January 4th, 2012
08:57 PM GMT
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London (CNN) – The decision by China’s airlines to snub Europe’s carbon emissions tax opens a new front in the battle of European Union versus the Rest of the World.

From this year, airlines which use EU airports must pay a carbon tax, regardless of the carrier’s nationality. They pay for the emissions of the whole flight - not just the bit in European air space.

Carbon credits are issued for up to 80% of emissions, meaning airlines are left with hefty bills to cover the balance.

What has enraged the Americans, Chinese, Latin Americans - in fact just about everyone - is that the EU imposed a blanket scheme.
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January 4th, 2012
04:04 PM GMT
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London (CNN) – I have an Financial Times cartoon on my desk by Banx which shows a man reading a book of "Greek Myths" to a child, with the tag line "...and the EU got all its money paid back in full." I don't cut out many cartoons but this one sets the tone for 2012.

We've known since October that Greece won't have to pay back all the money it has borrowed. Banks are already in deep discussions to reach a deal for a 50% "haircut" on some of the Greek government bonds they hold. Once that is agreed to, Greece is a step closer to getting some of the $168 billion loan - part of its second bailout - agreed by the European Union and the International Monetary Fund.

So what do we know going into 2012?

Let's be clear: A 50% haircut will not be enough. Greece's budget deficit numbers are getting worse, not better. Greece is not increasing the amount of tax that is swallowed up in the country's black economy. The Greek people face another $8 billion or so in austerity measures for 2013-2015, that is, if the coalition government of Lucas Papademos can pass the new measures through parliament ahead of the expected Spring election.

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