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October 10, 2009 |
October 10, 2009
Video: Goldstone UN Fact Finding Mission on the Gaza Conflict
Italian Tax Evaders Repatriate Funds at Record Pace Amid Slump
By Elisa Martinuzzi
Oct. 9 (Bloomberg) -- Italian tax evaders, lured by the country’s third amnesty since 2001, are repatriating funds at a record pace as the recession prompts them to pump cash into their companies.
“We’ve already received interest for twice as many funds that may be repatriated as in the previous amnesty,” Luca Caramaschi, head of private wealth management at Deutsche Bank AG in Italy, said in a telephone interview from Milan.
Italy’s parliament voted last week to forgive past false accounting under the amnesty, allowing companies to repatriate funds. Asset managers say the amount moving back home is poised to exceed both previous amnesties combined, when about 80 billion euros ($118 billion) was returned. Evaders have until Dec. 15 to apply for pardon in return for a 5 percent fee.
“There’s definitely an acceleration of interest,” said Giuseppe Marino, a tax consultant, author and a professor of fiscal law at Bocconi University in Milan. “It’s driven by the need to inject fresh capital in companies.”
Prime Minister Silvio Berlusconi has pledged that Europe’s most indebted nation will spend the proceeds from the amnesty on state universities and health care. Finance Minister Giulio Tremonti said last month the measure will help small companies stay afloat as the economy emerges from recession. Italy’s economy is set to contract about 5 percent this year and tax income is shrinking, according to the Ministry of Economy.
‘Moment of Crisis’
“In a moment of crisis, we expect a return of company money,” Attilio Befera, who runs Italy’s tax collector, the Agenzia dell’Entrate, said yesterday at a Milan briefing organized by Mediolanum SpA, the financial services firm partly owned by Berlusconi. Befera declined to estimate how much he expects to be repatriated.
While entrepreneurs are likely to account for the bulk of repatriations, older people who have stashed personal savings outside Italy are also seeking to move money back to share with family members, said Ferruccio Ferri, chairman of UBS AG’s Italian fiduciary unit, which administers client assets.
“Estates held abroad are re-emerging in notable dimensions,” said Ferri. UBS has about 16 billion euros under management at its Italian wealth management unit. “There’s been a significant increase in interest this early on in the amnesty.”
The push by Group of 20 leaders to target tax havens and clamp down on money laundering may also be boosting repatriations, according to Bocconi’s Marino, author of “Paradisi e paradossi fiscali,” (“Fiscal Paradises and Paradoxes”) published by Egea in 2009.
“The global context this time is different,” said UBS’s Ferri. “It’s not just an Italian initiative.”
The amnesty started on Sept. 15. The tax collector will take into account the complexities involved in moving assets, Befera said. Evaders can send in their paperwork after the deadline expires if they have paid beforehand, he added.
“There may be some difficulties given the relatively short timeframe,” Francesco de Ferrari, chief executive officer of Credit Suisse Group AG’s private banking unit in Italy, said in an e-mailed response to questions. “Interest is very strong among individuals and entrepreneurs.”
To contact the reporter on this story: Elisa Martinuzzi in Milan at emartinuzzi@bloomberg.net
Ships of Poison
Nuking the Mediterranean
By MICHAEL LEONARDI - October 10, 2009
As reported in the Calabria daily newspaper “Calabria Ora” by director Paolo Pollichieni, 55 are the number of ships confirmed by Italian navy admiral and chief of Italian intelligence organization AISE (formerly SISMI), Bruno Branicoforte; 55 Ships containing a toxic and dangerous mix of radioactive and other industrial contaminants that were traded in the international traffic of the world’s hazardous wastes on the high seas. Others unofficially talk of upwards to 140 ships. Only NATO knows for sure but has not yet revealed this information to the public, and who knows if they ever will? Now these 55 ships, cargos of waste aboard and possibly seeping into the waters of the Mediterranean, are said to be lying on the sea floor, intentionally sunk across international waters over the past twenty years. Branicoforte made his affirmation to the Italian parliamentary committee for the Security of the Republic, Copsair on the 25th of September.
The threat to public health is alarming to the coastal population of Italy as it should be to all of the 23 countries that border the Mediterranean Basin. Health reports from the Region of Calabria show elevated cases of cancerous tumors, especially among the younger population along the coasts. The culprits of this International tragedy: organized criminal elements, the corporate producers of this waste and the government’s that knowingly allowed this contamination of the sea to unfold; are now gathering forces and talking of confirmations of these ships and a clean-up of the Sea.
The assessor of the Environment in the Region of Calabria Doctor Silvio Greco, a marine biologist, reminds us that the majority of these wastes came from Industries outside of Italy. This makes it again clear that there must be an International effort monitored by citizen watchdog groups to contain the effects of this catastrophe. It is hard to trust those that made this mess in the first place to clean up this unthinkable man made disaster, but they may have the only means.
A ship from the Italian energy giant ENI is now in route from Cyprus to Calabria. As reported in the Calabrian daily il Quotidiano on the 8th of October, the vessel is specialized to verify the contents of the first ship to be photographed in the seas depths, 11 kilometers from Cetraro. ENI has offered the assistance of this vessel free of charge, recognizing the gravity of the situation. Another research vessel from the Italian environmental research institute called ISPRA is being retrofitted with special equipment to provide 3 dimensional images of the ship thought to be the Cunsky,
The regional fishing industry, especially around Cetraro, is being harshly affected and there is talk of public aid to families feeling the economic brunt from the crash in fish consumption. There is also concern about a blow to the tourism industry. This area is usually overrun with tourists during the month of August and many families here base their livelihoods around the tourist industry. Contaminated land from illegal dumping of hazardous wastes is also a large problem in this area and a threat to local agricultural practices, confounding an already ugly situation.
In Italy as a whole, Berlusconi and his harem of ministers continue to hold the public interest. Stefania Prestigiacomo, the young environmental minister from Sicily, said on the 7th of October that there will be every effort made on the part of the government to assess and clean up the situation in the Calabrian coastal waters near the towns of Cetraro, Fuscaldo, Guardia Piemontese, San Lucido and the cities of Paola, Diamante and Amantea on the Tyrennian Sea, where the first ship to be photographed lies off the coast. But nothing has yet been said by Prime Minister Berlusconi, President Napolitano or environmental minister Prestigiacomo about the other 54 ships confirmed by Admiral Branicoforte. Other regions beyond Calabria, including Tuscany, Basilicata and Campania, are asking for more action and communication from the Berlusconi government as Berlusconi himself has yet to address the issue publicly and Prestigiacomo has done so only sparingly. The opposition is accusing the government of negligent inaction, while Prestigiacomo says that she is doing all she can as she begins to break her silence on this global calamity.
The Berlusconi government is also under pressure to for it’s decision to bring back nuclear power to Italy. In 1987 Italians voted overwhelmingly against the use of nuclear power and existing plants were phased out by 1990. In 2008 the Berlusconi led government reversed this decision and announced a renewed investment in nuclear energy and a new generation of plants.
The recent landslides in the Sicilian province of Messina that caused the death of at least 21 people have combined with Berlusconi’s continuing legal saga and sex scandal to temporarily shift attention here from the Ships of Poison. The Landslides in Messina are seen as another result of the neglect of the South by the national government and abusive criminal practices in the Southern regions.
At the European level there is interest coming from the European Parliament to address the horrible reality coming to light here. The Calabrian Environmental Assessor Greco will lead an Italian delegation to Strausburg in order to further elaborate the gravity of this situation of the Ships of Poison to the European Community on the 20th of October.
Throughout the world there is growing attention and focus on this story while at the local level there is a mass mobilization underway. On the 24th of October organizers are planning an International day of action with a large demonstration in the small city of Amantea near the river Oliva. This area is largely seen here as ground zero for this horrid reality. Along the shores of Amantea in 1990, a ship called the Jolly Rosso, laiden with toxic and radioactive waste, beached ashore after a failed attempt to sink it off the coast. The contents of the Jolly Rosso were then dumped on land nearby. The area suffers from elevated deaths due to leucemia and cancerous tumors thought to be linked to findings of the highly toxic Cesium 137, Mercury and other poisonous substances contaminating the land, river and sea. On the 24th of October it is hoped that this situation will be given the attention it deserves and that a global cooperation may begin to heal the waters of our beautiful Mediterranean Sea. We hope this for our children and children’s children.
The Calabrian daily newspaper il Quoitidiano has created an on-line petition to call on the Italian government to move quickly to both assess and begin to address this International disaster. It calls on the Italian government to contain the damage from the radioactive waste at sea and on land. There have been an average of 2000 signatures a day from all over the world. The link is here and you can sign where it says firma la petizione. If you would like to take part in the International Day of Action on the 24th by organizing a local event in solidarity or attending the demonstration in Amantea you can send an email to me and I will forward it to the local organizers here.
Michael Leonardi currently lives in Calabria. He teaches English at the University of Calabria in Cosenza and at the Vocational Highschool in Maratea for training hotel and restaurant workers. He can be reached at mikeleonardi@hotmail.com
Source
By MICHAEL LEONARDI - October 10, 2009
As reported in the Calabria daily newspaper “Calabria Ora” by director Paolo Pollichieni, 55 are the number of ships confirmed by Italian navy admiral and chief of Italian intelligence organization AISE (formerly SISMI), Bruno Branicoforte; 55 Ships containing a toxic and dangerous mix of radioactive and other industrial contaminants that were traded in the international traffic of the world’s hazardous wastes on the high seas. Others unofficially talk of upwards to 140 ships. Only NATO knows for sure but has not yet revealed this information to the public, and who knows if they ever will? Now these 55 ships, cargos of waste aboard and possibly seeping into the waters of the Mediterranean, are said to be lying on the sea floor, intentionally sunk across international waters over the past twenty years. Branicoforte made his affirmation to the Italian parliamentary committee for the Security of the Republic, Copsair on the 25th of September.
The threat to public health is alarming to the coastal population of Italy as it should be to all of the 23 countries that border the Mediterranean Basin. Health reports from the Region of Calabria show elevated cases of cancerous tumors, especially among the younger population along the coasts. The culprits of this International tragedy: organized criminal elements, the corporate producers of this waste and the government’s that knowingly allowed this contamination of the sea to unfold; are now gathering forces and talking of confirmations of these ships and a clean-up of the Sea.
The assessor of the Environment in the Region of Calabria Doctor Silvio Greco, a marine biologist, reminds us that the majority of these wastes came from Industries outside of Italy. This makes it again clear that there must be an International effort monitored by citizen watchdog groups to contain the effects of this catastrophe. It is hard to trust those that made this mess in the first place to clean up this unthinkable man made disaster, but they may have the only means.
A ship from the Italian energy giant ENI is now in route from Cyprus to Calabria. As reported in the Calabrian daily il Quotidiano on the 8th of October, the vessel is specialized to verify the contents of the first ship to be photographed in the seas depths, 11 kilometers from Cetraro. ENI has offered the assistance of this vessel free of charge, recognizing the gravity of the situation. Another research vessel from the Italian environmental research institute called ISPRA is being retrofitted with special equipment to provide 3 dimensional images of the ship thought to be the Cunsky,
The regional fishing industry, especially around Cetraro, is being harshly affected and there is talk of public aid to families feeling the economic brunt from the crash in fish consumption. There is also concern about a blow to the tourism industry. This area is usually overrun with tourists during the month of August and many families here base their livelihoods around the tourist industry. Contaminated land from illegal dumping of hazardous wastes is also a large problem in this area and a threat to local agricultural practices, confounding an already ugly situation.
In Italy as a whole, Berlusconi and his harem of ministers continue to hold the public interest. Stefania Prestigiacomo, the young environmental minister from Sicily, said on the 7th of October that there will be every effort made on the part of the government to assess and clean up the situation in the Calabrian coastal waters near the towns of Cetraro, Fuscaldo, Guardia Piemontese, San Lucido and the cities of Paola, Diamante and Amantea on the Tyrennian Sea, where the first ship to be photographed lies off the coast. But nothing has yet been said by Prime Minister Berlusconi, President Napolitano or environmental minister Prestigiacomo about the other 54 ships confirmed by Admiral Branicoforte. Other regions beyond Calabria, including Tuscany, Basilicata and Campania, are asking for more action and communication from the Berlusconi government as Berlusconi himself has yet to address the issue publicly and Prestigiacomo has done so only sparingly. The opposition is accusing the government of negligent inaction, while Prestigiacomo says that she is doing all she can as she begins to break her silence on this global calamity.
The Berlusconi government is also under pressure to for it’s decision to bring back nuclear power to Italy. In 1987 Italians voted overwhelmingly against the use of nuclear power and existing plants were phased out by 1990. In 2008 the Berlusconi led government reversed this decision and announced a renewed investment in nuclear energy and a new generation of plants.
The recent landslides in the Sicilian province of Messina that caused the death of at least 21 people have combined with Berlusconi’s continuing legal saga and sex scandal to temporarily shift attention here from the Ships of Poison. The Landslides in Messina are seen as another result of the neglect of the South by the national government and abusive criminal practices in the Southern regions.
At the European level there is interest coming from the European Parliament to address the horrible reality coming to light here. The Calabrian Environmental Assessor Greco will lead an Italian delegation to Strausburg in order to further elaborate the gravity of this situation of the Ships of Poison to the European Community on the 20th of October.
Throughout the world there is growing attention and focus on this story while at the local level there is a mass mobilization underway. On the 24th of October organizers are planning an International day of action with a large demonstration in the small city of Amantea near the river Oliva. This area is largely seen here as ground zero for this horrid reality. Along the shores of Amantea in 1990, a ship called the Jolly Rosso, laiden with toxic and radioactive waste, beached ashore after a failed attempt to sink it off the coast. The contents of the Jolly Rosso were then dumped on land nearby. The area suffers from elevated deaths due to leucemia and cancerous tumors thought to be linked to findings of the highly toxic Cesium 137, Mercury and other poisonous substances contaminating the land, river and sea. On the 24th of October it is hoped that this situation will be given the attention it deserves and that a global cooperation may begin to heal the waters of our beautiful Mediterranean Sea. We hope this for our children and children’s children.
The Calabrian daily newspaper il Quoitidiano has created an on-line petition to call on the Italian government to move quickly to both assess and begin to address this International disaster. It calls on the Italian government to contain the damage from the radioactive waste at sea and on land. There have been an average of 2000 signatures a day from all over the world. The link is here and you can sign where it says firma la petizione. If you would like to take part in the International Day of Action on the 24th by organizing a local event in solidarity or attending the demonstration in Amantea you can send an email to me and I will forward it to the local organizers here.
Michael Leonardi currently lives in Calabria. He teaches English at the University of Calabria in Cosenza and at the Vocational Highschool in Maratea for training hotel and restaurant workers. He can be reached at mikeleonardi@hotmail.com
Source
IOF troops block olive harvesting
| 10/10/2009 - 09:57 AM |
 |
|
JENIN, (PIC)-- Palestinians in east Jenin whose lands were isolated behind the separation wall have said that Israeli occupation forces (IOF) guarding gates of the wall were blocking their entry into their land. The villagers said that the IOF soldiers, who usually open those gates at 8 am and close them at 5 pm, were harassing them and hardly allowing them to enter their own lands to harvest the olives crop. They complained that they have been denied entry for three days without any justification. The villagers of Faku'a village said that the IOF issue a limited number of entry permits for them, asking for the intervention of human rights groups to allow them to reach their land. |
Time for a War Tax
How to Pay for Escalation in Afghanistan
By STEVE BREYMAN
October 10, 2009
The United States has spent $228.2 billion on combat operations in Afghanistan since October 2001, so the Congressional Research Service tells us. The White House recently said that the single most cost-effective option--withdrawing US fighting forces--was not on the table during its ongoing review of AfPak strategy. This means, among other things, that the cost will continue to mount whether General McChrystal gets his additional tens of thousands of troops or not. The quarter trillion dollar figure does not include the current cost of recruiting young men and women to fight the war (hundreds of millions of dollars per year), the future cost of veterans’ benefits (likely to be gigantic), nor the cost of debt service on the borrowed money. The latter figure could rise as high as $200 billion, according to Nobel Prize-winning economist Joseph Stiglitz. Put together, these figures rival those of the Wall Street bailout.
This has been a war, as is the war in Iraq, and as was the war in Vietnam, that the US waged on future taxpayers’ dimes. One consequence of the Johnson- and Nixon-era war splurge was the stagflation of the 1970s, and the withering of Great Society programs. The self-imposed pay-as-you-go spending rule enacted by Congress in 1990 expired in 2002 just as George W. Bush prepared to invade Iraq. This was a period during which the US ran budget surpluses for the first time since the 1950s. The rule mandated that any new spending be budget neutral: new spending had to be offset by spending cuts or tax increases elsewhere in the budget. A new version of the rule recently passed the House and is currently before the Senate. President Obama has said he will sign the bill into law. As written, the bill does not exempt war spending.
The president also (re)committed to paying for the wars through the regular budget process (this was a campaign promise)—following one 2009 supplemental war spending bill that overwhelmingly passed both houses. Supplementals required a straight up or down vote; no amendments were permitted, as in the regular budget process. Obama’s FY2010 defense budget reflects this more honest approach. But this forthcoming budget simply adds the rapidly growing tab of the wars to the national debt. A truly honest approach would pay for the wars with real money, not funds borrowed from the Chinese and our great-great-grandchildren.
The United States invented the telephone excise tax to help finance the Spanish-American War in 1898. Renewed many times afterwards, during times of both war and peace, the tax (which applies today only to local calls spelled out as such on a phone bill) has essentially been made obsolete by cell phones and bundled service. The revenues, which ended up in the general fund anyway, were never enough to pay the full toll for any war. The War Tax Act of 2010 could remedy this and other defects in the American tradition of paying (or not) for war.
A war tax, called such and sized to cover the full cost of the wars, would signal an important break from the lies and chicanery of the George W. Bush years. The tax should be progressive rather than regressive. It should be renewed or reinstated every year US forces engage in combat on foreign soil, air, or water. The Blackwaters, Lockheed Martins, and Halliburtons—contemporary war profiteers—should pay the lion’s share through targeted and loophole-free corporate income taxes. But none of us who make incomes above a genuine poverty level—not the federal government’s shameful underestimate--should be exempt. Why? Because war is too easy without basic fiscal responsibility.
A vote for war funding—a leading cause of deficit spending--is today without political risk for all but a handful of members of Congress. It does not take much if any deliberation for most members to vote “yes” on “authorizations for the use of force,” and for the supplemental bills to “pay” for the force. Indeed, the only risk they face comes should they vote against war spending. Presidents notice, and potential challengers back home notice. Hardly surprising then that Bush and Obama received everything they’ve asked for in Iraq and Afghanistan from Congress these past eight years.
That same Congress is unlikely to show much enthusiasm for a war tax. Why should it? The current arrangement works just fine for most members, thank you very much. Institution of a war tax would, like all good things, require a years long, focused and strategic grassroots campaign against extraordinary odds and fierce resistance. A war tax addresses the fiscal root of the problem by simply paying for war on an as-you-go basis. A war tax is the fiscal policy equivalent of universal single-payer health care. But it stands even less chance of implementation.
There is no cost-effective alternative to a war tax besides the off-the-table immediate exit strategy. The administration has boxed itself into a deficit-spending corner. It is virtually certain that whatever revised policy emerges from the present round of meetings, it will cost more than the exorbitant status quo.
Congressional war hawks (who double as deficit hawks, even during a recession) the Washington Post editorial board, and General McChrystal are pushing Obama to escalate the eight-year-old war. Again, the White House announced that declaring victory over al-Qaeda in Afghanistan (a fair claim, according to the president) and holding a parade is, unfortunately, not on the near-term horizon.
It’s a shame that the economic cost of the war has not figured at all in the current debate over US AfPak policy. Were it to, escalation would be the first option off the table.
Steve Breyman teaches at Rensselaer Polytechnic Institute. Reach him at breyms@rpi.edu
Source
By STEVE BREYMAN
October 10, 2009
The United States has spent $228.2 billion on combat operations in Afghanistan since October 2001, so the Congressional Research Service tells us. The White House recently said that the single most cost-effective option--withdrawing US fighting forces--was not on the table during its ongoing review of AfPak strategy. This means, among other things, that the cost will continue to mount whether General McChrystal gets his additional tens of thousands of troops or not. The quarter trillion dollar figure does not include the current cost of recruiting young men and women to fight the war (hundreds of millions of dollars per year), the future cost of veterans’ benefits (likely to be gigantic), nor the cost of debt service on the borrowed money. The latter figure could rise as high as $200 billion, according to Nobel Prize-winning economist Joseph Stiglitz. Put together, these figures rival those of the Wall Street bailout.
This has been a war, as is the war in Iraq, and as was the war in Vietnam, that the US waged on future taxpayers’ dimes. One consequence of the Johnson- and Nixon-era war splurge was the stagflation of the 1970s, and the withering of Great Society programs. The self-imposed pay-as-you-go spending rule enacted by Congress in 1990 expired in 2002 just as George W. Bush prepared to invade Iraq. This was a period during which the US ran budget surpluses for the first time since the 1950s. The rule mandated that any new spending be budget neutral: new spending had to be offset by spending cuts or tax increases elsewhere in the budget. A new version of the rule recently passed the House and is currently before the Senate. President Obama has said he will sign the bill into law. As written, the bill does not exempt war spending.
The president also (re)committed to paying for the wars through the regular budget process (this was a campaign promise)—following one 2009 supplemental war spending bill that overwhelmingly passed both houses. Supplementals required a straight up or down vote; no amendments were permitted, as in the regular budget process. Obama’s FY2010 defense budget reflects this more honest approach. But this forthcoming budget simply adds the rapidly growing tab of the wars to the national debt. A truly honest approach would pay for the wars with real money, not funds borrowed from the Chinese and our great-great-grandchildren.
The United States invented the telephone excise tax to help finance the Spanish-American War in 1898. Renewed many times afterwards, during times of both war and peace, the tax (which applies today only to local calls spelled out as such on a phone bill) has essentially been made obsolete by cell phones and bundled service. The revenues, which ended up in the general fund anyway, were never enough to pay the full toll for any war. The War Tax Act of 2010 could remedy this and other defects in the American tradition of paying (or not) for war.
A war tax, called such and sized to cover the full cost of the wars, would signal an important break from the lies and chicanery of the George W. Bush years. The tax should be progressive rather than regressive. It should be renewed or reinstated every year US forces engage in combat on foreign soil, air, or water. The Blackwaters, Lockheed Martins, and Halliburtons—contemporary war profiteers—should pay the lion’s share through targeted and loophole-free corporate income taxes. But none of us who make incomes above a genuine poverty level—not the federal government’s shameful underestimate--should be exempt. Why? Because war is too easy without basic fiscal responsibility.
A vote for war funding—a leading cause of deficit spending--is today without political risk for all but a handful of members of Congress. It does not take much if any deliberation for most members to vote “yes” on “authorizations for the use of force,” and for the supplemental bills to “pay” for the force. Indeed, the only risk they face comes should they vote against war spending. Presidents notice, and potential challengers back home notice. Hardly surprising then that Bush and Obama received everything they’ve asked for in Iraq and Afghanistan from Congress these past eight years.
That same Congress is unlikely to show much enthusiasm for a war tax. Why should it? The current arrangement works just fine for most members, thank you very much. Institution of a war tax would, like all good things, require a years long, focused and strategic grassroots campaign against extraordinary odds and fierce resistance. A war tax addresses the fiscal root of the problem by simply paying for war on an as-you-go basis. A war tax is the fiscal policy equivalent of universal single-payer health care. But it stands even less chance of implementation.
There is no cost-effective alternative to a war tax besides the off-the-table immediate exit strategy. The administration has boxed itself into a deficit-spending corner. It is virtually certain that whatever revised policy emerges from the present round of meetings, it will cost more than the exorbitant status quo.
Congressional war hawks (who double as deficit hawks, even during a recession) the Washington Post editorial board, and General McChrystal are pushing Obama to escalate the eight-year-old war. Again, the White House announced that declaring victory over al-Qaeda in Afghanistan (a fair claim, according to the president) and holding a parade is, unfortunately, not on the near-term horizon.
It’s a shame that the economic cost of the war has not figured at all in the current debate over US AfPak policy. Were it to, escalation would be the first option off the table.
Steve Breyman teaches at Rensselaer Polytechnic Institute. Reach him at breyms@rpi.edu
Source
The Securitization Boondoggle
Down the Rat Hole
By MIKE WHITNEY - October 10, 2009
The relentless financialization of the economy has resulted in a hybrid-system of credit expansion which depends on pools of loans sliced-and-diced into tranches and sold into the secondary market to yield-seeking investors. The process is called securitization and it lies at the heart of the current financial crisis. Securitization markets have grown exponentially over the last decade as foreign capital has flooded Wall Street due to the ballooning current account deficit. A significant amount of the money ended up in complex debt-instruments like mortgage-backed securities (MBS) and asset-backed securities (ABS) which provided trillions in funding for consumer and business loans. Securitization imploded after two Bear Stearns hedge funds defaulted in July 2007 and the secondary market collapsed. Now the Federal Reserve and the Treasury are working furiously to restore securitization, a system they feel is crucial to any meaningful recovery.
But is that really a wise decision? After all, if the system failed in a normal market downturn, it's likely to fail in the future, too. Is Fed chair Ben Bernanke ready to risk another financial meltdown just to restore the process? The Fed shouldn't commit any more resources to securitization (over $1 trillion already) until the process is thoroughly examined by a team of experts. Otherwise, it's just good money after bad.
Here's Baseline Scenario's James Kwak digging a bit deeper into the securitization flap:
Here's an excerpt from the New York Times article "Paralysis in Debt Markets Deepens Credit Drought":
Securitization also creates incentives for fraud, because the banks only interest is originating and selling loans, not making sure that borrowers can repay their debt. The goal is quantity not quality. In fact, this process continues today, as the banks continue to originate garbage mortgages through off-balance sheet operations which are underwritten by the FHA. A whole new regime of toxic loans are being cranked out just to maintain the appearance of activity in the housing market. The subprime phenom is ongoing, albeit under a different name.
So why did the banks switch from the tried-and-true method of lending money to creditworthy applicants to become "loan originators"? Isn't there good money to be made in issuing loans and keeping them on the books?
Yes, there is. Lots of money. But not as much money as packaging junk-paper that has no capital-backing and then dumping it on credulous investors. That's where the real money is. Unfortunately, the massive build-up of credit without sufficient capital support generates monstrous bubbles which have dire consequences for the entire economy.
And do we really need securitization? Nobel economist Paul Krugman doesn't think so:
Mike Whitney lives in Washington state. He can be reached at fergiewhitney@msn.com
Source
By MIKE WHITNEY - October 10, 2009
The relentless financialization of the economy has resulted in a hybrid-system of credit expansion which depends on pools of loans sliced-and-diced into tranches and sold into the secondary market to yield-seeking investors. The process is called securitization and it lies at the heart of the current financial crisis. Securitization markets have grown exponentially over the last decade as foreign capital has flooded Wall Street due to the ballooning current account deficit. A significant amount of the money ended up in complex debt-instruments like mortgage-backed securities (MBS) and asset-backed securities (ABS) which provided trillions in funding for consumer and business loans. Securitization imploded after two Bear Stearns hedge funds defaulted in July 2007 and the secondary market collapsed. Now the Federal Reserve and the Treasury are working furiously to restore securitization, a system they feel is crucial to any meaningful recovery.
But is that really a wise decision? After all, if the system failed in a normal market downturn, it's likely to fail in the future, too. Is Fed chair Ben Bernanke ready to risk another financial meltdown just to restore the process? The Fed shouldn't commit any more resources to securitization (over $1 trillion already) until the process is thoroughly examined by a team of experts. Otherwise, it's just good money after bad.
Here's Baseline Scenario's James Kwak digging a bit deeper into the securitization flap:
"The boom in securitization was based on investors’ willingness to believe what investment banks and credit rating agencies said about these securities. Buying a mortgage-backed security is making a loan. Ordinarily you don’t loan money to someone without proving to yourself that he is going to pay you back...Investors are no longer willing to trust the ratings agencies or rush back into opaque world of structured finance. The reason the securitization boycott continues, is not because of "investor panic" as Fed chair Ben Bernanke likes to say, but because people have made a sensible judgment about the quality of the product itself. It stinks. That said, how will the economy recover if the main engine for credit production is not repaired? That's the problem.
The securitization bubble happened because investors were willing to outsource that decision to other people — banks and credit rating agencies — who had different incentives from them." (Baseline Scenario)
Here's an excerpt from the New York Times article "Paralysis in Debt Markets Deepens Credit Drought":
"The continued disarray in debt-securitization markets, which in recent years were the source of roughly 60 percent of all credit in the United States, is making loans scarce and threatening to slow the economic recovery. Many of these markets are operating only because the government is propping them up.Securitization could be fixed with rigorous regulation and oversight. Loans would have to be standardized, loan applicants would have to prove that they are creditworthy, and the banks would have to hold a greater percentage of the loan on their books. But financial industry lobbyists are fighting the changes tooth-and-nail. That's because securitization allows the banks to increase profits on miniscule amounts of capital. That's the real story behind the public relations myth of "lowering the cost of capital, disaggregating risk, and making credit available to more people." It's all about money, big money.
Enormous swaths of this so-called shadow banking system remain paralyzed. Depending on the type of loan, certain securitization markets have fallen 40 to 100 percent.
A once-thriving private market in securities backed by home mortgages has collapsed, from $744 billion in 2005, at the peak of the housing boom, to $8 billion during the first half of this year.
The market for securities backed by commercial real estate loans is in worse shape. No new securities of this type have been issued in two years." ("Paralysis in Debt Markets Deepens Credit Drought" Jenny Anderson, New York Times)
Securitization also creates incentives for fraud, because the banks only interest is originating and selling loans, not making sure that borrowers can repay their debt. The goal is quantity not quality. In fact, this process continues today, as the banks continue to originate garbage mortgages through off-balance sheet operations which are underwritten by the FHA. A whole new regime of toxic loans are being cranked out just to maintain the appearance of activity in the housing market. The subprime phenom is ongoing, albeit under a different name.
So why did the banks switch from the tried-and-true method of lending money to creditworthy applicants to become "loan originators"? Isn't there good money to be made in issuing loans and keeping them on the books?
Yes, there is. Lots of money. But not as much money as packaging junk-paper that has no capital-backing and then dumping it on credulous investors. That's where the real money is. Unfortunately, the massive build-up of credit without sufficient capital support generates monstrous bubbles which have dire consequences for the entire economy.
And do we really need securitization? Nobel economist Paul Krugman doesn't think so:
"The banks don’t need to sell securitized debt to make loans — they could start lending out of all those excess reserves they currently hold. Or to put it differently, by the numbers there’s no obvious reason we shouldn’t be seeking a return to traditional banking, with banks making and holding loans, as the way to restart credit markets. Yet the assumption at the Fed seems to be that this isn’t an option — that the only way to go is back to the securitized debt market of the years just before the crisis."There are only two ways to fix the present system; either regulate the shadow banking system and every financial institution that trades in securitized assets, or ban securitization altogether and return to the traditional model of banking. Regrettably, the Fed is pursuing a third option, which is to pour more money down a rathole trying to rebuild a system that just blew up. It's madness.
Mike Whitney lives in Washington state. He can be reached at fergiewhitney@msn.com
Source
Dollar Dilemma
By Doug Noland - October 09, 2009
Renewed U.S. dollar weakness has evoked calls for Washington to implement a true strong dollar policy. Larry Kudlow is calling for a supply-side cut of marginal corporate tax rates and for the Federal Reserve to hike rates 25 bps in support of our currency. He knows “none of this is gonna happen.” Others believe the focus should be trimming our massive federal deficit. A move to fiscal and monetary restraint is surely needed to help stabilize the dollar. Restraint is not going to happen.
Perhaps chairman Bernanke tossed a tiny bone to the currency markets yesterday evening. Yet everyone in the world knows U.S. policymaker focus is on aggressive short-term stimulus with the objective of jump-starting rapid economic recovery. Officials from both the Federal Reserve and Treasury have stated their view that a strong U.S. economy is the best prescription for a strong dollar. Simple enough. So, perhaps they’ll increasingly be compelled to tweak their comments in hope of influencing currency trading. But don’t hold your breath waiting for a meaningful shift in strategy – say aggressively boosting rates or slashing spending – to protect the value of our currency. Current policy is not the primary issue anyway.
Non-productive Credit expansion/inflation is the bane of currency stability. The dollar’s fundamental problem these days lies with the underlying structure of the U.S. economy. As much as near zero interest-rates and Trillion dollar deficits don’t improve the situation, they are symptomatic of much broader systemic issues. Indeed, ultra-loose monetary policy, scary deficits, and ongoing dollar devaluation are all consequences of deep structural maladjustments to the services and consumption-oriented U.S. “bubble” economy.
And I would make the point that this maligned economic structure has been the driver for both policy and dollar weakness. With the collapse of the Wall Street/mortgage finance Bubble, acute structural fragilities required unprecedented stimulus in order to stem implosion. Once stabilized, policy focus turned immediately to short-term performance – positive GDP growth, spending recovery and job creation. Not surprisingly, the focus remains on finding a quick fix, with scant attention to structural issues.
As it relates to the dollar stability, I would argue that the central policy issue should be to create a backdrop conducive to far-reaching adjustment and repair to the economic structure. Aggressive stimulus would be expected to spur short-term performance gains. However, this would be at the cost of delaying necessary structural corrections. This dynamic may help explain why the bulls have been right on stocks this year but wrong that U.S. recovery would boost the dollar. Washington may believe that big GDP growth numbers will support a strong dollar, but global markets (and policymakers) seem to recognize clearly that the course of U.S. policy undermines the long-term value of our currency (and their dollar holdings).
Decades of credit excess cultivated an economic structure that produces too little and survives on too much credit. The Credit inflation/dollar debasement dilemma was masked for years. The dollar indulged both in its global reserve status and the world’s keen desire to participate in our financial asset Bubble. For years, the U.S. “private”-sector Credit apparatus (Wall Street securitizations, GSE obligations, derivatives, etc.) was the global “asset class” demonstrating the strongest (most alluring) inflationary bias. As fast as our Credit system inundated the world with dollar liquidity, these financial flows would as quickly be recycled right back into U.S. securities. The dollar was king on the back of reflexive speculative flows.
The dollar was not ok – it was fundamentally weak. But it looked ok relatively, in a world of weak currencies and expansive global speculation. And as long as this recycling mechanism functioned smoothly, the U.S. Credit system could easily expand Credit on an annual basis sufficient to boost various types of “output” that tallied in GDP. And with Wall Street and mortgage credit at the heart of the U.S. Credit Bubble, financial excess fed a self-reinforcing boom in lending, asset inflation, consumption, business investment and government expenditures. Moreover, any bout of financial turmoil would see U.S. yields collapse and a virtual buying panic for agency and mortgage-related securities – rapidly reflating our Bubbles.
Many things changed with the bursting of the Wall Street/mortgage finance Bubble. For one, our “private”-sector Credit mechanism was no longer capable of creating sufficient Credit to sustain inflated real estate Bubbles or the inflation-distorted Bubble economy structure. For two, the U.S. Credit system decisively relinquished it status as the most alluring global “asset class.” Years of dollar debasement had already worked to sway the inflationary biases away from the U.S. toward energy, gold, commodities and the “emerging” markets and economies. The unfolding post-Wall Street Bubble reflation has found – for the first time - the “developing” and commodities worlds supplanting the U.S. as the favored destination for speculative finance. This is big.
Granted, deleveraging and unwinding of dollar bearish bets initially propelled the dollar higher. Yet I would argue that the global crisis will be looked back on as a seminal event for our currency. Our policymakers have much less flexibility in the new financial and economic landscape. Both fiscal and monetary measures have lost potency. Trillions of dollars of deficits, zero interest rates and a $2 Trillion Fed balance sheet today get less system response than hundreds of billions and a few percent would have achieved previously. This hurts the dollar. And acute financial and economic fragilities ensure extreme policy measures will remain in place for much longer than would have previously been necessary. This also hurts dollar confidence.
Meanwhile, the “developing” world currencies, markets and economies dramatically outperform the United States. Global reflationary dynamics have put a premium on asset markets in China, Asia and the developing world. This robust inflationary bias, then, places a premium on things consumed in - and demand from - these economies.
So much of our economic structure evolved during - and for - a different era. Our Bubbles were inflating; market dynamics had created great power and flexibility for policymaking; the U.S. consumer was the king; and our securities and economic booms were the focus globally. While some of our multinational companies will benefit, too much of our economic structure is poorly positioned for today’s new global landscape. Not only does our maladjusted economic structure today require too much non-productive Credit creation, it lacks the type of real economic returns necessary to attract global financial flows. This is a big predicament not easily remedied.
It is worth noting that Australia’s central bank was this week the first major central bank to begin the process of removing monetary stimulus. Global markets reacted by pushing the dollar even lower. The “commodity” currencies, gold, energy, commodities and global equities surged higher.
I’ll take the markets’ reaction to uncommon central banking rationality as early confirmation that attempts to tighten ultra-loose monetary conditions globally will be impeded by speculative inflows already bent against the dollar. This dynamic reinforces already strong reflationary forces in non-dollar markets, while intensifying speculative selling pressure against the greenback. Expect foreign central banks to be pressured to buy a lot more dollars and global markets to experience even more destabilizing Monetary Disorder.
Source
Renewed U.S. dollar weakness has evoked calls for Washington to implement a true strong dollar policy. Larry Kudlow is calling for a supply-side cut of marginal corporate tax rates and for the Federal Reserve to hike rates 25 bps in support of our currency. He knows “none of this is gonna happen.” Others believe the focus should be trimming our massive federal deficit. A move to fiscal and monetary restraint is surely needed to help stabilize the dollar. Restraint is not going to happen.
Perhaps chairman Bernanke tossed a tiny bone to the currency markets yesterday evening. Yet everyone in the world knows U.S. policymaker focus is on aggressive short-term stimulus with the objective of jump-starting rapid economic recovery. Officials from both the Federal Reserve and Treasury have stated their view that a strong U.S. economy is the best prescription for a strong dollar. Simple enough. So, perhaps they’ll increasingly be compelled to tweak their comments in hope of influencing currency trading. But don’t hold your breath waiting for a meaningful shift in strategy – say aggressively boosting rates or slashing spending – to protect the value of our currency. Current policy is not the primary issue anyway.
Non-productive Credit expansion/inflation is the bane of currency stability. The dollar’s fundamental problem these days lies with the underlying structure of the U.S. economy. As much as near zero interest-rates and Trillion dollar deficits don’t improve the situation, they are symptomatic of much broader systemic issues. Indeed, ultra-loose monetary policy, scary deficits, and ongoing dollar devaluation are all consequences of deep structural maladjustments to the services and consumption-oriented U.S. “bubble” economy.
And I would make the point that this maligned economic structure has been the driver for both policy and dollar weakness. With the collapse of the Wall Street/mortgage finance Bubble, acute structural fragilities required unprecedented stimulus in order to stem implosion. Once stabilized, policy focus turned immediately to short-term performance – positive GDP growth, spending recovery and job creation. Not surprisingly, the focus remains on finding a quick fix, with scant attention to structural issues.
As it relates to the dollar stability, I would argue that the central policy issue should be to create a backdrop conducive to far-reaching adjustment and repair to the economic structure. Aggressive stimulus would be expected to spur short-term performance gains. However, this would be at the cost of delaying necessary structural corrections. This dynamic may help explain why the bulls have been right on stocks this year but wrong that U.S. recovery would boost the dollar. Washington may believe that big GDP growth numbers will support a strong dollar, but global markets (and policymakers) seem to recognize clearly that the course of U.S. policy undermines the long-term value of our currency (and their dollar holdings).
Decades of credit excess cultivated an economic structure that produces too little and survives on too much credit. The Credit inflation/dollar debasement dilemma was masked for years. The dollar indulged both in its global reserve status and the world’s keen desire to participate in our financial asset Bubble. For years, the U.S. “private”-sector Credit apparatus (Wall Street securitizations, GSE obligations, derivatives, etc.) was the global “asset class” demonstrating the strongest (most alluring) inflationary bias. As fast as our Credit system inundated the world with dollar liquidity, these financial flows would as quickly be recycled right back into U.S. securities. The dollar was king on the back of reflexive speculative flows.
The dollar was not ok – it was fundamentally weak. But it looked ok relatively, in a world of weak currencies and expansive global speculation. And as long as this recycling mechanism functioned smoothly, the U.S. Credit system could easily expand Credit on an annual basis sufficient to boost various types of “output” that tallied in GDP. And with Wall Street and mortgage credit at the heart of the U.S. Credit Bubble, financial excess fed a self-reinforcing boom in lending, asset inflation, consumption, business investment and government expenditures. Moreover, any bout of financial turmoil would see U.S. yields collapse and a virtual buying panic for agency and mortgage-related securities – rapidly reflating our Bubbles.
Many things changed with the bursting of the Wall Street/mortgage finance Bubble. For one, our “private”-sector Credit mechanism was no longer capable of creating sufficient Credit to sustain inflated real estate Bubbles or the inflation-distorted Bubble economy structure. For two, the U.S. Credit system decisively relinquished it status as the most alluring global “asset class.” Years of dollar debasement had already worked to sway the inflationary biases away from the U.S. toward energy, gold, commodities and the “emerging” markets and economies. The unfolding post-Wall Street Bubble reflation has found – for the first time - the “developing” and commodities worlds supplanting the U.S. as the favored destination for speculative finance. This is big.
Granted, deleveraging and unwinding of dollar bearish bets initially propelled the dollar higher. Yet I would argue that the global crisis will be looked back on as a seminal event for our currency. Our policymakers have much less flexibility in the new financial and economic landscape. Both fiscal and monetary measures have lost potency. Trillions of dollars of deficits, zero interest rates and a $2 Trillion Fed balance sheet today get less system response than hundreds of billions and a few percent would have achieved previously. This hurts the dollar. And acute financial and economic fragilities ensure extreme policy measures will remain in place for much longer than would have previously been necessary. This also hurts dollar confidence.
Meanwhile, the “developing” world currencies, markets and economies dramatically outperform the United States. Global reflationary dynamics have put a premium on asset markets in China, Asia and the developing world. This robust inflationary bias, then, places a premium on things consumed in - and demand from - these economies.
So much of our economic structure evolved during - and for - a different era. Our Bubbles were inflating; market dynamics had created great power and flexibility for policymaking; the U.S. consumer was the king; and our securities and economic booms were the focus globally. While some of our multinational companies will benefit, too much of our economic structure is poorly positioned for today’s new global landscape. Not only does our maladjusted economic structure today require too much non-productive Credit creation, it lacks the type of real economic returns necessary to attract global financial flows. This is a big predicament not easily remedied.
It is worth noting that Australia’s central bank was this week the first major central bank to begin the process of removing monetary stimulus. Global markets reacted by pushing the dollar even lower. The “commodity” currencies, gold, energy, commodities and global equities surged higher.
I’ll take the markets’ reaction to uncommon central banking rationality as early confirmation that attempts to tighten ultra-loose monetary conditions globally will be impeded by speculative inflows already bent against the dollar. This dynamic reinforces already strong reflationary forces in non-dollar markets, while intensifying speculative selling pressure against the greenback. Expect foreign central banks to be pressured to buy a lot more dollars and global markets to experience even more destabilizing Monetary Disorder.
Source
Gas giant, Total resumes talks with Iran
Press TV - October 10, 2009 10:39:22 GMT
French gas giant, Total, has resumed its talks with the National Iranian Oil Company (NIOC) on participating in Iran's South Pars gas field project.
The talks commenced in Tehran on Saturday after months of delay. According to Iranian Mehr news agency, the French company's representatives announced Total's readiness to construct a Liquefied Natural Gas (LNG) plant in the gas field.
The report did not reveal the details of the talks.
Following long delays from Total, Iran set a deadline for the company to reevaluate negotiations for the venture. When the company failed to respond, Tehran signed a $4.7 billion deal with China in June.
Total CEO, Christophe de Margerie recently described the talks with Iran as being "at a standstill," but said there was still a possibility for cooperation.
The South Pars gas field is being jointly developed by Iran and Qatar. The Iranian share of the field is about 14 trillion cubic meters of gas, or about eight percent of the total world reserves, and more than 18 billion barrels of liquefied natural gas resources.
NIOC Head Seyfollah Jashnsaz also said that the door is open for the French company to participate in the project.
Jashnsaz mentioned, however, that Total must first secure the consent of China's CNPC, which became Iran's main overseas partner when Total fell behind on its commitments due to political pressure from Washington.
"Because of Total's procrastination, the contract for the upstream sector was signed with the Chinese company and this company is considered to be the operator of this project," Jashnsaz said.
The executive added that Iran is interested in developing ties with countries throughout the world, but "regarding its petroleum industries, it will not keep waiting for any company."
Iran has the second largest gas reserves in the world after Russia and the second largest petroleum reserves in the world after Saudi Arabia.
French gas giant, Total, has resumed its talks with the National Iranian Oil Company (NIOC) on participating in Iran's South Pars gas field project.
The talks commenced in Tehran on Saturday after months of delay. According to Iranian Mehr news agency, the French company's representatives announced Total's readiness to construct a Liquefied Natural Gas (LNG) plant in the gas field.
The report did not reveal the details of the talks.
Following long delays from Total, Iran set a deadline for the company to reevaluate negotiations for the venture. When the company failed to respond, Tehran signed a $4.7 billion deal with China in June.
Total CEO, Christophe de Margerie recently described the talks with Iran as being "at a standstill," but said there was still a possibility for cooperation.
The South Pars gas field is being jointly developed by Iran and Qatar. The Iranian share of the field is about 14 trillion cubic meters of gas, or about eight percent of the total world reserves, and more than 18 billion barrels of liquefied natural gas resources.
NIOC Head Seyfollah Jashnsaz also said that the door is open for the French company to participate in the project.
Jashnsaz mentioned, however, that Total must first secure the consent of China's CNPC, which became Iran's main overseas partner when Total fell behind on its commitments due to political pressure from Washington.
"Because of Total's procrastination, the contract for the upstream sector was signed with the Chinese company and this company is considered to be the operator of this project," Jashnsaz said.
The executive added that Iran is interested in developing ties with countries throughout the world, but "regarding its petroleum industries, it will not keep waiting for any company."
Iran has the second largest gas reserves in the world after Russia and the second largest petroleum reserves in the world after Saudi Arabia.
'Religious' Jews antagonize Jerusalem locals under prayer pretext
October 10, 2009Jerusalem – Ma’an - Hundreds of religious Jews marched toward the Al-Aqsa Mosque compound, taking over the streets in the Old City in what was described as an in-your-face celebration of Shmini Atzeret, which falls a day after the Jewish holiday of Sukkot.
The celebration was viewed by Palestinians in the area as a provocative act.
While many observant Jews in the holy city walk to the Western Wall complex at the bottom of the Al-Aqsa Mosque compound for part of the Shmini Atzeret celebration, hundreds of agitators made their way to the Palestinian neighborhood on Al-Wad Street near the entrance of the Al-Qatanin Market. Palestinians observing the group believed they were attempting to break into the Al-Aqsa Mosque.
On the pretext of celebration, religious Jews performing the Hakafot - dancing round in circles with the Torah - pushed Palestinian shopkeepers out of the streets and ordered them to close their doors.
“You are dirty Arabs,” was a slogan the antagonistic group launched at Palestinians in the area, with several shopkeepers being backed into their stores or small corners of the Old City by advancing celebrators. Racial slurs against Arabs mixed in with the traditional rain prayer marking the end of Sukkot and the start of the harvest.
The group of ultra-orthodox Jews was accompanied by several dozen Israeli soldiers and border guards, who watched as religious rituals were used to antagonize local residents.
Palestinians who refused to back down from the ralliers and remained in the area were told by police that they must shut their stores and leave the area for two hours by order of the police department, “so the worshipers could perform their prayers,” one officer said.
Jerusalem Waqf officials rejected the police order and urged residents to “remain steadfast in confronting the settlers’ provocative acts.”
Police were also seen barring the rowdy group from the entrance area of the Al-Aqsa Mosque, bolstering Palestinian concerns that under the pretext of prayer, the group indeed intended to break into the compound.
The location the group staged the prayer at is a street that runs from the Western Wall in the north toward the Al-Qatanin Gate, one of the main gates to the Old City, which is next to one of the entrances to the Muslim Haram Ash-Sharif, or Noble Sanctuary, that is home to the Al-Aqsa Mosque.
The incident occurred just hours after Israeli forces lifted their siege on the Al-Aqsa Mosque compound, where more than 100 Palestinians were barricaded, inside, refusing to leave for fear the compound would be taken over by Israel.
Following the Friday prayer at the mosque, nearly 100 more Muslim worshippers remained in the area, vowing to remain there until the close of the Jewish holidays, which end Saturday night. Many of those inside the area have said they will not leave for another two days to ensure the safety of the area.
Gaffe-prone Berlusconi says he paid 'judges'
Press TV - October 10, 2009 13:36:26 GMT
 |
Italian Prime Minister Silvio Berlusconi says he is the world's most prosecuted man. |
In yet another trademark gaffe, Italian Prime Minister Silvio Berlusconi says he has paid millions of euros to consultants and judges during his court appearances.
The Italian magnate, who is famous for his numerous blunders, was forced to quickly correct himself, saying in a press conference that he had spent 200 million euros on "consultants and lawyers."
Berlusconi also called himself the most prosecuted man in the world with making over 2,500 court appearances and spending millions on his defense.
"I am absolutely the person who has been most persecuted by judges of all times, in the entire history of the world," he said Friday after judges lifted his immunity from prosecution.
Last week, a Milan court ordered his media empire Fininvest to pay a record fine of 750 million euros after ruling that it had obtained a favorable legal decision through bribery.
The decision came after Italy's Constitutional Court on Wednesday overturned a law which was shielding Berlusconi from prosecution while in office.
The verdict paved the way for two corruption trials to resume against Berlusconi.
So far, the Italian premier has faced charges including corruption, tax fraud, false accounting and illegally financing political parties. Although some initial judgments have gone against him, he has never been definitively convicted.
In the latest cases, he is accused of paying his former British tax lawyer, David Mills, 600,000 dollars to give false evidence in two trials in the 1990s. Mills was convicted in February of accepting the payment.
Another pending case against Berlusconi involves allegations that his Mediaset television empire overcharged for broadcasting rights.
The 73-year-old billionaire media tycoon turned politician has seen his popularity ratings drop in the past few weeks as he is also facing a string of sex scandals.
When asked about calls by critics for his resignation as his personal and legal problems damage the country's image in the world, he said, "the reality is completely the opposite."
"In my opinion, and not only mine, I am the best prime minister we can find today," asserted Berlusconi.
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