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ECONOMICS – FINANCE – WORLD NEWS – GREEK DEBT

China has big plans; Swiss-Greek deal on taxes

It’s a slow news day, ladies and gentlemen. The US, or at least the east cost, is covered in snow brought by Sandy‘s follow-up storm, and is otherwise in remission from the election. Sandy has hit the demand for gas, as well as the supply system of gas stations, so much that the price of crude oil slumped by 4.8% due to the sudden oversupply. The rebuilding and repairing works following the damages caused by the storm, will have a positive effect on the US economy that will be carried over into the new year, if you want to believe Morgan Stanley.

Alphaville takes the opportunity of this otherwise boring day for a comprehensive post on what is happening in China today. From the PSC (Politburo Standing Committee), “a group of ageing men with dyed hair and dark suits,” which decides on all major policies of the country, to the future commander in chief of China’s unnecessary massive army of 3 million people (active and reserve), this explains it all.

On the back of today’s Communist Party meeting, departing president Hu Jintao announced that per capita income would [have to] double by 2020. In 2010, the World Bank rated China’s gross national per capita income 121st in the world. At that point, it amounted to $4,260, less than 1/10 of that of the US. Hu also mentioned the necessity of financial reform and more democracy. It will be left to current vice president Xi Jinping to figure this out. read article

In Europe, both the Bank of England and the ECB met to change nothing, and French-Belgian bank Dexia quietly received a third bailout worth €5.5bn last night.

The Greeks voted in favor of the austerity package that gets them the €31bn from the troika, while protesters went crazy on the streets of Athens. New cuts include slashing pension benefits and salaries in the public sector by 5-35%, increase taxes on gas and cigarettes, increase contributions to state healthcare and increase retirement age from 65 to 67 year. read article

More interestingly, Greece is also working on a deal with Switzerland that is as overdue as it is ethically questionable. Under an agreement, Switzerland could collect taxes on undeclared money held in Swiss bank accounts by Greek citizens. Greek tax evasion totals around €28bn per year. So far, Switzerland also has bilateral tax agreements with the UK, US, Germany and Austriaread article

So long.

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