Re: New EC Thread

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4 April 2012 Last updated at 21:08 Share this pageEmail Print Share this page

435ShareFacebookTwitter.Markets down over US and Europe economy fearsContinue reading the main storyMarket DataLast Updated at 23:30

Market index Current value Trend Variation % variation
FTSE 100 5703.77 Down -134.57 -2.30%
Dax 6784.06 Down -198.22 -2.84%

Meanwhile, ECB president Mario Draghi warned that the eurozone's economic outlook "remains subject to downside risks".

He made the comments after the ECB kept eurozone interest rates on hold at 1% for the fifth month in succession.

Spanish austerity

The Spanish government is continuing with extensive cost-cutting measures to reduce both its high budget deficit and overall level of sovereign debt.

It needs to sell bonds successfully on a rolling basis to meet its existing debt payments.

In addition to the disappointing take-up of the latest auction of Spanish government bonds, the yields on those already in circulation rose, which suggests that once again investors are getting more worried about Spain's ability to meet its debt payments.

The yield on 10-year Spanish bonds rose by 0.25 percentage points to 5.7%, the highest level since January.

Kathleen Brooks, a research director at financial website Forex, said: "In Europe the economic data is weak and sovereign concerns are flaring up once more."

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Protesters have clashed with riot police in the Greek capital, Athens, hours after a pensioner shot himself dead outside parliament.

The 77-year-old man killed himself in the city's busy Syntagma Square on Wednesday morning.

Greek media reported he had left a suicide note accusing the government of cutting his pension to nothing.

Flowers have been laid at the spot where he died and tributes have been paid online.

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“
Start Quote
I see no other solution than this dignified end to my life, so I don't find myself fishing through garbage cans for my sustenance”
End Quote
Extract from reputed suicide letter

Hundreds of demonstrators gathered in the square outside parliament on Wednesday evening, the scene of many large protests in recent months.

Violence erupted, with petrol bombs hurled at police, who fired tear gas in response.

Depression and suicides are reported to have increased in Greece as the country introduces tough austerity measures to deal with huge debts.

'Dignified end'

The man has not been officially identified but was named in Greek media as Dimitris Christoulas. He was said to be a retired chemist, with a wife and a daughter, who had sold his pharmacy in 1994.

He shot himself in the central square just before 09:00 (06:00 GMT), Athens News reports.

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Analysis

Mark Lowen

BBC News, Athens

--------------------------------------------------------------------------------
The unemployment rate is now over 20% and a similar number is below the poverty line.

The suicide rate in Greece used to be the lowest in Europe but it has soared during the crisis.

Behind the figures there is a society that is feeling intense pain.

As you walk around the streets of Athens and beyond you can see the signs of a broken society.

Homelessness is on the rise, shops are closing and there has been a rise in anti-immigrant violence.

There is another Greece as well - the Greece that continues to persevere, where people go out and enjoy themselves.

But it is also a nation that is deeply troubled and that is likely to be expressed in early elections that are expected in about five or six weeks.

In the alleged suicide note, found by police and reported by Athens News, he said: "The government has annihilated all traces for my survival, which was based on a very dignified pension that I alone paid for 35 years with no help from the state.

"And since my advanced age does not allow me a way of dynamically reacting... I see no other solution than this dignified end to my life, so I don't find myself fishing through garbage cans for my sustenance."

Dozens of people left handwritten messages and flowers at the spot where Mr Christoulas killed himself.

One of the notes, pinned to the tree, read "Enough is enough", while another said "Who will be the next victim?"

Later, as night fell, the demonstrations degenerated into clashes as activists threw rocks and petrol bombs at police, who responded with tear gas and flash grenades.

Prime Minister Lucas Papademos issued a statement calling the death "tragic".

"In these difficult hours for our society we must all - the state and the citizens - support the people among us who are desperate."

Government spokesman Pantelis Kapsis called the suicide a "human tragedy" but said "the exact circumstances" were unknown.

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Greece crisis in numbers

Sources: ELSTAT, BBC

Suicides rise

Evangelos Venizelos, head of the socialist Pasok party that holds a majority in the coalition government, called on colleagues to refrain from "political commentary" and "show solidarity and togetherness".

Antonis Samaras, head of the conservative New Democracy party, said politicians must do more to "help Greeks escape from despair".

Drastic austerity measures have been imposed on Greece to meet the terms of a huge eurozone financial bailout needed to save the country from bankruptcy.

Thousands of civil service jobs have been cut, taxes raised and there have been reductions in pay, benefits and pensions.

Suicides increased by 18% in 2010 from the previous year, according to Reuters news agency. The number of suicides in Athens alone rose over 25% last year.

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Don Madlin- Analyst says ECB HAS to bail out Spain or it won't happen at all. The G20 , China and other countries say
it is up to the EU to sort out it's problems.

He says Greece will default and believes the IMF nor any individual Country will lend money to Greece or Spain or any other Euro Country. It was an ill
conceived plan to have one currency fits all for such diverse Countries with no Central Bank.

Spanish Bond yields have increased to almost 6% and not reached their Sales target. The country is unlikely to reach it's target in 2012 or 2013 and
urgently needs help.

If Spain, the 4th largest Country defaults it will test to the limit the puny defences and the senseless decision by Merkel to impose such stringent
austerity measures when the World is in recesssion.

The Swiss Franc has increased in value because of the panic over the euro and the swiss are concerned because they had set their limt.

The latest upsets have caused the EU to issue a statement that they have matters under control.

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Spain’s Economic Woes Rattle Investors; Europe Markets Slide

By Angeline Benoit and Lucy Meakin - Apr 5, 2012 2:54 PM GMT+0100
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A slide in Spanish stocks and bonds deepened as investors’ concerns that Prime Minister Mariano Rajoy may require international aid rattled markets.

Spain, the euro region’s fourth-largest economy, is in “extreme difficulty,” Rajoy said yesterday, raising the likelihood of a bailout for the second time this week. The Ibex stock index slid 0.7 percent in Madrid today. The benchmark Stoxx Europe 600 Index extended its biggest retreat in four weeks and the MSCI Emerging Markets Index slipped 0.3 percent to 1,034.65 as of 3:14 p.m. in Madrid.




















A slide in Spanish stocks and bonds deepened as investor concerns that Prime Minister Mariano Rajoy may require international aid rattled European markets. Photographer: Jock Fistick/Bloomberg
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A rally triggered by more than $1 trillion of European Central Bank loans to the region’s financial institutions to stave off a credit crunch is running out of steam and, while Italian Prime Minister Mario Monti is pressing ahead with an economic overhaul, Rajoy is failing to meet deficit targets amid a worsening recession.

“Stress has returned to the periphery of the euro area,” David Mackie, chief European economist at JPMorgan Chase Inc., wrote in a note today.

Spanish bonds fell today, pushing the yield on the 10-year benchmark bond to the highest since Dec. 12 at 5.79 percent, and widening the spread with similar-maturity German bunds to more than 4 percentage points.

Asian Currencies

Asian currencies declined, led by Indonesia’s rupiah, as the region’s stocks extended their biggest loss since December after weak demand for Spanish bonds renewed concern Europe’s debt crisis will worsen. The MSCI Asia-Pacific Index of shares dropped 0.1 percent, following a 1.5 percent slump yesterday.

The yield on Spain’s 10-year benchmark bond has jumped nearly one percentage point since March 2, when Rajoy announced the government would miss its budget-deficit target this year. He set the target for 2012 at 5.3 percent of gross domestic product -- lowering it from 5.8 percent under European Union pressure -- instead of 4.4 percent and warned public debt will surge to a record 79.8 percent of GDP as it imposes the deepest austerity in at least three decades.

The concern about Spain also led to a slump in Italian bonds, even as Monti moved to eliminate the budget deficit next year and revamp the economy. The yield on Italy’s benchmark 10- year bond rose 13 basis points to 5.50 percent, the highest since Feb. 23.

‘Closer Scrutiny’

Italy’s borrowing costs have fallen lower than Spain’s since March as concerns about the latter’s solvency became greater. One of Monti’s moves to increase confidence in country’s economy has been to present an overhaul of labor- market rules, cited by economists as one of the reasons why Italy’s economic growth has lagged behind the European Union average for more than a decade.

“Spain will remain under closer scrutiny,” Janet Henry, chief European economist at HSBC Holdings Plc, wrote in a report today. “The concerns about the financial system are unlikely to abate, in which case the markets will continue to question whether or not Spain too could also find itself in need of financial assistance.”

The ECB yesterday waived an exit from emergency stimulus measures after Spain barely covered the minimum amount targeted at an auction. ECB President Mario Draghi wants governments to deliver on promised structural reforms and fiscal consolidation before the impact of measures wears off.

Credit-default swaps insuring Spanish bonds have surged 21 percent since the start of the year to 461 basis points, according to CMA, signaling investors bet its government may be the fourth in the euro region to request a rescue. That compares with a 1 percent decline in swaps on Portugal, the next worst- performing nation, and more than 40 percent drops for Norway, Sweden and the U.S.

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The conventional wisdom in European circles is that the next European recipient of extra bailout money will be on the Iberian peninsula.

Spain has managed so far to avoid taking money from the troika (International Monetary Fund, European Commission and European Central Bank), but investors are clearing out of its bonds and its benchmark borrowing costs are closing in on 6% for the first time since December.

Portugal has not been so fortunate. It has already taken a €78bn Troika bail-out and many suspect it will need another. Now, while the IMF’s latest assessment of the country’s travails says explicitly that it still believes the country will be able to borrow from the capital markets by next year, it’s clear they harbour misgivings about the country’s chances.

While Portugal hasn’t “done a Greece” and missed its initial targets (indeed, its deficit last year was, at 4%, lower than the 5.9% IMF target; it expects to meet the target this year), there are worrying underlying signs.

The first is that Portugal has managed to meet those targets largely though a one-off accounting tricks – shifting bank pension funds to the state social security system. Were it not for this tactic (not dissimilar to what the UK Government plans to do with the Royal Mail pension scheme), it would have missed its borrowing targets.

Moreover, and this is the really important thing, the country’s economy simply isn’t growing as fast as is needed to escape from its ongoing crisis. The economy is now expected to contract by a pretty awful 3.25% this year; unemployment is higher than expected, averaging 14.5% this year, compared with a previous forecast of 13.75%.

The report (and bear in mind these things are invariably deeply euphemistic), is not particularly encouraging:

Beyond 2012, the growth outlook remains uncertain. Staff projects growth to be 0.3% next year and 2% in 2014, acceleration that merely reflects a cyclical rebound. But there is some uncertainty even around this. In particular, the government has yet to identify and adopt a set of reforms that would foster a near-term supply response. At the program’s inception, the fiscal devaluation was expected to play this role. But there has been little progress in identifying an alternative to this—a gap that staff called on the authorities to address as quickly as possible.

In the absence of such measures, staff does not expect Portugal to regain the market share that it has been losing in recent years over the forecast horizon. While export growth has outpaced underlying real external demand in 2010–11, those dynamics are not fully carried over in the projection period. Even then external demand nonetheless plays an important role in providing impetus for the recovery.

What this means, in short, is that Portugal simply isn’t responding to the IMF medicine fast enough to get back onto its feet. The hope had been that gradually the country could drag itself back towards being competitive – with its exports cheap enough to compete with fellow European neighbours (more on this competitiveness issue here).

However, as a detailed box in the IMF report points out, the country has barely improved its competitiveness at all in the past few years.

Weaker growth may not sound all that dramatic at first. But to understand its importance, consider the following chart from the IMF report.



The baseline expectation is that, if all goes well, the country can whittle away its total national debt to around 80% by 2030. However, as this chart shows, if the country faces weaker growth and fails to adjust its spending appropriately, it could well be around 130% by then. In other words, it doesn’t take much for the country to slide into debt spiral territory.

None of this is a given, but you can detect an increasingly worried tone in the IMF’s report. Its conclusion perhaps says it best:

In all, with increasing risks to market access in 2013, strong policy implementation will be critical to enhance the credibility of the program and improve market perceptions.

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By the Editors Apr 5, 2012 12:00 AM GMT+0100
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The decisive test of the euro area’s plans for economic recovery was never Greece but Spain, and the European Union shows every sign of failing it.

The Spanish government’s new austerity plan hasn’t won investors’ confidence, and this creates a threat not just to Spain but to the whole EU. Europe’s governments need to change course before it’s too late.

An auction of Spanish bonds on Wednesday was the first verdict on Spain’s new budget. It didn’t go well. Demand was poor and prices fell. The country’s borrowing costs rose with 10 year bond yields in the secondary market hitting 5.7 percent, the highest since the beginning of the year. The premium over German government bonds increased to nearly four percentage points, the highest since November.

The problem is not that Spain’s new austerity plan is too timid. Just the opposite: Under EU orders, Spain is promising what might be the tightest fiscal squeeze that it or any other European economy has ever faced. The new plan calls for the budget deficit to fall from 8.5 percent of gross domestic product to 5.3 percent this year. Since the economy is already shrinking, this requires a discretionary fiscal tightening of roughly 4 percent of GDP -- with the unemployment rate already standing at about 23 percent.

Lost Ground

Spain overshot its previous too-demanding fiscal targets, and is being told to make up lost ground. It missed its budget goal because regional governments, over which Madrid has limited control, failed to do their part, while economic growth came in lower than expected. This is all too likely to happen again. Excessive austerity stamps on growth, which causes public borrowing to rise despite the government’s efforts. The government’s new plans are simply not credible: The more it succeeds in cutting public spending, the worse the outlook for growth and hence for public debt.

Spain’s overall unemployment rate is terrible enough, but the youth unemployment rate is an amazing 50 percent. Recession isn’t the only cause. The country’s labor market, divided by Franco-era rules between an absurdly protected sector for long- term employees and a lightly regulated sector for those on temporary contracts, has long been seen as one of the most dysfunctional in the developed world. The government’s efforts to reform it are necessary and long overdue -- but it’s hard to win support for reforms that will cause further labor-market disruption at a time like this. The new center-right government, in office barely three months, is facing strikes and just lost a regional election it expected to win. As well as losing the confidence of the markets, it may already be losing the confidence of voters.

The Greek economy is tiny, but Spain’s is the fourth largest in the euro area. If it goes down it will take the EU’s still-puny defenses against such an eventuality down with it. The European Central Bank’s long-term liquidity operations, which have let banks borrow roughly 1 trillion euros on easy terms, have lately helped to stabilize financial conditions, but Spain’s worsening predicament shows this was a false dawn.

Spain cannot work through this crisis without more help from its EU partners. In their own larger interests they should allow a milder path of fiscal consolidation, and support Spanish growth along that path. That means steps to buoy EU-wide growth, including easier fiscal policy in Germany and easier monetary policy from the ECB. It means outright temporary fiscal transfers to Spain. Above all it means announcing that the ECB will act as lender of last resort to distressed euro-area governments.

Spain is being drawn into a vicious circle of economic, fiscal and political collapse. Even now, this is an avoidable danger, so long as the EU is willing to act. But if it stands aside too long and lets Spain fall into the trap, containing the damage will make dealing with Greece look like child’s play.



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Crisis fatal for small businessmen


5 April 2012



Niels Bojesen


Since the crisis began in 2008 at least fifty artisans and business owners have committed suicide in the region that was the engine of Italy’s economic miracle of the 1990s. Those who have been unable to adapt to new circumstances have seen the collapse of the model that built a prosperity they thought would never end.

Leonardo Bianchi

Laura Tamiozzo's eyes are glued to the laptop screen, and her voice, soft but determined, resonates in the parish hall of the San Sebastiano Centre. in Vigonza, a village near Padua. Behind her is a poster of the FILCA-CISL union (Veneto), which has organised the public meeting.

The poster shows rows of graves and 25 names of long-established companies that have closed their doors, amid general indifference. “Dear Flavia, it has not been easy for me to write this letter, but I wanted to tell you that the tragedy that struck your family is also the one that hit my own.”

Laura Tiamozzo reads out the letter that she sent on Jan. 22 to Flavia Schiavon, 35, who is sitting next to her. The Great Crisis took away their fathers. Both were building contractors, and both committed suicide.

Giovanni Schiavon shot himself in the head in his office on December 12. The case caused a stir because, while Schiavon was certainly himself in debt, the state owed him 250,000 euros. Antonio Tamiozzo, meanwhile, hanged himself on the night of January 1 in one of the warehouses of his company, which employed more than thirty people. Daniele Marini, director of the Northeast Foundation, explains that while it is “difficult to draw up a typical profile of these business leaders”, one can nonetheless identify some shared characteristics.

The first is the small if not miniscule size of their businesses, which mostly operate in established sectors such as construction, small crafts and others. A second is that, in a system in which a SME in Italy’s Northeast relies on an average of 274 suppliers, which typically are responsible for 80 percent of the finished product, all the SMEs are closely tied to each other.

Declaring bankruptcy is considered shameful

According to figures from CGIA [the union of SMEs and craftsmen] of Mestre, at least 50 small Veneto contractors or artisans have taken their lives since the crisis began. “Sharing a job is sharing life itself,” explains writer and journalist Ferdinando Camon. “When the company is in crisis, the boss suffers terribly from not being able to pay his employees and from watching them tighten their belts. This is what’s behind a lot of these suicides: in the culture of the working communities of the Northeast, having to lay off employees, closing the firm down and declaring bankruptcy is considered a disgrace, and a breach of the social responsibilities of the head of the company.”

It is not unlikely, says Camon, that some suicides “more or less express a conscious desire to declare the debtor – the State, in other words – an assassin, the one responsible for the death.”

Anger is mounting, and relationships with the political world seem to have been damaged irreparably. After Tangentopoli [the great anti-corruption investigation that raked over the political class in the 1990s], in fact, the economy and society of Veneto thought they would grow much better without the restraint of “institutions”.

The distrust of the state was entirely mutual: “The Northeast is a mysterious jungle. Rome does not see into it. Or if she does see into it, she does not understand it.”

Lonely, isolated and misunderstood

One of the few certainties is that these Veneto entrepreneurs feel lonely, isolated, abandoned, and misunderstood. At the Vigonza meeting, it was decided to create an association of families of victims of the crisis. As for the various professional associations, they are trying to respond to urgent needs. In late February, the Confartigianato d’Asolo et Montebelluna (association of artisans of Asolo and Montebelluna) inaugurated Life Auxilium, a psychological counselling service for entrepreneurs in distress, giving them a freephone number (which gets an average of one call per day) and the services of a support centre.

Are these suicides the macabre consequence of the exhaustion of a “model”? Not necessarily. In reality, the “locomotive of Italy” – a region brimming with energy, scene of a wild and spontaneous explosion of businesses of all kinds – had started to slow down around the year 2000.

It was then that “the development of the Northeast, as we know it began to 'finish up', because the factors behind this tremendous momentum had reached their limits,” wrote one of the authors of Innovatori di confine. I percorsi del nuovo Nord Est[“Innovators on the border. The routes of the new Northeast”] a collective work published by Marsilio in 2012 and edited by Daniele Marini.

“The availability of labour has given way to demographic stagnation, a dearth of local workers; these businesses that have been under family management for many years have always had trouble passing them down to future generations, and the region’s countryside, which is urbanising but still has open spaces, is gradually becoming saturated in terms of available space and infrastructure. All these favourable factors, which had boosted the economy of the Northeast and brought prosperity, had run up against their limits.”

Stefano Zanatta, president of Confartigianato Montebelluna-Asolo, is on the same wavelength: “The crisis has shown up the weaknesses of the system. It is still highly fragmented, thanks to small and very small enterprises. At the beginning that was a trump card, as the engine was turning over fine, and it generated wealth and full employment. But now, with four years of crisis, we can no longer cope with a system that is bigger than us.”

Work is the be-all and end-all

The figures from Movimpresa for 2006-2010 make it clear that the balance between new listings and firms going out of business in the Northeast is negative: 6,023 SMEs have vanished. For Daniele Marini, however, a small business is not necessarily fated to close its doors or to be shoved aside by the markets.

It also has to be able to make an “evolutionary leap” in technology innovation, in organising production and services, and it must be able to establish “commercial and production relations with larger companies that are internationalised.”

Despite the great transformations of the last twenty years, the company's Northeast continues to be strongly oriented towards work, where everyone – business leaders and employees – regardless of social background, generation or group, base their identity on their work. And work is also the main concern of the population – particularly now.

In 1996 the sociologist Ilvo Diamanti [a specialist in the Northeast] warned that “work has become the new religion. [...] I fear we are going to be in for some big problems, and not just economic ones. Because if work is the be-all and end-all, if it is economic success that brings satisfaction, the day when development slows down will bring not only economic but also psychological repercussions.”

“Culture and happiness count for nothing. The money – the schei, as it is called here – is everything,” says Ferdinando Camon. “The small business owner is not just living through a debt crisis: he’s living through a total crisis. A crisis of nerve, a moral crisis, a mental crisis. That's why he commits suicide. Because the schei is his only value, and if his life doesn’t have enough of it, he thinks it’s no longer worth living. The schei is the absolute value.”

On the web
Original article at Linkiesta it
La Repubblica article it


Context

Wave of suicides among artisans and entrepreneurs

The wave of suicides caused by the crisis has not remained within the Northeast: in recent days two Roman contractors have taken their own lives, and an artisan in Bologna set himself on fire. Throughout Italy between 2008 and 2010 suicides linked to economic causes went up by 24.6 percent (from 150 to 187), writes La Repubblica, citing union sources and denouncing a possible “copycat effect". Following these recent episodes, the professional unions of entrepreneurs and artisans have asked the government to set up an emergency fund to help those who cannot handle their debts.

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24 hours ago

@BBCGavinHewitt via Twitter
Umberto Bossi was an important ally of Berlusconi and an opponent of unelected PM Mario Monti. His departure shakes up Italian politics.

24 hours ago

@BBCGavinHewitt via Twitter
Reports from Italy suggest that the leader of the Northern League Umberto Bossi has resigned over financial scandal.

24 hours ago

@BBCGavinHewitt via Twitter
Sarkozy wants to freeze France's contribution to the EU #Sarkozy

14:03 UK time, Thursday, 5 April 2012

@BBCGavinHewitt via Twitter
On the back of letter to French people Pres Sarkozy writes 'a country without frontiers is a country without identity' #france2012

10:39 UK time, Thursday, 5 April 2012

@BBCGavinHewitt via Twitter
Those European officials and politicians who have suggested the eurozone crisis is over might want to look at Spanish borrowing costs today

16:21 UK time, Tuesday, 3 April 2012

@BBCGavinHewitt via Twitter
Christine Lagarde says cutting spending too quickly could make matters worse. Yet another warning about too much austerity.

16:19 UK time, Tuesday, 3 April 2012

@BBCGavinHewitt via Twitter
IMF boss Christine Lagarde says global economy still recovering but 'fragile' especially in Europe.

11:23 UK time, Tuesday, 3 April 2012

@BBCGavinHewitt via Twitter
Sign of depth of Spanish problems. Public debt due to rise from 68.5 per cent to 79.8 pc by end of year #Spain

12:21 UK time, Monday, 2 April 2012

@BBCGavinHewitt via Twitter
A Greek Research Group says the Greek economy will shrink 5 per cent this year. This on top of 4 years of decline #Greece

12:19 UK time, Monday, 2 April 2012

@BBCGavinHewitt via Twitter
In Spain the Prime Minister says reducing the deficit to 5.3 per cent this year is 'absolutely indispensable' #Spain

10:08 UK time, Monday, 2 April 2012

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Re unemployment in eurozone - the figure rose to 10.8 per cent. Highest level in fifteen years #Eurocrisis

10:05 UK time, Monday, 2 April 2012

@BBCGavinHewitt via Twitter
In Feb eurozone unemployment was up 10.8 per cent. This will fuel the debate over whether austerity is working #Eurocrisis

10:02 UK time, Monday, 2 April 2012

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Interesting data ex France. Car sales fell 21 per cent in first quarter. Citroën and Renault sales down by 30 per cent #france2012

09:30 UK time, Monday, 2 April 2012

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Further evidence of eurozone heading into recession. In March manufacturing was significantly down particularly in France #Eurocrisis

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2.2KShareFacebookTwitter.Email 18:32 UK time, Friday, 30 March 2012

Gavin added analysis to:

Spain unveils 27bn euros of cuts
A government minister said Spain needed to tighten up its finances to meet EU targets for reducing deficits without stifling economic growth and job creation.

That is the challenge.

Read full article

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148ShareFacebookTwitter.Email 14:22 UK time, Friday, 30 March 2012

Spain's economic gamble
122The Spanish government said this was the most austere budget since Spain became a democracy in 1977.

And so it was.

Read full article

13:44 UK time, Friday, 30 March 2012

@BBCGavinHewitt via Twitter
Spain plans more than 27 billion euros of savings just in 2012 #Spain

13:41 UK time, Friday, 30 March 2012

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Spain to freeze public sector salaries in 2012 #Spain

13:40 UK time, Friday, 30 March 2012

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Spanish government says ministries will see a 16.9 per cent cut to their budgets. That will prove tough #Spain

11:08 UK time, Friday, 30 March 2012

@BBCGavinHewitt via Twitter
In Copenhagen finance ministers debate whether they can create a trillion euro rescue fund but the real crisis is recession and no growth.

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Europe's pain is coming America's wayBy Frida Ghitis, Special to CNN
April 6, 2012 -- Updated 0233 GMT (1033 HKT)
Demonstrators crowd Cibeles Square during a general strike last week in Madrid, Spain.STORY HIGHLIGHTS
Frida Ghitis: The pain of budget cutbacks is being felt in many parts of Europe
She says in reality the decisions are about who will pay more -- and receive less
America has rightly been spared budget cutbacks in the midst of a recession, she says
Ghitis: The U.S. debt is growing at unsustainable pace, day of reckoning is coming
Editor's note: Frida Ghitis is a world affairs columnist for The Miami Herald and World Politics Review. A former CNN producer/correspondent, she is the author of "The End of Revolution: A Changing World in the Age of Live Television."

Amsterdam, Netherlands (CNN) -- The problem has become so complicated, that perhaps only a child can solve it. An 11-year-old Dutch boy, Jurre Hermans, entered a serious economics competition with a plan for bringing the Greek economy back from the brink.

In the end, Hermans, the youngest ever to enter the Wolfson Economics Prize, received a 100 euro voucher for his original idea -- conceived on the notion of exchanging debt for slices of pizza. Maybe Washington can invite him for some budget brainstorming. Meanwhile, Europe's crisis goes on, still in need of creative solutions.

Beyond the placid old Amsterdam canals, the bustling bike lanes and the quaint tulip fields, roils a furious debate about the future of the Netherlands. On the surface, the issue is what to do about the budget deficit. In reality, it is about whose life will become more difficult. Who will pay more? Who will receive less? It is a question coming soon to a deficit-spending country near you: the United States.

In other parts of Europe, in places like Greece and Spain, similar discussions have toppled several governments and have escalated into huge, sometimes violent protests, as people lash out in frustration against government decisions they find intolerable.

I believe that some time next year, with the election in the past, when either Barack Obama has started his second term or Mitt Romney has finished unpacking in the White House, Americans, too, will discover that budget debates are not just academic exercises or political theater. It's a good bet that just as Europe has come up against the reality that deficits cannot grow forever, so too will America. Investors, who have taken losses in the European debacle, will start looking at America's books, questioning its solvency, and demanding change.

The European economic crisis has unfolded most dramatically in Greece, where the economy has plunged into a depression. With its budget deficit and national debt rising out of control, the Greek government sought help from the eurozone, where rich countries demanded stark austerity measures in exchange for a bailout.

Greece, like other countries in Europe, had given up its own currency in exchange for the euro, so it did not have the option of printing more money or devaluing the currency to pull itself out of the mess created in part by politicians who gave voters what they wanted without troubling to bring up the unpleasant fact that someone, sooner or later, would have to pay.

Today, the Greek people are enduring economic pain that makes America look like a paradise of prosperity. Unemployment stands at 21%, wages are collapsing for both government and private sector workers.

A series of new taxes have been imposed, including a "solidarity" tax, new property taxes and higher self-employment taxes. The VAT, a national sales tax on all transactions, has jumped from 13% to 23%. The minimum wage has been been sharply cut. Poverty has increased dramatically.

After all that, Greece is still required by European rules to cut another 4.7% of gross domestic product from its budget, equivalent to the United States suddenly cutting more than $700 billion.

Even if it achieves those goals, or rather because it will enact such draconian cuts, the Greek economy is expected to sink deeper.

The European economic pact requires countries to keep their budget deficits below 3% of GDP. That became increasingly difficult as the world entered a recession. In Greece's case, the government had been concealing its deficit spending. In other countries, especially those that relied heavily on real estate, home prices collapsed, and tax revenues declined, opening up the budget gap.

The Dutch economy, one of the healthier ones, now faces a 4.6% deficit. There's talk of across-the-board pay freezes and even more social safety-net cuts, among other ideas. Unemployment is just 6%, but the country has returned to recession.

In Spain, the government wants to avoid requiring a bailout the way Greece, Ireland and Portugal have. The newly-installed government of Prime Minister Mariano Rajoy needs to slash the budget by 5.5% of GDP, even more than Greece.

Spain expects unemployment, already the worst in the developed world, to go over 24% this year, about the same experienced by the United States during the Great Depression.

The European crisis is far from over, but it already has important lessons for the United States, where federal deficit figures are treated as poison darts to be thrown among politicians, rather than as an important problem needing adult solutions.

The top three lessons from Europe are these:

• Deficits matter and sooner or later will have to be cut

• Trying to cut deficits in the middle of a recession makes the recession worse

• When the cutting starts, it will cause major social and political upheaval, as well as very real pain.

Unlike most European countries, the United States has the luxury of printing money and borrowing almost at will. The crisis in Europe has actually made it more attractive to lend to the United States, so it's easy to pretend the deficit and the debt don't matter. But America's deficit of about 10% of GDP and debt of $15 trillion, roughly 100% of GDP, cannot go on forever. Interest payments on the debt already consume more than $200 billion each year, and the debt is rising at blinding speed.

The United States was right to deal with the recession first before tackling the longer term problem. Europe is proving what the Hoover administration already showed in the 1930s, that cutting spending in a recession is counter-productive.

But, with the economy recovering, the time will soon come for the difficult decisions: Will the government cut defense spending, Social Security, or Medicare? Or perhaps other programs that keep millions out of poverty?

In the Netherlands, the ruling coalition has been brought to the edge of collapse over the choices. The far-right politician Geert Wilders demanded huge reductions in foreign aid. There is also talk of ending the mortgage tax deduction, along with other tax increases.

Social services have been reduced and food banks say they have seen an "explosion" in the number of clients. And the government is still looking for more cuts.

The choices go to the heart of a nation's character.

Voters in the United States should insistently demand that presidential candidates say exactly what they will do about the deficit.

They should also demand that politicians at long last resolve -- not just debate -- the problem.

Will politicians behave responsibly?

If you hear anyone say tax cuts alone will get the economy growing and fix the problem, don't believe it. Economists say spending cuts and tax increases are necessary.

If adults won't face up to the truth, maybe it's time to bring in the children for new ideas, and for a reminder of what's at stake.

The opinions expressed in this commentary are solely those of Frida Ghitis.

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Japan, China to ‘Consult Closely’ on Support for IMF, Azumi Says

By Mayumi Otsuma - Apr 7, 2012 6:24 AM GMT+0100
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Japan and China will seek to coordinate on supporting the International Monetary Fund’s effort to contain Europe’s debt crisis, Japanese Finance Minister Jun Azumi said.

“Rather than make decisions independently, we’ve agreed to consult each other very closely” on financial contributions to the IMF, Azumi told reporters today after meeting with Chinese Finance Minister Xie Xuren in Tokyo.















Jun Azumi, Japan's finance minister. Photographer: Kiyoshi Ota/Bloomberg
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The finance ministers of Asia’s two largest economies met before the Group of 20 countries gathering later this month in Washington. One topic at the G-20 meeting will be increasing cooperation with the IMF. The Fund needs more resources to shield the global economy from threats of strains on Europe’s financial system, rising oil prices and high unemployment, Managing Director Christine Lagarde said this week.

“It won’t probably be smooth for G-20 nations to hammer out details for their contributions to the IMF,” Tomoko Fujii, a senior foreign-exchange strategist at Bank of America Merrill Lynch in Tokyo, said before Azumi and Xie met. “It’s important for Japan to check China’s intention on this, while China probably wants to increase its political influence if it puts up money.”

The IMF asked in January for as much as $500 billion in additional lending resources. Member countries have been reluctant to pitch until European nations did more to help themselves. The U.S. has refused to increase its contribution to the fund.

‘Not Convincing’

European finance ministers decided March 30 that 500 billion euros ($667 billion) in fresh money would be added to the 300 billion euros already committed to create an 800 billion-euro defense against the two-year-old turmoil. Euro-area finance chiefs insisted that they’ve fulfilled their side of the bargain.

“The firewall European nations presented in March isn’t convincing enough to give momentum to discussions for other countries’ financial contributions to the IMF,” Fujii said.

Concerns about Europe’s debt crisis were rekindled this week as Spain’s borrowing costs surged on concern that the country’s public debt will expand and the region’s fourth- largest economy may ask for a bailout. Yields on Spain’s 10-year bonds rose to a four-month high.

“Europe’s crisis hasn’t ended” even as the situation improves from last year, Azumi said today. “This still needs careful monitoring and we can’t yet become optimistic.”

Yet to Decide

Japan and China have yet to decide on cooperation with the IMF, and will continue their discussions on this until the G-20 meeting, Azumi said today. The nations agreed to strengthen and expand Asia’s regional currency swap agreement, sharing a view that “there is a need for Japan and China to cooperate to prevent crisis in Asia,” he said.

Possible G-20 support for the global economy could be similar to a G-20 decision in April 2009 to triple the fund’s resources as part of plan to avoid the global economy from slipping into a recession. At the time, the U.S. and Japan each contributed $100 billion, the EU $178 billion and China $50 billion.

Azumi and Xie today agreed the world economy continues to grow at a moderate pace even as many uncertainties still remain, according to a statement released by the Japanese finance ministry.

Today’s meeting is the second this year between the two finance ministers. Azumi visited Beijing in February and met Xie and Vice Premier Wang Qishan.

Growth Targets

China last month pared this year’s economic growth target to 7.5 percent from the 8 percent goal in place since 2005, part of government plans to tilt growth toward consumption and away from exports. In the fourth quarter of last year, the world’s second-largest economy grew 8.9 percent.

Azumi said he was told today that China’s domestic demand has been firm and consumption stronger than expected. He said he considers it possible that China can achieve this year’s targeted 7.5 percent growth or ever a greater expansion.

Azumi also said it’s fully possible Japan can achieve its growth goal of 2% for the fiscal year started April 1, as demand from reconstruction is emerging even as the economy struggles with the yen’s appreciation.
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This was always on the cards, emerging and Eastern Countries resented La Garde's appointment , apparently, the US has always headed the World
Fund and Europe the IMF. After over 2 years and pumping millions in loans from the IMF the situation is worse , had Greece been allowed to default at the very beginning it would not have the kind of debt now that it can never hope to repay and maybe the World catastrophe imagined would not have been so bad.

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This is hilarious.


http://www.thepoke.co.uk/2011/10/25/world-economy-collapse-explained-in-3-minutes/

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MotleyCrew Investment Company 4th April


past events for comfort.

Global financial markets were in turmoil for most of 2011, mostly because of events within the eurozone; the currency union formed by the countries that use the euro. Top of the agenda was, and still is, how to prevent Greece from defaulting and affecting the rest of the eurozone.

The big fear is that if the Greece leaves the euro, several other countries will follow, causing a wave of debt defaults that triggers a depression throughout Europe. But history tells us that when a country leaves a currency union, what usually happens that it experiences a short, sharp recession, which is followed by a swift recovery.



























































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As quiet as a Eurocrat in Athens


9 April 2012
Le Temps Geneva Comment2




Mayk


Their mission: to bring the Greeks onto the path of budgetary virtue. Their method: to shake up established practice and insist on sacrifices. The risk: they may be targeted by anyone with a gripe against the EU.

Richard Werly

On one side of the room, a window gives onto the ruins of the Acropolis and the scaffolding assembled by the team of archaeologists with a brief to watch over this crucible of European civilisation.

On the other, the two screens Yannis Siatras uses to monitor the stock market, one of which is intermittently displaying the front cover published by German magazine Focus in February 2010. It shows Vénus de Milo giving the finger and is accompanied by a headline that announces, "Cheats in the EU family": a highly symbolic image that is associated with EU diktats and contempt.

"Show that! And then try to explain that the Union is on our side", complains Yannis, a former financial editor, who is tempted to run for a seat at the next general election in May.

Silence as a first line of defence

We had already been warned by Kostas Pappas, a spokesman for the permanent representation of Greece in Brussels, "Beware of clichés that poison the atmosphere", so it was no surprise to hear the same view expressed at the the European Commission delegation in Athens, which is located just behind the parliament building. On the other side of the street, the Evzones, soldiers in the traditional partisans uniform of white tights and pom-pommed hobnailed boots, were changing the guard, watched by handful of tourists.

One of them, a Greek American, was incensed by the display of the blue and gold-starred flag of the EU. "They have no place in the country of Socrates,” he says. “They are immoral servants of banks."

Panos Carvounis is no longer bothered by this type of accusation. The genteel 50-year-old head of the European Commission Representation in Greece is well used to criticism. "I live at home. I go to the cinema without any fuss, while Greek politicians who have had bad press are afraid to leave their homes. I am often questioned, but never vilified", he says.

In contrast, other members of the contingent of Eurocrats, who have been posted in Athens since the beginning of the crisis in the spring of 2010, have made silence their first line of defence.

Some 15 experts are deployed in the Greek capital as part of the Commission’s tasks force to help the country take advantage of EU funds [Greece has only managed to tap less than a third of the funds made available to it as part of the EU’s 2007-2013 budget]. A further 30 work for the EU delegation, and also serve as a secretariat for the troika, the tripartite agency (Commission, International Monetary Fund, European Central Bank) with a brief to implement the agreement that was finally accepted by Greek leaders in mid-March.

This latter group are charged with supervising the second €130 billion European bailout that will finance Athens until the end of 2014: a sum that has been made available in addition to the first €110 billion lent by the 27-member EU in 2010, and the €107 billion of debt that the country’s private creditors accepted to write off within the framework of a bond swap which will be completed by 18 April.

Officials under police protection

In view of their mission to provide assistance in the release of funds, the members of the task force, which is soon to be doubled in size, are largely popular. In contrast, the brief for officials working for the troika is to supervise, verify and audit. As such they offer an ideal target for sections of the population that have become the enemies of Europe: redundant civil servants who have been laid off in waves, entrepreneurs whose businesses have been stifled by ailing banks, populist politicians with a gift for exploiting anti-German sentiment, extreme right nationalists and hard left anti-capitalists.

Not surprisingly, the lifestyles of both groups are radically different. The task force staff, who liaise with civil society and meet with social partners, live in private apartments or downtown hotel rooms rented by the month. The troika officials, who come and go to negotiate with government ministers, generally stay under police protection in suites at the Athens Hilton.

For the Greek media, the Eurocrats are personified by three names: Matthias Mors the Commission representative to the troika, Horst Reichenbach the leader of the task force and Georgette Lalis, who is in charge of the task force in Athens.

A major issue is that the German nationality of two of the trio is grist to the mill for caricatures in the "Bismarck meets Socrates" genre.

For proof that this can be a problem, consider the awkwardness prompted by the fact that the fiscal expert expedited by the Commission just happens to be a Greek speaking German. "Don’t mention it too often", suggest his colleagues, who are clearly pleased to have already recovered 500 million euros in unpaid taxes in 2011.

Georgette Lalis, a Greek, senior European civil servant appointed by Brussels to run the task force in Athens is the key link in the chain. The affable, plain speaking 50-year-old has her offices on the seventh floor of a mournful tower block in the residential neighbourhood of Panormou. Her boss, Horst Reichenbach, travels with a bodyguard. She does without. He tends to be evasive when answering questions. She prefers to be direct.

From 2001 to 2004, she was given leave of absence by the EU to take up a post at the head of the Land Registry in Athens, an institution whose labyrinthine records were implicated in massive tax evasion which is now being reformed under the leadership of officials from the Netherlands:

"In Greece, Europe has run up against problems between the Greek state and its citizens", she explains. One of her team chimes in: "No one ever told the people that three generations would have to pay for the sudden increase in wealth in the 1990s and the noughties. We are the ones who have to present the bill."

The other difficulty for the Eurocrats charged with the financial clean-up is that they have to contend with the consequences of the Commission’s failings: in particular its reluctance to mobilise member states to "discipline" Greece when its public spending went overboard in the wake of the 2004 Olympics.

Behaving like politicians

Then there is the gullibility of the EU statistics agency, Eurostat, which was beguiled by shameful Greek tricks to the point where conspiracy theories have emerged to explain its behaviour, and the silence of European Court of Justice President Vassilios Skouris, who at one point was tipped to lead the current coalition government instead of former ECB President Lucas Papademos. It is details like these that lent credence to allegations of passive complicity.

Achilleas Mitsos is reluctant to take a position on this issue. In his handsome apartment in Kolonaki, a neighbourhood of Athens that used to be favoured by the wealthy before the nouveaux riches opted to live close to the area’s beaches, the retired Director-General of Research skirts around the issues that have been problematic for Greece since its inclusion in the EU in 1981, and more controversially since its adoption of the euro.

"It is all very complicated,” remarks our host, who speaks perfect French. “At meetings in Brussels, I often said that Greece should be subject to more supervision but… in other fields, Greece was definitely making progress," he intones, hesitating whenever he appears about to breach an unstated law of silence.

Buoyed by the money received from Brussels and cheap loans from from financial markets, the Greek “bubble” brought wealth to a certain section of the population, and boosted the careers of the Greek elite. "The Greek Eurocrats were the worst,” complains shoe importer Andreas. “They knew what was happening but they didn’t dare speak out. Worse still, many of them were proud to see little Greece make a fool of Europe. They behaved like politicians, while our politicians behaved like crooks."

And now? "We would love to see a Jacques Delors with the courage to say to the Greeks: ‘ Your borders are the borders of Europe. You are the Europe, in which your elected leaders do not deserve to participate’", remarks an EU official. But the Delors era is over. And José Manuel Barroso, the current President of the European Commission, has not set foot in Athens since the start of the crisis

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AFP


In spite of the efforts made by NGOs and the distribution of EU funds, Europe’s main minority is no better off than it was 10 years ago. A lack of appropriate supervision in Brussels, the corruption of local leaders and the indifference of national governments are at the root of the problem.

Hellen Kooijman

On International Roma Day, which falls on 8 April, the significant proportion of Europe’s 12 million Roma who live in deplorable conditions will not have much to celebrate. And poverty is not the only worry for the community.

Ethnic tensions are on the rise. In 2008, Roma camps came under attack in Italy, intimidation by racist parliamentarians is the norm in Hungary, and in September of last year thousands of Bulgarians took to the streets to chant such slogans as ‘Turn the gypsies into soap’.

Speaking in 1993, ‘Vaclav Havel prophetically remarked that “the treatment of the Roma is a litmus test for democracy”: and democracy has been found wanting. The consequences of the transition to capitalism have been disastrous for the Roma. Under communism they had jobs, free housing and schooling. Now many are unemployed, many are losing their homes and racism is increasingly rewarded with impunity.

EU role is limited

There was the prospect of some improvement at the end of the 1990s, when Central and Eastern European countries were preparing to join the EU. “Roma leaders were extremely happy”, recalls former MEP Jan Marinus Wiersma. Candidate member states brought their legislation into line with EU standards and presented ambitious plans.

However, as NGOs and Roma activists have pointed out, these initiatives turned out to be window-dressing. For example, in Bulgaria, official figures reported a surge in the numbers of Roma finding jobs.

“In practice, they were sacked after a few months”, explains Bulgarian researcher Ilona Tomova in her office in Sofia. “In the communist countries, we were practised in the art of manipulating figures. But the EU did not see this.”

Now that these countries have have joined the EU, Brussels has lost its ability to exert pressure on them points out Rob Kushen, the director of the European Roma Rights Centre in Budapest.

Moreover, the European Commission is bound by the principle of subsidiarity: “With respect to the Roma, European member states have to the most important role in the areas of education, labour, housing and health. Ours is a coordinating role”, says Matthew Newman, a spokesman for Human Rights and Justice Commissioner Viviane Reding.

However, Brussels can exert an influence on policy via European Funds. In the period 2007-2014, the Czech Republic, Romania and Slovakia each received 172 million euros earmarked for the Roma.

Member states that are home to Roma populations can also apply for funding from wider social programmes, which can tap into a total budget of 17.5 billion euros.

Slovakia received 200 million Euros for a new programme on which Roma representative Klara Orgovanova worked, along with a team of thirty people, from 2001 through 2006.

How the grant money disappeared

But when a new SMER and Slovak National Party coalition came to power in July 2006, the German magazine Der Spiegel reported that National Party leader Ján Slota suggested that the best way to tame a Roma is with “a long whip in a small back garden”.

Thereafter, the bulk of the funds were appropriated for new traffic lights, technical equipment in hospitals, and even for football clubs with no Roma members. Orgovanova and her team were sacked.

Funds have been pocketed by fake NGOs, or channeled into the salaries of highly placed corrupt civil servants, at least this is the conviction expressed by former MEP Els de Groen, pro-Roma activists and the journalists involved in BIRN, the Balkan Investigative Reporting Network.

That said, sometimes the misuse is not always intentional: grant applications are complex and require a good understanding of EU jargon.

Faced with an upsurge in racism compounded by the attempted Italian census in 2008, and, perhaps more importantly, in the wake of France’s decision to deport Roma in 2010, the European Commission has limited its criticism to arguments about violations of the right to free movement, setting aside issues of racial equality.

It is a reaction that has been deemed to be wanting by human rights organisations. According to Nele Meyer of Amnesty International, the Commission is reluctant to take further action because “discrimination and anti-gypsyism are extremely controversial political issues”.

‘The Commission cannot be a fundamental rights super cop’, says Human Rights and Justice spokesman Matthew Newman, who also points to the the “low level of absorption” of the EU subsidies intended for the Roma. “Only a proportion is requested. Roma are not a political priority.”

With regard to Romania, Valeriu Nicolae, the Roma director of the Policy Center for Roma and Minorities remarks: “For the period 2007-2013, Romania received around 230 million Euros. We have a million Roma. That is not even 20 cents per Rom per day.”

Why does the Commission not appoint a Euro Commissioner for minorities? “Member states are afraid that he or she would also take an interest in the plight of Hungarians in Romania or the Basques in Spain’, says Jan Marinus Wiersma, while Hungarian MEP Kinga Göncz raises another understandable fear. “Countries could then think: ‘Oh great, Brussels will take care of it.’”

In the wake of the dramas in Italy and France, the Union appears intent on adopting a more active approach. In April 2011, the European Council backed a resolution for an ‘EU Framework for National Roma Integration Strategies’.

Livia Jaroka – the only European Parliamentarian of Roma descent – is enthusiastic about the attention that is now being given to the socioeconomic benefits of Roma integration, because “politicians are not going to help the Roma just like that.”

However, the Commission is still relying on member states to find solutions. What that amounts to in practice was recently demonstrated by Hungary, where “the Viktor Orban government lowered the age of compulsory education, allowing Roma children to leave school earlier”, says Rob Kushen of the ERRC.

It indicates how extremely difficult it is to get something done for the Roma in the current climate. In a number of European countries, the government has to cope with a right-wing extremist opposition: and in Hungary’s case, Viktor Orban has to contend with Jobbik, a party that is openly anti-Roma. So, in spite of the fact that it is sorely needed, change will not be easy to achieve. As Kushen points out, “Democracy is also about the protection of minorities. But Orban does not seem to understand that.” It is precisely what Havel warned against in 1993.

On the web
Original article at MO* nl

Related
The Roma, Europe's pariahs

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4:15pm UK, Monday April 09, 2012

Anthee Carassava, in Greece

A powerful bomb blast has rocked the Greek capital, gutting a government building in the latest show of violence ahead of critical national elections.
No injuries have been reported after the explosion, which was triggered by a makeshift firebomb.

But police in Athens said the early-morning blast caused extensive damage to the soaring building, housing the government's Public Sector Reform Ministry.

There was no previous warning, police said. Nor has there been any claim of responsibility by a rash of extremist groups that have recently revived attacks on symbols of power and wealth after a long hiatus during Greece's debt crisis.

The blast comes less than a week after a similar attack targeted the office of Costas Simitis, a former prime minister credited with bringing Greece into to Europe's single currency fold in 2001.

Days later, a 77-year-old pensioner shot himself dead in daylight outside Parliament, saying his debts had left him no way out.



A pensioner's suicide sparked protests in Athens last week

Over the weekend mobs of militant protesters stormed a tiny television studio in northern Greece, pelting the news host with eggs and yoghurt for airing the views of far-right politicians.

Visually arresting, the grainy footage went viral on YouTube and featured prominently on international newscasts.

But in Greece, it - on top of the violence and anger gripping the country - signified something different and more telling.

"People are mad. And perhaps justifiably so after so many years of austerity," said Yiorgos Karatzaferis, the leader of a small far-right party.

"With elections nearing, though, the problem is that when voters vote in anger, when they go to the ballot box thinking 'I'll show you, you idiots', the result may prove dangerous: the next day may prove even worse than the previous."

That is exactly what is at stake in Greece's upcoming elections, the most decisive in this country's recent history.

Lucas Papademos, the technocrat prime minister leading a provisional coalition government since November, looks poised to announce the date this week. The national poll is expected by mid-May.

Unofficially, though, campaigning has already begun with political adverts making their first appearance on prime time television and politicians timidly pressing the flesh in public rallies.

Locked out of international markets, Greece has relied almost exclusively on foreign credit since its European peers and the International Monetary Union cast Athens' first financial lifeline of 110 billion euros in May 2010.



Prime Minister Lucas Papademos is expected to announce a date for elections

The exchange? A rash of tax hikes, salary and pension cuts that have pushed Europe's poorest over the edge.

Unemployment has surged to over 20%; one in five Greeks have been made homeless; crime has increased by a whopping 125% in the last year alone; and suicides, the cruellest possible toll exacted from the Greek crisis, have doubled.

"Holding elections against such a backdrop isn't wise," a senior government official told Sky News on condition of anonymity. "It's risky."

Indeed. With social resentment swelling, voters are increasingly turning to smaller, fringe parties as a way to protest, polls show. They have also started planning more demonstrations and strikes in the coming weeks.

Already this week, striking seamen prepared for a showdown with the government, vowing to keep ferries docked for two days ahead of the Eastern Orthodox Easter weekend.

The government has since been considering emergency measures.

Still, the biggest challenge will come on May 1 when traditional May Day protests are expected to morph into massive anti-austerity rallies.

"It will be a massive security drill," said a senior police official.

"We expect a lot of people out there, venting years of anger."

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Spain Confronts Crisis Threat as Rajoy Seeks Deficit Cuts

By Marcus Bensasson and Charles Penty - Apr 10, 2012 12:00 AM GMT+0100
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Spanish Prime Minister Mariano Rajoy stepped up efforts to reassure investors he can bring the country’s deficit under control as his government fights to avoid becoming the fourth euro-area member to require a bailout.

Rajoy met with his health and education ministers yesterday to discuss cuts of more than 10 billion euros ($13 billion), the Spanish government said in an e-mailed statement. The government reiterated its pledge to reduce the deficit to 3 percent of gross domestic product next year, and will accelerate its sale of stakes in lenders under government administration, according to the statement late yesterday.





Enlarge image









Mariano Rajoy, Spain's prime minister. Photographer: Jock Fistick/Bloomberg
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Spanish bonds slumped last week, with 10-year yields posting their biggest weekly gain since January, as investors’ concern mounted that Rajoy’s government may join Greece, Ireland and Portugal in requesting an international rescue. Spain’s premier spoke on April 4 of “extreme difficulty” as the country barely covered its minimum target at a debt auction.

“As a result of Spain’s challenges, sentiment towards its sovereign bonds is now the bellwether for Europe’s debt crisis,” Mansoor Mohi-uddin, chief currency strategist at UBS AG (UBSN), wrote in an e-mailed note on April 7. “If investor appetite wanes, then currency markets will start to price in either ECB rate cuts to help restore sentiment, or Madrid requires external assistance from its European Union partners.”

Rajoy’s Plans

The yield on Spanish 10-year bonds jumped 40 basis points to 5.75 percent as markets closed on April 5 in a holiday- shortened week. The Swiss franc breached the 1.20 ceiling versus the euro yesterday, only the second time the barrier has been crossed since Switzerland’s central bank introduced a currency cap on Sept. 6. The level was last surpassed on April 5.

Rajoy will spell out his government’s planned reforms to a meeting of People’s Party parliamentary deputies tomorrow, an official in the government’s communications department who asked not to be named in line with its policy, said in a phone interview yesterday.

Spanish borrowing costs have risen since Rajoy announced on March 2 that his government wouldn’t comply with the 4.4 percent deficit target the previous administration had set with the European Union. Euro-region finance ministers then settled on a target of 5.3 percent of gross domestic product for Spain.

Enduring Austerity

The government forecasts Spanish public debt will surge to a record 79.8 percent of GDP this year as it imposes the deepest austerity in at least three decades.

“Given that Spain is trying to tighten fiscal policy at the same time as it is in a recession and its housing market is still declining, it is not surprising that observers are so skeptical,” Jim O’Neill, chairman of Goldman Sachs (GS) Asset Management, said in an e-mailed note.

Charles Dallara, head of the Institute of International Finance who negotiated a Greek debt swap on behalf of private bondholders, said Europe is focusing too much on austerity, threatening its economic recovery.

“We are calling for a rebalancing of some aspects of the current strategy in Europe to ensure that there is not an excess of near-term austerity,” Dallara, managing director of the Washington-based IIF, which represents more than 450 firms, said yesterday in an interview on Bloomberg Television’s “Surveillance Midday” with Tom Keene.

Spending Clampdown

Spain’s central government is seeking to tighten control on spending by the nation’s autonomous regions, including health care and education. In the “coming days” it will coordinate with the regions to adapt budgets to the goal of reducing their deficits to 1.5 percent of GDP this year, the government said in its statement yesterday.

Investor concerns about recession in Europe, the “vicious circle” it might cause and also the state of Spanish regional government finances are behind the surge in Spain’s borrowing costs, Economy Minister Luis de Guindos told Cadena Ser radio station yesterday.

His comments came after an interview in Frankfurter Allgemeine Zeitung published on April 7 where he said public sector reforms, “especially health care and education,” were next on the government’s agenda as it tries to cut costs and overhaul the euro region’s fourth-biggest economy.

“We have to have a debate between the central government and the autonomous regions and think about whether in the current situation we have to provide all the health services for free to a gentleman who earns more than 100,000 euros,” de Guindos said yesterday. “It is a very important debate in which the future of the quality of health care in Spain is in play.”

Crisis Toolbox

With threat looming of a resurgence of the region’s sovereign debt crisis, Dallara of the IIF called on officials to enhance their crisis-fighting tools. This is “essential for reassuring markets that the euro area has the resources and commitment to assist member countries facing contagion risks and difficulties in accessing capital markets,” he wrote in a letter prepared for next week’s meetings of the International Monetary Fund and of the World Bank.

Euro-area finance ministers last month decided that 500 billion euros ($656 billion) in fresh money would go along with 300 billion euros already committed to create an 800 billion- euro defense against the two-year-old crisis. The decision stopped short of a bolder step considered before the meeting.

The region’s turmoil has put renewed pressure on banks from Europe’s highly indebted states. The European Central Bank’s financing for Portuguese lenders rose to a record in March, the Bank of Portugal said yesterday. ECB financing climbed to 56.3 billion euros from 47.6 billion euros in February. ECB financing previously peaked at 49.1 billion euros in August 2010.

The announcement came after the Bank of Italy on April 6 said its country’s lenders also borrowed the most on record from the ECB in March, with Italian banks taking up almost a quarter of the funds offered by the euro area’s central bank. They borrowed 270 billion euros, according to the statement.

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10 April 2012 Last updated at 09:46 Share this pageEmail Print Share this page



The Belgian government has told striking public transport workers that 400 extra police officers will be deployed in Brussels, after a transport inspector was beaten to death.

The assault on Saturday triggered a shutdown of the capital's metro and bus network over the Easter weekend. The system remained paralysed on Tuesday.

The inspector was assaulted at the scene of a collision involving a car and a bus. He died of head injuries.

The suspected assailant was arrested.

Brussels is the headquarters of the European Commission and Nato and is a magnet for many international organisations.

The assailant is reported to be the car driver, a 28-year-old, who allegedly punched the inspector in the face.

The victim has been named as Iliaz Tahiraj, 56, an Albanian-origin inspector for the STIB transport network with 29 years' service.

Hundreds of his STIB colleagues marched through central Brussels on Monday to show their outrage over his death.

The pledge of extra security came after talks on Monday between officials from the federal and Brussels governments, the STIB management and transport unions.

Belgian Interior Minister Joelle Milquet and Brussels Prime Minister Charles Picque took part.

In addition to 400 extra police officers the authorities plan to create 50 new posts for Brussels transport security officers.

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There is growing concern over the civil unrest of those Countries experiencing genuine hardship because of the imposed austerity.

Charles Dallara of the IIF says the fiscal policy is too severe and an increase in the firewall will be necessary. He recommends that at the coming IMF
meeting , there should be a more balanced fiscal policy, Ease pressure on the Banks regarding liquidity and a bigger Firewall.

The Worlds richest have lost $9 Billion on investments in Europe and with the recent forced write down of 76% on the Greek Bonds many Investors,
private and Companies are wary.

Bank of America spokesman says the Eurozone has lost all credibility with both Governments and Investors.

Spanish crisis rattles the market and investors are fleeing to French and German Bonds.

Italian, Spanish and Portugese yields are rising.

Goldman Sachs says the Spanish problem is hard to achieve, not least because of Regional autonomy.

U.K. and European Stocks open lower and the Euro falls in value which benefits Germany which has a current account surplus but refuses to purchase
from other European Countries even though their Export Trade is still doing well.

Sarah Quinlan , QAM Founder thinks investors are pulling out and going home. The loss on the Greek Bonds has made them nervous. Her view is 27
Countries have different goals and are not pulling together and until these issues are resolved, no more entries to the EU should be considered.

Draghi will have to deal with resistance from Germany over the lending to Banks because it creates inflation.

[Panda]

The most-accurate foreign-exchange forecasters say the euro will slide as austerity-driven spending cuts from Spain to Italy reignite debt turmoil and drag the region into recession.

Nick Bennenbroek, head of currency strategy at Wells Fargo & Co., who topped the list for the fourth time out of the past six quarters according to data compiled by Bloomberg, expects the euro to drop more than 5 percent to $1.24 at the end of 2012. Westpac Banking Corp., which had the second-lowest margin of error, predicts $1.26.












Euro notes in denominations of fives and tens are arranged for a photograph in London. Photographer: Simon Dawson/Bloomberg





Play Video


April 10 (Bloomberg) -- Henry Dixon, co-founder of Matterley, talks about the European Central Bank's long-term refinancing operations and the outlook for mergers and acquisitions in the U.K. Dixon, speaking with Mark Barton on Bloomberg Television's "On the Move," also discusses AstraZeneca Plc Chief Executive Officer David Brennan. (Source: Bloomberg)





Play Video


April 10 (Bloomberg) -- Kit Juckes, head of foreign-exchange research at Societe Generale SA, discusses Bank of Japan monetary policy, the U.S. economy and the outlook for the euro. Juckes, speaking with Caroline Hyde on Bloomberg Television's "First Look," also talks about JPMorgan Chase & Co.'s derivatives trading practices. (Source: Bloomberg)
.
The euro’s biggest quarterly gain in a year will prove fleeting. The economy faces “downside risks” amid rising Spanish and Italian borrowing costs, European Central Bank President Mario Draghi said on April 4. The benefits of record ECB loans to local banks, which helped drive yields down from euro-era records, are fading and the region faces recession, while the U.S. expands at the fastest pace in two years.

“One of the reasons the euro gained was that we saw some progress in the European debt crisis and some improvement in European bond markets, and we’re near the end of that,” Bennenbroek said in a telephone interview in New York on April 2. “The euro will weaken further as slow to no growth weighs on sentiment and as ECB actions continue to weigh.”

The euro weakened 0.3 percent to $1.3064 at 11:11 a.m. London time, and slid 0.7 percent to 106.10 yen. The dollar fetched 81.19 yen from 81.49 yesterday.

First Quarter Gain

The 17-nation currency strengthened 2.95 percent in the first quarter as the European Union arranged a second bailout package for Greece after the nation negotiated a debt-swap with its private-sector investors, and as the ECB provided a record amount of loans to the region’s banks. The actions reduced investor concern that the crisis would spread.

Austerity measures across the region are driving the economy into a recession, spurring concern the ECB may introduce further easing measures, according to Richard Franulovich, a senior currency strategist at Westpac in New York.

“Europe’s going through deleveraging, austerity, and growth is very poor,” he said in an April 3 telephone interview. “So you have a situation where the ECB could be easing and the Fed is basically on hold, and that should mean interest-rate differentials move in the dollar’s favor.”

Rise to Resume

The next three most-accurate forecasters see euro gains continuing. Jane Foley, a London-based senior currency strategist at Rabobank International and the fifth-most accurate, said the euro may rise as the Federal Reserve keeps interest rates at a record low and the U.S. moves to cut its budget deficit after presidential elections in November.

Employers in the U.S. added 120,000 jobs in March, the fewest in five months, Labor Department figures showed on April 6 in Washington. The March increase was less than the most pessimistic forecast in a Bloomberg News survey, in which the median estimate called for a 205,000 gain. Unemployment declined to 8.2 percent, the lowest since January 2009, from 8.3 percent.

“The labor market recovery is still slow and the unemployment levels very high,” Foley said in a telephone interview on April 3. “If there is any degree of fiscal cleanup after the election, then that will be a drag on growth and monetary policy will have to remain accommodative for longer.” The euro will probably trade at $1.35 in nine months and climb to $1.40 a year from now, she said.

JPMorgan Chase & Co. and Oversea-Chinese Banking Corp., the third and fourth most-accurate forecasters, predict the euro will appreciate to $1.36 and $1.35, respectively, by year end.

Euro Support

“We will not be explicitly expecting another meltdown” for the euro, Emmanuel Ng, a currency strategist at OCBC in Singapore, said by telephone yesterday. “We still expect risk for the euro to be on the downside.” Ng said he predicts the euro will be at $1.30 at the end of June.

Europe’s common currency will remain supported as Spain and Italy are unlikely to require financial aid and the U.S. isn’t growing fast enough for the Fed to start raising interest rates, according to John Normand, head of currency strategy at JPMorgan, the biggest U.S. lender.

“There are enough mechanisms to allow countries like Spain and Italy to retain market access even if they may have to roll over debt at higher interest rates for a period,” London-based Normand said in a telephone interview April 5. “It’s difficult to look at the balance of data emerging from the U.S. and conclude that the Fed will prepare the ground for rate hikes.”

ECB Stimulus

While the Fed has said it would keep its range for overnight bank lending at zero to 0.25 percent through 2014, it’s holding off on increasing monetary stimulus unless the U.S. economic expansion falters or prices rise more slowly than its 2 percent target, according to minutes of the central bank’s March 13 meeting released on April 3. Fed Bank of Richmond President Jeffrey Lacker said a day later that U.S. economic growth next year may warrant a rate increase before 2014.

Europe’s emergency stimulus won’t end soon, Draghi said at a press conference after the ECB’s April 4 meeting. It’s premature to talk about an exit strategy, he said, adding that inflation will remain contained in the medium term.

The euro area is headed for a contraction of 0.4 percent this year, after 1.5 percent growth in 2011, according to the median estimate of 20 economists in a Bloomberg News survey. That compares with growth of 2.2 percent in the U.S., the fastest since 2010, as forecast in a separate survey.

Interest Rates

Strategists expect the ECB to keep its main refinancing rate at 1 percent through at least the third quarter of next year, while the Bank of Japan’s main rate will be 0.1 percent by the end of that period, separate surveys show. The BOJ kept its key rate and stimulus programs unchanged after a meeting today.

Investors may have overestimated developed nations’ readiness to raise rates and reverse loose monetary policy, according to Royal Bank of Canada, which had the most accurate dollar-yen forecast.

“There’s an unrealistic expectation of how early central banks will tighten in the world outside Japan,” Adam Cole, global head of foreign exchange strategy in London at the firm’s RBC Capital Markets unit, said in an April 4 telephone interview. “If the market moves to reflect that and we see two- year yields in the U.S. and the rest of the world come down back toward Japanese levels, the upward pressure on the yen will reemerge.”

Yen Forecasts

Two-year yields on Japanese bonds are at 0.11 percent, just below the one-year average of 0.15 percent. The difference between the Japanese yields and similar-maturity U.S. yields is 0.20 percentage point, up from as low as 0.08 percentage point this year in January. The spread between the Japanese securities and German two-year yields was 0.02 percentage point, after the yields were almost the same earlier this year.

Cole said the yen will appreciate 10 percent to 73 per dollar by the end of the year and by 15 percent to 93 per euro.

Public borrowing in Spain will balloon to a record 79.8 percent of gross domestic product this year, according to the 2012 budget that the government presented to parliament April 3, as the nation finances a deficit that was almost three times the euro-area limit last year.

Spain’s 10-year bond yield has jumped about 85 basis points, or 0.85 percentage point, since Prime Minister Mariano Rajoy said on March 2 that the government budget deficit would miss the 4.4 percent of GDP target the previous administration had agreed to with the EU. Spain agreed to set the target at 5.3 percent March 12.

Borrowing Costs

The additional yield investors demand to hold Spanish 10- year bonds instead of similar-maturity German bunds, the region’s benchmark government securities, climbed to more than 400 basis points last week, reaching the most since Nov. 30.

Borrowing costs for Spain are at December levels, before the ECB’s unlimited three-year bank loans were first allotted on Dec. 21. Some of the 1 trillion euros taken in the longer-term refinancing operations, or LTROs, has been recycled into government debt, which helped shave as much 1.44 percentage points off the 10-year yield before it began to rise in March.

Italian Prime Minister Mario Monti faces strikes against austerity measures and his labor-reform plan, which allows companies to fire workers for economic reasons without letting courts reinstate them, is dividing his ruling coalition. The Democratic Party, which has supported the prime minister’s four- month-old government, has pledged to change the rule in parliament, even as Monti has said he won’t permit it.

Short Euro

Futures traders have been short the euro, or betting on a decline in the common currency, for 32 straight weeks, the longest such period since 2010.

The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with those on a gain -- so-called net shorts -- was 79,480 in the week ended April 3. Net longs were 99,516 in May 2011, as the Fed was ending its $600 billion bond-buying program.

“The macro picture is slowly but surely turning more compelling for the dollar,” said Westpac’s Franulovich. “The U.S. growth picture is much more secure than Europe’s.”

Strategists were ranked according to the accuracy of their estimates for 13 currency pairs in each of six quarters beginning with the three months ended Dec. 31, 2010. To test long-term accuracy, Bloomberg Rankings added one annual forecast, which was made in March 2011 for March 2012.

Only firms with at least four forecasts for a particular currency pair were ranked, and only those that qualified in at least eight of 13 pairs were included in the ranking of best predictors. Thirty-one firms qualified.



.

[Badboy]

THE WORLD'S RICHEST HAVE LOST $9BILLION IN EUROPE
WHO ARE THEY?
AS AN AFTERTHOUGHT,PERHAPS THE WORLD'S RICHEST SHOULD LOST MORE

[Panda]

THE WORLD'S RICHEST HAVE LOST $9BILLION IN EUROPE
WHO ARE THEY?
AS AN AFTERTHOUGHT,PERHAPS THE WORLD'S RICHEST SHOULD LOST MORE

Here's the top twenty Badboy......there were 100 on the list, too many to copy and paste.



Carlos Slim Helu














2




Bill Gates

1955

Businessperson, Entrepreneur, Chief Executive Officer, Programmer, Philanthropist, Creative Director More

Seattle

United States of America






3




Warren Buffett

1930

Businessperson, Entrepreneur, Philanthropist, Investor

Omaha

United States of America






4




Bernard Arnault

1949

Businessperson

Roubaix

France






5




Larry Ellison

1944

Businessperson, Entrepreneur

Manhattan

United States of America










6




Lakshmi Mittal

1950

Chief Executive Officer

Sadulpur

India






7




Amancio Ortega














8




Eike Batista

1957

Businessperson, Entrepreneur, Chief Executive Officer

Governador Valadares

Brazil






9




Mukesh Ambani

1957

Businessperson, Chief Executive Officer, Managing Director

Aden

India






10




Christy Walton

1955

Philanthropist



United States of America






11




Li Ka-shing














12




Karl Albrecht

1920

Businessperson, Entrepreneur

Essen

Germany






13




Stefan Persson

1947

Businessperson



Sweden






14




Vladimir Lisin

1956

Businessperson

Ivanovo

Russia






15




Liliane Bettencourt

1922

Philanthropist

Paris

France










16




Sheldon Adelson

1933

Businessperson, Entrepreneur, Chief Executive Officer, Philanthropist, Real estate developer More

Dorchester

United States of America






17




David Thomson

1856

Politician



Australia






18




Charles Koch














19




David Koch

1956

Businessperson, Journalist, Presenter, TV Journalist, Business Analyst

Australia

Australia






20




Jim Walton

1958







Note , there are no British names.

[Badboy]

THANKS FOR THAT INFO,PANDA

[Panda]

Member States



Spain

Mariano Rajoy loses some of his shine


10 April 2012
El Mundo Madrid Comment



The Spanish Prime Minister is bringing in one austerity measure after the other to stave off the economic collapse of his country. But after seven years in opposition, he is finding it difficult to be entirely credible and effective, three economists argue.

Jesús Fernández-Villaverde | Luis Garicano | Tano Santos

Spain is at a key moment in its history. With some debt markets getting nervous once again, a Budget for 2012 that has convinced few and an economy in recession, we are headed for a bail-out that must be avoided at all costs, because the consequences would be extremely dire.

First, because those who would intervene are our creditors and would therefore not have our best interests in mind. Second, the bailout would impose an even harsher fiscal adjustment. Third, because while we know how to get into these interventions, we don’t know how to get out of them; the bail-outs lead to a flight of private capital and a drying up of the liquidity of a country. And fourth, because it won’t work: the interventions of the IMF are based on currency devaluations and a subsequent rise in external demand. Since this is not possible in the eurozone, the interventions in Greece and Portugal haven’t improved anything.

So what went wrong? How have the dark clouds that went away temporarily after the December action by the ECB rushed back in so quickly? The answer is simple but devastating: the new government, though it has undertaken a decisive labour reform, has failed to tackle the two fundamental problems undermining our credibility: the financial sector and budgetary policy.

Autonomous regions continue to bleed out

The financial system is in a critical state. We have failed resoundingly to convince the capital markets to refinance our banking liabilities. Spanish banks can only issue credits with government guarantees and are only staying afloat thanks to the liquidity provided by the ECB. Their logical reaction to the new capital requirements has been to tighten credit, which has choked off many companies.

Fiscal policy has been suffering for four reasons. The first is the absurd dance of the deficit figures that we have suffered from since autumn and that has led observers to question the true status of our public finances.

The second is the intolerable delay in bringing in the budget. Not only has the grace period of 100 days that was granted to the new government been squandered but, in bringing in the budget just after the elections in Andalusia, we have made it clear that, in Spain, urgency takes second place to politicking.

The third is that these budgets have fallen foul of years of opposition based on populism. As promises were made not to cut pensions and officials’ salaries and not to raise the VAT, the budget has no choice but to cut back on public investment and to try out a tax amnesty. But markets are not deceived by balancing acts. They grasp that these budgets will worsen our fiscal situation over the medium term and that they demonstrate the inability of our leaders to face up to the difficulties.

And finally, the finances of the autonomous regions continue to bleed out and no one believes that those regions will really cut €27 billion from their budgets in 2012.

Mistaken populism

What to do? First, the Government should forget about the elections, whether they are in Galicia, the Basque regions or anywhere else, and they should pack the pollsters off to other tasks. The absolute priority is to sort out our lack of credibility.

Second, to restore the flow of credit as soon as possible. This will be achieved only if confidence returns to the banking sector and the banks can gain access to the capital markets without government guarantees or the liquidity from the ECB. A clear alternative is to use the European Financial Stability Fund to recapitalise the financial system, which does not imply any intervention. Spain has sufficient cause to ask for different treatment than other less responsible partners have received.

Third, to develop a multiyear fiscal consolidation plan that is credible, calm and systematic. Regarding spending, this plan should cut the salaries of officials, thin their ranks and freeze pensions, while budget items devoted to education, productive investments and R & D should be maintained where possible.

Regarding revenues, this plan should introduce a VAT rise staggered over the next five years. Regarding institutions, the plan should create an independent fiscal council and radically rethink the autonomous regional financing modes to give us a rational state model. It is unacceptable that the regulations discussed by the European Commission give the Commission more power to control the Government of Spain than the Spanish government itself has to deal with its fractious autonomous regions.

After four years of crisis in which the governments of Spain, this one and the previous one, have been dragged along by events, it may already be too late to change things. But it’s still worth trying because we are certainly facing what may be our last chance to straighten out this interminable crisis. For that, though, we need a radical change of attitude that starts with abandoning the mistaken populism of the last two years of the opposition to the Zapatero government.

[Panda]

REUTERS - President Nicolas Sarkozy pledged to achieve a budget surplus for the first time since 1974 and cut France’s swelling debt if re-elected on May 6, warning that his Socialist rival would lead the country towards the fate of Greece or Spain.

Presenting an austere manifesto 17 days ahead of the first round of voting on April 22, Sarkozy said he would put a “golden rule” to parliament in July that would commit France to balance its budget, as promised to European partners.

Struggling to beat Socialist Francois Hollande and secure a second term, Sarkozy is increasingly playing on voters’ fears about the economy to portray his rival as an unsafe pair of hands at a time when Europe is still in crisis.

“Some countries in Europe are on the edge of a precipice today. We cannot refuse to make the historic choice of competitiveness, innovation and reducing public spending,” said the conservative Sarkozy, who trails Hollande in polls f









President Nicolas Sarkozy on pension reform










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or the run-off.

“To depart even slightly from the commitments France has made would mean a crisis of confidence,” he said.

In another dig, Sarkozy said the speed of market reactions today meant that whereas it took the last Socialist president, Francois Mitterrand, two years to plunge France into crisis in the 1980s, the left today might manage it in just two days.

Polls show that stubborn unemployment and stagnant household income are voters’ top worries today, far ahead of issues such as crime and immigration which got Sarkozy elected in 2007.

Sarkozy, who himself presided over an explosion of the debt and deficit after the 2008 financial crisis, said his programme would generate a budget surplus of 0.5 percent of gross domestic product in 2017 after achieving balance in 2016, and public debt would fall to 80.6 percent from a peak of 89.4 percent in 2013.

Sarkozy called for a mass rally of the “silent majority” to support him on Paris’ central Place de la Concorde on April 15 - a week before the first ballot.

“Retake the Bastille”

He seemed to be trying to emulate hard-left candidate Jean-Luc Melenchon, who has stormed to third place in some opinion polls after leading a march of tens of thousands of leftists to “retake the Bastille” last month, symbolically re-enacting one of the high points of the 1789 French Revolution.

Pre-empting Sarkozy’s attack on his spending plans, Hollande told Canal+ television early on Thursday that if elected he would immediately order an audit of public finances and could freeze some spending plans.

The battle over debt and deficit came after a cover story in the Economist weekly en









President Nicolas Sarkozy pledges a 'strong France'










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titled “France in Denial” made waves in political circles by accusing the two rivals of lacking serious ideas for tackling the country’s economic and fiscal problems.

Sarkozy said Hollande’s plan to lower the retirement age to 60 from 62 for people who started work at age 18 or younger showed it was the Socialist who was in denial.

“That proposal alone is a negation of the existence of the crisis, and the existence of an outside world,” he said.

Earlier, Foreign Minister Alain Juppe, tipped as a possible prime minister if Sarkozy wins, said Hollande’s economic and European plans were an “explosive cocktail” that could derail Europe’s exit from its debt crisis.

“Explosive cocktail”

“The cocktail of these two measures, the immediate spending without savings, in other words slippage in our public finances, and secondly, throwing the EU treaty into question, could cause the system to explode,” Juppe said.









President Nicolas Sarkozy: A balanced budget by 2016










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Latest polls show Sarkozy just ahead or level with Hollande in round one, with Melenchon edging ahead of far-right candidate Marine Le Pen for third place and centrist Francois Bayrou sliding to fifth. But all show Hollande ahead with at least 53 and up to 56 percent support for the decisive second ballot.

To win, Sarkozy needs centrist and far-right voters to rally behind him in round two, but surveys show many of those people will give their runoff votes to Hollande.

The harsh language from Sarkozy’s camp kept up a long-running exchange of barbs. Fuming after Sarkozy recently told a reporter Hollande was “nul” - a word that translates as “useless” or “pathetic” - the Socialists derided him for taking so long to produce a manifesto.

“It’s not very serious,” said Socialist Party chief Martine Aubry, noting Hollande presented his programme in January.

“Sarkozy’s programme is his record of the past five years, only worse,” said Hollande, who asserts that the wealthy rather than the needy benefited most from tax giveaways since 2007.

















The Socialist, who wants to hire 60,000 school staff and create 150,000 state-aided jobs, said he hoped to recruit 4,000 school support staff before the new academic year in September.

[Panda]

Spain reminded the market that it would not meet it's target which is why bond yields are higher. The Spanish regions may be forced to accept the
budget by relinquishing their autonomy.
Spanish Banks have enormous difficulty due to exposure to the Property bust .
Spanish Bond yields nearing 6% and Spanish Banks have lost E1.6 Billion on yields.


The ECB is holding Bonds for all these vulnerable Countries and the Bundesbank is critical of the prospect these Bonds will not be repaid.

The outcome of the upcoming Greek Election may be fraught. There are several small which will gain seats which may make it difficult to get austerity
plans accepted. The question of immigration has been raised and it is suggested illegals should be rouinded up and deported.France has largestFinancial debt and Sarkozy promises 86% GDP and rising will be reduced. He says he would raise the 35 hr working week . Lawmakers are rushing to implement reversal of austerity cuts prior to the forthcoming Election. Talk of deporting illegal immigrants.

Italy is selling E11 short term debt .


Interesting to note that Apple has earned E33 Bln in the last year, more than Greece, Spain and Portugal put together who earned E32 billion.

Also interesting to note that as the Euro Countries are facing massive problems they are now looking to round up illegals and deport them . Even Britain,
faced with two Jails housing Illegals awaiting trial after 6 years has vowed to speed up the process.

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