that the decline since June 2009 was larger than the 2.6 percent decline that occurred during the recession. Adding them together, Green and Coder conclude that average household income has fallen 7.2% since December 2007.
According to Green, “almost every group is worse off now than it was three years ago, with the exception of households with householders 65 years old and over. For some groups of households—Blacks, men living alone, younger and upper-middle age brackets, those with some college but no degree, the unemployed, the self-employed, and those living in the West—the declines tended to be larger than average.” Racial inequality is reflected in the fact that income for white households declined by 5.2% while income for black households dropped by 11.1%, or more than twice the rate.
Not everyone has experienced a drop in income, however. As AllGov reported in July, a study from Northeastern University found that “corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent” of growth since the recovery began in 2009. Corporations are posting record profits, while investors, who are disproportionately wealthy already, are earning large capital gains that are taxed at special low rates, leading to greater inequality and even slower economic growth.
UK changes position on IMF loan for Morsi’s Egypt
British officials refrain from giving full backing to Egypt’s $4.8 billion loan request, having previously supported such funding under military rule
By Amer Sultan | Ahram Online | August 25, 2012
London – The United Kingdom has refrained from backing Egypt’s request of a $4.8 billion loan from the International Monetary Fund (IMF).
“We prefer to wait and see the results of the negotiations between Egypt and the IMF,” a UK Foreign Office spokesperson told Ahram Online.
During her recent visit to Cairo, the IMF’s managing director, Christine Lagarde, received a formal request from Egypt for a $4.8 billion loan.
“The UK thinks that this is a good opportunity for dialogue between the two parties,” the spokesperson added.
Asked whether the UK would back the Egyptian request if the IMF board decides in its favour, the spokesperson replied: “We do not have anything to say for the time being.”
The UK’s caution seems to mark a significant change in its attitude towards Egypt’s calls for international assistance to overcome its economic difficulties.
The UK provides 5 per cent of the IMF budget, making it the fourth biggest contributor, with equivalent voting power. It follows the US (18 per cent), Germany (6 per cent) and Japan (6 per cent).
Early this year, the UK government was enthusiastic about an IMF offer of a $3.2 billion loan at a 1.5 per cent interest during Egypt’s period of direct military rule.
A high level UK diplomat then told Ahram Online that the offer was “an amazingly good deal” with “virtually no conditionality.”
UK support at the time followed a meeting of British representatives with the Supreme Council for Armed Force (SCAF), which until July 2012 had veto power on all political decisions.
The diplomat explained that his government felt the deal the IMF put to Egypt was very favourable.
Speaking this week, the Foreign Office spokesperson insisted there was no change in the UK positions on the IMF loan after President Morsi took the reins of power from SCAF.
During her visit to Egypt last Wednesday, Lagarde met Morsi and his prime minister Hesham Kandil, and praised the Egyptian vision for reform.
“We are impressed by the strategy that President Morsi and Prime Minister Kandil have proposed during our meetings today,” she said at a joint press conference with Kandil.
An IMF technical team is due to arrive in Cairo in early September to begin work on arrangements for the mooted loan.
“We prefer foreign borrowing at this stage given the low interest rate of the IMF loan compared to much higher rates when borrowing domestically,” said Kandil, on the matter.
He added that borrowing domestically would crowd out the private sector and the IMF loan would help ease liquidity problems.
The IMF said in a statement it had maintained close dialogue on economic policy with Egyptian authorities since the start of the transition period in February 2011. It said it has also provided considerable technical assistance upon request from the government.
Related articles
- Egypt requests $4.8bn IMF loan (alethonews.wordpress.com)
- IMF hopes to sink claws into Egypt (morningstaronline.co.uk)
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Does Kevin Barrett Seek to “Absolve Islam of a Terrible Crime”?
The Kevin Barrett-Chomsky Dispute in Historical Perspective – Last part of the series titled “9/11 and the Zionist Question”
By Prof. Tony Hall | American Herald Tribune | August 28, 2016
Amidst his litany of condemnations, Jonathan Kay reserves some of his most vicious and vitriolic attacks for Kevin Barrett. For instance Kay harshly criticizes Dr. Barrett’s published E-Mail exchange in 2008 with Prof. Chomsky. In that exchange Barrett castigates Chomsky for not going to the roots of the event that “doubled the military budget overnight, stripped Americans of their liberties and destroyed their Constitution.” The original misrepresentations of 9/11, argues Barrett, led to further “false flag attacks to trigger wars, authoritarianism and genocide.”
In Among The Truthers Kay tries to defend Chomsky against Barrett’s alleged “personal obsession” with “vilifying” the MIT academic. Kay objects particularly to Barrett’s “final salvo” in the published exchange where the Wisconsin public intellectual accuses Prof. Chomsky of having “done more to keep the 9/11 blood libel alive, and cause the murder of more than a million Muslims than any other single person.” … continue
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- Surge in premature births, congenital defects, cancer deaths in Gaza – Not a ceasefire Day 92
- No Tricks Zone
- Denmark Places Climate Protection Above Animal Welfare, Poisoning And Culling Cows
- New Study: Greenland Was 3-7°C Warmer And Far Less Glaciated Than Today 6000-8000 Years Ago
- German Media Report That Current Frigid Weather Can Be Explained By Arctic Warming!
- Berlin Blackout Shows Germany’s $5 Trillion Green Scheme Is “Left-Green Ideological Pipe Dream”
- Modeling Error In Estimating How Clouds Affect Climate Is 8700% Larger Than Alleged CO2 Forcing
- Berlin’s Terror-Blackout Enters 4th Day As Tens Of Thousands Suffer In Cold Without Heat!
- Expect Soon Another PIK Paper Claiming Warming Leads To Cold Snaps Over Europe
- New Study: Human CO2 Emissions Responsible For 1.57% Of Global Temperature Change Since 1750
- Welcome To 2026: Europe Laying Groundwork For Climate Science Censorship!
- New Study Finds A Higher Rate Of Global Warming From 1899-1940 Than From 1983-2024
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