EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

France shows no growth over the last year and is increasingly cause for concern , the target for 2013 of reducing it"s debt to -3% is not likely to be acheived and is in danger of losing it"s AAA status. It appears that Leadership is lacking in the EU as in America and economies are not growing because
no one wants to take drastic action to start rebuilding.

It is looking more and more serious for France, Germany too is reputed to have a higher debt than reported.. Although Germany previously was unwilling to agree to a Eurobond, it is believed France and Germany are to meet to discuss this and other topics. You have to wonder what decisionmaking
goes on without consultation with the other EU Members, there may well be some, like Finland and Hollland whose Economies are more stable.

Italian Prime Minister Berlesconi has announced stringent measures to reduce the debt, £17.5 Billion in expenditure, 50,000 Job losses......it seems he
is finally admitting Italy has a problem, another bail-out from the ECB????


The Cabinet agreed on the measures on Friday despite fierce resistence from
local government officials who claimed they were "socially unjust".

Prime minister Silvio Berlusconi said the measures were fair and responded to
requests from the European Central Bank (ECB).

The ECB has demanded a balanced budget a year earlier than anticipated as
well as structural reforms to promote growth.

The Cabinet approved 20bn euro (£17.5bn) in cuts for 2012 and 25bn (£22bn)
for 2013.

On Wednesday the Milan stock market suffered its sharpest one-day drop since
the Lehman Brothers crisis in October 2008, with the main index falling
6.65%.

The drastic sell-off of Italian stocks and bonds over the past month has put
paid to the government's frequently repeated claim to have kept Italy out of the
eurozone debt crisis.

The public debt burden, at 120% of gross domestic product
(GDP), is second only to Greece's in the eurozone but a relatively modest
deficit and a generally conservative financial system had shielded it until
recently.

AT THE RATE THIS PROBLEM IS SPREADING,WHICH COUNTRIES IN THE EU WILL NOT NEED BAILING OUT?

Badboy wrote:AT THE RATE THIS PROBLEM IS SPREADING,WHICH COUNTRIES IN THE EU WILL NOT NEED BAILING OUT?

France will be the next and even Germany has troubles with DeutcheBank and rumoured to have debt problems. Analysts are convinced that the EU will fail and even if a Eurobond is issued it will not attract investment.

Panda wrote:

Badboy wrote:AT THE RATE THIS PROBLEM IS SPREADING,WHICH COUNTRIES IN THE EU WILL NOT NEED BAILING OUT?

France will be the next and even Germany has troubles with DeutcheBank and rumoured to have debt problems. Analysts are convinced that the EU will fail and even if a Eurobond is issued it will not attract investment.

WHAT WOULD HAPPEN IF EU FAILS,BACK TO ORIGINAL CURRENCIES

Badboy wrote:

Panda wrote:

Badboy wrote:AT THE RATE THIS PROBLEM IS SPREADING,WHICH COUNTRIES IN THE EU WILL NOT NEED BAILING OUT?

France will be the next and even Germany has troubles with DeutcheBank and rumoured to have debt problems. Analysts are convinced that the EU will fail and even if a Eurobond is issued it will not attract investment.

WHAT WOULD HAPPEN IF EU FAILS,BACK TO ORIGINAL CURRENCIES

Yes, Governments would be able to govern as they see fit, if some Countries get into too much debt they would have to go to the IMF for help. Croatia
was meant to be joining a couple of weeks ago, not heard anything since. the cost of running the EC is astronomical plus each Member has to pay for
MEP"s which is just a talking shop. Do you remember the EC directive that Member Countries could only sell straight Bananas, we were paid to leave fields fallow so as not to swamp the EC with produce like they had with the Wine and Butter Mountain. There are Europhiles who will want to keep the EC going and there might be a smaller union.

The Head of the World Bank speaking in Australia says the World faces a severe Economic crisis and blames lack of Leadership from the U.S. and EU.

Merkel and Sarkozy are due to meet tomorrow to discuss the crisis.

It seems as though the meeting between Sarkozy and Merkel later today is to consider the issue of a Eurobond, which Gerrmany up unyil now has
been against. The idea is there would be a 60 % coloured green covered by the ECB and 40% coloured red which individual Countries can sell to raise
money from the Market. Angela Merkel does not want to pou more money into these distressed Countries and Germany has Bank debts itself.

However, if the euro is to be saved and with it the EU something needs to be done. It remains to be seen whether the rest of the EU Countries accept thi.

The meeting between France and Germany Leaders is scheduled for today. Germany"s latest GDP figure is less than expected , as is Spain,
shares have opened lower.

Germany has pledged E200 Billion and France E150 Billion to bail out these Countries and the German population is against a Eurobond,, the latest
poll in Germany shows:-

59% No more bailouts, 75% Disapprove of Merkel, 58% Greece to be ejected from the EU.

Spokesmen for German Chancellor Angela
Merkel and French President Nicolas
Sarkozy have said that their bosses won’t talk about euro bonds when they
meet today in Paris.

That would pretty much make them the only Europeans not talking about the
financial instrument that could rescue Europe from its
growing debt crisis.

Since the idea was first seriously floated more than a year ago, euro bonds
have won considerable support. These securities would be jointly issued and
guaranteed by all 17 countries using the common currency, replacing all or some
of the individual countries’ debts. We agree with the market players --
investors, economists, business groups, traders -- who see euro bonds as the
best way to end the continent’s debt woes. Now the politicians need to come
aboard.

It’s understandable why Merkel and Sarkozy might resist. Euro bonds would
violate a central tenet of the currency bloc: Each country is responsible for
its own finances. The debate also highlights the power struggle between Brussels
and the national capitals. Until now, more power has resided with the national
leaders. The birth of euro bonds would require a new, region-wide fiscal
authority with the ability to influence taxing and spending; the creation of
such an entity would reshape the political landscape at a stroke.

Further Timidity


These are important considerations, but they are outweighed by the risks of
further timidity. The crisis has already spread from the tiny economies of Greece and
Portugal to the heavyweights of Italy and Spain. A July 21
euro-area agreement to bolster the region’s rescue vehicle, the European
Financial Stability Facility, failed to calm markets. Now even France is seen as
vulnerable. The longer Merkel and Sarkozy shy away from big steps, the more
expensive it will become to rescue the euro. The euro experiment itself may be
at stake, not to mention the global economy.

There is no way here to divorce economics from politics. German opposition to
euro bonds remains formidable. Many voters and important figures in Merkel’s
governing coalition and cabinet, including Finance Minister Wolfgang
Schaeuble, are against the idea. The hostility stems from the high price
Germans paid to finance unification in the 1990s. Germans bit the bullet then,
and they are hard-pressed to see why the Greeks and others shouldn’t do the
same. Merkel’s coalition partners, the Free Democrats, are becoming the German
equivalent of the Tea Party with their strong anti-tax, anti-bailout views.


Changing Calculus


Still, the calculus for Merkel is changing, and she may be better off taking
the political risk of backing euro bonds and trying to sell the concept to
voters. No country has gained more than Germany from the common currency,
helping it sustain an export-powered economy. German exporters drove that point
home yesterday by endorsing the euro bond idea.

What’s more, further piecemeal bailouts -- the sure cost of putting off euro
bonds -- would only stoke voter anger and jeopardize the dwindling prospects of
her Christian Democratic Union in 2013 elections. All six regular
opinion polls suggest that the opposition Social Democratic Party and the resurgent Green Party,
which both support euro bonds, would win if the election were held today.

The main fear of German taxpayers is that mutual borrowing through euro bonds
will push up Germany’s debt costs. It’s not necessarily so: The size of
the market would be similar to that for U.S. Treasuries, making euro bonds an
attractive asset for investors looking to park money at minimal cost.

Liquidity Premium

This liquidity premium could even lower Germany’s borrowing costs, according
to economists at the Brussels-based think-tank Bruegel. And a unified finance
ministry could easily exert the control over individual countries’ finances that
many in Merkel’s party desire.

Sarkozy, too, should be looking more favorably at euro bonds now that the
crisis is at his doorstep. He faces voters in eight months -- and the French
economy has stalled out. Slow growth means less tax
revenue, higher safety-net expenses and increasing debt costs. French voters
seem more sympathetic to a tighter fiscal union, but Sarkozy has refrained from
moving too far ahead of Merkel on such a controversial topic.

The best thing Merkel and Sarkozy could do to restore balance in the European
economy is get in step with each other - - and then join with their neighbors,
both stable and shaky, in creating euro bonds.

To contact the Bloomberg View editorial board: view@bloomberg.net.

• 
  
• 
  
• 
  

Portugal has released fugures showing a minus growth, the worst figure of the Countries under pressure. France has problems , as has Germany.
Ireland was showing slight improvement until the German figures were published yesterday. Italy is going to use stringent measures to combat it"s
deficit. Gordon Brown has said Sarcozy and Merkel MUST reach a decision .

David Blanchflower , an ex Member of the British Monetary Policy Committee says the reform of the EU should have been done 18 months ago, says
collapse of the EU is inevitable, Politicians cannot on the one hand go for austerity and go for growth at the same time. It seems a vicious circle and
ends up with Countries never out of debt.

If Britain wants to save money, I suggest withdrawing the Troops from Afghanistan immediately and a ban on immigration unless the person has a job to go to for starters.

Panda wrote:Portugal has released fugures showing a minus growth, the worst figure of the Countries under pressure. France has problems , as has Germany.
Ireland was showing slight improvement until the German figures were published yesterday. Italy is going to use stringent measures to combat it"s
deficit. Gordon Brown has said Sarcozy and Merkel MUST reach a decision .

David Blanchflower , an ex Member of the British Monetary Policy Committee says the reform of the EU should have been done 18 months ago, says
collapse of the EU is inevitable, Politicians cannot on the one hand go for austerity and go for growth at the same time. It seems a vicious circle and
ends up with Countries never out of debt.

If Britain wants to save money, I suggest withdrawing the Troops from Afghanistan immediately and a ban on immigration unless the person has a job to go to for starters.

Gordon Brown....thought he was going to save the world

If Britain wants to save money, I suggest withdrawing the Troops from Afghanistan immediately and a ban on immigration unless the person has a job to go to for starters

I could add some to this. Oh Panda, now you've put me in a bad mood

Angelina wrote:

Panda wrote:Portugal has released fugures showing a minus growth, the worst figure of the Countries under pressure. France has problems , as has Germany.
Ireland was showing slight improvement until the German figures were published yesterday. Italy is going to use stringent measures to combat it"s
deficit. Gordon Brown has said Sarcozy and Merkel MUST reach a decision .

David Blanchflower , an ex Member of the British Monetary Policy Committee says the reform of the EU should have been done 18 months ago, says
collapse of the EU is inevitable, Politicians cannot on the one hand go for austerity and go for growth at the same time. It seems a vicious circle and
ends up with Countries never out of debt.

If Britain wants to save money, I suggest withdrawing the Troops from Afghanistan immediately and a ban on immigration unless the person has a job to go to for starters.

Gordon Brown....thought he was going to save the world

If Britain wants to save money, I suggest withdrawing the Troops from Afghanistan immediately and a ban on immigration unless the person has a job to go to for starters

I could add some to this. Oh Panda, now you've put me in a bad mood

Fancy being a Candidate at the next Election ? I bet we would sort Britain out

That Gordon Brown has a b***dy cheek , "no more boom and bust" ....... that should be engraved as an epitaph on his Gravestone.

Well, it looks like nothing has been resolved on the EU crisis, all Merkel and Sarkozy could come up with is a balanced budget law for all EU Countries
and a Tax on foreign Transactions. No more bail-outs, no Eurobond. Expect the Euro to fall and Wall Street to take their money elsewhere. Another
example of weak Government, Politicians more intent on winning re-election than working for their Countries.

Sarkozy And Merkel Plan Eurozone 'Government'

• 
  
• 
  
• 31 Comments
  

10:58pm UK, Tuesday August 16, 2011




France and Germany have proposed "collective economic goverment" for
the eurozone after European investors sought reassurance from the two
countries' leaders.










French President Nicolas Sarkozy and German Chancellor Angela
Merkel want balanced budget laws to be established in all eurozone
countries.


It was revealed after the pair met in Paris for talks on the issue,
with markets anxious for signs they have a plan to restore stability in
the region.


Sky's economics editor Ed Conway said: "They needed to come out with
some sound and fury, without conceding they were doing extra radical
moves.


"What they've done in essence is to promise some radical measures. They're looking at this eurozone government.







Germany previously enjoyed strong exports of manufactured products





"They've promised there's going to be a financial transaction tax.
However, when they were asked later on in the press conference whether
there would be these eurobonds, which everyone is talking about... they
said that wasn't on the agenda any time soon."


The meeting came as new figures show Germany's economy has lost its
"dynamism" and has all but stalled in recent months, putting further
pressure on the eurozone.


The quarterly GDP growth figure of only 0.1% was way below
expectations and is significantly lower than the 1.3% growth recorded in
the previous three months.


It means the German economy is growing at half the rate of the UK's, which saw 0.2% expansion for the quarter.


According to Germany's national statistics agency, reduced consumer
spending and less investment in construction projects was to blame for
the slowdown.







Germany is home to manufacturers such as Faber-Castell and Volkswagen





"The dynamism in the German economy has cooled significantly since the robust start to the year," the agency said.


Until now Germany's economy, Europe's biggest, had been growing
strongly thanks to exports all round the world, especially in developing
countries.


Its industrial strength had helped shield it from the sovereign debt
crisis that is afflicting the 17 countries that use the euro.


Stock markets in Frankfurt, Paris and London all lost ground
following the release of the weak GDP figure, but gained some back some
ground in the afternoon.

European markets have opened lower today , S & P says no need to alter France"s AAA rating. Spanish protesters furious at visit of Pope costing
£5 million when the Country is in such a state economically. Hedge Fund Mangers say if the EU taxes transactions, they will invest elsewhere.

Chief European Equity Strategist Robert Quinn from Standard and Poors doesn"t believe a double dip recession will happen but beleives a recession is on the cards. Joe Biden U.S. Vice President to meet China"s future Leader to form a working relationship to convince him that the U.S. will be able to repay it"s debt of $ 1.17 TRILLION.!!!!

U.S. Banks step up scrutiny of European Banks who look vulnerable.

U.S. Bank Morgan Stanley says U.S. is heading for Recession, ex Federal Reserve Officer says not, that the Mortgage Companies will be financed so they
can give Mortgages to Borrowers to buy their Homes and start the ball rolling again. I think that"s rubbish, where are buyers supposed to Finance a Mortgage when the cost of living is so high, the Dow is down about 5% at the moment.

The German people are not happy about a collective EU goverment they just want Merkel to stop using their € to prop up these weak members , she is not popular and her party have been losing local elections .Germany is not a bottomless pit and the cost of living is rising here just as in the UK :

Dax, the German Stock Exchange down 5.60% CAC , French, 5.04% Euro is down around the World. It"s looking more and more like a Global recession
unless the fear factor is removed and strong leadership in all the Countries moves quickly nothing will bw resolved. Maybe it"s payback for all the easy
Credit that was available which resulted in people living beyond their means which has finally proved unsustainable

halfamo wrote:The German people are not happy about a collective EU goverment they just want Merkel to stop using their € to prop up these weak members , she is not popular and her party have been losing local elections .Germany is not a bottomless pit and the cost of living is rising here just as in the UK :

What kills me though halfamo is that Germany and France are more interested in the elections next Year than trying to resolve this massive problem. !!!

The Americans are requesting that DeutcheBank and Societe Generale provide details of their liquidity because several Hedge Fund Managers have
shares in them. I wonder what the other European Members make of this shambles. There is no way a Eurobond would change anything because it
imposes restrictions on every Country"s Finance, also, the way the ECB have handled this problem, other Countries outside the EU would not trust
the value of the Bonds.

The FSA is stepping up security of Eurozone Banks

Mark Kleinman sky News




The City regulator has intensified its scrutiny of major French, Italian and
other banks operating in the UK amid ongoing share price turmoil and concerns
about their ability to survive a freezing over of critical bank funding
markets.

I've learnt that in recent weeks, the Financial Services Authority (FSA) has
been holding daily talks with some of the largest banks which have a substantial
presence in London.

In a statement, the FSA told me today: "As you'd expect, we are in close
contact with the banks we supervise."

The regulator has heightened its monitoring of major Eurozone banks such as
Societe Generale of France and BBVA of Spain in the weeks since fears about
sovereign defaults by members of the currency bloc began to escalate.

The FSA's approach is designed to reflect the increasingly intrusive approach
it vowed to adopt in the wake of the 2007-08 banking crisis, which left several
British banks having to be wholly- or partly-nationalised.

Executives at several European banks say the FSA has been seeking more
detailed and more frequent information from them about their funding and
liquidity positions.

"They have been on the phone more-or-less constantly," an executive at one
bank said.

The executives say it has been particularly pronounced since the flames of
the Eurozone debt crisis began licking at the door of Italy and Spain. Major
German and French banks have massive exposures to the economies and banking
systems of those countries.

The news about the FSA's stance mirrors a move by the Federal Reserve Bank of
New York to hold discussions with European lenders, reported by the Wall Street
Journal earlier this week.

Most big European banks with operations in the UK are supervised in a
different way to British lenders such as Barclays and HSBC, because they are
treated as branches rather than subsidiaries of their parent.

Unsurprisingly, the FSA has also been holding more frequent discussions with
the domestic regulators of the banks whose operations it supervises in the
UK.

The plunging stock markets tend to grab most of the headlines, but the real
concern for the FSA is that a UK arm of a European bank would not be able to
meet financial commitments because of its inability (or that of its parent) to
access the necessary funding.

It's not clear whether any bank has yet found itself staring over the
precipice in that way but what's striking is that some of the senior financiers
I've spoken to in New York during the last 48 hours are beginning to liken the
current turmoil to the events of 2008.

Given those fears, it's right that the FSA should be intensifying its
supervision of European banks in this way.

Angela Merkel will not be swayed by Market pressure and has ruled out a Eurobond.

Italy"s debt burden will balloon as austerity smothers growth.

Interest being paid on Government Bonds, 10.6% Portugal 16.8% Greece, 2% Germany

Spain has cut Health System, and brought forward Tax payments due and Elena Salgado is confident the austerity measures will acheive the target.

European stocks are slightly up, Germany"s down.

With the refusal of Angela to agree to a Eurobond, Euro Traders are going to rely on Trichet to come up with a solution.

Four Traders in the Securities Unit at Deutchebank in Korea have been indicted for manipulating prices to the tune of millions . This is why I presume
Deutchebank is more indebted than it admits.