EC PRESIDENT CALLS URGENT MEETING FOR TOMORROW #2

Sarkozy has admitted 8 Billion Euros owed by French Banks. He has revised the growth figure to 1% next year in line with Germany

Italy is selling Bonds today , maturing 2014, @4.93% as opposed to the 5 yr bons issued in Sept. 2009 @ 4.68% interest. the 10 yr Bond @
6.06% is higher than the last tranch @5.98% recently sold.

Ireland expects to be the first Country to repay the bailout it received. Mutterings from other countries about it"s 12.5% Corporation Tax
giving it an unfair advantage are discounted, it"s growth has come from U,S, Tech Companies opening in Ireland and an adaptable workforce
also the austerity measures accepted by the population.

The Greek Finance minister has said if there is a choice between the Nation and the Bankers, there is only one answer.....the Nation. Looks
as thought the EU Unit assigned to ensure Greece sticks to its austerity plan is in for a hard time.

The euphoria surrounding the announcement yesterday that a plan was made sent shares around the World soaring, today there is a more
sober approach , no certainty the Chinese will lend and if they do they will want a full Guarantee for repayment and access to more trade.

Rogoff, former IMF Committee Member says Italy is the biggest problem and he thinks it is inevitable that the Euro will fail. The Italian debt is 1.3 Trillion Euros.

It is all very well the EU saying they will guarantee any loan from the IMF or China, but the cost of Insuring such huge loans would be prohibitive.

Italy France and Spain are the Countries with the biggest debts, apart from Greece and one Analyst suggests that they need growth to start
reducing their debt so the new President of the ECB, Mario Dragni must consider lending these Countries money, not buying Bonds, to kickstart
growth in these Countries.

Ireland"s Prime Minister Edna Kenny says his Country will be the first to repay it"s bailout after helping Allied Irish Bank achieve liquidity.
In consideration , he is hoping the EU will reduce the interest on it"s bonds, the 10 year one pays 8.21% interest.

Debt crisis

China is ready to help

28 October 2011
The Global Times
Beijing


Bas van der Schot

• 
  
• 
  

• Text larger
  
• Text smaller
  
• Send
  
• Print
  

The eurozone is looking for financial aid from emerging countries, mainly China. A prospect that sends shivers down the spines of many Europeans. But for the official Beijing daily Global Times, any future deal will need to be a “civilized” one.
European leaders reached an agreement yesterday to reduce the Greek debt. They expect cash-rich countries outside the EU to partly provide funding for their bail-out plan. China, with the largest foreign exchange reserve, has become a key target.
A developed Europe turns to China for cash. This sounds jarring to people in both Europe and China. Some Europeans hold that Europe hasn't dropped to the level to beg China just yet. The mainstream mentality there seemingly thinks the EU should prompt China to provide funding, while it shouldn't give China any other benefits.
In China, fierce debates are underway. Many can't understand why China should extend a helping hand to Europe, since its own city of Wenzhou is in a funding crisis.
China and Europe are not the type of sworn friends who can extend a non-hesitant helping hand as the other experiences a crisis. Both sides are adding calculations at the moment. Public opinions further complicate the scenario – on both sides, there are unprofessional analysts who prioritize catering to the raging populism.
Markets must open

Perhaps the depth of China's participation in the eurozone's bail-out plan has been decided by common interests and mutual distrust between both sides. China will not stay detached, since its interests are closely bonded to Europe in globalization.
But on the other hand, China won't bring a "big surprise" to Europe. Even wealthier economies within the eurozone feel reluctant to help Greece. As an outsider, China can't fix a problem that can only be fixed by eurozone members themselves.
If the EU really wants China's funding, they should consider further opening their markets to China, as well as admitting China's position as a market economy. If they think such "deals" are not worth it, China won't force them to proceed.
For the Chinese, it is ignorant to link the eurozone's bail-out plan to Wenzhou's debt crisis. The former is related to using China's foreign exchange reserves, which can't be used to save the enterprises left by runaway bosses in Wenzhou.
A pinch-fist Europe

As a world power, China should help out others who have been hit by a crisis or disaster. The Chinese should understand that a country that only chases after its interests but ignores its morals will be disliked.
But the Europeans should also reflect upon themselves while rebuking China as a pinch-fist. They discriminate China's system, and they do not want to export technologies to China.
Whenever a Chinese enterprise makes a buyout investment in Europe, local public opinion flares up. They fear that China will learn too much from them and become more successful. They just want to lie on their old assets and always take the lead.
This mentality makes Europe appear as a pinch-fist. China's participation in the eurozone's bail-out plan should not be over-politicized. It should be a civilized deal, and the tacit rules are crystal clear to both parties involved.
Counterpoint

Ignore human rights for Chinese largesse?



Europe is “tempting the dragon”, to save the eurozone, headlines Gazeta Wyborcza. But according to the Warsaw daily, this may come at a high cost. “Europe rests its hopes on China. A country that carries out the highest number of executions in the world and sends its dissidents to labour camps. A state that prosecutes Tibetans and Uyghur people and censors the Internet.”
“Counting on China to strengthen the EFSF, EU leaders should answer a basic question”, Gazeta Wyborcza writes. “If they take [China’s] billions to save Greece or Italy, will they still have the courage to condemn the breaching of human rights in Tibet or Sinkiang? [...] Europe may get scared that Beijing will put its foot down or it may simply feel foolish since it is not done to ask for help and to lecture [the donor} at the same time.”

The final deal for Greece is the 50% write down on Bonds, making Banks with large Greek exposure even worse off. The bail-out stands at E1.4 Trillion.

Danish Banks to shun a E76 billion lifeline because they want to sort the problem out themselves.

Berlesconi is defiant, he is not standing down and says he is the only one to resolve Italy"s problems.

Mario Draghi takes over today as President of the ECB, he has been on the Board and considered a worthy successor to Trichet .

The Chinese are known to want to get out of U.S. $ so a deal with the EFSF could be done but the Chinese would only agree if a concession is made about
trade.

The Euro solution risks unravelling as a slowdown in European exports slows.

Rating Agencies are reported to be considering downgrading European Banks.

The Euro and all European Shares are down and the OECD (part of G20 ) economic outlook is for a marked slowdown in the EU.

Russia has pledged a E10 billion loan, no news of China investing . The EU is trying Wall Street and G20.

There is anger too that it will only be the EFSF Fund which will be insured, the ECB is considered a secondary Market and some Analysts are saying the whole excercise is a con to keep Greece in the EU.

ITS APPEARS MANY PEOPLE IN FGREECE ARE NOT GOING TO PAY THE PROPERTY TAX.
MANY ARE BUYING GENERATORS.

Badboy wrote:ITS APPEARS MANY PEOPLE IN FGREECE ARE NOT GOING TO PAY THE PROPERTY TAX.
MANY ARE BUYING GENERATORS.

Badboy, Greece should have been allowed to default from the beginning. One analyst is callinmg the EU plan a confidence trick and the only way the EURO will survive is if there is fiscal union.Stocks around Europe are down and the E10 billion offered by Russia is a drop in the Ocean compared to what the
European Banks need.

Greece's prime minister has called a referendum on the new EU bailout
package, as a leading economist tells Sky News a no vote would be a disaster for
the eurozone.


George Papandreou said if the Greek people
do not want the deal that is designed to slash the country's mountain of debt by
nearly a third, it will not be adopted.

He gave no date or other details on the proposed referendum, which would be
the first in Greece since 1974.

"This will be the referendum: the citizen will be called upon to say a big
'yes' or a big 'no' to the new loan arrangement," he told Socialist members of
parliament.

"This is a supreme act of democracy and of patriotism for the people to make
their own decision ... we have a duty to promote the role and the responsibility
of the citizen."


What Was Agreed?

:: Banks and private investors to take 50% loss on Greek government debt
:: Rescue fund known as the EFSF to be boosted to 1trn euros
:: Banks told to increase core cash reserves to 9% by next June

Mr Papandreou said he would also ask for a vote of confidence to secure
support for his austerity measures policy.

The announcement comes as Greece faces delicate negotiations with its
eurozone peers on the details of last week's agreement and with global bankers
asked to accept a 50% loss on their Greek debt holdings.

Speaking on Sky's Jeff Randall Live, Nobel prize-winning economist Professor
Christopher Pissarides said the deal is the only solution to solve the debt
crisis.

"If it's rejected, it'll be a disaster for Greece," he said. "It'll be bad
enough for the European Union and the eurozone in particular, but it'll be far
worse for Greece."

He added that a no vote would mean Greece would have to declare bankruptcy
and be removed from the eurozone - and that Mr Papandreou would have to
resign.

European leaders finally agreed the elements of the debt deal early on
Thursday morning following marathon talks in Brussels.


European leaders agreed on an aid package at an emergency
eurozone summit in Brussels last week



It was decided banks will have to accept a 50% write-down on any Greek debt
they hold - higher than the 40% they had originally tabled.

It was also agreed that the 440bn euro (£386bn) bailout fund will be
increased to around 1trn euro (£876bn).

A day after the details of the bailout package were revealed, a survey showed
nearly 60% of Greeks viewed it as 'negative' or 'probably negative'.

Mr Papandreou's announcement comes a day before the leaders of the world's 20
biggest economies are set to gather in the south of France for the G20
summit.


Read more about the eurozone debt crisis deal:

:: China Could Give $100bn To Euro Bailout Fund

:: Does The Eurozone Debt Deal Go Far Enough?

One of the comments about the EU.

Posted by: lawyer on October 28, 2011 11:37 AM

I am a TRUE BRITISH PATRIOT residing in Germany. Hence have first hand info and experience in the eurozone.

BIGGEST blunder ever! Certain politicians envisaged Europe becoming the "United States of Europe". Just like the USA.

CAN NEVER WORK!

First and foremost there is not one unified language spoken. Therefore
people don't understand each other. In addition the mentality of the
various nations is so different, particularly some of the newer arrivals
they still live in the 14th century!

Europe, in its' present form was doomed before it began.

I look forward to placing my vote, even if I have to take a flight to the UK, AGAINST EU membership.

Britain must GET OUT ASAP!

• Recommend (26)
  

Yay! Greece will get a referendum - but this must mean Greece is not a democracy - because we are supposed to be a democracy but we are not allowed to have referendums!!!!!!!!!!!!!!!

http://www.guardian.co.uk/business/nils-pratley-on-finance/2011/oct/31/george-papandreou-greek-referendum?newsfeed=true



Greek referendum: this could get messy
Prime minister George Papandreou says he trusts his citizens. The markets may not

The Greek prime minister, George Papandreou. Many will suspect that his move has been driven by Greek politics and the need to bolster his fragile government. Photograph: François Lenoir/Reuters
"We trust citizens, we believe in their judgment, we believe in their decision," declared Greek prime minister George Papandreou as he announced a referendum on last week's loan package.

The first response is to applaud an outbreak of democratic spirit, a quality in short supply across the eurozone as the debt crisis has raged. The second response is to wonder how investors, who were already starting to question the solidity of last week's grand three-part rescue plan for the eurozone, will take this latest twist in the tale. Extremely badly, one suspects.

The unanswered questions include: what will the Greek people be asked? If the referendum is framed as a choice between the euro and the drachma, what happens if the Greek people choose to exit the single currency? What would be the mechanism? Would Greece default on more than 50% of its debt? If so, what would happen to the euro bank recapitalisation plan?

And did Papandreou mention his plan to Angela Merkel or Nicolas Sarkozy last week? The silence last night from Berlin and Paris suggests not. Can the EU still continue to dispatch funds to a country that could, within a couple of months, decide it doesn't want to sign up to the terms of the loan package?

There will be a natural temptation to believe that Papandreou's move is driven primarily by internal Greek politics and the need to maintain support for his fragile government. There is indeed a strong whiff of that. The trouble is that referendums, once announced by a serving prime minister, are hard to put back in the box. There's no real knowing how Greeks will vote, even if told by their politicians that austerity would be so much worse outside euroland and without the protection of a loan package.

With two months of campaigning in prospect, this plot threatens to become messy. It's not as if euroland politicians, even when times were good, had a good record of winning referendums...

Thanks Angelique,

Papandreou is between a rock and a hard place, he knows the people of Greece will fight any more moves to curb spending and riot in the Streets again.
The debt is colossal and will take generations to control and bring down. If the Greeks vote for a Referendum then rioters would have to accept it, if they
vote against then a default is the only option.

The Swiss Bank Credit Suisse has reported a loss and is shedding 1,500 more jobs. Globally, Banks in the last few months have had 137,000 sackings,
87,000 of which are European. Bank of England"s Paul Fisher says double dip recession is possible.

Italy is selling Bonds @ 6.20% interest, believed to be the highest ever.

Let"s hope if a double dip DOES happen, the Banks will never again trade in the way they have.

Sarkozy and Merkel must have steam coming out of their ears at the thought of a Greek referendum....after all this time and effort. Will they refuse to go on with the bailout plans, I wonder???

Wouldn't it just be better to let Greece go under? That seems to be what they want to do anyway.

Angelina wrote:Sarkozy and Merkel must have steam coming out of their ears at the thought of a Greek referendum....after all this time and effort. Will they refuse to go on with the bailout plans, I wonder???

Wouldn't it just be better to let Greece go under? That seems to be what they want to do anyway.

Morning Angelina,

Papandreou has taken a big gamble , if he wins he can implement austerity measures, if he loses , chaos in Greece. Merkel and Sarkozy were determined
to keep Greece afloat because they feared the damage to the Euro . However, their 18 month hand wringing and final plan is in tatters.

Greece has never been in favour of this bailout and I am sure will vote against it.

Banco Populaire, an Italian Bank is in dire straits and their CEO is currently in London trying to get funding and says austerity rules must be undertaken immediately. Expect strikes galore if any rules are implemented.

Add to this the fact that no-one is keen to fund the EFSF and the ECB would have to change its mandate to lend banks with money they have not got and the situation for the Euro and EU is getting critical.

Markets Plunge On Shock Greek Referendum Call

• 76 Comments
  
• 
  
• 
  

9:30am UK, Tuesday November 01, 2011


Markets around the world have fallen following the news that Greece wants to
stage a referendum on the bailout deal designed to rescue the eurozone.


The FTSE 100 Index opened more than 2% lower, while Germany's Dax was 4.3%
down and the Cac-40 in France lost more than 3%.

European stocks were down close to 3% overall and MSCI's all-country world
stock index shed 1.7%.

Analysts said traders were reacting to Monday's announcement by Greek Prime
Minister George Papandreou said he would put Greece's bailout to a public
vote.

It immediately cast doubt on the eurozone's plan to hand Athens 130bn euros
and arrange a 50% writedown on its huge debt.

Mr Papandreou said if the Greek people do
not want the deal that is designed to slash the country's mountain of debt by
nearly a third, it will not be adopted.

He gave no date or other details on the proposed referendum, which would be
the first in Greece since 1974.


What Was Agreed?

:: Banks and private investors to take 50% loss on Greek government debt
:: Rescue fund known as the EFSF to be boosted to 1trn euros
:: Banks told to increase core cash reserves to 9% by next June

"This will be the referendum: the citizen will be called upon to say a big
'yes' or a big 'no' to the new loan arrangement," he told Socialist members of
parliament.

"This is a supreme act of democracy and of patriotism for the people to make
their own decision... we have a duty to promote the role and the responsibility
of the citizen."

Speaking on Sky's Jeff Randall Live, Nobel prize-winning economist Professor
Christopher Pissarides said the deal is the only solution to solve the debt
crisis.

"If it's rejected, it'll be a disaster for Greece," he said. "It'll be bad
enough for the European Union and the eurozone in particular, but it'll be far
worse for Greece."

He added that a 'no' vote would mean Greece would have to declare bankruptcy
and be removed from the eurozone - and that Mr Papandreou would have to
resign.

European leaders finally agreed the elements of the debt deal early on
Thursday morning following marathon talks in Brussels.


European leaders agreed on an aid package at an emergency
eurozone summit in Brussels last week



It was decided banks would have to accept the 50% writedown - higher than the
40% they had originally offered.

It was also agreed that the 440bn euro (£386bn) bailout fund will be
increased to around 1trn euro (£876bn).

A day after the details of the bailout package were revealed, a survey showed
nearly 60% of Greeks viewed it as "negative" or "probably negative".

Mr Papandreou's announcement came a day before the leaders of the world's 20
biggest economies gather in the south of France for the G20 summit.

Beware Of Greeks Looking Miffed

• 
  
  
  
  
  
• 
  
  
  
  
  
• Share
  
• Comments (0)
  

Tim Marshall

November 01, 2011 10:15 AM

• 
  
  
  Recommend post (2)
  

Journalists love a good Greek story. It allows us to pretend we
are familiar with the classics and write punning headlines based on well
known phrases from the ancients.
'Greek tragedy' is the most obvious and over used and has been deployed on a daily basis during the recent debt crisis story.
Now Prime Minister George Papandreou has delivered us another opportunity by calling a referendum on the Euro zone's 'historic' bail out plan.
Last month's deal calmed the markets. The PM's announcement sent them
spiralling downwards because most analysts believe the Greek population
will reject the deal as it requires further austerity measures among a
population whose living standards are falling faster than the markets.
Brussels hates referendums. The hoi polloi have an irritating habit of saying what they want, often the opposite of Brussels, but the people will have their day.
They
appear likely to vote no. This is expected to trigger Greece falling
out of the Euro and crash landing on the Drachma, followed by an attack
on all the banks across Europe which by then may or may not be
firewalled against exactly this scenario.
Papandreou may be just
trying to save his job, or may be gambling that he can get better terms
on a new Eurozone deal, because he may believe that eventually the
Germans are going to cut Greece loose, anyway. As Epicurus said
'We do not so much need the help of our friends as the confidence of their help in need."
For
the Greeks this comes after decades of living real lives based on a
make believe economy which the Eurozone countries pretended was fit to
join them.
Who's to blame? Just about everyone, but the Greeks
like to blame outsiders first and foremost. After all, the evil banks
lent them the money that allowed them to live the good life. If they
hadn't' been so evil, Greece might have lived within its means.
It takes a Herculean effort to stop the blame game after making that point. So I won't.
You
could add to the debate that again and again the Greeks winked at their
politicians as they went into the voting booths, and the politicians
winked back. This allowed Greece to have a standard of living similar to
other 'rich' countries in the EU. Working hours were shorter - how
civilized. Retirement ages were younger - how wise. Public services were
good- how fair. But, corruption was rampant, taxes low, innefficiency
high, the unions were paid off, and the public sector was a joke ending
with the punch line - 'You get the job because you are related to me'.
And to pay for this?
Pay for? As the wisest of philosophers, Homer,
said "It’s a secret thing called a home equity loan. I get all this
cash - and the house gets stuck with the bill....When you gave me that
money, you said I wouldn’t have to repay it ’til the future. This isn’t
the future. It’s the lousy, stinking now!”
The 'now' came with massive economic downturn and the banking crisis.
Before
all this the German and French governments had pretended to believe the
Greek economic figures in order to allow them into the Eurozone. The
great European dream of ever closer union required bringing the family
together in a single currency. There were entry rules, economic
stipulations about GDP and limits on debt, but the Greeks pretended
their economy met them, the Eurozone pretended to believe them, and the
banks pretended they weren't moonlighting in a giant casino and lent
them money. What could possibly go wrong?
As Homer said "Doh!"

Dax the German Stock market is down 6.7% all European stocks are down

One Wall Street Trader says Papandreou knows he has no control over the behaviour of the Greek citizens rioting and by having a referendum is putting
the Ball in their Court with a Referendum which is not due to take place until Dec/Jan. He also knows it is inevitable that Greece will default because of the huge interest they have to pay on Bonds issued, the 10 yr Bond pays 24.3% interest. The rest of the World is struggling with poor growth so where Greece goes from here is anyone"s guess. That goes for the EU as well.

Greeks Stunned By Call For Debt Crisis Vote

• 0 Comments
  
• 
  
• 
  

A trumpeter blasts out a defiant tone in Athens during the
annual 'No Day' celebrations


2:20pm UK, Tuesday November 01, 2011

Anthee Carassava, in Athens


As European market shares swooned, the euro slumped and Greece’s finance
minister checked into an Athens clinic with severe stomach pains, the nation's
pundits, politicians and public tried to make sense of their Prime Minister’s
surprise call for a referendum.


Despite plummeting popularity and widespread
opposition to austerity measures, Prime Minister George Papandreou said his decision to put
a new, hard-bargained debt-and-loan deal to a public ballot was a “supreme act
of democracy and patriotism.”

Still, he failed to explain when the popular vote would be held, what
question Greeks would face and most importantly, why a referendum - the first in
37 years after Greeks voted to abolish the monarchy following the fall of a
seven-year brutal dictatorship in 1974 - was really needed.

Whether an act of unprecedented brinkmanship or sly political play, Mr
Papandreou’s surprise decision has already begun to backfire with scores of
politicians lashing out at the socialist premier in shocked disbelief.

“It’s crazy!” Konstantine Mitsotakis, a former prime minister, whined on
Greek television.


The Greek leader negotiated with leading eurozone
heads



"It’s a completely irresponsible move that complicates the country’s already
difficult situation.”

Amid growing dissent leading socialist politician Milena Apostolaki also
quit, pushing the government closer to collapse as the surprise resignation
leaves Mr Papandreou's party with a razor-thin two-seat majority in the
300-strong parliament.

Across the country, newspaper headlines blared: “Risky Political Escapade,”
“Blackmail” and “Politically Bankrupt.”

Meanwhile, clutches of cartoonists depicted the prime minister as a king
anchored to his throne, defying the interests of his crisis-fatigued
subjects.

On the streets, austerity-hit Greeks greeted the referendum call with mixed
feelings. Some of them, like Sophia Vriolou, a 25-year-old nurse, said they
backed the proposed plebiscite - but only to vote down the government.


A large portion of the Greek public opposes harsh
austerity measures



“For months, now, Papandreou has stayed away from the political spotlight,”
Ms Vrioulou said.

“Now, he suddenly reappears with a grand plan, saying we the people matter.
Why didn’t we matter when we were out on the streets protesting the austerity
measures he signed up to?”

With a recession biting deeper into the economy and
unemployment climbing to nearly 17%, such sentiments echo across the capital, Athens.

On Tuesday, conservative leader Antonis Samaras held urgent talks with the
country’s president in a bid to block what he called Mr Papandreou’s “scheming”
design to either cling on to power or exit heroically.

“We are determined to block this - It is a matter of national priority and
everyone must be responsible for his actions,” he said.

By some accounts, Mr Samaras and his conservative lawmakers were considering
to resign en mass by Friday, the end of a three-day debate and confidence vote
the prime minister also requested in an attempt to shore up support within his
fractious party.


Greek Prime Minister George Papandreou is under immense
pressure



It remained unclear whether Mr Papandreou had
advised European leaders who crafted the Greek debt and loan deal
last week, of his referendum plan.

The deal envisaged private banks marking a 50%
write-down on the value of Greek bonds they hold in exchange for a mammoth £88bn
bailout loan to Athens - the second stitched together by the EU and the International Monetary Fund in a year.

Mr Papandreou’s call for a referendum comes as Athens prepares to face
delicate negotiations with its European peers over the fine details of the
debt-and-loan agreement reached last week.

There was no immediate reaction from European leaders who squabbled for
months over how to deal with troubled economies like Greece, and stem the spread
of the continent's growing debt crisis.

"This is just the latest twist in the unfolding
tragedy," Sony Kapoor of independent think tank Re-Define
said.

"With an irresponsible opposition that is promising Greek voters the moon,
it's very difficult to see how this referendum could be won under
gut-wrenching austerity."

Markets Rally As EU Heads Defend Greece

• 270 Comments
  
• 
  
• 
  
• 
  

3:41pm UK, Tuesday November 01, 2011





Financial markets have rallied after European Union leaders
said they "fully trust" that Greece will meet its eurozone bailout
commitments.


The presidents of the European Commission and the European Council
issued a joint statement saying they fully expect Greece will live up to
the conditions agreed at the summit where the latest 130bn euro aid
package was set.


The joint statement from Herman Van Rompuy and Jose Manuel Barroso
said: "We are convinced that this agreement is the best for Greece.


"We fully trust that Greece will honour the commitments undertaken in
relation to the euro area and the international community."


An unscheduled meeting will take place on Wednesday, ahead of the G20
summit in Cannes, to discuss the announcement by the Greek prime
minister George Papandreou that he would put the bailout to a referendum.






Germany Dax 1-Day Chart







French president Nicolas Sarkozy and German Chancellor Angela Merkel
agreed on talks with the Greek leadership, the International Monetary
Fund and EU heads "to guarantee the full and swift implementation of the
summit decisions, which are today more necessary than ever".


Stock and bond markets had been hit earlier following news of the proposed referendum in Greece.


The FTSE 100 Index opened more than 2% lower. European stocks were
down close to 3% overall and MSCI's all-country world stock index shed
1.7%.


The Greek markets shed more than 6% on their opening.






FTSE 100 1-Day Chart







Mr Papandreou
said if the Greek people did not want the deal - designed to slash the
country's mountain of debt by nearly a third - it will not be adopted.


He gave no date or other details on the proposed referendum, which would be the first in Greece since 1974.


"This will be the referendum: the citizen will be called upon to say a
big 'yes' or a big 'no' to the new loan arrangement," he told Socialist
members of parliament.


"This is a supreme act of democracy and of patriotism for the people
to make their own decision... we have a duty to promote the role and the
responsibility of the citizen."


Greek opposition leader Antonis Samaras dismissed the calls for a referendum and suggested snap elections instead.








What Was Agreed?

:: Banks and private investors to take 50% loss on Greek government debt
:: Rescue fund known as the EFSF to be boosted to 1trn euros
:: Banks told to increase core cash reserves to 9% by next June

Nobel prize-winning economist Professor Christopher Pissarides said the deal was the only solution to solve the debt crisis.


"If it's rejected, it'll be a disaster for Greece," he told Sky's
Jeff Randall Live. "It'll be bad enough for the European Union, and the
eurozone in particular, but it'll be far worse for Greece."


He said a 'no' vote would lead to Greece being declared bankrupt and
being removed from the eurozone. Mr Papandreou would have to resign.


European leaders finally agreed the elements of the debt deal early on Thursday morning following marathon talks in Brussels.


It was decided that banks would have to accept the 50% writedown - higher than the 40% they had originally offered.












European leaders agreed on an aid package at an emergency eurozone summit in Brussels last week





It was also agreed that the 440bn euro (£386bn) bailout fund will be increased to around 1trn euro (£876bn).


A day after the details of the bailout were revealed a survey showed
that nearly 60% of Greeks viewed it as "negative" or "probably
negative".


On Wednesday, leaders of the world's 20 biggest economies gather in the south of France for the G20 summit.




Read more about the eurozone debt crisis deal:


:: China Could Give $100bn To Euro Bailout Fund


:: Does The Eurozone Debt Deal Go Far Enough?


The European Stock Market has declined further, not sure whether Papandreou has done this for the people or to strengthen his Leadership. By delaying the Referendum until January the World focus on Greece will turn to Italy and Spain and what arrangement will be made for these Countries......watch this space.!!

As far as I can gather, Papandreou has been under a lot of pressure, not just because of the riots but his Party"s majority was just 3, reduced today to two because one of his Party is to vote against a referendum , it is anticipated
that 46% are against the referendum and 70 % want to remain in the Euro.
There is a confidence vote on Friday, if Papandreou loses there will have to be an Election.

Papandreou is meeting with Merkel and Sarkozy tomorrow and the matter will be discussed at the G20 meeting on Friday.

The IMF may create a 6 months Credit Line for small Countries in thhe EU providing thet have not renaged on their payments to the ECB.

Since so many are suggesting the ECB should take a more active approach and they have not, I can only assume it is because they have not got a Mandate in the Treaty . If the EURO members decided to alter the Treaty, the 10 non-Euro Countries would have cause for complaint. An American
analyst said today, the Treaty is doomed to fail because there is no fiscal union which is essential and why was Greece allowed to borrow so much money
from all these Banks without any checks on it"s solvency.

Financial
markets have suffered heavy falls as European Union leaders said they
"fully trust" that Greece will meet its eurozone bailout commitments.


The presidents of the European Commission and the European Council
issued a joint statement saying they fully expect Greece will live up to
the conditions agreed at the summit where the latest 130bn euro aid
package was set.


The joint statement from Herman Van Rompuy and Jose Manuel Barroso
said: "We are convinced that this agreement is the best for Greece.


"We fully trust that Greece will honour the commitments undertaken in
relation to the euro area and the international community."


An unscheduled meeting will take place on Wednesday, ahead of the G20
summit in Cannes, to discuss the announcement by the Greek prime
minister George Papandreou that he would put the bailout to a referendum.






Germany Dax 1-Day Chart







French president Nicolas Sarkozy and German Chancellor Angela Merkel
agreed on talks with the Greek leadership, the International Monetary
Fund and EU heads "to guarantee the full and swift implementation of the
summit decisions, which are today more necessary than ever".


Stock and bond markets opened up down following news of the proposed
referendum in Greece - and on closing, it did not look much better.


The FTSE 100 Index closed more than 2% lower. European stocks were
also hit by heavy falls with italy down 7% and Germany's DAX and
France's CAC both sliding at least 5%.


In Greece, the markets shed more than 6%.






FTSE 100 1-Day Chart







Mr Papandreou
said if the Greek people did not want the deal - designed to slash the
country's mountain of debt by nearly a third - it will not be adopted.


He gave no date or other details on the proposed referendum, which would be the first in Greece since 1974.


"This will be the referendum: the citizen will be called upon to say a
big 'yes' or a big 'no' to the new loan arrangement," he told Socialist
members of parliament.


"This is a supreme act of democracy and of patriotism for the people
to make their own decision... we have a duty to promote the role and the
responsibility of the citizen."


Greek opposition leader Antonis Samaras dismissed the calls for a referendum and suggested snap elections instead.








What Was Agreed?

:: Banks and private investors to take 50% loss on Greek government debt
:: Rescue fund known as the EFSF to be boosted to 1trn euros
:: Banks told to increase core cash reserves to 9% by next June

Nobel prize-winning economist Professor Christopher Pissarides said the deal was the only solution to solve the debt crisis.


"If it's rejected, it'll be a disaster for Greece," he told Sky's
Jeff Randall Live. "It'll be bad enough for the European Union, and the
eurozone in particular, but it'll be far worse for Greece."


He said a 'no' vote would lead to Greece being declared bankrupt and
being removed from the eurozone. Mr Papandreou would have to resign.


European leaders finally agreed the elements of the debt deal early on Thursday morning following marathon talks in Brussels.


It was decided that banks would have to accept the 50% writedown - higher than the 40% they had originally offered.












European leaders agreed on an aid package at an emergency eurozone summit in Brussels last week





It was also agreed that the 440bn euro (£386bn) bailout fund will be increased to around 1trn euro (£876bn).


A day after the details of the bailout were revealed a survey showed
that nearly 60% of Greeks viewed it as "negative" or "probably
negative".


On Wednesday, leaders of the world's 20 biggest economies gather in the south of France for the G20 summit.




Read more about the eurozone debt crisis deal:


:: China Could Give $100bn To Euro Bailout Fund


:: Does The Eurozone Debt Deal Go Far Enough?









Recommended Stories

• Russia 'Now World's Most Risky Place To Fly' (Sky News )
  
• Shock And Flaw: A New Drama Over Greek Debt (Sky News )
  
• Osborne Backs Eurozone Debt Rescue Deal (Sky News )
  
• Unthinkable Poised to Happen on Wall Street. See Disturbing Charts. (Moneynews)
  
• All You Need To Know About the Economic Calendar (eToro Education)
  

(Selected for you by our sponsor )

Your Comments

Sort comments by: Newest Oldest Recommended

Posted by: spice man on November 1, 2011 6:06 PM

KICK THEM OUT OF THE EURO ZONE IT IS SIMPLE

• Recommend (1)
  
• Report this comment
  
• Permalink
  

Posted by: Codfangle on November 1, 2011 5:51 PM

Posted by: commonsenseUK on November 1, 2011 5:47 PM

The answer is simple ....KINNOCK !!! Nuf said.
I dont think he EVER audited the books.

• Recommend (7)
  
• Report this comment
  
• Permalink
  

Posted by: irishdub on November 1, 2011 5:51 PM

There
is a summit in France this week of europeand and world leaders and the
Dow Jones is reporting that european leaders have told the Greek PM that
even if his goverment agree to the referendum they are not permitting
the Greeks to have a referendum in January and also there is no time. Is
that democracy or dictatorship?

• Recommend (7)
  
• Report this comment
  
• Permalink
  

Posted by: commonsenseUK on November 1, 2011 5:47 PM

It
is becoming very clear that there are no checks and balances in all
this within the Eurozone. Greece will surely struggle to meet debt
repayments even with a 50% haircut; Italians are STILL issuing
government bonds, even at an all-time 6%high, and took on even more debt
last Friday.

Where, on earth, are the checks and balances in all this and just where
are the controls to stop Euro governments getting deeper into the mire
and setting-up guaranteed future dependencies on the newly centralised
bail-out funds??? Surely the Debt Management Offices in each member
state must now start to "report to the centre" to avert the crisis
spreading?

All that's happened is an attempt at a Greek shore-up for now and the
situation will surely repeat and worsen across other member states....

• Recommend (1)
  
• Report this comment
  
• Permalink
  

Posted by: jackie97 on November 1, 2011 5:40 PM

It may all hinge on the wording of the referendum question.....eg most Greeks, by far, wish to stay in the euro!!

• Recommend (1)
  
• Report this comment
  
• Permalink
  

Posted by: artist on November 1, 2011 5:27 PM

A
lot of you are saying that you admire the Greeks for digging their
heels in . well I certainly do not . They have been living way beyond
what they can afford for years , they ink it is funny to avoid taxes ,
they are corrupt , and now they whinge because reality has caught up.
How can you possibly admire that ?

• Recommend (6)
  
• Report this comment
  
• Permalink
  

Posted by: S Coates on November 1, 2011 5:24 PM

I
wonder is this Papandreou throwing his toys out of the pram because he
was annoyed that Sarkozy said it was an error to have let Greece into
the euro.
Greece agreed to a new bailout and now the whole deal gets a torpedo
below the waterline.......the Greek public never want to pay tax so fat
chance of them voting in favour of any agreement......goodnight euro !

• Recommend (6)
  
• Report this comment
  
• Permalink
  

Posted by: Mellie7878 on November 1, 2011 5:17 PM

So
Greece were happy to take a bailout from Germany - of which the German
people were not given the luxury of a referendum, but yet when it comes
to them having to make a choice, they think their citizens deserve a
say?

• Recommend (2)
  
• Report this comment
  
• Permalink
  

Posted by: SeniorSceptic from Lincoln on November 1, 2011 5:07 PM

I wonder if the Germans will invade again?

Posted by: jackie97 on November 1, 2011 5:05 PM

Could
it be for purely political reasons, ie possible fall of Greek
Government, that a referendum has been called? Markets will likely
continue to lurch badly, given the dodgy situation with Italy also...

I think some of the comments are interesting, especially the EU Leaders suggesting the Referendum could not take place.

One interesting bit of News, Papandreou sacked 3 Generals the other day suspected of plotting a coup, this might be why he has called for a referendum NOW which if it proves that the Population wants to stay in th EU, they must accept the austerity.

Papandreou"s Cabinet gave him their support at the meeting last night , but 6 Members of Parliament asked him to resign ......expect Fireworks at his
meeting with Merkl and Sarkozy.

The IMF has not yet signed up to the 8 Billion tranche and in Noivember E3.6 billion Bonds mature and in December E7.8 so the 8 billion will not last two
minutes.

The ringfencing of Italy and Spain may not be feasible because it relies on support from the IMF which has insufficient funds. to get more money, the
IMF would have to go to the Partners which include Germany and Britain , are you with me so far?

The Greek crisis has proved how little monitoring has been done by the EU of the finances of it"s Members and how difficult it is to have one curency for
17 Countries . The answer is Fiscal Policy which Germany does not want and lending power given to the ECB which means changing the Treaty.

China is very concerned about its investment in the EURO as are many other Countries , it looks as though it would have been easier to let Greece default 18 months ago before the recession got worse.