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Re: New EC Thread

Post  Panda on Wed 20 Jun - 16:23

Jun 20, 10:51 AM EDT


Greek conservative head sworn in as PM

By NICHOLAS PAPHITIS and ELENA BECATOROS









ATHENS, Greece (AP) -- Greek conservative party head Antonis Samaras was sworn in as prime minister Wednesday at the helm of a three-party coalition that will uphold the country's international bailout commitments.

The move ends a protracted political crisis that had cast grave doubt over the country's future in Europe's joint currency and threatened to plunge Europe deeper into a financial crisis with global repercussions.

Samaras, an American-educated 61-year-old economist, was sworn in three days after his party won the second national elections in six weeks but without enough votes to form a government on its own.

His New Democracy party will join forces with the socialist PASOK party, which came in third place, and the smaller Democratic Left led by Fotis Kouvelis. Discussions on the lineup of ministers were expected to be completed by Wednesday night.

"I will ask the new government that will be formed tomorrow to work hard so that we can offer tangible hope to our people," Samaras told reporters as he left the presidential mansion.

Greek stocks rose marginally in response to the news, with Athens shares closing up 0.5 percent, limiting earlier gains.

The new prime minister was to meet with outgoing Finance Minister Giorgos Zanias, PASOK head Evangelos Venizelos and Kouvelis on Wednesday evening.

All three parties broadly back Greece's pledges to bailout creditors for further austerity and reforms, although they have pledged to renegotiate some of the terms for the rescue loans.

New Democracy and PASOK are also looking for an extension of at least two years in the deadlines for implementing fresh cutbacks worth a total (EURO)14.5 billion ($18.42 billion).

Democratic Left leader Fotis Kouvelis went a bit further Wednesday, saying that Greece should eventually "disengage" from the austerity commitments and "lift those measures that have literally bled society."

Greece has been dependent on the loans from other Eurozone countries and the International Monetary Fund since May 2010. In return, it has imposed deep spending cuts, slashed salaries and pensions, and repeatedly hiked taxes.

The measures have left the country struggling through a fifth year of recession, with unemployment spiraling to above 22 percent and tens of thousands of businesses shutting down.

Earlier Wednesday, hundreds of poverty-stricken Greeks queued in a central Athens park for free vegetables. Cretan farmers handed out some 2,700 10-kilo packages of produce, in cooperation with the capital's municipal authorities.

Among the people lining up was Panayiota Sidera, 31, from Athens. She said she has been unemployed for two-and-a-half years and her husband is also out of a job. The couple is living on a (EURO)250 monthly disability pension and rent from an apartment they own, and has a (EURO)540-a-month loan installment to pay.

"That's my predicament," she said, adding that the food handout "is helping people, and I'm grateful."

"The government should have been doing this years ago," she said.

Zanias is to represent Greece at an upcoming meeting of Eurozone finance ministers.

The eurogroup talks "will be the first big battle on the revision of the bailout agreement, the creation of a framework that will allow us to move to positive growth and to combat unemployment which is the big problem of Greek society," Venizelos said earlier in the day.

In Sunday's vote - and the previous, inconclusive May 6 election - angry voters strongly favored parties promising to end the hardship by tearing up Greece's pledges for continued austerity and reforms.

However, the anti-austerity standard bearer - the radical left Syriza party - finished a narrow second in Sunday's election that gave New Democracy 129 of Parliament's 300 seats.

----

Menelaos Hadjicostis in Athens contributed

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.





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Re: New EC Thread

Post  Panda on Wed 20 Jun - 17:35



Apparently the EU is poised to ease the burden on Greece when they accept the bail-out. Samares will have a meeting to negotiate easing the austerity
which he pledged to do if elected.

Germany sees the worst slump in 14 years.

RBS Cheif Executive says Europe must compete again but several smaller Countries will not have the drive and the current diffficulties will take years
to overceom. He says Spain and Italy needs to be re-capitalised but it is up to these Countries to go for growth and be more competetive.

The general concensus suggessts one person be appointed to act instead of all Members having to meet which is delaying any action.

Since the election Greek Banks have not seen so many withdrawals and the government is hoping the people will put their money back in the Banks.

Cyprus is under pressure from the EU to accept a E10 Billion bail-out but Cyprus is trying to get a loan from Russia because it doesn,t want the high
interest ratse on Bond issues. Russia owns a lot of properties in Cyprus, including the Casinos and knows it is in their interest to keep Portugal solvent.

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Re: New EC Thread

Post  Panda on Wed 20 Jun - 18:39


Jun 19, 2012 11:30 PM GMT+0100
.

..
The European Union’s audacious policy of not having a policy to deal with its economic crisis has almost run its course.

Last week, investors took less than a day to decide that the proposed assistance package for Spanish banks wouldn’t do. This week, the good news from Greece -- leftists who want to confront rather than cooperate with Brussels were defeated in the general election -- was discounted even faster.



About Clive Crook

Clive Crook is a Bloomberg View columnist and member of the Bloomberg View editorial board. His column appears on Thursdays. A former chief Washington commentator of the 'Financial Times,' he previously worked at 'The Economist.'
More about Clive Crook .
Attention turned back to Spain and Italy. Spanish bond yields surged above 7 percent, the highest since the crisis began, signaling fear of default. If Spain, an economy five times bigger than Greece, goes under, saving the euro will be the smaller of Europe’s problems. The EU itself will be in danger.

With the EU’s politicians unable or unwilling to act, everything depends on the European Central Bank and its chief, Mario Draghi.

That may sound familiar. Once the fiscal stimulus of 2009 had passed, the U.S. Congress and administration fought to a draw, leaving the economy’s prospects in the hands of the Federal Reserve. With the recovery again losing momentum and U.S. politics stalemated, many investors expect that the Fed will soon announce a third round of quantitative easing, where the central bank buys bonds to drive down long-term interest rates. It is unorthodox, controversial and necessary. The government can’t act, so the Fed has to.

Constitutional Design

Europe’s fiscal paralysis has a different cause: an argument about the EU’s constitutional design. The consequence is much the same. The ECB has to step up. It wasn’t easy for the Fed to enlarge its role in this way, and it will be even harder for the ECB, which operates under tighter legal restraints.

There’s no alternative. We will know one way or the other within days. EU leaders have a summit meeting scheduled at the end of the month. Supposing they can ride out the next week or so, could that produce a breakthrough? Don’t bet on it.

The EU’s political leadership understands that a Spanish default would be a cataclysm -- including for Germany, the principal architect of the no-policy policy and a country already exposed to enormous losses if the euro system unravels. Few deny that forceful action could avert the danger. They have known this for months, and still just stand there.

Ahead of the summit, it is unclear whether they are even discussing the needed remedies -- first, a banking union that creates a single mechanism for financial regulation, deposit insurance and bank reorganization; and second, some measure of fiscal burden-sharing, perhaps through the issue of jointly guaranteed euro bonds.

There is high-level support for the idea of a banking union someday, eventually, but no real sense of urgency. It requires legislation, goes the prevailing view. You can’t rush these things.

As for debt mutualization, Germany and like-minded northern European countries remain opposed in principle. No fiscal union without political union, says Germany -- an unpromising approach, considering that political union is the last thing Europe’s voters want to see emerge from this mess.

Recently Germany’s leaders have seemed more receptive to an idea put forward last year by a council of German economic experts for a so-called redemption pact. This would provide a measure of fiscal risk-sharing tied to strict rules and penalties for noncompliance. Even if this were the right design (which it isn’t, as I explained last week), it might require months of talks and legislative action.

ECB Tools

The most the summit seems likely to do is start official consideration of the idea. That is no good, because the market’s patience is used up. If Europe’s governments refuse to act decisively and soon, the ECB will have to. Like the Fed, the ECB has the tools.

This is a question of propriety and legality, not economics. With big parts of Europe falling back into recession, unemployment high, wages suppressed and inflationary pressures minimal, the argument for stronger monetary easing is open and shut. The ECB should engage in large-scale quantitative easing. At the same time it can guarantee the solvency of Spain and Italy by acting as lender of last resort to their governments.

The ECB can deliver monetary stimulus and restore confidence in the distressed governments’ solvency at a stroke, without further debate or delay, so long as it is forceful enough.

What’s stopping it? When Europe’s monetary union was being designed, this kind of intervention was ruled out because the legitimate need for it was never envisaged. Central-bank financing of governments was seen as a formula for fiscal excess and uncontrolled inflation. History shows the danger is real.

Restricting the ECB’s discretion so tightly, though, was a huge error, because the EU lacks any other collective macro- policy machinery. The Fed was right to resort to unorthodox stimulus when conditions demanded it. The ECB must do the same.

Can it act without breaking the law? The spirit of the law rules it out. The letter is more accommodating. Bear in mind, the ECB has already done it on a small scale. Under its Securities Markets Program, the central bank bought Spanish and Italian debt last year; previously it had bought Greek, Irish and Portuguese government debt under the same plan. The ECB said the purchases weren’t direct financing of governments. The idea was to safeguard the money transmission mechanism, a proper ECB function -- an interesting distinction that nobody else understood.

Later the ECB rolled out its much larger liquidity relief operation -- again, to many, a form of QE. Instead of buying government debt, the ECB lent to banks at very low rates in the hope that they would buy the sovereign bonds instead. The maneuver worked for a while, and the legally questionable debt- buying program fell into disuse.

The time for this stratagem has run out. Providing cheap liquidity can’t deal with insolvency. The Securities Markets Program must be revived -- urgently and at scale. It is fine if Draghi says he is safeguarding the money transmission mechanism. Let him deny the purpose is to assure the solvency of Spain and Italy. Investors won’t believe him, so it won’t matter. The main thing is that he acts, because nobody else seems willing to, and Europe is in grave danger.

(Clive Crook is a Bloomberg View columnist. The opinions
expressed are his own.)

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Re: New EC Thread

Post  fuzeta on Wed 20 Jun - 20:41

And so it goes on and on. When will they ever admit it just will not work???? Whatever are they trying to do? They are all playing lip service to this great catastrophe and pretending there is a way out. Politicians (including ours) can bleat all they like. They are so terrified of the euro collapsing, they will say anything except admit the truth of it all.

They have got us all in this mess and now they are trying to bluff their way out. In the end the reckoning will come. I am thinking of following the Greeks and putting whatever I have under the mattress. It will all come tumbling down due to greed . I think the leaders involved in all this are not telling us anywhere near the truth of the matter IMO only

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Re: New EC Thread

Post  Panda on Thu 21 Jun - 9:21



Merkel balks at Hollande's suggestion to fight EURO turmoil with debt purchases.

European Companies in debt crisis are being snapped up by U.S.

Greece faces downgrade to MCSI. Samares is to name a new Government today.One of the main streets in Athens which was on a par with Regent St.
in London for shopping is now mostly showing boarded up windows .

Spain faces a debt test, their Bonds sold today at slightly lower rate as were Italian and French Bonds

Italy is facing bail-out on a level with Spain .

Stocks across Europe have opened lower , all except Switzerland.

New Zealand and Australia are keeping their financial heads above the water but China and the U.S. are not which is worrying the Market.

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Re: New EC Thread

Post  Panda on Thu 21 Jun - 11:47

Europe has no monopoly on democracy


20 June 2012
De Standaard Brussels Comment21





During the G20 summit in Los Cabos, an indignant Jose Manuel Barroso declared that Europe had not come to Mexico get any tutoring in democracy from emerging states. The European Union, however, not only suffers from a democratic deficit, but lacks legitimacy in the eurocrisis. A look outside the box cannot hurt here, writes a Belgian editor.

Bart Sturtewagen


José Manuel Barroso was not always the man at the head of a European Commission that can't get the financial crisis under control. In his youth, his native country of Portugal suffered under dictatorship. His political commitment is rooted in a genuine democratic conviction.

When he declared at the G20 summit in Los Cabos that Europe needs no lessons in democracy from anybody, and certainly not from countries that are not democracies at all, this was not an expression of a random bad mood. What was at stake for him was something he believes in deeply.

However, there are two problems with his argument. The first is that the European Union has a less democratic structure than he claims: between the populations and the EU administration yawns a certain gap. In part, this is due to the perverse habit of states and governments to blame everything that goes wrong in Europe on "Brussels".

But that's not all. Europe is the noble and heroic response of a political elite to the Second World War. As such, it is by far the most important political undertaking of our time. But gradually, it’s turning out that those origins are not sufficient grounds to justify the unification process over the long run.

Even before the eurocrisis grabbed all the attention, it was becoming ever harder to remain united, both on EU enlargement and on the deepening of European integration. But as long as the motor driving the Union was more prosperity, security and freedom, this was not so important. Which brings us to the second problem with Barroso’s outburst in Mexico.

Sleek Americans, dynamic Chinese

Even if one views Europe as a democracy, albeit a staged and therefore imperfect one, we cannot avoid the conclusion that its growth model looks extremely weary. Regions in which our Rhineland model does not exist certainly know greater social contradictions and injustices. They are less stable, and have greater shocks and swings between euphoria and depression.

At our best, however, we are a superior model of society that comes closest to the “greatest good for the greatest number”. But there are times in which other systems – the sleek Americans here, the dynamic Chinese there – prove to be economic and political competitors that sluggish old Europe no longer seems able to take on.

The two fundamental problems of Europe are mutually reinforcing. The discomfort of the citizens over the Union’s opaque groping towards decisions is growing more intense today, now that the decision-making process has proven incapable of saving the cornerstone of unification, the euro, from a downward spiral. The fear that the failure of the euro may prove a fatal wound to European integration may therefore be justified.

In his declaration Barroso, perhaps unconsciously, puts his finger on the actual wound: Can Europe be both more democratic and more efficient at the same time – that is, both politically and economically stronger? Or are these two goals mutually exclusive?

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Re: New EC Thread

Post  Panda on Thu 21 Jun - 13:54


Ronald Freeman of Atlantic Council says Germany is the Country which is not part of EURO and is too unbalanced.

1. Germany pays it's workers the lowest wages.

2. Has no Welfare State.

3. Imports very little.

4 Says NO to everything , wants fiscal , political and sovereignty change.

5. Germany must come up with a workable solution and Merkel cannot keep saying NO.Germany is riskier than people think.

6. The introduction of the Euro without back-up was ill conceived Each Country has it's own method of Governance and this is what makes the Euro
so vulnerable and the lack of Annual audit of Members should have been a prerequisite.

7.Merkel's inability to alter her stance is because her Party did not do very well in the recent elections and she knows the German people do not want to lend any more money for bailouts to other Countries . If she agreed with other EU Proposals she would be voted out of the next Election.

Spain's true debt will not be known until later today when the Test is completed.Roland Berger and Oliver Wyman are the Investigators, so far they have
estimated a loan of E650 billion but this cannot be confirm until the test is complete.

Van Rumpoy's blueprint, to be discussed at the EU meeting includes Bills and Banks.

Berlesconi says it wouldn't be that bad if Italy left the Euro , it could concentrate on Exports.

There is a holiday complex called National ? favoured by the very rich wich Greece must sell and will test demands.

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Re: New EC Thread

Post  Badboy on Thu 21 Jun - 18:29

650 BILLION?
MY,WHAT BIG SUMS THEY COME UP WITH.

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Re: New EC Thread

Post  Panda on Fri 22 Jun - 7:38

Paris yields on euro bonds


21 June 2012

Presseurop
Die Zeit, La Tribune Comment3




Eurobonds won’t be coming any time soon. France, through its prime minister, has just accepted what Germany has been saying for months. In an interview with the German weekly Die Zeit, Jean-Marc Ayrault recognises that –


Communitisation of debt requires greater political integration, and that will take some years to be carried out. It’s just that we cannot wait that long to act. Once again, time is pressing.

The new head of the French government, criticising all-out austerity once again, suggests other ways out of the euro crisis, however –


We must move towards common banking supervision, with a European system for deposit guarantees. We can also find solutions that allow states to have easier access to financing [...]. In the short term, the role of the European Stability Mechanism (ESM) should be strengthened. Under certain conditions, it should be allowed to act like a bank to ensure that States do not go into more debt on the backs of the taxpayers.

In Paris, La Tribune notes that “by falling into line on the eurobonds question, the new French government is giving up the heart of its European program.” Recalling Chancellor Angela Merkel’s sharp criticism of François Hollande’s proposals, the daily estimates that –


... the new French president has taken note of this lesson. He has forgotten that promise of debt pooling that he was proudly pushing for a month back. [...] He has forgotten it, like he has forgotten his notion of reshaping the ECB along the lines of the American central bank – a real casus belli for Berlin – and like he has forgotten about renegotiating the fiscal pact to slip into it a ‘section on growth’, now reduced to trivial occasional measures that no one can seriously believe will have any impact on the European economy, let alone on the French.

“With these setbacks,” La Tribune concludes, “Paris is acknowledging its weak position in Europe.”

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Re: New EC Thread

Post  Panda on Fri 22 Jun - 7:45


DR


This bedroom community northwest of Madrid symbolises the real estate lunacy behind Spain’s turn of the century financial bubble that is dragging down the country’s banking system today. Under a state repayment scheme, Pioz will need thousands of years to reimburse its creditors.

Lola Galán


The blocks of townhouses, some clear beige, others in red brick, flank the almost intact silhouette of the XV century castle in the distance. The roundabout leading to Pioz (Guadalajara), about 55 kilometres northeast of Madrid, is marked with signs warning of a dangerous intersection and of lanes leading to housing developments. Everywhere crop up clusters of new houses built in the fury of the housing boom.

Trascastillo, El Bosque del Henares, Valcastillo, Las Suertes, Montealto, La Arboleda, Los Charquillos, Madrebuena. Some are half-empty. Similar scenes litter many other parts of Spain. The one thing special about Pioz is that it is the most indebted town in the country. According to its mayor, Amelia Rodriguez (PP, Popular Party, conservative) the municipality is carrying a debt of no less than 16 million euros – on a budget of two million euros.

7,058 years

In the midst of the day-to-day maelstrom of the crisis, Pioz is a small-scale example of the failure of the development model that has prevailed in recent decades in Spain. A village that in the mid-nineties had less than 1,000 inhabitants invested millions in the hope of becoming a bedroom community of 25,000. That never happened. Today Pioz has 3,800 registered residents and a gaping hole in its finances.

Being identified as the most indebted town in Spain by its own mayor, however, has not pleased most of the lifetime residents. And more than one is wondering why Amelia Rodríguez was so diligent in identifying their town as the town that would take 7,058 years to pay off its debt through Spain’s Plan de Pago a Proveedores (Plan for Payment to Suppliers) that was alluded to a few days ago by the Secretary of State of Public Administration, Antonio Beteta – especially since Beteta spoke of a ‘town in Guadalajara’, but took great care not to name names.

“I’m not saying either that it’s this town – only that it might be,” clarifies the mayor of Pioz, conducting the interview with great seriousness while declaring herself “sick of interviews” and very busy. Amelia Rodriguez, 45, black hair cut short and wearing dark pants and a pink blouse, seems well aware of the uproar caused by her complaint.

“I agree that it’s not good for the town, but what do I do? Shut up?” That wouldn’t be the style of Mayor Rodriguez, who has more than two decades in municipal politics behind her. In July 2011, shortly after being elected mayor, she sent out circulars to all the administrations exposing the dire situation of local finances.

“There are the bills,” she says, pointing to a pile of white folders stacked on a shelf in her office. The debts run into the hundreds of thousands of euros, for supplies and maintenance, for street lighting, town-planning consultancy, school cleaning and outstanding payments on the municipal swimming pool.

Choose between bullfights or school heating

Of the latter, according to Rodriguez, only 300,000 euros were paid, and the invoice with interest well exceeds one million. Faced with the bills, “this year I had to cancel the bullfights, because I had to choose between the bullfights or heating the schools in winter,” says the mayor, who insists that her complaint is not political. “It’s not about whether the government was the PSOE or the PP. It's about having half a brain,” she says, alluding to Emilio Rincón, her predecessor as mayor.

Rincón, town councillor for the Regionalist Party of Guadalajara in 1999 and mayor until the last election in 2011, first with an independent grouping, then with the PSOE, passionately defends his administration against the “lies” of his successor. To start, he slashes the real debt in half. “In the adjustment plan adopted at the plenary the talk was of 5.4 million euros, which would be 80 percent of the debt, or approximately eight million euros – there’s nothing there about 16 million euros.”

The former mayor, who worked in construction and is now unemployed, is one of the two Socialist councillors of Pioz following the split in the party and the creation of Ciudadanos por el Cambio (CuC, Citizens for Change), which won four seats on the Council and has made a common front with him on this issue. “The mayor is talking about bills, but she isn’t producing them. We’ve been asking to speak to the auditor for a year now and we haven’t succeeded,” Vladimiro Pastor, CuC spokesman at the Town Hall, says by telephone.

Much of the town’s debt comes from the water treatment plant, built after the adoption of planning scheme in 2003. The bill for it, about 5.5 million euros, was about to be taken over by the outgoing regional government. Why was it not done in stages? For the construction industry, it was a time of plenty. From the late nineties, “the voter rolls doubled every three or four years,” Pastor says.

All the projects ground to a halt

And the Town Hall rubbed its collective hands. “We were thinking of building about 7,000 homes in order to get up to 25,000 inhabitants,” says Rincón, 49, in the Los Cazadores bar, run by a family member. “People were coming from Madrid and the Henares Corridor to buy homes here. We could have got up to at least 10,000 registered voters.”

Urban planning called for an infrastructure plan: water treatment, sewage collectors, lighting. “An investment of 12 million euros, of which eight million were paid in,” said Rincon. There also came the swimming pool, the cultural centre, and the medical centre, all essential to a bedroom community of 25,000. But in the summer of 2007 the wind abruptly changed. “The promoters put a freeze on the construction when they saw that the first phase wasn’t selling,” recounts the ex-mayor, and all the projects ground to a halt.

“Still, the town has benefited from all that. From the pool and the health centre, which used to be just stables, and the cultural centre, which has a library and a very nice event hall.” The speaker, Emilio Varela, owner of a central bakery and neighbour to one of the empty estates in Pioz, is appalled at all the controversy, even though the library has been closed for months because the librarian has been on sick leave and the brand-new medical centre is open only in the mornings; for emergencies, patients have to head for neighbouring Chiloeches.

But the Cervantes cultural centre is up and running, and, says Varela, it has helped knit together a town where most residents come from somewhere else. Although they don’t quite add up to the dream of 25,000, they are a small fraction of what the borrowed money was planned for.

Translated from the Spanish by Anton Baer

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Re: New EC Thread

Post  Panda on Fri 22 Jun - 8:20


Air France/KLM to shed 5,000 jobs.

Merkel to meet Monti, Hollande and Rajoy to discuss the latest crisis with the banks.

Mario Monti says if a conclusion is not reached by the end of the month, the situation will get worse and there must be a stimulous for growth and
better supervision of the Banks.

He favours the idea of Banks needing help to be the borrower, not the Sovereign as suggested by Rajoy.

Schauble suggests another look at the Financial transaction tax which Britain is so against. Sweden is also against thios and says it will take Business away.
The stress tests on Spanish banks suggests E62 million would be minimum to help the Banks , however, the stress tests taken 2 years ago on EU banks
proved worthless so if the same method is used this result should not be taken as gospel. Two days is hardly long enough to go through the Books of all Spanish Banks.

One analyst suggested the vain attempts by the EU to stem the crisis is like trying to put deck chairs out on the Titanic.

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Re: New EC Thread

Post  Badboy on Fri 22 Jun - 13:52

Panda wrote:
DR


This bedroom community northwest of Madrid symbolises the real estate lunacy behind Spain’s turn of the century financial bubble that is dragging down the country’s banking system today. Under a state repayment scheme, Pioz will need thousands of years to reimburse its creditors.

Lola Galán


The blocks of townhouses, some clear beige, others in red brick, flank the almost intact silhouette of the XV century castle in the distance. The roundabout leading to Pioz (Guadalajara), about 55 kilometres northeast of Madrid, is marked with signs warning of a dangerous intersection and of lanes leading to housing developments. Everywhere crop up clusters of new houses built in the fury of the housing boom.

Trascastillo, El Bosque del Henares, Valcastillo, Las Suertes, Montealto, La Arboleda, Los Charquillos, Madrebuena. Some are half-empty. Similar scenes litter many other parts of Spain. The one thing special about Pioz is that it is the most indebted town in the country. According to its mayor, Amelia Rodriguez (PP, Popular Party, conservative) the municipality is carrying a debt of no less than 16 million euros – on a budget of two million euros.

7,058 years

In the midst of the day-to-day maelstrom of the crisis, Pioz is a small-scale example of the failure of the development model that has prevailed in recent decades in Spain. A village that in the mid-nineties had less than 1,000 inhabitants invested millions in the hope of becoming a bedroom community of 25,000. That never happened. Today Pioz has 3,800 registered residents and a gaping hole in its finances.

Being identified as the most indebted town in Spain by its own mayor, however, has not pleased most of the lifetime residents. And more than one is wondering why Amelia Rodríguez was so diligent in identifying their town as the town that would take 7,058 years to pay off its debt through Spain’s Plan de Pago a Proveedores (Plan for Payment to Suppliers) that was alluded to a few days ago by the Secretary of State of Public Administration, Antonio Beteta – especially since Beteta spoke of a ‘town in Guadalajara’, but took great care not to name names.

“I’m not saying either that it’s this town – only that it might be,” clarifies the mayor of Pioz, conducting the interview with great seriousness while declaring herself “sick of interviews” and very busy. Amelia Rodriguez, 45, black hair cut short and wearing dark pants and a pink blouse, seems well aware of the uproar caused by her complaint.

“I agree that it’s not good for the town, but what do I do? Shut up?” That wouldn’t be the style of Mayor Rodriguez, who has more than two decades in municipal politics behind her. In July 2011, shortly after being elected mayor, she sent out circulars to all the administrations exposing the dire situation of local finances.

“There are the bills,” she says, pointing to a pile of white folders stacked on a shelf in her office. The debts run into the hundreds of thousands of euros, for supplies and maintenance, for street lighting, town-planning consultancy, school cleaning and outstanding payments on the municipal swimming pool.

Choose between bullfights or school heating

Of the latter, according to Rodriguez, only 300,000 euros were paid, and the invoice with interest well exceeds one million. Faced with the bills, “this year I had to cancel the bullfights, because I had to choose between the bullfights or heating the schools in winter,” says the mayor, who insists that her complaint is not political. “It’s not about whether the government was the PSOE or the PP. It's about having half a brain,” she says, alluding to Emilio Rincón, her predecessor as mayor.

Rincón, town councillor for the Regionalist Party of Guadalajara in 1999 and mayor until the last election in 2011, first with an independent grouping, then with the PSOE, passionately defends his administration against the “lies” of his successor. To start, he slashes the real debt in half. “In the adjustment plan adopted at the plenary the talk was of 5.4 million euros, which would be 80 percent of the debt, or approximately eight million euros – there’s nothing there about 16 million euros.”

The former mayor, who worked in construction and is now unemployed, is one of the two Socialist councillors of Pioz following the split in the party and the creation of Ciudadanos por el Cambio (CuC, Citizens for Change), which won four seats on the Council and has made a common front with him on this issue. “The mayor is talking about bills, but she isn’t producing them. We’ve been asking to speak to the auditor for a year now and we haven’t succeeded,” Vladimiro Pastor, CuC spokesman at the Town Hall, says by telephone.

Much of the town’s debt comes from the water treatment plant, built after the adoption of planning scheme in 2003. The bill for it, about 5.5 million euros, was about to be taken over by the outgoing regional government. Why was it not done in stages? For the construction industry, it was a time of plenty. From the late nineties, “the voter rolls doubled every three or four years,” Pastor says.

All the projects ground to a halt

And the Town Hall rubbed its collective hands. “We were thinking of building about 7,000 homes in order to get up to 25,000 inhabitants,” says Rincón, 49, in the Los Cazadores bar, run by a family member. “People were coming from Madrid and the Henares Corridor to buy homes here. We could have got up to at least 10,000 registered voters.”

Urban planning called for an infrastructure plan: water treatment, sewage collectors, lighting. “An investment of 12 million euros, of which eight million were paid in,” said Rincon. There also came the swimming pool, the cultural centre, and the medical centre, all essential to a bedroom community of 25,000. But in the summer of 2007 the wind abruptly changed. “The promoters put a freeze on the construction when they saw that the first phase wasn’t selling,” recounts the ex-mayor, and all the projects ground to a halt.

“Still, the town has benefited from all that. From the pool and the health centre, which used to be just stables, and the cultural centre, which has a library and a very nice event hall.” The speaker, Emilio Varela, owner of a central bakery and neighbour to one of the empty estates in Pioz, is appalled at all the controversy, even though the library has been closed for months because the librarian has been on sick leave and the brand-new medical centre is open only in the mornings; for emergencies, patients have to head for neighbouring Chiloeches.

But the Cervantes cultural centre is up and running, and, says Varela, it has helped knit together a town where most residents come from somewhere else. Although they don’t quite add up to the dream of 25,000, they are a small fraction of what the borrowed money was planned for.

Translated from the Spanish by Anton Baer
THOUSANDS OF YEARS TO PAY OFF DEBT,SPENDING TOO MUCH MONEY ETC CAN DO THAT TO YOU.

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Re: New EC Thread

Post  Panda on Fri 22 Jun - 16:30



.

It appears the EU is finally taking action. At a meeting today with Merkel, Mont and Hollande it was decided to go for growth of 1% of GDP.

The ECB relaxes the rules for Banks to borrow.

Merkel says the direct funding of bailouts of Banks violates the Treaty.

Banks in Spain are rallying after the stress tests show the situation of the Banks is not as bad as anticipated.

Italian consumers confidence is sapping morale because of higher unemployment and higher prices

German business confidence is at a two year low.

An IMF spokesman said if the EU had a seperate banking system like the U.S. which dealt with all Euro Countries it would eliminate a lot of the problems
and no one Country would have to bail out others.

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Re: New EC Thread

Post  Panda on Fri 22 Jun - 18:03

Czech Republic

Doctored audits lead to EU fund freeze


22 June 2012



“The reimbursement of sums spent on European projects will not resume until October,” reports news website aktualnĕ.cz following discussions between the Czech Ministry of Finance and the European Court of Auditors.

Having received a warning from the EU financial supervisor to the effect that it no longer trusted Czech auditing authorities, Prague decided to suspend its requests for co-financing. In the wake of a control, the Court noted “a high risk” that corrected audit reports supplied to Brussels had had been doctored, because they indicated only negligible issues.

For example, with regard to the transport sector in 2011, Czech experts estimated that only 1.85% of European subsidies had been spent in a manner that did not comply with the rules. However, checks carried out by the Court of Auditors revealed non-compliance in 41.82% of cases.

Having already been placed under supervision by the European Commission, which has suspended EU funding to the country, the Czech Republic risks losing 22bn crowns (€856m), warns Prague daily Lidové Noviny.

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Re: New EC Thread

Post  Panda on Sat 23 Jun - 9:22

Eurozone crisis

Saving Private Euro goes Rome


22 June 2012


L'Espresso, Le Figaro, La Stampa, El País Comment





L'Espresso, 22 June 2012


Angela Merkel, Mariano Rajoy, François Hollande and Mario Monti, the leaders of the four heavyweight eurozone states, are meeting in Rome this June 22 to find a "common vision" ahead of the European Council of June 28 and 29 . A high stakes meeting, Le Figaro notes, as the Italian PM, in an interview with several European newspapers, warns against "a failure in the talks", which could lead to speculative attacks on some countries.

In recent weeks, Le Figaro writes, Mario Monti has stepped up reform proposals –


His proposals to avoid financial disaster have received support from François Hollande. However, Angela Merkel remains "curiously cold," according to sources in Rome. And Brussels is proving sceptical. Olli Rehn, Commissioner for Economic Affairs, has likened them to "financial aspirin".

Le Figaro adds that Monti, wants to make of the gathering "a summit of convergences" –


He is calling on the attendees not to get lost in "ideological debate" [...] and wants to act as a mediator in encouraging Germany to participate in a growth initiative and in convincing France to overcome its reluctance over transfers of national sovereignty.

For La Stampa, Mario Monti wants above all to abandon "the philosophy of slowness" which seems to have dogged Europe this past year. During the interview –


A German journalist asked Monti to try to speak as if he was talking Mr. Müller, a typical German pensioner, terrified at the idea of ​​paying out for other people. The Italian's demeanour changed, and he imagined them drinking a few beers together and telling the pensioner to relax. [...] Hopefully, this will convince the German lady he will be facing.

For L'Espresso, which leads with "Saving Private Euro" as headline, discussions and goodwill alone will not solve the crisis. The "ultimate weapon" on that everyone is thinking about will have to do with reducing one way or the other debt in eurozone states – including a partial default. "An idea that was completely taboo until now."

Madrid daily El País believes that Spanish PM Mariano Rajoy "accedes to the European Directory in a position of extreme weakness" –


Spain is in no condition to influence the future of the union, but in a best case scenario, it can soften the harsh conditions that some of its partners wish to impose in exchange for essential financial assistance. [...] Rajoy will depend on the complicity of Monti and Hollande to appease the inflexibility of Angela Merkel.

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Re: New EC Thread

Post  Panda on Sat 23 Jun - 17:14

10:49am UK, Friday June 22, 2012

Alistair Bunkall, business correspondent

Who would want to be Mario Monti right now after the university professor became Italy, and indeed Europe's, new hope when he succeeded the controversial Silvio Berlusconi as Prime Minister last November?
He's a quiet man but a tough negotiator with none of the flamboyance of his predecessor - a technocrat to stabilise the wobbling Italian economy. He came with the nickname 'Super Mario'.

But his popularity nationally and internationally is souring. When he took office his approval rating was above 70%. A recent poll puts it now at 33%. Ouch!

Italy is still in a fragile state, despite Mr Monti's eight months in charge.


This lack of achievement hasn't endeared the Italian PM to European officials either, and there is a sense that he's talking a good game on the international stage but failing to deliver at home.

Alistair Bunkall, Sky News
Its problems are often over-shadowed by those of Greece and Spain, but its almost 2trn euro of outstanding debt makes it the most indebted European country - and the growing uncertainty that now surrounds Mr Monti's leadership is causing much unease amongst investors.

Not least because Italy has to refinance more than 200bn euro of debt later this year - no easy task, especially with 10-year borrowing rates fluttering around the 6% mark.

As the foreign exchange broker FxPro recently pointed out, Italy's debt mountain dwarfs that of Spain by a ratio of 5:2.

Imagine then if it needed a full-scale bailout - not beyond the realms of possibility.

One of Mr Monti's tasks has been to reform labour regulations, making it easier for companies to sack workers whilst trying to encourage more full-time work.

These changes are still being tediously thrashed out in the Italian parliament and show no sign of being approved any time soon.

Unemployment is now close to 10%, nowhere near that of Greece or Spain's but significant, painful and too high nonetheless.



He has also introduced a severe austerity package that has included 24bn euro of new taxes - it's as unpopular as it is necessary.

This lack of achievement hasn't endeared the Italian PM to European officials either and there is a sense that he's talking a good game on the international stage but failing to deliver at home.

However, of all the gathered leaders at the G20 in Mexico, it was a suggestion from Mr Monti that perhaps gained the most headlines.

He mooted the idea that the two European bailout pots (the EFSF and soon to exist ESM) should be used to buy the sovereign bonds of countries experiencing high interest rates: namely Spain and Italy.

Nothing has been formalised yet and Germany appears to be lukewarm on the idea, but it has gained credibility not least because of the widespread briefings given to journalists in Los Cabos - a tactic perhaps deliberately employed to pressurise Angela Merkel into accepting it.

Mr Monti's argument, which has support from his equally beleaguered Spanish counterpart Mariano Rajoy, is that Spain and Italy have taken significant steps to improve their respective economies and therefore don't deserve to be subjected to conditions set down by the EU/IMF troika in event of a bailout.

He argues that an intervention by the EFSF and ESM in this manner would be a way around that.



Motni will meet with Merkel and Hollande in Rome ahead of the EU leaders summit

French President Francois Hollande has suggested his support, but the scepticism amongst other leaders about what Mr Monti has really achieved in Italy won't help his case.

Europe, and by that read Ms Merkel, might not have a choice though. The German leader is showing signs of waning influence - in Mexico she was bullied by non-Eurozone leaders keen to see some action from her.

The eurozone's problems are starting to have an effect outside of the single currency area.

But it won't be external pressure that forces the German chancellor to act. Instead it might be the prospect of elections in Italy should Mr Monti's rivals try to force him out - Europe doesn't need further political uncertainty right now.

Worse than that is the prospect of an Italian bailout - such an event could be curtains for the euro.

Mr Monti's plan will be discussed further in Rome today when he hosts a meeting with Ms Merkel, Mr Hollande and Mr Rajoy. It will almost certainly be on the agenda again in Brussels at the EU Leaders' Summit next week.

Some commentators believe Mr Monti needs to win approval for it in order to save his leadership as well as the Italian economy.

Super Mario needs to start living up to his name.



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Re: New EC Thread

Post  Badboy on Sat 23 Jun - 19:33

I READ THAT WHAT IS BEING SAID IS THAT THE GREEK GOVERNMENTAL SYSTEM NEEDS TO BE MORE COMPUTERISED,EG TAX SYSTEM AND INFORMATION SHARING ACROOSS GOVERNMENTAL DEPARTMENTS.

I ALSO HAVE A TWEET SEND TO ME ABOUT GREEK TOURISM.

APPARENTLY THE GREEK TOURISM AUTHORITY HASN'T TWEETED SINCE OCTOBER, A POOR STATE OF AFFAIRS BECAUSE THEY NEED TO ENCOURAGE TOURISM(17% OF GDP)

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Re: New EC Thread

Post  Panda on Sat 23 Jun - 23:01

9:41pm UK, Friday June 22, 2012

The leaders of the eurozone's four top economies have agreed the European Union should boost growth by adopting a series of measures worth about 130bn euro (£104bn).
Italian Prime Minister Mario Monti, German Chancellor Angela Merkel, French President Francois Hollande and Spanish Prime Minister Mariano Rajoy held talks in Rome.

Mr Monti said the four leaders had agreed that kickstarting growth in the eurozone was key to restoring confidence.

He said: "The first objective we agree on is to relaunch growth, investments and to create jobs."

Mr Monti said the leaders agreed that, while much had been done to stem the euro crisis, there was still more work to do.

The Italian leader told reporters: "We want there to be a significant European growth package, that is worth about 1% of Gross Domestic Product (GDP), or 130bn euro.



"Growth can only have solid roots if there is fiscal discipline, but fiscal discipline can be maintained only if there is growth and job creation."

Ms Merkel hailed the move as "an important signal", adding: "The lesson of this crisis is more Europe, not less Europe."

The talks come ahead of a crucial full European Union summit in Brussels next week aimed at resolving the debt crisis.

Mr Monti said the message the four nations want to come out of the forthcoming meeting in Belgium on June 28 to 29 is that the euro will survive.

He said the meeting should "put at ease the financial markets expectations", adding "that the euro is here to stay and we all mean it".

"The great project which has been successful until now, the euro, is irreversible."
Mr
Hollande added that the four leaders had agreed on the need for a financial transaction tax.

The French president also said there could be "no transfer of sovereignty without greater solidarity".

A transfer of sovereignty would be required for deeper fiscal integration in the eurozone, which Ms Merkel is pushing for, but France wants financial burden sharing to be a higher priority.

[/b][b]

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Re: New EC Thread

Post  Panda on Sun 24 Jun - 10:15

24 June 2012 Last updated at 09:52 Share this pageEmail Print Share this page

Greece's new Prime Minister Antonis Samaras will miss this week's EU summit while he recovers from eye surgery, according to a government spokesman.

He underwent routine surgery on Saturday for a damaged retina, with the operation said to have been a success.

Mr Samaras was sworn in as prime minister only last Wednesday to head a three-party pro-austerity coalition.

The "troika" of rescue lenders have also postponed a planned visit to Athens according to Greek media.

Inspectors from the EU, European Central Bank and IMF had been due to review Greece's progress in meeting bailout conditions on Monday, but local reports say they will not now arrive until early July.

Negotiations

Greece is under huge international pressure to fulfil bailout terms.

The new governing coalition consists of two "pro-memorandum" parties who broadly support continuing the austerity and reforms demanded by Greece's lenders - Mr Samaras' centre-right New Democracy and the beleaguered socialist Pasok party - as well as the more sceptical Democratic Left.

The new government is seeking to water down the requirements imposed on it by other EU countries and by the International Monetary Fund, including an extension to the deadline for it to reduce its budget deficit by at least two years, to 2016.

The Greek reform programme was expected to be a major item on the agenda of the two-day EU summit in Brussels that begins this Thursday.

To compound the government's difficulties, the new finance minister Vassilis Rapanos is in hospital after apparently fainting on Friday.

His condition was said on Saturday to be "stable and improving". He was originally due to be sworn in on Saturday.

In a policy document, the government said its aim was for the fiscal target envisaged by the bailout deal to be met without further cuts to salaries and pensions.

Elections held last week ended a two-month deadlock over its implementation.

Pro-bailout parties gained a narrow majority in parliament, despite widespread public anger at austerity measures stipulated in the bailout.

'Avoiding layoffs'
Continue reading the main story
Analysis

Mark Lowen

BBC News, Athens

--------------------------------------------------------------------------------
Greece's new government was elected by promising voters that it would renegotiate some terms of the country's bailout. The concessions that it hopes to obtain have now become clear and they go further than previously thought.

The package may go too far for Germany, whose chancellor, Angela Merkel, reiterated last week that Greece must stick to its cost-cutting path. She is mindful that German voters are frustrated with footing the bill for the Greek bailout.

Representatives of Greece's international lenders had been due to arrive here on Monday to assess what changes, if any, might be acceptable, with further discussions at an EU summit next week. Greece may be overplaying its hand now so as to win some concessions in a later compromise.

But if the tactic backfires, if the requests fall on deaf ears, the new government will face a swift backlash at home. And that would make its first few months in office even harder than expected.

The government's negotiation document was published following agreement on policy goals between the coalition partners New Democracy, Pasok and Democraftic Left, and precedes a confidence vote in parliament.

It includes provision for "an extension to the period for the fiscal adjustment by at least two years, so that the fiscal target is met without further cuts in salaries and pensions".

"The aim is to avoid layoffs of permanent staff, but to economise a serious amount through non-salary operational costs and less bureaucracy," it said, quoted by AFP.

Under the current bailout deal, Greece has agreed to take 150,000 civil servants off the payroll by 2015.

Other provisions include:

reviewing minimum wage cuts and measures to facilitate private-sector layoffs
employers and unions to be allowed to set a private sector minimum wage
rearranging taxpayers' arrears for the year so that they do not exceed 25% of income
reducing VAT in catering from 23% to 13%
extending unemployment benefits
Greece's new cabinet was announced two days ago.

All three parties have signed a agreement to fully support the coalition, giving it a majority of 29 in parliament.

However, the cabinet is dominated by the conservative New Democracy party, after its left-wing partners Pasok and Democratic Left barred their MPs from joining.

Mr Samaras (L) and Mr Rapanos (R) are both in hospital
They are represented by two party officials each. It is believed that they may not want to be associated with austerity measures.

The BBC's Mark Lowen in Athens says the test for the new government will be to win significant concessions from eurozone partners in the weeks ahead.

Eurozone officials say the bailout should only be revised to reflect the deeper recession, and delays to implementation caused by inconclusive elections in April and the subsequent failure to form a government.

The country got an initial EU-IMF package worth 110bn euros (£89bn; $138bn) in 2010, then a follow-up this year worth 130bn euros.

It has also had 107bn euros of debt, held by private investors, written off

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Re: New EC Thread

Post  Badboy on Sun 24 Jun - 18:45

SOME PEOPLE IN GREECE ARE LIVING BY TRYING TO FIND BURIED TREASURE BY DIGGING HOLES IN THE GROUND.
CRIMINALS ARE BREAKING INTO MUSEUMS TO STEAL ITEMS TO SELL,ARCHAEOLOGICAL DIGS HAVE BEEN CANCELLED BECAUSE OF LACK OF CASH.

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Re: New EC Thread

Post  Panda on Mon 25 Jun - 7:20

21 June 2012 Last updated at 16:19 : Global reactionsBy Dhruti Shah and Priya Shah

BBC News

With the eurozone crisis showing little sign of abating soon, the focus has turned towards other emerging key players in the world's global economy.

Brazil, Russia, India, China and South Africa (Brics) have pledged to give the International Monetary Fund's crisis "war chest" $75bn (£48bn) to help it deal with the situation.

Japan is another country that has offered help - providing loans worth $60bn (£38bn) to the fund.

BBC News website readers in each of these respective countries have a mixed reaction to their governments' actions.

Ariane Ferreira, Sao Paulo, Brazil

It's a good idea for Brazil and other countries to help the eurozone because there were times in the past when they needed help from the IMF's fund, as well as getting loans directly from other European countries.

It is very important to help the eurozone, especially when it comes to encouraging economic growth, as much of our market needs to sell products and services to European consumers.

When Europe grows, the whole world grows. This is because all of the the economies are connected.

But if we just take a look at Brazil's problems with health, education, security, the hungry, unemployment and misery, this money would be considered very important and useful for us Brazilians.

We know that Brazil's domestic debt is growing quickly and one day we too may need financial help.

Alexander Krylov, Moscow, Russia

I think the reason why the Brics nations agreed to provide the funding is because they are interested in making sure the global economy has support as it is something that affects everyone.

However, I feel that not every country in Europe is doing the right thing. I'm not convinced that Spain and Greece should be taking on new debts - it's not a good idea when your economy is in a stage of stagnation rather than growth.

I understand why the Brics countries included caveats. There is a saying in Russia: "The man who is paying for the girl's supper can dance with the girl all night". In other words, by giving the money, Russia and the other Brics countries should be allowed to give their recommendations and have more power.

Jervis Mendonca, Hyderabad, India

The whole euro idea was doomed to failure from the beginning and the regulatory bodies should have been far more proactive than they have been so far.

Other countries shouldn't suffer because of the excesses of the EU zone; a lot of money was squandered when times were good and now they stand with a begging bowl in front of the Brics countries.

It's probably not a bad idea to let the European economies fail, because I think it's deeply unfair that poorer countries subsidise and bail them out while their own people languish in extreme poverty.

The Europeans have had it good for a long time, and it's probably fair that they realise that a few people cannot have everything for nothing.

Xiao Xu, Beijing, China

As a Chinese person, I think this is a good idea.

China is doing well, it is the world's second largest economy and should do all it can to help the world economy.

We have high growth rates of 8% or 9% while Europe is slowing down. We export to Europe. If its economy collapses, it affects us too.

Gerrit Synders, Durban, South Africa

I think we should help but we appear to have given too much to the IMF this time around.

South Africa needs to be focusing on spending money on its own infrastructure and dealing with poverty before it looks at bailing out other countries.

The government's plans were kept under the radar and it was only when President Jacob Zuma turned up in Brazil, did we realise the extent to which South Africa was helping out.

I expect the country is thinking more about long-term benefits rather than the short-term ones. It is a good thing that we are now to have more voting powers, but to be honest, I think the IMF really needs to do a better job of explaining why the situation has got so bad.

Yuko Ishikawa, Tokyo, Japan
Continue reading the main story

Start Quote
I would like to help Europe but I am also afraid that Japan may not have the time to help others, when Japan itself is on the brink of bankruptcy”
End Quote
I have ambivalent feelings toward Japan helping the IMF with eurozone crisis. Of course, as Japan is the member of this world and used to be one of the strongest economic nations, Japan should be helping European countries in this critical state.

If the Euro crisis fails disastrously, the result would affect not only Japan but also the whole world. But it's also true that Japan's public debt is twice the size of its GDP, whereas Greece's debt is 165%.

The prime minister is trying to raise the consumption tax rate from 5% to 10% to relieve this situation but it is said that if we don't raise it soon, the Japanese economy will collapse in the near future.

I would like to help Europe but I am also afraid that Japan may not have the time to help others, when Japan itself is on the brink of bankruptcy - although many Japanese people don't realise this.

More views
The question Indians need to be asking themselves is, where is this money coming from? Does India have the money to lend? What is the arithmetic? Indians should be proud that their country can help the world economy. We have received aid money in the past, so we should also give it, it is a matter of good relations. Hopefully this will mean India's position in the world economy will be respected by other nations. But the question remains, what is the source of this money? Subh Surya Sarkar, Bhopal, India

Continue reading the main story

Start Quote
It is important for Brazil to show that it can contribute and is a major player”
End Quote
Marcelo Bruzzi

Sao Paulo

China is not rich, there are people here who are living a terrible life. They need money for education and health care, but the government is reluctant to spend money on social security. Money shouldn't be lent to rich countries, but spent inside this country. We need to change this development model so that it is driven by domestic consumption rather than international exports, which is bad for the Chinese people. It's ridiculous that a poor person lends money to rich people. China has already done a lot for the world. We help keep prices low with our resources and labour. We help other economies rise up, but this does not help our people. Li (not real name), Sichuan province, China

Many people in South Africa will not agree with the proposed increase, mostly the trade unions will ask the government how they can justify giving that amount to the IMF. They wont realise that we will essentially be banking it with the IMF and then have a greater role to play in the IMF. They will have to educate the people on why this is needed or face massive criticism. The crisis in the EU affects SA more than most might think as many of our exports go to the EU. There has also been a decrease in tourism from the EU because of the crisis, which is very evident in Cape Town. I have first hand knowledge of this as I am in the industry. Stephan Fourie, Cape Town, South Africa

If the money helps significantly change the situation and actually benefit everyone, then it can be considered a good idea. But Brazil has a lot of problems and we need money invested in our own schools, hospitals and other services. I hope this injection of money will result in more help for Brazil in the future too - that it will encourage international firms to come here because they can see what we can offer. It is important for Brazil to show that it can contribute and is a major player; however I think a lot of the decisions that are made are political rather than economical. Marcelo Bruzzi, Sao Paulo, Brazil

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Re: New EC Thread

Post  Panda on Mon 25 Jun - 11:34

Market Gloom Prevails as Spain Formally Asks for Aid for Banks

By STEPHEN CASTLE and RAPHAEL MINDER

Published: June 25, 2012




LONDON — Market gloom prevailed early Monday at the start of a crucial week for the euro, as Spain made a formal application for billions in aid for its sickly banks and European leaders prepare for talks over the creation of a European banking union to shore up the currency.









.



Related

Pressure for Action at Brussels Meeting (June 25, 2012)


Greece’s New Leaders to Miss Crucial Meeting (June 25, 2012)


Bankers Call for Wider Measures to Stem Crisis (June 25, 2012)


Times Topic: European Debt Crisis



Stock markets and the euro dropped on Monday amid pessimism about the prospect that European Union leaders, who are due to meet Thursday and Friday in Brussels, will achieve the far-reaching breakthrough needed to relieve pressure on Spain and Italy, both of which face elevated borrowing costs.

In making a formal request Monday for up to 100 billion euros, or $125 billion, in bank aid, the Spanish economy mister, Luis de Guindos, said in a letter to Jean-Claude Juncker, head of the Eurogroup of euro zone finance ministers, that the final amount of the financial assistance would be set at a later stage.

The recent assessments of Spanish banks made by the International Monetary Fund, as well as two consulting firms, should be the “starting point” to establish exactly how much European money Spanish banks should receive, Mr. de Guindos said in the letter.

Audit reports released last week indicated that Spain will need as much as 62 billion euros to shore up a banking system brought low by a real estate crash.

Mr. de Guindos also confirmed his intention to sign a memorandum of understanding for the package, which would include full details, by July 9, in time for the next meeting of euro zone finance ministers.

He left the door open for further talks about how the European money should be disbursed, underlining recent efforts by Madrid to pressure its European counterparts into allowing its banks to receive the money directly, rather than adding to Spain’s sovereign debt by going to the Spanish government, as current European Union rules require.

E.U. leaders may discuss whether to change those rules at their meeting in Brussels at the end of the week. They will also debate a series of far-reaching changes to the regulation of banks, including a plan to wind up insolvent banks, a central deposit guarantee fund and a bigger supervisory role for the European Central Bank.

The issue of bank regulation highlights the threat posed by the so-called doom loop at the heart of the euro zone, in which the weak finances of banks and governments on Europe’s periphery drag each other down.

An outline agreement to bail out Spanish banks, struck earlier this month, failed to impress financial markets because the loans from the euro zone rescue fund will, under the current rules, only add to the debt of Spain’s government.

An audit of Spanish banks was commissioned by Spain’s Economy Ministry in May after the government took control of Bankia, a giant mortgage and prime casualty of the real estate collapse that left many of Spain’s banks with mounting levels of loans in or near default. Spain’s deep recession and high unemployment are compounding those problems.

Spain expects finance ministers from the 17 euro zone countries to set the terms of the loan, such as the interest rate, at their meeting on July 9. It then expects the results of more audits of its banks by the end of July and may not specify a final figure until September.

In effect, Spain is happy to drag out its bank rescue in order to let the idea of a European banking union ripen and in the hope that, by the time the funding is provided, it can be paid directly into the banks — whatever the current rules say now.

Spanish officials know that, at the center of discussion at the two-day summit of E.U. leaders on Thursday and Friday, will be a proposal for a banking union at the European level, which could break the cycle that threatens the future of the single currency.

That and other ideas for centralized bank supervision will be outlined in a paper from the president of the European Commission, José Manuel Barroso; the president of the European Council, Herman Van Rompuy; the president of the European Central Bank, Mario Draghi, and the heads of the Eurogroup of euro zone finance ministers, Jean-Claude Juncker.

The document will also outline proposals for deeper economic integration in the euro zone.

But even if the details can be agreed upon this week, such a plan will take months if not years to implement.



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Re: New EC Thread

Post  Panda on Mon 25 Jun - 14:29

Spanish Banks have apparently been fiddling the Books and raising the value of the Mortgages so it is difficult to estimate how much the Bail out will
be until true indebtedness is known.

George Soros, the scourge of Britain when the £ had to be devalued has a proposal for the survival of the Euro which he hopes to discuss with the EU
and Obama

He says a Euro with Germany as it's head would be unacceptable.

Merkel again rejects the theory of joint EuroBonds on the eve of the EU Meeting on Thursday. To be fair, this is inconceivable when Germany is the
only really solvent Country and should only be considered when all the Euro Countries are on a par financially, which is never going to happen.

Greeks were under the impression that Merkel would relent a little on the austerity plan if they voted to stay in the Union. This is not the case and gives
potentially more power to Szyriza the Party who wanted to not accept the bail -out, default on existing debt and return to the Drachma.

Cyprus is still struggling and doesn't want to ask the EU for a bail-out if it can help it.

Stocks across Europe and Britain have opened lower today.

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Re: New EC Thread

Post  Panda on Mon 25 Jun - 16:57

Why Mario Monti needs to speak truth to power


25 June 2012
Financial Times London Comment4

Stephff


Only a political union can save the euro and the EU, and only the Italian PM can say it clearly and convince Germany, argues columnist Wolfgang Münchau before this week’s EU summit. But will he?

Wolfgang Münchau


Just imagine it is this Thursday evening in the European Council’s gathering of Europe’s heads of state, and the Italian prime minister stands up and says this: “Mr President, dear colleagues. We are confronted with a simple choice: we can today either save the euro and build the foundation for a future political union, or we could flunk it and achieve neither. We all know what we need to do to save the euro. We require a banking union for Spain, a fiscal union for Italy and a political union for Germany.

“We can, of course, disagree on details. But we have to settle some of these differences this weekend, and take a decision on the steps that are needed right now. Our crisis resolution policies have failed time and again. We now need something that works fast. If we fail, I can assure you that I can no longer be part of this group, and my country can no longer be part of this project.”

Let me say first of all that I do not really expect Mario Monti to say such a thing, not even a more cryptic version. He is the leader of a technical government. His job is to fix things. Standing up to the German chancellor – grandstanding as some people might call it – let alone wagering Italy’s future is not part of his remit. Italy’s political parties appointed him because they needed a plumber to succeed the playboy, not a gambler. The last thing they wanted was a leader.

I believe there is a case for a calculated gamble. But its risks and pay-offs must be fully understood. The point is not so much to call Angela Merkel’s bluff, as some of my Italian and Spanish friends have been urging. She is not bluffing, despite the fact that a break-up of the eurozone would clearly be disastrous for Germany. Joschka Fischer, the former foreign minister, said recently that by allowing the eurozone to break up, Germany would for the third time in a century have inflicted utter devastation on Europe and on itself.

Those who advocate the strategy of calling Germany’s bluff often assume a degree of rationality that is plainly absent. The Germans have developed a strange narrative of the crisis. Following the debate there, as I do regularly, has a parallel universe feel about it. There is, for example, a denial that the current account surpluses are even remotely a factor. In the German narrative, the economy is like a football game, which Germany is winning. And the chancellor’s job is to support the team against another team – as she did in Gdansk last Friday when Germany beat Greece. Germany, like Ms Merkel, looks unstoppable.



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Re: New EC Thread

Post  Panda on Mon 25 Jun - 17:07

25 June 2012 Last updated at 12:52 Share this pageEmail Print Share this page



Cyprus's credit rating has been cut to junk status by Fitch, reflecting fears the country could require a eurozone bailout to shore up its banks.

Cyprus, whose banks are heavily exposed to Greece, will need 4bn euros (£3.2bn) to support its banks, said Fitch.

This is on top of 1.8bn euros Cyprus said it needs by Friday to recapitalise its lender Cyprus Popular Bank.

Cyprus' president said he would meet other political leaders on Tuesday afternoon to discuss the options.

Cyprus' junk credit rating means it is almost impossible for it to borrow money from international markets, as it makes it too expensive for it to do so.

Cypriot officials have previously said that they would seek foreign aid from fellow eurozone nations or from Russia, or a combination of the two.

Cyprus is believed to be reluctant to apply to the eurozone bailout fund for the full amount needed to recapitalise its banks because of the strict conditions that may come attached.

Cyprus is keen to protect its low 10% corporate taxation rate which makes it an attractive base for foreign companies.

The scale of the potential bailout required is almost a quarter of Cyprus' total economic output for the year, according to Fitch's estimates.

Fitch said the downgrade was mainly due to the exposure of its three largest banks - Bank of Cyprus, Cyprus Popular Bank and Hellenic Bank - to Greece.

"Even assuming that Greece remains in the eurozone, Cypriot banks will have to bear significant further loan losses as the Greek economy continues to contract over the medium term as well as the deterioration in domestic asset quality," it said.

Fitch also warned that further downgrades were possible if the situation in Greece deteriorated further.

Fitch's move follows that of other major rating agencies Moody's and Standard & Poor's which have already cut Cyprus' credit rating to junk.

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