European stocks tumbled 4 per cent, with banks plumbing a more than two-year low, as worries about public deficits in Greece and Italy and a regional election rout for Germany's ruling party cast fresh doubt on the euro zone's ability to tackle its debt crisis.
Europe is burning, but that does not seem to bother the un-elected top eurocrats, who have their own strange priorities: Instead of dealing with the soon to explode crisis at home, EU Commission president Jose Manua Barroso and commissioner Connie Hedegaard are busy in Australia propping up PM Julia Gillard´s crumbling election campaign:
Joining Ms Gillard on a news briefing on Monday, European Commission president Jose Manuel Barroso urged the Australian government to continue what it has started on its planned carbon pricing scheme, which he said only highlighted the country's commitment as a responsible member of the international community.
"Australia's decision to put a price on carbon emissions is, in our view, an important step both environmentally and economically," Barroso was quoted by ABC as saying.---
Also, EU climate commissioner Connie Hedegaard praised Ms Gillard for integrating her carbon pricing schemes with the basic dynamics of the market as she met with members of the Australian Parliament led by Climate Change Minister Greg Combet."I can only say that our experience in Europe is to have a market-based system that works and we saw during the crisis when demand for allowances dropped, so also did the price," Hedegaard recalled in giving her approval to Ms Gillard's efforts to work her political solutions through existing local market conditions.
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Barroso and Hedegaard should perhaps be a little bit careful when lauding the EU "carbon price system". The picture they paint of it has very little in common with reality:
Emissions trading scheme is a 'failure'
The EU Emissions Trading Scheme is like a cargo ship stranded on a beach. Expected to play its vital part in an international carbon economy, it is grounded on the hard economic realities facing Europe. It sits there looking lonely and pointless thanks to the failure to secure an international deal. Instead of lucky locals picking over crates of consumer goods, there are big businesses and financiers making handsome profits at the expense of poor consumers. Instead of an insurer picking up the bill, families get higher electricity prices. Too many manufacturing workers play the role of the crew, and will be looking for a new job.
There is a lot of money in the ETS for special interests. ArcelorMittal has enjoyed €1bn worth of surplus allowances in the last two years as steel production has fallen in the recession. Energy companies have made billions in windfall profits as a result of getting valuable allowances for free.
Even criminals are making a fortune. Europol announced, in December 2009, that governments had lost €5bn to carousel fraudsters - using the ETS. And, more recently, the whole market had to be suspended for a while thanks to repeated thefts. The price is paid by consumers – residential and business – stood at €15.6bn in 2010. For consumers, in the UK for example, the burden was about £75 a family. And that is just for a rotting failure of an ETS. At the medium term target price of £30, that cost would be more like £175 a family for the same emissions. The cost to families is tough enough. It hits the same poor and elderly families - who depend most on benefits and, therefore, makes it harder for governments to control public spending.
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