EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

BAILING OUT DEXIA WOULD TAKE THAN ALL OF BELGIUM'S GDP!
SOURCE;GUARDIAN

Badboy wrote:BAILING OUT DEXIA WOULD TAKE THAN ALL OF BELGIUM'S GDP!
SOURCE;GUARDIAN

HI Badboy I think the idea is to split Dexia into bad Bank and I believe France will help .

Protests in Greece has meant Greek Flights grounded , schools closed and clashes with Police.

Angela Merkel says Germany is ready to recapitalise Banks if needed , using the E440 Billion allocated to EFSF

A T.V. interview in Australia by a respected analyst says he is certain Greece will default and Merkel"s statement is to calm the stock Marlets and protect
the Euro. Apparently the IMF cannot buy Bonds but they can make a loan to the EFSF which is a backdoor method helping the Banks .

The Netherlands, Slovakia and Malta have objected to the release of the second tranche of E8 billion to Greece.


I presume the protest marches have convinced the EU that Greece will never be able to complete it"s austerity plan.

Just announced, at a meeting in Luxembourg a non binding decision was taken to force Airlines to pay for a permit in an effort to curb the carbon
emissions. Shares in Airlines have fallen as a result, the U.S. Airlines in particular are furious. It is estimated that Air Fares will have to increase because
profits will fall.

Don"t you think the EU could have waited until better times around the World before implementing this decision???? I think it just shows how out of sync
the EU is and too big to be administered efficiently.

Merkel and LaGarde meeting this afternoon to discuss Banking crisis German University Economics Professor says it is very serious for the Banking system
around the World. Protesters with placards have gathered outside the Building in Berlin where the meeting is to be held.

This is the last meeting Trichet, President of the ECB will hold today. It is not expected he will make any decisions.

Spain sells E4.5 billion bonds maturing in 2014.

Merkel stresses the EFSF Fund is a lender of last resort and Banks should go to their Governments. Italy and France disagree, they say this is a EU problem

European Banks face new stress test.

Italy will probably have to go to the ECB for a loan.

Portugal Banks lost 67% last year , nine banks being downgraded by Moody"s.

Struggling Belgian Bank is to break up and Luxembourg and France are going to salvage what they can.

The EU is being urged to resolve Greek problem before G20 meeting next month.

It is acknowledged that the U.S. is also facing a downturn.

Sarkozy And Merkel Meet Over Banking Crisis

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6:51pm UK, Sunday October 09, 2011

Alistair Bunkall, business correspondent

The French President and German Chancellor have agreed a package of measures
to help stabilise the eurozone.










Angela Merkel said she and Nicolas Sarkozy "are determined to do the
necessary to ensure the recapitalisation of Europe's banks".

Mrs Merkel spoke after talks in Berlin on Sunday that
are aimed at forging an agreement ahead of a summit of the European Union's 27
leaders later this month.

Mr Sarkozy said it was "not the moment" to go into the
agreement's details but said that the French-German accord "is total."

The talks were the most important during a weekend of meetings across
Europe's capitals, but the opinions of the two leaders differ.

Chancellor Merkel insisted that banks should try and raise money themselves
as a first priority or, failing that, their respective governments should come
to their rescue.



Mr Sarkozy and Mrs Merkel have been meeting regularly to
discuss the crisis



Only then, if all other options are exhausted, should money from the European
bailout pot - the
EFSF - be allowed.

French diplomats have insisted there is no disagreement, but few believe
them.

On
Saturday, Mr Sarkozy met Christine Lagarde, the former French finance minister
and now managing director of the International Monetary Fund.

Their meeting in Paris lasted just over an hour but no details were
revealed.

Meanwhile the governments of France, Belgium and Luxembourg have agreed to
dismantle the troubled bank Dexia.



The French President with the IMF's new boss, Christine
Lagarde



Internationally, it might not be the best-known French bank (when compared
with the likes of BNP Paribas and Societe Generale) but its importance in the
economic infrastructure of both countries should not be under-estimated.

Mrs Merkel realises the German public is not in favour of further
bailouts.

Mr Sarkozy's poll ratings are low and, should his government be forced to
support any of its banks, it could precipitate a downgrade in France's AAA
credit rating.

He has more than half an eye on presidential elections next year.

The financial sector is now looking ahead to see what concrete plans might
emerge from the Europe-wide summit of leaders later this month.

sky news

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4:09pm UK, Monday October 10, 2011


Ed Conway, economics editor



Cynical Britons sometimes deride the French and Germans for
supposedly lacking a fully-developed sense of humour. This is quite
unfair.







Nicolas Sarkozy and Angela Merkel were short on details about their 'agreement'




Only the sharpest satirist could have come up with the script for Angela Merkel and Nicolas Sarkozy’s press conference on Sunday,
in which the German Chancellor and French President insisted they now
had a plan to solve the eurozone crisis, but steadfastly refused to
provide any kind of details on what that plan might comprise.


When journalists pressed Frau Merkel on the matter, she chided them:
"The French president said we are not going into any details today. The
whole package will be ready by the end of the month."


Then the European Commission decided, at the last minute, to delay by a week the key euro leaders' summit, which was seen as the last real opportunity to agree a common approach to the crisis before the crunch meeting in Cannes.







Europe's leaders urgently need to tackle the long-term future of the single currency





What with all this chaos and hilarity, it might be worth boiling down
the euro crisis to five big questions which the continent's
policymakers have yet to answer – though if Sunday's performance was
anything to go by we shouldn't expect any definitive solutions.


1. Who will back the eurozone rescue fund?


The most immediate question on the table. The European Financial
Stability Facility is, at 440bn euros, big enough to support Greece and
some of the smaller Mediterranean countries were they to lose the faith
of private investors, but way too small if Italy and Spain were to go
down the same road.


The German constitutional court has made it clear that the country
should not contribute any more capital to the Fund, which has left
policymakers scrambling for an alternative way to increase its firepower
without demanding more money from individual member states.


But there are a variety of ways the EFSF could be leveraged up, with
one being to make that 440bn euros into a so-called equity tranche which
would absorb the first 20% of losses if a country was to default.


In this version, the European Central Bank could lend the rest of the
cash – though there are some other flavours. Alternatively, private
sector money could be sought to bolster the fund. But either way there
still doesn't seem to be clarity on how to increase its size.



2. Can the fund be used to prop up failing banks?


The euro crisis should not be seen merely as a sovereign debt crisis,
since so many of those government bonds sit in other European banks. A
Greek default would cause an instant balance sheet shock throughout
Northern Europe. The implosion of Belgian bank Dexia is partly a result
of its exposure to these kinds of risks.


So it is clear that in conjunction with any rescue fund for stricken
European governments there needs to be some public support for banks.
But where should that support come from – national finance ministries or
from a trans-European institution like the EFSF? The Germans want the
former, the French the latter.



3. Will private investors take the hit if Greece defaults?


One key part of the latest Greek bailout, which is just being
ratified by the last euro members (Malta and Slovakia), is that
private-sector investors would voluntarily accept a write-down on Greek
debt. The structure of this deal, determined largely by the banks
themselves, was complex and, at the time seemed to imply that they would
accept a 21% haircut on their investments.


This seemed, on the face of it, a welcome development: Greece is
trapped in a debt spiral, so the more you can reduce the burden of their
debt the better. Unfortunately there are two problems: first, the way
the haircut was calculated was good for banks but less so for Greece –
as the country’s fiscal position worsened the effective debt reduction
actually decreased, meaning what looked like 21% in July is far less
today.


Second, even that 21% is probably not enough: most insiders think
anything less than a 50% write-off of Greek debts would not do the
trick. The German news agency DPA has reported that senior Eurozone
finance officials are discussing a haircut of up to 60%. However, we
have yet to learn what that haircut will be and how exactly it will
work.



4. What is the long-term plan for the eurozone?


In other words, is the future one of Eurobonds, of commonly-issued
debt, of a continent-wide system of taxation and spending? Will there be
a genuinely powerful central Treasury? Will it be big enough to
convince markets that the euro will remain a going concern in the
future?



5. Can Europe's decision-makers actually make decisions?


This is not intended to be an impertinent question. One of the
persistent problems throughout recent months is that although
politicians and officials throughout the euro area are well aware of the
threat posed by the currency's crisis, they have failed to take
decisive action to address it. This is partly due to the unprecedented
nature of the issues at hand but also, more importantly, due to the
inherent difficulty of implementing profound legislative changes in a
system comprising 17 independent democracies.


The duty of German politicians is, first and foremost, to their
citizens, and often that implies an entirely different decision to what
would best serve the duty of the broader eurozone. Can the policymakers
possibly implement the far-reaching reforms necessary to save the
eurozone while maintaining their duty both to their citizens and to the
project? And do it in good time? After all, Parliamentary timetables are
notoriously difficult to co-ordinate.

Italy is selling E 9 Billion Bonds today, after Fitch downgrade will interest rate for the Bonds be higher?

The "Troika", EU,IMF and ECB will shorly issue it"s report on Greek crisis.

ECB says prime concern is to buy Bonds, not bail out Banks.

David Riley, Head of Sovereign Ratings for Fitch says there is no easy solution with the Banking crisis or Greek Debt and a solution could drag
on for several months.

The 10 year bonds issued today are currently realising these interest rates , Italy 5.58%. Spain 4.98%, France .02%.......that"s what happens when you get downgraded. the last I heard was Greece paying 67.8%.!!!

An analyst was just suggesting that the EU will split up into a two tier system. this is because he doesn"t think the Southern Countries like
Spain, Portugal, Italy and Greece try very hard to export which is what makes for a healthy Economy.

Slovakia is the last Country to vote on increasing the EFSF and is against the Greek bail out . Since it is a small Country , even if it votes
against, the majority will rule.

Slovakia Stalls Crucial Eurozone Bailout Deal

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7:12am UK, Wednesday October 12, 2011




Efforts to boost the powers of the eurozone's emergency bailout fund
have fallen into disarray after a rejection by Slovakia's parliament.







Leaders hope Slovakia will approve changes to the bailout fund later this week




George Osborne will now be under renewed pressure to find a
way of reviving the UK economy after plans for tackling Europe's debt
crisis hit a stalemate.


All eyes had been trained on how Slovakia would vote because it was
the last of the 17 member states to decide on measures designed to
expand the pot.


The enhanced European Financial Stability Fund - which would be
increased to 440bn euros - cannot be implemented until it has been
passed by all members.


Three of the four parties in the right-of-centre coalition government
wanted to push through the changes, which are aimed at preventing the
Greece debt crisis from spiralling out of control.







Prime minister Iveta Radicova and leader of the SaS party Richard Sulik





But the Freedom and Solidarity party argued that the country, as one
of the poorest members, should not have to pay for the huge debts racked
up by richer states such as Greece or Italy.


European leaders now hope Slovakia will approve the move later this week.


Greece has learnt it will gain more bailout cash - a total of 8bn
euros - after a decision by debt inspectors from the EU, International
Monetary Fund and European Central Bank.


But with problems in the eurozone, Britain's biggest trading area,
showing no signs of abating and stock markets braced for another rough
ride, Labour is expected to up its attack on the Chancellor.


MPs are set to force a Commons vote on domestic action to stimulate growth.







Greek Red Cross workers demonstrate at the country's parliament

It looks as if Greece will get the second Tranche of 8 Billion , but with the escalating protests against the austerity measures there will be no
more bail-outs.

Italy and spain downgraded by S& P face more problems and one analyst says if the EFSF fund is not increased both Countries will need a Lender of last resort.

European stocks have fallen on the News that Slovakia, the smallest, poorest Country had the common sense to vote against throwing good
money after bad trying to keep Greece afloat when it"s Population fights every move to save money.

Trichet, the outgoing President of the ECB says the crisis has reached systemic proportions and Sovereign debt has spread all over the World.
the EU must act swiftly to halt the contagion.

A G20 Conference is being held tomorrow where focus will be on the EU problems and its contagion around the World, ramifications being felt in Asia.

Danish Pension Fund reports EU faces Japanese style tsunami.

Barosso says European Banks should have required Capital and until they do, no dividends should be paid and no pay increases to Employees.

Ireland tells Merkel and Sarkozy to quickly mend their Banks.

Euro Bailout Fund Plan Gets Final Approval

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10:17pm UK, Thursday October 13, 2011

Plans to boost the eurozone rescue fund have cleared the final hurdle after
Slovakia's parliament approved the measures in a repeat vote.




Slovakia has backed an extension of the fund in a repeat
vote



The bailout fund known as the European Financial Stability Facility (EFSF)
can now be increased in size and scope as all 17 eurozone nations have accepted
the proposal.

Slovakia's coalition government rejected the deal on Tuesday, prompting the
prime minister to offer early elections in exchange for the support of the main
opposition party.

In a repeat ballot, 114 politicians voted in favour of boosting the bailout
fund's powers - well above the 76 needed.

As one of the eurozone's youngest, poorest and smallest nations, some in
Slovakia were opposed to the bill to bolster the powers of the EFSF.



Euro
Acronyms

Do you know your EFSF from your ESM? Read our
full explainer.








With a population of just 5.4m, the country produces only 1% of the 17-member
eurozone's total output.

Slovakia's portion of guarantees backing up the EFSF is 7.7bn euros (£6.7bn),
which is about 11% of its annual output.

The head of one of the parties in the ruling coalition argued that this was
too much considering Slovak living standards are just 74% of the EU average and
below Greece's 89%.

However, Slovakia has enjoyed numerous benefits since joining the EU in 2004
and recent opinion polls showed most people backed plans to expand the fund.



Events in Slovakia highlighted the difficulty of getting
17 eurozone nations to agree



The vote eventually came down to internal politics, with the opposition party
voting tactically in an attempt to bring down the government.

The package now agreed will raise the EFSF to 440bn euros (£384bn) and give
it the ability to buy sovereign bonds, extend emergency lending to countries and
recapitalise banks.

"After the successful completion of all political approval procedures, the
EFSF and its Board will finalise quickly all necessary guidelines and procedures
to be able to use the new instruments in the near future," said Klaus Regling,
the chief executive of the fund.

Spain is not doing too well in Bond Sales , Standard & Poors says it will be downgraded to AA-.

At the G20 Meeting it is being discussed on whether to increase the IMF Fund with a $390 Billion War chest which can help Italy and Spain.


Where will all this end I wonder, it"s like trying to plug holes in a Colander and who is going to pay for all this borrowing?.....Yes, you"ve
guessed , the Taxpayer when the real culprits, Bank Managers, Financial Watchdogs, Governments etc get off scot free. Oh, and the 1%
mega rich who manage to both avoid payng tax and keep their Fortunes

Portugal received E78 billion Bail-out and it"s President says measures are in place to repay the debt through higher taxation and cost cutting
.It is estimated that Portugal will not be able to repay and the problem has been overlooked in the scramble to ringfence Italy and Spain,
two Countries too big to fail.

Trichet says it must not be underestimated the difficult task of ongoing structural transformation . Governance of European Countries should
have been improved.

G20 Countries very concerned at the World-Wide fall out because of the EU crisis.

Writing down 70% of Greek debt is being suggested.

It has been considered that a 50% write down on Greek Bonds should ease the situation for Greece. the ECB will continue to buy Bonds.

The French Banks are cause for concern and the U.S. is reducing loans to French Banks. If the EU Guarantees future sales of Bonds, it would
mean the EFSF would not have to be increased.

A Bank of Tokyo Executive says he thinks the current situation will mean Banks can"t lend , production stagnates and possibly this will be seen as a failure of the Euro which would then be aborted.

European Banks are being boycotted by Private Lenders and Investors, especially French Banks.

Downgrade Pain For Spain Ahead Of G20 Talks

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4:28pm UK, Friday October 14, 2011

Europe's debt crisis will dominate a meeting of G20 finance ministers this
weekend, after a downgrade in Spain's credit rating became the latest troubling
development.










Rating agency Standard & Poor's said Spain's 21% unemployment rate - the
highest in the eurozone - cast doubt over its economic recovery prospects.

It added that high private sector debt and tighter lending conditions were
among other reasons for cutting the nation's long-term rating to AA- from
AA.

As the Spanish government deals with ever higher interest rates on its debt,
investors fear it could be the next eurozone economy to require an emergency
bailout.

What
can we expect from this weekend? The answer is not a lot - at least not in
public.

Ed Conway, economics editor



But Spain's treasury argues that the rating agency has underestimated the
scope of its deficit reduction plans, which will take time to bring
improvements.

The downgrade came as the Portuguese government unveiled its latest efforts
to boost state revenues, by adding a new 5% tax to company profits above 10m
euros.



After a summer of protests over unemployment, youths
gather at a Barcelona rally



Further pressure on European governments to act over the debt crisis is sure
to follow a meeting of G20 finance ministers and central bank heads in Paris
this weekend.

But little is expected in the way of concrete plans, given that the talks are
taking place just nine days before a make-or-break EU summit in Cannes.

Elsewhere in the eurozone, Italy's prime minister Silvio Berlusconi survived
a confidence vote which he himself called for following demands from the
opposition that he step down.

Mr Berlusconi claimed his government was the only credible option to get the
country through the sovereign debt crisis - despite warnings from the Bank of
Italy governor that recent deficit reduction plans do not go far
enough.

IMF Plan Opposed Amid G20 Finance Boss Talks

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3:26am UK, Saturday October 15, 2011




G20 finance chiefs are to continue talks in Paris as plans designed
to combat Europe's debt crisis ran into resistance from the United
States.







France's finance boss Francois Baroin (L) on the way to a conference during G20 talks




The second day of discussions on Saturday comes ahead of a G20 leaders' summit in Cannes on November 3 and 4.


Proposals have been outlined to double the size of the International
Monetary Fund as part of a broader international response to the ongoing
debt crisis.


The plan to inject around $350bn into the IMF has the backing of several developing economies.


But US Treasury Secretary Timothy Geithner and his Canadian and Australian counterparts dismissed the idea.

What can we expect from this weekend? The answer is not a lot - at least not in public.

Ed Conway, economics editor







The IMF's dominant shareholders, including the US, Japan, Germany and
China, feel the fund's $380bn worth of resources is enough.


Mr Geithner said: "They (the IMF) have very substantial resources that are uncommitted."


German Finance Minister Wolfgang Schaeuble agreed the euro zone debt crisis was for Europe to solve.


He expressed confidence that EU leaders would produce a plan at a
summit on October 23 that would be convincing for financial markets.







Mr Geithner said the IMF did not need more money





The United States is among countries keen to keep pressure on the
Europeans to act more decisively to end the debt crisis that began in
Greece.


Since the problems began two years ago, they have spread to Ireland and Portugal - and are also lapping at Spain and Italy.


The talks come as Standard and Poor cut Spain's long-term credit
rating, citing the country's high unemployment, tightening credit and
high private sector debt


Fears about the damage a default by Greece - and possibly others -
could inflict on the financial system have seen global stocks fall 17%
from their 2011 high in May.



































.

G20 Meeting: What Can We Expect?

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Ed Conway

October 14, 2011 2:48 PM

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Three weeks and counting.
The
countdown to the Cannes summit in early November, widely regarded as
the key deadline by which euro ministers must have solved the currency
area's crisis, is now halfway through - but much of the hard work has
yet to be done.
That's the message the Chancellor, George Osborne,
will be delivering to the world's finance ministers as they meet in
Paris for the G20 finance summit tonight.
In one sense, there is
room for some small satisfaction, since euro ministers are keeping to
the timetable they were informally set by their international
counterparts when they met in Washington for the International Monetary
Fund (IMF) meetings.
By now, they were supposed to have ratified
the second Greek/euro bailout package they agreed in theory on July 21,
which involved imposing 21% haircuts on investors in Greek bonds
(essentially negotiated debt defaults), increasing the power of the
European Financial Stability Facility (EFSF) and providing further cash
for Greece.
And on that count at least, the euro ministers have
succeeded, given Slovakia this week finally approved the EFSF (though
not before the vote took down the government).
The problem is that approving this bailout is not enough.
The
EFSF is not big enough, and will need to be increased if it is to have
any chance of protecting bigger economies such as Spain and Italy.
The
21% haircuts are too small, but increasing them (and hence the value of
all the Greek debt sloshing around the European banking system) will
imply having to pump extra capital into banks in France, Germany and
elsewhere, potentially including RBS in the UK.
Then there's the
question of how to restore confidence in markets - specifically
confidence that the euro ministers have wrested control of the crisis.
So what, on all these other issues, can we expect from this weekend? The answer is not a lot - at least not in public.
All
of those issues need to be dealt with not by an international forum
like the G20, but by the euro members themselves, so any progress from
the G20 summit this weekend is likely to take place behind the scenes as
ministers informally discuss measures they will announce at the
European summit next weekend (specifically Sun October 23).
So,
instead, the ministers are likely to focus on issues which are really of
properly international significance. Two are worth mentioning in
particular.
First there will be talk about how to improve the
global economic and financial architecture and make it better at crisis
prevention in the future. This means discussion about what kind of
capital requirements should be imposed internationally for big banks,
and talk about how to improve the multilateral bodies whose job it is to
prevent future crisis - for instance the IMF and the Financial
Stability Board.
Second, there will be rather a lot of talk about
the IMF's likely need for a further infusion of capital to shore up its
balance sheet and prepare it for the next leg of the crisis.
However,
there's one important point worth clarifying here. Most of the world's
leading countries have yet to actually implement the IMF capital
increase they technically agreed all the way back in 2009 in the London
Summit. Only about 25% of the IMF new funding has actually been ratified
by governments around the world - and that includes Germany.
So,
in short, expect a lot more exhortation this weekend aimed at European
ministers, a lot more dramatic language about the consequences if they
don't find a decisive solution for their crisis by the Cannes G20 summit
in November, but don't expect a grand solution for the euro's problems.
That, if indeed it ever does come, will dribble out of Brussels next weekend, and then be announced with a fanfare in Cannes.

It is hoped the EU will have worked out their bail-out plans and put them in operation before the G20 meeting. Several Members
of the G20 are against the IMF getting more involved in what they see as a European problem, not World wide.

IT IS BEING SAID IN THE NEW SCIENTIST THAT THE GREEK CRISIS COULD CAUSE GLOBAL WARMING BY CAUSING LESS TO BE SPEND ON TACKLING GLOBAL WARMING.

Badboy wrote:IT IS BEING SAID IN THE NEW SCIENTIST THAT THE GREEK CRISIS COULD CAUSE GLOBAL WARMING BY CAUSING LESS TO BE SPEND ON TACKLING GLOBAL WARMING.

I don"t know about that Badboy, if this crisis spreads Worldwide people won"t have enough money to heat their homes so Global warming
will ease anyway. Apart from Europe, it"s spread to China, Japan, Australia, Canada U.S.A because of all the Bank interlending and of course
downturn in spending. Tesco and all the other Supermarkets have cut their prices which is helping the Consumer.

Panda wrote:

Badboy wrote:IT IS BEING SAID IN THE NEW SCIENTIST THAT THE GREEK CRISIS COULD CAUSE GLOBAL WARMING BY CAUSING LESS TO BE SPEND ON TACKLING GLOBAL WARMING.

I don"t know about that Badboy, if this crisis spreads Worldwide people won"t have enough money to heat their homes so Global warming
will ease anyway. Apart from Europe, it"s spread to China, Japan, Australia, Canada U.S.A because of all the Bank interlending and of course
downturn in spending. Tesco and all the other Supermarkets have cut their prices which is helping the Consumer.

You took the words...Panda! I was just thinking as I made a cup of tea just then that if we can't afford to heat our homes because of the hikes in energy costs, that should help global warming somewhat!