Re: New EC Thread

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19 April 2012 Last updated at 10:14


Spain's borrowing costs rose at a debt auction on Thursday, but it managed to sell all of the bonds it was offering.

The 10-year bonds were sold at a yield of 5.743%, up from 5.403% when the bonds were last sold in February.

The rate for two-year bonds dropped slightly to 3.463% from 3.495% in October.

Spain sold all the 2.54bn euros ($3.33bn; £2.08bn) of bonds it was offering, with demand higher than at the previous sale.

"Overall, then, a reasonable set of results which will go some way to allaying fears the domestic bid [demand] for Spanish bonds has dried up," said Richard McGuire, rate strategist at Rabobank.

But he added that: "This support does come at a price".

There had been worries about this week's bond auctions after the interest rates on existing 10-year bonds rose above 6% on Monday.

Borrowing costs above 6% are considered by many analysts to be unaffordable in the long run.

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China will lend $200 Billion to the IMF Japan is also lending some. Russia wants reform of the IMF which says it has received $ 320 billion in promises,
not enough for a larger Firewall, especially if Spain needs a bail-out.

Spanish Bonds sold this morning reached the maximum target but with a slightly higher yield. Analyst says the Genie is out of the bottle now with
regard to Spain and it will probably need a bail-out.

France has sold $10.5 million Bonds this morning.

Tensions are rising with regard to Spain and the IMF says a bail-out is likely.

France is jittery because of the Election and Hollande promises that if he is elected he will give a rise to State workers.

Germany's economy is gaining momentum and may be asked by the IMF to contribute more for the Firewall.

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A Studio discussion says Merkel is to attend a meeting of the IMF looking for more contributions. Apparently the Chinese contribution of $200 million
is not confirmed , South Korea will contribute, the U.S.A. will not contribute any more. Goldman Sachs says this is not a Sovereign debt problem, it is a European problem and it should be sorted out by them.

Apparently the IMF has a pledge of $400 Billion which is quite insufficient for a firewall especially since it is looking increasingly likely that Spain will be
requiring a bail-out .

Analyst Gallo from Merrill Lynch says European Banks need more Capital , especially Spain ..... Spanish Banks have a 48% decrease in Home values .
The only Spanish Bank which has it's head above water is Santander . It is becoming increasingly likely that Spain will need a bail-out and possibly
Portugal and Spain will need help.

Apparentlly, China, South Korea and Japan will want their pound of flesh for lending the IMF , probably an opening up of trade in Europe and more seats
on the IMF and World .

It is not yet known whether Russia has made a contribution but has made it's views known that it wants reform of the IMF. Traditionally, the head of
IMF is European and World Bank by the U.S.A.

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19 April 2012 Last updated at 16:52 Share this pageEmail Print Share this page
The European Parliament has adopted a controversial bill clarifying US access to personal data about airline passengers in the EU.

MEPs agreed by 409 votes to 226 to let the US Department of Homeland Security see data on the Passenger Name Record (PNR), under strict controls.

Supporters say this is a vital step in the fight against terrorism.

But some fear information could be used for other unspecified purposes which could affect civil rights.

The agreement applies to airlines operating flights between any of the 27 EU countries and the US.

It covers not only European airlines but also any carriers that are "incorporated or storing data" in the EU and operating flights to or from the US.

The new agreement replaces a provisional 2007 EU-US deal, under which PNR data is already transferred to the US authorities.

But that deal was renegotiated, under pressure from the European Parliament, which insisted on firmer privacy safeguards.

The European Commission, which drafts EU law, says the new accord does provide more legal certainty and privacy safeguards.

Anti-terror monitoring

The PNR information includes names, addresses, credit card and phone numbers, but in some circumstances may also include sensitive data on an individual's ethnic origin, meal choices, health, political views or sex life.

The US authorities say they will "employ automated systems to filter and mask out sensitive data from PNR".

Sensitive data "could be used in exceptional circumstances when a person's life is at risk", a European Parliament statement said.

Such data would be accessed only case-by-case and would be permanently deleted 30 days after receipt unless needed for a specific investigation.

The deal says PNR data will be used exclusively to combat terrorism or fund-raising for terrorism, as well as trans-national crimes that incur a jail sentence of three years or more.

Although airlines already collect many details on passengers, from phone and credit card numbers to meal preferences and medical conditions, now they will transfer that data to the US Department of Homeland Security.

Privacy concerns

The BBC's Imogen Foulkes in Strasbourg says many questions remain about how the information will be used, how long the US will keep it, and who else might have access to it.

Some MEPs fear the deal sets a precedent and ask how the EU would respond if China or Russia asked for the same information, our correspondent says.

The European Parliament has approved a PNR deal with Australia and is negotiating one with Canada.

The deal approved on Thursday, which took several years to negotiate, says any passengers who believe their data has been misused will have access to US justice to seek redress.

PNR data will be stored in an active US database for up to five years. After the first six months all information which could be used to identify a passenger will be masked out.

Some MEPs say the proposals leave too many unanswered questions, such as how will the US use this information, how long will it keep the data and who will have access to it?

Dutch Liberal-Democrat MEP Sophie in 't Veld was involved in drafting the proposals but voted against the bill.

"The results of the vote show clearly that there are very strong reservations against this agreement. However, the US made it very clear that a 'no' vote would be answered by suspending visa-free travel to the US," she said.

"Many colleagues - understandably - did not want to make this sacrifice. But it is highly regrettable that the fundamental rights of EU citizens have been bargained away under pressure."

The US ambassador to the EU, William E Kennard, said the vote showed a joint EU-US "commitment to the security of the travelling public".

He said it would "provide legal certainty for airlines and assure travellers that their privacy will be respected".

According to British Conservative MEP Timothy Kirkhope, PNR data was "instrumental" in capturing collaborators of the 7 July 2005 London bombers and the 2008 Mumbai terror attackers.

He said PNR data had also "led to the capture of dozens of murderers, paedophiles and rapists" and "95% of all drug captures in Belgium and 85% in Sweden are caught using PNR data".
Your comments

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8:42pm UK, Thursday April 19, 2012

Ed Conway, economics editor

Christine Lagarde has issued a personal appeal to George Osborne to provide extra funds for the International Monetary Fund.
The Fund's managing director, who warned that there were "dark clouds on the horizon" for the world economy, said "it is in their interests" that Britain provides extra bail-out cash.


The UK is there for international grave situations. It's always been there. It's always been a very loyal partner when it's tough. But it's in their interest - because if the key partners of a country like the UK are in very bad shape they are bad clients.

Christine Lagarde, IMF chief
In an interview with Sky News, she said that she had now raised $320bn of the $400bn extra resources she wants to bolster the Fund by, but added: "We have more [funds] in the pipeline. They will be announced in the coming days and I hope that by the end of the spring meeting that we have reached critical mass."

She added that it was "in [Britain's] interests" to provide more resources for the fund.

"The UK is a founding father of the IMF. John Maynard Keynes was one of the two patrons. And the UK is there for international grave situations," she said.

"It's always been there. It's always been a very loyal partner when it's tough. But it's in their interest - because if the key partners of a country like the UK are in very bad shape they are bad clients. They can't pay their bills. They can't trade properly. And it's not in the interest of the UK to have a weak euro."



George Osborne is expected to pledge extra money to the Fund this week

While many expect George Osborne to pledge extra money to the fund this week, Britain is still one of the few remaining hold-outs for the new money-raising round - the proceeds of which may be used in future euro bailouts.

The last time Mr Osborne went to Parliament to raise fresh IMF bailout funds, it triggered a Conservative backbench revolt.

Should the UK have to provide more than a further £10bn, the Chancellor would have to return to Parliament for permission.

Mme Lagarde said that she wanted the euro bailout funds to be able to channel money directly to troubled Spanish banks, rather than doing it indirectly through the country's government.

She said: "Spain is dealing with its issues. We wish it [recapitalisation] could happen more directly between the European pool of money rather than have to be channelled through the sovereign."

The comments come amid growing worries that the country, which is facing borrowing costs of over 6%, may need a bailout.

The fund has never lost its members' money in its previous bailouts, but given the scale of the current sovereign debt crisis, some economists suspect this could happen to it for the first time.


The captain of the ship has to stay on board until the last moment - and I'm not suggesting our boat is in bad shape. It's in pretty good shape actually, and I'm determined to do the job.

Christine Lagarde, IMF chief
She refused to rule out the possibility of this occurring this time around, but added: "Our job is to look at risks. So when we put in place a programme we also look at mitigating the risks. And we don't like to have a huge concentration of risks..."

She continued: "Clearly the eurozone is a centre of concentrated risk which is why it justifies fully the burden sharing approach that we've had and that we'll continue to insist on having and the risk mitigation policy that I've just mentioned."

Asked whether she would consider resigning if the IMF were to lose money, she said: "Well that's an interesting proposition. I tell you something - we never leave the table of negotiations with our members and I would be the last one to leave the table.

"The captain of the ship has to stay on board until the last moment - and I'm not suggesting our boat is in bad shape. It's in pretty good shape actually, and I'm determined to do the job, thank you."

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Ed Conway
April 19, 2012 7:53 PM

Recommend post (0) Here, for those who like these things, are the full quotes from our Christine Lagarde interview earlier today.

The captain stays with the ship


Given it’s the centenary of the sinking of the Titanic, the choice of metaphor was probably a little unfortunate – but the message is clear nonetheless. Christine Lagarde is determined to do everything she can to ensure the International Monetary Fund doesn’t lose money on its euro bailouts.

When I asked her whether she would consider resigning if the Fund lost money, the IMF managing director said:

Well that’s an interesting proposition! I tell you something- we never leave the table of negotiations with our members and I would be the last one to leave the table. You know, the captain of the ship has to stay on board until the last moment. And I’m not suggesting our boat is in bad shape. It’s in pretty good shape actually, and I’m determined to do the job.

A fuller (but smaller) handbag

In Davos in January, Mme Lagarde brandished her handbag on stage and said she was on a mission to fill it – in other words to persuade IMF members to provide a bit more cash in case of future crises. I asked her how full that bag was now.

We are Half-way through, a little more than that actually. We’ve actually formally started a few days ago. And at this point in time, thanks to obviously, the eurozone, Japan, the Nordic countries, Switzerland, we are at 320 billion dollars, which is not bad, not bad at all. And we have more in the pipeline. They will be announced in the coming days and I hope that by the end of the spring meetng that we have reached critical mass.

Q: But isn’t that $400bn target a diminished ambition from the previous target [of $600bn]?

We have adjusted our target in view of the actual risks. And if you remember we did a risk assessment back in December. And in Dec we had lots of big clouds on the horizon. We had financing needs for two years. We had few measures taken by Italy, Spain, Greece.

So we reassessed at the end of March to make sure that the risk assessment we had done…was still accurate. Are we were reassessed downwards. Not so much because countries have gone under the radar screen or because so much measures, so many measures have been taken, but because we’re essentially three months into the year. And that some of the countries have not only secured their financing for the three months but have anticipated and have covered their financing needs for much more than three months.

So we reassessed downwards and therefore the bag that I’m carrying around is a little bit smaller but still, you know, significant.

More money please, George

Here’s how Mme Lagarde responded when I asked her why Britain should be giving more resources to the IMF:

Because it’s in their interest. You know, why do you think Japan is committing 60 billion dollars? Japan is a multilateral country at heart. The UK is as well. The UK is a founding father of the IMF. John Maynard Keynes was one of the Fund’s two patrons.


And the UK is there for international grave situations. It’s always been there. It’s always been a very loyal partner when it’s tough.


But it’s in their interest. Because if the key partners of a country like the UK are in very bad shape they are bad clients. They can’t pay their bills. They cant trade properly. And its not in the interest of the UK to have a weak euro.

Contemplating a break-up

I then asked whether those euro risks included a potential euro break up or a disorderly default, as spelled out by the IMF's own World Economic Outlook earlier in the week.

We have to consider all potential risk scenario because that’s the best way to be of service to our membership. To indicate what are the risks on the horizon. What would be the escalation of damage. Of collateral damages – because if something of that nature was to happen it wouldn’t be without consequences on the fringes and beyond. Another good reason to try to help them keep it together.

Q: Is it fair to say that without the IMF’s help, the euro would have collapsed?

[Smiling] I would like to think so – but no. The IMF is available to the entire membership and to specific members when they face difficulties. This was clearly the case with a country like Ireland, like Portugal, like Greece, and we have to continue supporting the members in trouble. Under our system of rules, controls, we only lend if there is implementation of the economic program because our endgame is to restore stability, is to help countries that essentially have balance of payment problems, or financing problems which are very acute.

Q: So your endgame is to ensure the survival of the euro?

No. My endgame is to bring more stability across the global economy and we have to help the Arab spring countries. In due course we help the Latin American countries. The Asian countries when they faced the Asian crisis. Now it’s the euro zone that has had specific difficulties, which is why we are looking at them and helping them.

Give directly to Spanish banks

I asked Mme Lagarde about the notion that the euro bail-out funds should be able to give directly to Spanish banks rather than having to channel the money through national governments. She answered as follows:

I was very pleased to hear that the Spanish government is taking this issue very seriously and is taking appropriate measures to deal with the recapitalization of banks. That will happen across the world essentially. Because the Basel III standards that require more capital will apply gradually in all corners of the world. And it is specifically acute in some countries. Spain is dealing with its issues. We wish it could happen more directly between the European pool of money rather than have to be channeled through the sovereign.


It can happen effectively through indirect means, via the country. It happened in Greece for instance. It happened in Ireland but the relationship was between the FSF at the time and Ireland. The end result was recapitalization of banks.

A future French president?

I finished by asking Mme Lagarde about the rumours that one day she could run for the French presidency. She was characteristically tight-lipped:

I’m very pleased with the job that I’m doing and I’m not so concerned about always being the first [female IMF MD, female French president]. I’m very concerned about somebody being a second after me, and then a third, then a fourth. I think it’s very good that women have a seat at the table.


Q: Do you miss French politics?

I miss France now and again. I miss my French friends.

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Emmanuel Faure


Thousands of young people, often educated, are leaving Portugal and Spain. Europe doesn’t need them while Africa and South America receive them with open arms.

Aleksandra Lipczak

Ana Ferreira oozes optimism. She is twenty six, comes from the Azores and for almost four years now has been based in Africa, first in Angola, now in Mozambique. Contrary to what could be expected, she is not a volunteer but a paid employee at a corporate human resources department.

“When I look at my friends in Portugal, living on student grants, doing short-term jobs, completing successive graduate or postgraduate courses, I think they are detached from real life. I live in Maputo where I’m doing great and actually advancing career-wise. What am I supposed to be returning to?”

Gonçalo Jorge, a twenty-eight year old marketing executive from Lisbon, fought not for work but against frustration. After obtaining his degree, he got a job with a public transport company. “I wanted to do great things but all that was waiting for me was a sinecure”, he says. When he finally found an interesting opening at a private company, it was the terms of employment, with a contract for just a year, that proved a problem. So he moved to Angola and today is country manager for a Portuguese wine producer. He is responsible for the company’s entire operations in Angola and earns four times what he did in Portugal.

Portugal has already lost one in ten of its university graduates. The exodus has continued for several years now because the crisis and high unemployment hit the country much earlier than the rest of Europe. Youth unemployment in Portugal is at over 34 percent today and in Spain at over 50 percent. If it weren’t for emigration, it would be much higher.

New World Welcomes

Those made redundant in Europe – engineers, architects, construction workers – are received with open arms in Africa and South America. Brazil is at full steam preparing for the 2014 World Cup and 2016 Olympic games. Engineers and architects are being recruited on a great scale for public projects, including $200 billion-worth projects in the power industry. Brazil’s economy grew by nearly 3 percent last year. Argentina saw 8 percent growth and its unemployment rate at 7 percent is more than three times lower than Spain’s.

Rich in oil, diamonds and other natural resources, Angola is one of the fastest growing countries in the world today. Annual GDP growth reaches 15 percent here and 3,000 Portuguese companies operate throughout the country, building roads, bridges, skyscrapers, railroads, pipelines. The country, for thirty years ravaged by a civil war that ended just a decade ago, is short of specialists, while Portugal suffers from a surplus of skilled labour.

“For some years ago job offers from Angola can be found in every Portuguese newspaper,” says Pedro Góis, migration sociologist at the University of Coimbra. “Two groups are primarily leaving: older people who want to save some money, and young ones seeking professional development and fun.”

Lust for life

If the Portuguese feel at home in Angola, it’s even easier for them to adapt to life in Brazil. According to estimates by Lisbon’s Observatório da Imigração, over 700,000 emigrants from Portugal currently live and work in Brazil.

In Spain, which for the last ten years received some 5 million immigrants from South America, Africa and Asia, Spanish emigration to the former colonies in South America is a subject so new few experts are able to discuss it. But the figures speak for themselves; according to Spanish consulates in Argentina, some 1,200 Spaniards settle there every month.

“The typical emigrant is a man aged 25-35, often an engineer, architect or IT professional”, says Marta López-Tappero, international mobility expert at Adecco. “In brief, a young man with an appetite for new experiences and challenges.”

In the former colonies the language barrier doesn’t exist and cultural adaptation is smooth. Especially in Buenos Aires. At the turn of the 19th and 20th centuries, some 2 million Spaniards came to Argentina as third-class passengers, mainly from Galicia, the country’s poorest, farming region, which is why Spaniards are called gallegos in Argentina today. In the second half of the 20th century, first the dictatorship and then the crisis of the 1990s brought Argentinians to Europe. Now the trend has reversed again.

A “European invasion”, “new Eldorado”, “thrill-seeking expedition” – such concepts are familiar and must sound disturbingly to the European ear. “No, there’s no reason to talk about another colonisation,” Mr Góis says firmly. “Rather, we are witnessing the birth of a new global class of migrants who will never settle permanently anywhere. Sooner or later, they will either go back or move to another country where the offer will be better”.

But perhaps the reversed migration is the consequence of much more profound changes taking place in the world. The balance of power between the West and the rest of the world or, if you will, between North and South, is shifting.

On the web
Polityka website pl
Tygodnik Powszechny article pl


Comment

The scar of unemployment

The crisis has affected everyone in Europe, but young people have been hardest hit, points out Polish weekly Tygodnik Powszechny. And not only in Greece, Spain or Portugal, but also in Poland, where the unemployment rate for the under 24s nears 30 percent, as well as Slovakia at 35 percent. And this will have long term effects, warns the Polish weekly -


Joblessness is painful for everyone. But for young graduates, who for years have nurtured expectations about life and themselves, it can be a shock. Research shows that protracted unemployment at a young age results in lack of self-confidence later on. This is called the unemployment ‘scar’ or ‘stigma’. So even when Europe finally shakes off the crisis, the future of these [young] people will still be in doubt.

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Economy

IMF is a troublesome ally


18 April 2012
NRC Handelsblad Rotterdam Comment88




IMF Managing Director Christine Lagarde at a Paris press conference in October, 2011.


The International Monetary Fund, which recently warned Europe of the possibility of another crisis, forms part of the troika charged with rescuing countries in financial difficulty. However, over the last year under the presidency of France’s Christine Lagarde, the organisation which is often presented as a saviour has adopted a less conciliatory tone.

Last Christmas, IMF Managing Director Christine Lagarde offered the German Chancellor a trinket from Hermès. Angela Merkel also had a small gift for Christine Lagarde: a CD of the Berlin Philharmonic playing Beethoven.

Notwithstanding this thoughtful behaviour, the personal relationship between the two women is now being sorely tested: in the wake of two years of intense involvement in the struggle to overcome the crisis in Europe, the IMF has begun to openly express its discontent.

In the Dominique Strauss-Kahn (DSK) era, it was reasonable to assume that China, Canada and Brazil would also adopt a similar line, but this is no longer the case. Today’s IMF is very different to the IMF of one year ago. For DSK, who had his sights set on the French presidency, a leading role in the campaign to save the euro was a godsend. Under Christine Lagarde, the IMF has become “a less stable partner”, points out a European civil servant.

A second-tier partner

The difference in personality between economist and politician DSK – who resigned amid rape allegations in May 2011 – and the lawyer and corporate CEO, Christine Lagarde, who succeeded him, only partly explains this change.

Perhaps more importantly, the IMF is increasingly uncomfortable with the role that has been attributed to it in the “troika” formed with the ECB and the European Commission. In the eurozone, the organisation, which is used to a high degree of autonomy, has become a “second tier partner”.

The Europeans in the troika, who are extremely strict in their approach, mainly take their orders from Germany. In the event of a divergence of opinion, the IMF is often the only member of the troika to argue in support of Greece.

“The IMF should never have allowed itself to become involved in this situation”, remarks Charles Wyplosz, of the Graduate Institute of Geneva. “It has been politically implicated.”

Already, under Dominique Strauss-Kahn, non-European countries were protesting, and critical voices were also raised from within the organisation. But the IMF’s second in command, America’s John Lipsky, was unable to to effectively counter his inspired European chief.

The Director of the IMF’s European Department at the time, Antonio Borges, who was also a former deputy governor of the Banco de Portugal, was similarly reluctant to speak out against his boss. A Portuguese director with responsibility for Portugal – this was also one of Dominique Strauss-Kahn’s initiatives.

Strauss-Kahn decided everything. He telephoned heads of state and sat in on European summits. He had considerable influence with the German Chancellor, and had just boarded a plane Berlin when he was arrested. Angela Merkel was plunged into a state a shock. ”This is serious”, she said when she heard news of the charges, “I need him!”

Shortly after the departure of Strauss-Kahn, Lipsky also left the organisation. According to Charles Wyplosz, his successor, David Lipton, is ”very powerful. He works under instructions from Clinton and Obama and embodies the opinion of the White House. Lipton believes that the European measures to counter the crisis are worthless”.

An extended critique of Germany’s European policy

In November, Christine Lagarde dispensed with the services of Antonio Borges. His replacement, Anglo-Iranian Reza Moghadam, who is a competent official with no specific links to the eurozone, has been appointed at a time when the management of the IMF is increasingly adopting an Anglo-Saxon approach rather than a European one.

The British and the Americans have tightened their hold on a crisis, which has prompted two schools of thought on the issue of countermeasures: on the one hand, there are the proponents of budgetary discipline, and on the other, there are those who argue that austerity represents a danger to the economy. Angela Merkel has demonstrated her allegiance to the first of these, Christine Lagarde is now identified with the second.

Outside of the framework of the troika, Christine Lagarde has sent an IMF team to Italy. She wants European banks to raise more capital, and favours protecting the eurozone with a gigantic firewall and eurozone bonds: a position that has met with some annoyance in Europe. During her tenure as French Minister of Finance, Christine Lagarde also pleaded for a powerful bailout fund and eurozone bonds, but at the time Angela Merkel succeeded in brushing aside both of these proposals. However, the German Chancellor will meet with increasing difficulty in maintaining this position now that Europe wants to obtain funds from the IMF.

Recently, all of these issues surfaced in speech delivered by Lagarde in Berlin. The previous evening, at a private dinner with Angela Merkel, she offered the German Chancellor an orange blossom scented candle symbolising “hope”. As Christine Lagarde later explained, it was intended to set the tone “in the wake of difficult discussions” prompted by a preview of the text of her speech, which was an extended critique of Germany’s European policy.

[Badboy]

THERE WAS AN ARTICLE IN GUARDIAN ABOUT HOW DEFENCE SPENDING MAY BE RESPONIBLE FOR GREECE'S DEFICIT,THEY SPEND ENOUGH 500BILLION EUROS?)TO CAUSE THE DEFICIT.
MOST WERE FOR CONTRACTS WITH GERMANY/US AND FRANCE.

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THERE WAS AN ARTICLE IN GUARDIAN ABOUT HOW DEFENCE SPENDING MAY BE RESPONIBLE FOR GREECE'S DEFICIT,THEY SPEND ENOUGH 500BILLION EUROS?)TO CAUSE THE DEFICIT.
MOST WERE FOR CONTRACTS WITH GERMANY/US AND FRANCE.

This is what's wrong with the EU, there should be a Defence Force made up of Soldiers , Sailors etc from every Member Country, and a Central Bank
system. Greece has for many years not collected Taxes, had no control over expenditure but should have been allowed to default from the very
beginning of this crisis. Now thw situation in the Eurozone is ten times worse.

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The Chancellor has lent £10 Billion to the IMF which is the limit he can lend without reference to Parliament, Labour is furious. The U.S. and Canada are
refusing to lend and saying Germany is a very rich Country and other European Countries are also rich, this is a European problem and should be
dealt with by the EU. Christine La Garde is now being criticised by G20 for using IMF Funds to bail out Europe when the concept of the IMF is to help
poor Countries.

HSBC spokesman King says the worst may still be to come for the EU, Greek austerity measures are not biting

Europe urged to sort out financial crisis as G20 warns of worse to come. What will Spain do to obtain growth , otherwise situation will worsen.

The ECB may unwillingly have to intervene.

It is expected that Hollande will win the first round in the French Election , the second round will be held on 6th May

France, Italy and Spain have a combined debt of E4 Trillion so if Spain does need another bail-out the Firewall will collapse .




The combined debt of France italy and Spain is Euro 4 Trillion , there is no way the Firewall is big enough to protect any of these Countries. Christine
La Garde says she has been guaranteed E420 Billion and expects to get more.

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European leaders are seeking growth as a way to attenuate the social consequences of austerity measures. But simply giving money to the countries of Southern Europe, which do not have the adequate economic foundations, is a pipe dream, warns a Swedish commentator.

Richard Swartz

If the picture painted by politicians is to be believed, the new aid package which will replace the old aid package will ensure conditions favourable to economic growth in the countries of Southern Europe. Yet this vision of the future resembles the missed opportunities of yesteryear. Does anyone really believe that the European debt crisis is behind us?

Until now, we've settled for pushing down hard on the brake and for treating the symptoms of the crisis. Everybody must belt tighten, willingly or unwillingly.

Once again, European leaders did what they do best: stalled for time. They intend to use it to favour economic growth, the only means to get out of the crisis. Growth that can be achieved only if everybody pulls their weight. This congenial and certainly true creed is repeated like a mantra by the major European leaders.

But is it also realistic? One sometimes has the impression that the political class only has a very vague idea of how the economy really works in some countries of Eastern or Southern Europe. There, slogans such as "reforms" or "growth" evoke nothing more than false hopes and pure fantasy.

The dilemma is particularly flagrant in Eastern Europe. When the communist regimes fell, the former economies were scrapped. The factories were closed or they went bankrupt. From one day to the next, or just about, every consumer good was replaced, from toothpaste to margarine including panty-liners, refrigerators, sofas and automobiles.

For consumers in the Eastern countries, this was a true blessing. In the blink of an eye, they went from dearth to abundance. The only problem was the Eastern countries did not have the money to buy all of these Western products. The populations of those countries were thus offered generous loans by the newly established commercial banks, they too of Western origin. The result is that these are now economies that generally produce little and rest only on the precarious perch of indebtedness.

A good part of Southern Europe finds itself in a comparable situation – with shrunken production, insignificant exports, and high debt. In Southern Europe, the introduction of the euro, paradoxically, had effects similar to that of the fall of the Wall. For the first time these countries had access to "real" – and cheap – financial loans, as if the Peloponnese or Estremadura were in the Rhineland or neighbouring on Bavaria.

Such an opportunity undoubtedly comes along only once in a lifetime. For nearly ten years, a deluge of loans flooded into Southern Europe. This money could have been used to build the foundations of self-sustaining economic growth – if investments had been made in infrastructure, in the overhaul of the State, in consolidating entire segments of industry or in education. Instead, it was thrown out the window.

Today, as new aid replaces the old, we are told it will allow the creation of conditions necessary for the expected change in the countries of Southern Europe and for their economic growth. Yet, we have already let this opportunity slip away; it is already behind us. The vision of the future sketched by European leaders resembles yesterday's lost opportunities.

Humans create more problems than solutions. [The late Swedish Prime Minister] Olof Palme used to say that the resolution of a problem – and thus of politics – is a question of will. For Karl Marx, the solution consists of becoming aware of what is indispensible. So be it. Neither of these two approaches can do any harm.

But it is undoubtedly Bismarck who was the shrewdest by declaring that politics is "the art of the possible" and that, therefore, solutions must be sought in what is concretely achievable. Even a mediocre economist or politician is able to find the miracle cure for Greece's economic woes but it would have as little chance of being adopted as one has of getting a Turkish coffee in Athens.

The question is what a number of European countries will live off of in the future given the current context of globalisation. No one seems to have the answer. All that is known is that life styles will have to change radically and that China, much more than Germany, is responsible for this situation.

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France

The rage of the provinces


20 April 2012
Die Zeit Hamburg Comment2



Of the ten candidates, voters will retain just two for the second round run-off of May 6.


Five years ago, Nicolas Sarkozy was the candidate of the “France that wakes up early.” Today he is the “President of the rich.” It’s his government that has brought about this switch, and it shows how much the country has changed through the crisis.

Gero von Randow

Michel Sieurin leans forward, sets down the shoe-hammer and lowers his voice: “Five years ago I voted for Nicolas Sarkozy. Today, I’m embarrassed by that. That slogan, ‘Work more to earn more’, I liked. But he’s done nothing for the little people. He’s the president of the rich.”

For 25 years Sieurin has been the shoemaker of Montivilliers, a small town in northern France near Le Havre. “The anti-Sarkozyism is a phenomenon of the Parisian elite,” Carla Bruni-Sarkozy said not long ago, and the pro-government media picked up the refrain: the Parisian literati, journalists and intellectuals are all against Sarkozy, but the “silent majority” out there think differently. That’s the story told too by the man himself, who out on the road in the provinces – surprise, surprise! – meets nothing but admirers. Perhaps Sarkozy should talk with someone like the shoemaker of Montivilliers.

As a young man the now 56-year-old Sieurin was a metal worker, organised in the CGT trade union devoted to class struggle. “In 1981, when Mitterrand brought the Left to power, I was expecting miracles.” The Left departed, capitalism stayed on. Sieurin saw a lot more wither away. His dreams of a united society. His job as an auto mechanic, and with it thousands of other industrial jobs in the region.

France is going downhill

On 22 April the French go to the polls to vote for a president; the concluding ballot, if needed, will be on 6 May. Michel Sieurin will probably leave his ballot blank. For him the socialist Francois Hollande is “just another Liberal” – a word that in France refers to the hated economic liberalism. The hard-left candidate Jean-Luc Mélenchon is too aggressive for the shoemaker, and the radical nationalists with Marine Le Pen are beyond the pale. “But not for some of my friends,” says Sieurin. “They’re angry and they want to show it. Fascists they’re not.”

Montivilliers is a small town like many others. Paris is a two-and-a-half-hour drive, but when it comes to culture the capital city is light-years away. The public debate is being thrashed out all on sides there, with the great city’s usual nervous energy. Life in the provinces of France moves at a different pace. Opinions take shape quietly here, among family, friends, in clubs. This is the France where the election will be decided. The geography of the country is changing. Low earners and long-term unemployed are moving into small towns and out into the countryside. In the big cities they often have only the choice between expensive neighbourhoods and dangerous ghettos.

“It’s quiet here,” is the first answer you get when you ask residents of Montivilliers for the good points about their town. Ancient houses surround the square, some half-timbered, most admittedly run down. It’s been a long time since the city had a market. The building in the best shape on the other hand is the nearly thousand-year-old abbey, which the state keeps up. Its history ended with the French Revolution, when the nuns refused to swear by the new Republic.

From 1793 the building even housed a brasserie. There is still an “Abbey Brasserie”, but it’s sited across from the abbey. Now it’s a meeting point for workers. Claude Far and Salim Khaoua, 28 and 30 years old, from Algeria and Morocco, and as “inseparable” as brothers, as they say, have met up there. They admire the Germans for their chancellor and their cars, and think that France is going downhill.

“President of the rich”

In this they’re in tune with the majority opinion, which is fed by a flood of books and articles that bemoan the decline into second-class status and with it the erosion of the “French social model”, which can be summed up in one word: Égalité. “Our buddies are almost all unemployed,” says Salim. “They can’t afford to go to the restaurant, like we can.”

Claude and Salim are almost always on the move, checking the welds of nuclear reactors around the country. Sometimes there are working wages, sometimes only money to tide them over, depending on whether their bodies have already received the critical dose of radioactivity and they have to take a mandatory break.

The two belong to that “France that gets up early,” whose virtues Sarkozy likes to praise. “He promised people like us that we would earn more – huh! It never happened.” And again: “He’s the president of the rich.” What about Hollande? “No, he wants to shut down nuclear power plants.” Marine Le Pen? “Maybe. France must defend itself against the competition. But the demand to return to the franc is nonsense.”

[Panda]

21 April 2012 Last updated at 22:22 Share this pageEmail Print Share this page


The Netherlands looks set for early elections after budget talks between the main parties collapsed on Saturday.

Leaders have been locked in negotiations for the last seven weeks to try and cut 16bn euros (£13.1bn) from the national budget.

They have been trying to agree on a fiscal austerity package to meet European deficit targets.

Dutch Prime Minister Mark Rutte told reporters that talks had failed and a new election was likely.

The right-wing Freedom Party walked out of the three-party talks with its ally, Mr Rutte's Liberal-Christian Democrat coalition, saying European Union demands were impossible to meet.

The prime minister is now preparing for a crisis meeting with his cabinet on Monday, but said "elections are to be expected".

Deficit demands

Although the Netherlands economy has weakened in recent months it remains one of Europe's strongest, with relatively low unemployment and a coveted AAA credit rating.

But these cuts are unavoidable if it is to meet the EU's target of bringing budget deficits below 3% of GDP.

Last month, revised data from the Netherland's Central Planning Bureau forecast that the 2013 public deficit would rise to 4.7% of GDP under current conditions.

The head of the anti-EU Freedom Party, Geert Wilders, said the package of cuts "will damage economic growth and... severely effect the spending power of many people, especially pensioners".

He said Brussels wanted to "take away the economy built up by the elderly", although the Netherlands itself has been one of the strongest proponents of tough fiscal regulations in Europe.

Dutch Finance Minister Jan Kees de Jager left IMF talks in Washington early after negotiations collapsed at home.

In a statement, he said it might still be possible to do a deal with other political parties to get the measures pushed through.

If that fails, an election would be held within the next few months.

[Panda]

It is looking increasingly unlikely that Angela Merkel's demand for a 3% GDP will be met and is dead in the water . If Sarkozy loses the Election , the
austerity plan will be ignored, now the Netherlands is not happy about it, Ireland is going to have a Referendum , Spain is likely to need a bailout-
Greece has no chance of meeting the target, billions of Euros have been printed to save the Banks, Billions is owed to the IMF and none of this has
helped. Maybe if Greece had been allowed to default the result would not have eben as bad as it it now.

[Panda]

Eurozone crisis

Divisions at ECB over support for banks

Dutch Central Bank chief Klaas Knot has said that several members of the ECB board are concerned that central banks of seven countries - Spain, Italy, Portugal, France, Ireland, Austria and Cyprus) are authorized to allow lending to small and medium sized companies. Original article in De Volkskrantnl

World Bank President says EURO Countries must reduce their deficit but admits it is very difficult to do this in a recession.

Marine Le Pen's Presidential Prospects might take her to a second round because of her famous Father.

The French National Front Candidate says France may opt out of the EURO, this is apparently in tune with many voters and if neither Sarkozy nor
Allande get a majority they will have to have a pact with a minor Party.

[Panda]

Moved from Armageddon thread


Schengen

France and Germany push to suspend free movement


20 April 2012



Süddeutsche Zeitung, 20 April 2012

France and Germany want to limit the free movement of people in Europe. The German newspaper Süddeutsche Zeitung has published a joint letter from the French and German interior ministers calling for "the possibility of re-establishing internal border controls." The matter could be raised at the next meeting of European politicians on April 26. In the letter Claude Gueant and Hans-Peter Friedrich suggest that suspension of the Schengen treaty is justified where security is insufficient at some of the EU external borders, and to address internal security matters and safeguard national sovereignty, the Munich daily writes. The Süddeutsche Zeitung adds that the resumption of border monitoring would aim to combat economic migration, and suggests this could foster anti-European political sentiment – What is the value of it, open borders without restrictions? [...] What is the point of freedom of movement if European governments are able to limit it? If member states withdraw into their national territory when there are problems, they are demonstrating that they believe their small nation state is far better than Europe. In this case we should not be surprised if nationalist parties, populist and the extreme right are on the rise throughout Europe. The temporary closure of internal borders is a continuous advertisement for the enemies of Europe. Source profiles Süddeutsche Zeitung .

[malena stool]

How racist..... or that's what they'd be saying about us if we'd suggested such a restriction...

[Panda]

How racist..... or that's what they'd be saying about us if we'd suggested such a restriction...

I think the massive infux of immigrants might have something to do with this. Malena, did you know that because the Belgian Authorites are not
checking passengers on the EuroTrains Britain has no record of who is coming in from anywhere . The U.K Port authorities are useless so Britain is overrun with Immigrants who just disappear into the crowd.

[Panda]

Apr 22, 4:48 AM EDT


IMF urges bold changes in Europe

By HARRY DUNPHY and MARTIN CRUTSINGER
Associated Press






WASHINGTON (AP) -- The International Monetary Fund, armed with a replenished arsenal containing billions of dollars to battle Europe's lingering debt crisis, now must press governments in the eurozone to carry out bold changes to reassure nervous financial markets and avert sending the crisis into a more dangerous phase.

The IMF's final communique Saturday after hours of high-level meetings did not go beyond saying what structural reforms were needed to restore fiscal health and spur economic growth in the 17 countries that use the euro.

But U.S. Treasury Secretary Timothy Geithner told the IMF policy-setting panel that Europe needs to be more creative and aggressive in fighting its debt crisis, employing all the financial resources at its disposal, including the European Central Bank.

"The success of the next phase of the crisis response will hinge on Europe's willingness and ability ... to apply its tools and processes creatively, flexibly and aggressively to support countries as they implement reforms and stay ahead of the markets," Geithner said.

German Finance Minister Wolfgang Schaeuble said the countries experiencing financial crisis in Europe are undertaking far-reaching reform measures.

"This includes labor markets, social security systems, public administrations and financial market institutions," he said. "This will allow countries to regain competitiveness and strong growth. It is the only way we will be able to restore confidence of our citizens and investors."

During the weekend meetings of the IMF and its sister institution, the World Bank, finance ministers and central bank governors said the threat of a sharp global slowdown had eased, but still used words like "weak," "fragile" and "challenging" to describe the outlook for the future.

The major accomplishment of the weekend was the pledge of at least $430 billion from individual countries that will nearly double IMF's reserves available for loans to almost $1 trillion.

"It is nice to have a big umbrella or a big firewall" IMF Managing Director Christine Lagarde told reporters at a news conference wrapping up the discussions. She and other officials said the extra resources should reassure financial markets that have been worried in recent weeks that Spain could be the next country in need of emergency loans from the IMF to escape a default.

The IMF, working with European governments, has provided rescue programs already for Greece, Portugal and Ireland, but Spain has a much bigger economy and would require much more financial support should it become unable to sell its government bonds to private investors.

Tharman Shanmugaratnam, Singapore's finance minister and the chairman of the IMF group, said that the IMF recognized that the world had to strike a delicate balance between getting government budgets back under control while at the same time promoting stronger growth.

The additional $430 billion in resources was announced by Lagarde following meetings of finance officials of the Group of 20 major economic powers Friday. The United States and Canada were two rich countries that did not make pledges. The United States would face problems winning support for increased support for the IMF and Canada expressed the view that Europe, as a rich continent, had sufficient resources to deal with its debt problems.

"They need to step up to the plate and overwhelm this issue with their own resources," Canadian Finance Minister Jim Flaherty told reporters.

Lagarde said Russia, India, China and Brazil had made private pledges but did not want to make public commitments until they had conferred with officials back home. This group has pushed for the IMF to put in place a 2010 agreement giving fast-growing, emerging economies such as theirs more of a voice in the agency's decision-making.

The IMF has struggled to find agreement because Europe will have to give up some of its voting power and seats on the 24-member executive board. At the moment, Europe controls eight; the expectation is that it could lose perhaps two.

Brazil, one of the developing countries that made a pledge but has not revealed the amount, has been vocal in its criticism of the IMF for allowing countries in Europe to delay resolution of the dispute over rebalancing the voting power.

Brazilian Finance Minister Guido Mantega said in his speech to the IMF committee Saturday that the resistance of some countries to the change in voting power had been "deeply damaging to this institution."

He said that even though Brazil would rank as the third largest economy in Europe behind Germany and France, its voting power at the IMF was equivalent to the Netherlands and smaller than Spain, Italy and Britain.

Elizabeth Stuart, a spokeswoman for Oxfam, the international aid agency, said that it was critical for the IMF to resolve the disputes over voting power so that the 2010 agreement can be implemented by the IMF's fall meeting.

"It is outrageous that a country like Luxemburg has more voting weight at the IMF than South Africa or Argentina," she said.

Of the more than $430 billion in increased support that the IMF raised, the agency released a list of specific commitments from 12 individual nations ranging from $60 billion from Japan to $2 billion from the Czech Republic. The biggest total amount was $200 billion pledged back in December by Europe.

---

Online:

International Monetary Fund: http://www.imf.org

World Bank: http://www.worldbank.org

---

[malena stool]

It's frightening to think what our country will be like 5 or 10 years down the line. Our politicians have lost control of immigration completely and have their heads so deep in the sand they're unable to see future problems their indecision and penny pinching are creating.

[mara thon]

I'm no financial expert but can anyone tell me why countries, such as UK, owe so much money but never pay it, yet continue to throw money about everywhere except where it should go?


http://www.bbc.co.uk/news/business-15748696

[malena stool]

I'm no financial expert but can anyone tell me why countries, such as UK, owe so much money but never pay it, yet continue to throw money about everywhere except where it should go?


http://www.bbc.co.uk/news/business-15748696

I think you'll find the answers you seek here, mara thon.

[Panda]

Time was when a Bank had to have 11% liquidity, a Wife's wages were never taken into account and you could only borrow two and a half times your
wages. I think Maggie Thatcher's own your own home and up to 60% discount on your Council House started off Capitalism. Banks were willing to lend
more, and at the height of the Housing Boom there were cases where you could obtain 125% Mortgage.

Then we were flooded with cheap goods from China and Japan Credit Cards offered a £7,000 limit without questionining one's ability to pay , then came
"quantitive easing", printing more money to cover the shortfall and in the process devalued the Currency. Where it will all end is anyone's guess .

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