Ökolöwen Leipzig

Ecological Lions of Leipzig, an East German environmentalist organization.

There’s an 1990 interview with them in a documentary film called “MITGIFT mit Gift” which shows before and after pictures of the terrible environmental damage East Germany inflicted on itself while attempting to meet its planning goals “in the clash of the systems,” as ZDF heute journal moderator Claus Kleber said.

The large hole in the ground at the beginning of this clip is not a giant coal pit but an open uranium mine, in Thuringia.

(Ə co LƏ ven   LIPED sig.)

Neue E.U.-Grenzen für Spekulation mit Nahrungsmitteln

New E.U. limits on food speculation.

As part of the reforms to the E.U.’s Markets in Financial Instruments Directive [much more comprehensible in German: financial markets guideline, Finanzmarktrichtlinie], negotiators from the E.U. Commission, Member States and Parliament agreed to create new upper limits capping possible food speculation, in an attempt to calm the markets and prevent investment-driven hunger around the world. Now that this agreement has been reached, it will take about 2.5 years for the Member States to implement the new caps in their national laws.

The British government under Prime Minister David Cameron (Tory party) held out for a long time against putting limits on commodities markets, even for foodstuffs. Proponents for the limits included some banks that voluntarily announced they would stop trading in food commodities. ARD tagesschau.de reported 100,000 people also signed a petition to the E.U. last year asking for this reform.

(NOY ah   eh OO grents en   fooeah   shpeck oo lah tsee OWN   mitt   GNAW roongz mitt elln.)

Minderung der Monokulturen

Reduction of monocultures in E.U. agriculture.

At 40% of their annual expenditures, agriculture is the E.U.’s biggest budget item, and it underwent some rational-sounding changes in 2013. The E.U. agricultural reforms agreed in the Agricultural Committee on 26 Jun 2013 started a shift in subventions, disincentivizing “ecologically problematic and optically wasteland-like monocultures,” according to ARD tagesschau.de. Subventions to large monocultures were to be reduced, with small and medium-sized farms being required to plant at least three different crops. “Greening” actions will have to be carried out by farmers in order to receive the 30% of subventions newly contingent on “environmentalization” steps, penalizing farmers who don’t enact the measures by two years after the new rules come into effect. Apparently the new measures encourage grasslands, and 5% of farmers’ land is to be kept free of artificial fertilizers and pesticides. Individual countries will now have the right to reduce subventions paid to large agribusinesses receiving >150,000 euros/year and increase subventions to small and mid-sized farms and young farmers <41 years old. Bug fixes: A blacklist will be drawn up of landed entities such as airports and sports clubs (i.e. golf) that will now have to prove they get substantial income from farming before they can receive farming subsidies in future. Previous erroneous multiple extra payments to farmers, so-called “double funding,” should now be eliminated. The European Parliament’s press release on the agreement concludes with the next steps for the reform: the long-term financial framework (M.F.F., multiannual financial framework) for the reform has to be worked out, after which the reform can move on to the Council for the countries’ leaders to approve. ARD tagesschau.de said in June 2013 that their approval was considered certain.

These reforms passed at the E.U. level on 25 Sep 2013.

Update on 05 Nov 2013: E.U. farm subventions are to be distributed in Germany according to a new system (Schlüssel: key or code) agreed by the German state agricultural ministers. ARD tagesschau.de said the size of the farm is no longer supposed to be the main criterion. This will shift subvention money from large farms in the former East Germany to small and medium-sized operations (“<46 hectares”). Brussels will now be sending 6.2 billion euros in farm subsidies to Germany per year, a reduction of about 10%. Also, “new environmentally-friendly programs will be paid for from the highly-contested budget for direct payments.” German farmers and their union, the Deutscher Bauernverband, said the security of knowing what monies will be coming to them in the next few years helps make up for the fact that it’s less money.

Update on 12 Nov 2013: The E.U. Parliament and E.U. Member States passed a budget planning to spend ~135.5 billion euros total in 2014, that’s ~9 billion euros less than in 2013, with >43 billion going directly to farmers.

(MINNED ah roong   dare   mon oh cool TOUR en.)

Kali-Kartell

“Potassium cartel.”

Update on 05 Aug 2013: Supposedly ~70% of the world potassium trade has been controlled by two export alliances, BPC in Russia and Canpotex in North America. The world price for potassium was kept at a “comfortable” ~$400/ton. Last summer a Russian potassium company, Uralkali, made a surprise exit from the BPC export alliance (BPC stands for Belarus Potash Company), and the potassium price then fell to ~$300/ton. The stock price of e.g. the K+S potassium and salts company in northern Hesse fell precipitously as well.

Update on 24 Oct 2013: Spiegel.de posted an amazing potassium follow-up: “A kingdom for a cartel. Lukaschenko’s battle with the oligarch.” After the Russian firm Uralkali abruptly ended their BPC cooperation with the Belarussian firm Belaruskali last summer, Belarussian Prime Minister Lukaschenko had Uralkali’s C.E.O., Wladislaw Baumgertner, arrested in Minsk, where he is still held by authorities though he was moved to house arrest in late September.

Since the split it’s been shown how dependent the White Russian state company was on its Russian partners: exports to India and China were considerable but have nearly ended because, White Russian sources said, Belaruskali’s sales personnel don’t have the English to keep their Indian and Chinese deliveries on Russian trains running? In addition to its dependence on Russian trains, White Russia remains dependent on Russian oil and gas. White Russian potassium mines have been experiencing temporary closures since the cartel ended. As the company’s revenues fall so do the state’s; Mr. Lukaschenko had been using the potassium company’s money to fill the government’s budget gaps.

Spiegel.de wrote that Uralkali and Belaruskali started working together in 2005 to help keep international potassium prices high, together controlling ~40% of the world market in 2012 for potassium salts, which are used to make artificial fertilizers. World potassium prices had peaks of as much as $900/ton, yet White Russia is now forced to try to attract nearby customers in Russia with prices around $140/ton, forcing the Russian competitor Uralkali to counteroffer $160/ton for domestic customers.

More historical background provided in the article: Uralkali is controlled by major shareholder Suleiman Kerimow (worth >$7 billion) who bought his interest from another oligarch in 2010. He was also interested in acquiring Belaruskali from Mr. Lukaschenko, who not only did not sell but announced that Mr. Kerimow had offered a purchase price of $10 billion to the government plus an additional $5-billion bribe to Mr. Lukaschenko. When the purchase offer was made is unclear from the Spiegel.de article but the nature of the gossip flying indicates it was before the BPC alliance ended.

(CAWL ee   cawt ELL.)

Außerbörslicher Schattenhandel

“Off-market shadow trading,” which der Spiegel says is also known as over-the-counter trading, done directly between speculators such as bank traders. May exceed trading in the (regulated) markets.

E.U. and U.S.A. regulators agree that they want to regulate O.T.C. trading. An F.A.Z. op-ed discussing recent U.S. Federal Energy Regulatory Commission (F.E.R.C.) fines mentioned that other U.S. financial authorities that could impose fines on international financial companies such as banks include the S.E.C. (Securities and Exchange Commission) and C.F.T.C. (Commodity Futures Trading Commission). It cited a quite-large Financial Times estimate of the size of global O.T.C. trading amounting to well over half a quadrillion dollars.

Regarding shadow-sector speculation in electricity: on 24 Jul 2013 the F.E.R.C.’s fine was upheld to London-based Barclays bank of nearly half a billion dollars to the bank (and $15 million to one manager and $1 million each to three traders) for benchmark manipulation affecting U.S. electricity markets between 2006 and 2008, including taking on-market losses in order to increase the value of off-market O.T.C. bets. Barclays intended to keep fighting the fine, however, and if the bank doesn’t pay it within the 30-day deadline the case could go to a U.S. federal court which could reset the fine. In January 2013 Deutsche Bank negotiated a settlement with the F.E.R.C. for the same electricity market gaming and received a fine of ~$1.5 million. On 24 Jul 2013 JP Morgan Chase was still negotiating with the F.E.R.C. about their fine for manipulating electricity prices in California and the Midwest; originally the settlement was said to be at nearly a billion but Chase succeeded in negotiating it down to less than one billion dollars though so far still more than Barclays’s ~$480 million.

Update on 30 Jul 2013: JP Morgan Chase’s F.E.R.C. fine for allegedly manipulating U.S. electricity markets was negotiated down to $410 million.

Regarding shadow-sector speculation in food commodities: The day before announcing its largest capital collection in its history as a mutual savings bank, on ~28 May 2013 Germany’s fourth-largest bank at the time published an open letter to the consumer advocacy organization Foodwatch.org saying their bank was joining their country’s second-largest bank and several smaller banks in pledging that they will no longer trade in or sell financial products based on agricultural commodities (such as grains). They recommended other banks also cease doing so in order to keep from driving up world food prices, remarking that investors’ demand to participate in food-based funds is low anyway. D.Z. bank said they have been and will continue to work closely with university academics to study and monitor world agricultural economics and the effects of food speculation. They requested government reregulation of both markets and of off-market trading to re-introduce “position limits” on the amount one entity, such as a hedge fund in the shadow financial sector, could wager on food-based financial products. After deregulation in the early 2000’s, “the speculators’ share in international commodity markets increased from 30% to 80%.”

At the time this D.Z. Bank letter was published, E.U. leaders intended to meet in late June 2013 to agree on regulations imposing these food-trading position limits but, said the head of the bank in question, “the financial sector” had already managed to introduce many loopholes into the drafts— “practically neutralizing the limitations on speculators,” said Foodwatch head Thilo Bode.

(Ow! ss ah BƏZZ lichh ah   SHOTTEN hond ell.)

 

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