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The Euro-What do you think is happening, is this prophetic

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September 24, 2017, 10:45:16 pm Psalm 51:17 says: The specific rule pertaining to the national anthem is found on pages A62-63 of the league rulebook. It states: “The National Anthem must be played prior to every NFL game, and all players must be on the sideline for the National Anthem. “During the National Anthem, players on the field and bench area should stand at attention, face the flag, hold helmets in their left hand, and refrain from talking. The home team should ensure that the American flag is in good condition. It should be pointed out to players and coaches that we continue to be judged by the public in this area of respect for the flag and our country. Failure to be on the field by the start of the National Anthem may result in discipline, such as fines, suspensions, and/or the forfeiture of draft choice(s) for violations of the above, including first offenses.”
September 20, 2017, 04:32:32 am Christian40 says: "The most popular Hepatitis B vaccine is nothing short of a witch’s brew including aluminum, formaldehyde, yeast, amino acids, and soy. Aluminum is a known neurotoxin that destroys cellular metabolism and function. Hundreds of studies link to the ravaging effects of aluminum. The other proteins and formaldehyde serve to activate the immune system and open up the blood-brain barrier. This is NOT a good thing."
http://www.naturalnews.com/2017-08-11-new-fda-approved-hepatitis-b-vaccine-found-to-increase-heart-attack-risk-by-700.html
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September 14, 2017, 04:31:26 am Christian40 says: i have thought that i'm reaping from past sins then my life has been impacted in ways from having non believers in my ancestry.
September 11, 2017, 06:59:33 am Psalm 51:17 says: The law of reaping and sowing. It's amazing how God's mercy and longsuffering has hovered over America so long. (ie, the infrastructure is very bad here b/c for many years, they were grossly underspent on. 1st Tim 6:10, the god of materialism has its roots firmly in the West) And remember once upon a time ago when shacking up b/w straight couples drew shock awe?

Exodus 20:5  Thou shalt not bow down thyself to them, nor serve them: for I the LORD thy God am a jealous God, visiting the iniquity of the fathers upon the children unto the third and fourth generation of them that hate me;
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Question: Whats the plan for the euro  (Voting closed: December 14, 2011, 02:58:14 am)
Collapse the euro before Chritmas - 0 (0%)
Collapse the euro before this time next year - 1 (25%)
Add a stronger currency to absorb the mess - 0 (0%)
Collapse the whole world financial structure soon to implement the mark(revelation) - 2 (50%)
Not clear from prophecy whats happening - 1 (25%)
Total Voters: 2

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« Reply #210 on: June 10, 2012, 09:26:58 pm »

http://www.businessinsider.com/euro-open-june-10-2012-6

6/10/12

The Weekend Is Over, And The Euro Surges To its Highest Level In Weeks

 Huh Huh

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« Reply #211 on: June 11, 2012, 12:48:18 pm »

http://www.moneycontrol.com/news/economy/eurozone-break-up-could-hit-usface_715882.html

6/11/12

Chief economic advisor Kaushik Basu has warned that if the Eurozone breaks up finally, it will be more disastrous than the 2008 global financial crisis triggered by the fall of the Wall Street banks, from which the global economy is yet to recover. "If Europe does slip into a crisis, it is going to be a very difficult time. There is no escaping from that.

Though we (government and the Reserve Bank) have a team that is working on different scenarios, to see how we will react, it will be a lie to say that we have the strength to weather that. It will hit us in the face," Basu told an Exim Bank organised here over the weekend.

Stating that a deeper European crisis was not impossible, he said there would be a jolt and it could spin Europe into a big crisis. "It is going to be a difficult one or two years for the world for sure." However, he said on the positive side, "Thankfully, Europe is no longer our biggest export destination, to the Middle East we probably export more today."

But he warned that the impact on us will be indirect. "Europe being a major driver of growth and if it slows down, even if we don't get a direct hit, the US is going to get hit immediately, China is going to get hit immediately. So the impact on us will come to us through our trading partners."

Citing how the Lehman fall engulfed the whole world in 2008, Basu said, the 2008 crisis made it clear it is not just from the goods directly being sold, but the crisis in the financing sector that the world got engulfed. Explaining the rationale for his fear on the global front, he said the problem will arise in 2014, when the LTRO (long term refinancing operations of the European Central Bank or ECB) payback comes in December 2014 and February 2015, when as much USD 1.3 trillion need to be paid by 800 banks to the ECB.

This will sap the entire banking system, he warned. However, Basu expressed hope that by 2015, the world economy, especially the emerging economies, will be better off by that time, saying "the emerging economies are in a position to build strength (during this interval) so when we come out of this tunnel, we will be at the top of it.

We will come out on top of growth drivers by 2015." The over two-year old Eurozone crisis, triggered by the sovereign debt crisis of Greece, is yet to be resolved and more and more countries are looking for bailout. The latest to join the bailout club is Spain.

On the impact of a possible Greek exit from the Euro, which looks more likely now (which will be clear after the crucial June 17 reelections) on the domestic economy, Basu said, "We are not out of the woods. There is indeed some risk that this is going to last a while. It will affect us."
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« Reply #212 on: June 12, 2012, 01:39:44 pm »

http://news.yahoo.com/eu-movement-money-people-limited-144836122--finance.html;_ylt=A2KJ3CV.WNdPN10AzDzQtDMD

6/12/12

EU: movement of money, people can be limited

BRUSSELS (AP) — The European Commission has been providing legal advice to others who are considering possible scenarios should Greece leave the euro, a European Union spokesman said.

Olivier Bailly said Tuesday that, legally, limits could be imposed on movement of people and money across national borders within the EU if it's necessary to protect public order or public security — but not on economic grounds.

"Some people are working on scenarios," he said, but refused to confirm or identify which organizations and people were working on them.
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« Reply #213 on: June 12, 2012, 01:41:36 pm »

http://www.irishtimes.com/newspaper/breaking/2012/0612/breaking24.html

EU discuss 'limiting ATM withdrawals'

6/12/12

European finance officials have discussed limiting the size of withdrawals from ATM machines, imposing border checks and introducing euro zone capital controls as a worst-case scenario should Athens decide to leave the euro.

EU officials said the ideas are part of a range of contingency plans. They emphasised that the discussions were merely about being prepared for any eventuality rather than planning for something they expect to happen.

But with increased political uncertainty in Greece following the inconclusive election on May 6th and ahead of a second election on June 17th, there is now an increased need to have contingencies in place, the EU sources said.

The European Commission said today it was helping with legal advice in discussions of contingency scenarios regarding Greece by the Eurogroup working group.

"I've not said that I'm not aware of any discussions, I've said I'm not aware about any plans, which is a slight difference," Commission spokesman Olivier Bailly told a regular news briefing, when asked about Commission involvement in discussions about the contingencies were Greece to leave the euro.

"What I said also is that some people are working on scenarios. We are providing information about EU law, as the guardian of the treaty," he said.

The discussions have taken place in conference calls over the past six weeks, as concerns have grown that a radical-left coalition, Syriza, may win the second election, increasing the risk that Greece could renege on its EU-IMF bailout and therefore move closer to abandoning the currency.

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« Reply #214 on: June 12, 2012, 02:57:39 pm »

Cyprus could be fifth EU nation to get bailout
12 June 2012, by Kim Hjelmgaard - London (MarketWatch)
http://www.marketwatch.com/story/cyprus-could-be-fifth-eu-nation-to-get-bailout-2012-06-12

The island-nation of Cyprus could be the fifth euro-zone economy to seek a bailout, according to a report published in The Wall Street Journal on Tuesday.

Cyprus Finance Minister Vassos Shiarly said in the Journal story that the nation's need for assistance for its banks was "exceptionally urgent."

On Monday, Shiarly said that Cyprus was considering an EU-sponsored bailout. However, no request for aid has taken place.

Cyprus will take over the presidency of the European Union in July.
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« Reply #215 on: June 12, 2012, 06:05:32 pm »

Brussels plans European banking union from 2013

6/12/12

A single regulator to oversee banks across all 27 European Union states could be in place as early as 2013 according to the European Commission.

A controversial new bank bailout fund 'financed' by a new EU tax is also planned. The proposal includes an EU-wide deposit guarantee scheme to protect savers in the event of a bank collapse.

The UK has said it would not sign up to a full banking union, suggesting it should only be for eurozone members.

The BBC understands a timetable for the plan will be agreed at a European Council Meeting on 28 and 29 June in Brussels. European Commission President Jose Manuel Barroso supports rapid implementation of the plan with initial provisions, such as common bank supervision, being introduced as early as January 2013.

http://www.bbc.co.uk/news/business-18409175
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« Reply #216 on: June 12, 2012, 09:34:55 pm »

http://www.marketoracle.co.uk/Article35017.html
Jun 06, 2012 - 10:24 AM
By: Gary_North

George Soros has laid it on the line. The eurozone will begin to break up, followed by the break-up of the European Union, within three months if the politicians do not come to an agreement to re-write the treaties and centralize power. No other figure has been this apocalyptic and this specific as to the timetable.

He sees this outcome as a catastrophe. I keep thinking: "Free at last! Free at last!"

Soros understands the price movements of currencies better than anyone else. This is how he became a multi-billionaire. He has used massive leverage – extremely high risk – to speculate in the currency futures markets, often taking the opposite side of trades with central banks. When a man has enough wisdom to beat the currency futures markets, I give him credit. He knows something about currencies.
 
In a recent essay, he points out that the 2008 crisis created a new realization that there is no consensus about economic theory. He insists that "economic theory has failed." On the contrary, economic theory has triumphed – Austrian economic theory. In 2007, numerous non-academic, non-tenured Austrians predicted the recession of 2008. I called it in late 2006, predicting a 2007 recession. The National Bureau of Economic Research retroactively dated it as having begun in December 2007 – just in the nick of time!
 
Soros goes even further. This failure is the failure of academic economic theory.
 
I believe that the failure is more profound than generally recognized. It goes back to the foundations of economic theory. Economics tried to model itself on Newtonian physics. It sought to establish universally and timelessly valid laws governing reality. But economics is a social science and there is a fundamental difference between the natural and social sciences. Social phenomena have thinking participants who base their decisions on imperfect knowledge. That is what economic theory has tried to ignore.
 
This is the criticism made repeatedly by Austrian economists, beginning with Ludwig von Mises exactly a century ago: The Theory of Money and Credit (1912). I cannot imagine a better statement of Austrian theory's rejection of mainstream economists' theory.
 
Soros has no explanation for the business cycle. Austrian economics does: central bank policies of monetary inflation and monetary stability.

Here is Soros' view. "I treat bubbles as largely unpredictable." That is, he has no theory of economic causation. Bubbles are followed by busts, he says, which are followed by government regulation. This really is the pattern, but he does not explain how bubbles get started. "According to my theory financial markets may just as soon produce bubbles as tend toward equilibrium." In other words, there is no known cause. He has no economic theory. But he has this much right: "Behind the invisible hand of the market lies the visible hand of politics."
 
He blames policy-makers for the crisis. "The authorities didn't understand the nature of the euro crisis; they thought it is a fiscal problem while it is more of a banking problem and a problem of competitiveness." Yes, it is: the problem of fractional reserves and fiat money, all supported by the central bank. But he will not admit this.

He adopts the joint conclusion of mainstream Keynesianism, monetarism, and supply-sidism: "And they applied the wrong remedy: you cannot reduce the debt burden by shrinking the economy, only by growing your way out of it." But how? He has no clue. The Austrians do: cut government spending, cut taxes, reduce government regulation, and stabilize money – none of which is going to be done.
 
A BUBBLE OF FAITH: THE EUROPEAN UNION
 
He says there has been a bubble of misplaced enthusiasm: the European Union. I like this idea.

I contend that the European Union itself is like a bubble. In the boom phase the EU was what the psychoanalyst David Tuckett calls a "fantastic object" – unreal but immensely attractive. The EU was the embodiment of an open society – an association of nations founded on the principles of democracy, human rights, and rule of law in which no nation or nationality would have a dominant position.

The EU was in fact the embodiment of globalism: bureaucratic rule, government regulation, and fiat money. "The process fed on its own success, very much like a financial bubble. That is how the Coal and Steel Community was gradually transformed into the European Union, step by step." It was transformed by bureaucratic power from above. Jean Monnet's idea had been operational at the Paris Peace talks in 1919.
 
He says that Germany used to be at the forefront of this movement in the 1950s. The politicians wanted a united Europe. "The process culminated with the Maastricht Treaty and the introduction of the euro." Then came disaster.
 
It was followed by a period of stagnation which, after the crash of 2008, turned into a process of disintegration. The first step was taken by Germany when, after the bankruptcy of Lehman Brothers, Angela Merkel declared that the virtual guarantee extended to other financial institutions should come from each country acting separately, not by Europe acting jointly. It took financial markets more than a year to realize the implication of that declaration, showing that they are not perfect.


The Maastricht Treaty was fundamentally flawed, demonstrating the fallibility of the authorities. Its main weakness was well known to its architects: it established a monetary union without a political union. The architects believed however, that when the need arose the political will could be generated to take the necessary steps towards a political union.
 
He is saying that the architects imposed a flawed system on Europe, but in the hope of tightening fiscal control at a later date. That date is now.

In retrospect it is now clear that the main source of trouble is that the member states of the euro have surrendered to the European Central Bank their rights to create fiat money. They did not realize what that entails – and neither did the European authorities.
 
The power to create national money is the heart of Soros' vision of what is positive. This is nationalism with a printing press. It means competing rates of monetary depreciation. A precious metals coin system alone has prevented this in history.
 
Then came the stupid bankers. They thought the PIIGS were Germany. They believed in the equality of debtors.
 
When the euro was introduced the regulators allowed banks to buy unlimited amounts of government bonds without setting aside any equity capital; and the central bank accepted all government bonds at its discount window on equal terms. Commercial banks found it advantageous to accumulate the bonds of the weaker euro members in order to earn a few extra basis points. That is what caused interest rates to converge which in turn caused competitiveness to diverge.

The 2008 collapse exposed this faith as naive. But critics had said this throughout the 1990s. No one listened. The leaders believed in the EU bubble, to use Soros' words. Germany was at the forefront of this faith.
 
Germany, struggling with the burdens of reunification, undertook structural reforms and became more competitive. Other countries enjoyed housing and consumption booms on the back of cheap credit, making them less competitive. Then came the crash of 2008 which created conditions that were far removed from those prescribed by the Maastricht Treaty. Many governments had to shift bank liabilities on to their own balance sheets and engage in massive deficit spending. These countries found themselves in the position of a third world country that had become heavily indebted in a currency that it did not control. Due to the divergence in economic performance Europe became divided between creditor and debtor countries. This is having far reaching political implications to which I will revert.


It took some time for the financial markets to discover that government bonds which had been considered riskless are subject to speculative attack and may actually default; but when they did, risk premiums rose dramatically. This rendered commercial banks whose balance sheets were loaded with those bonds potentially insolvent. And that constituted the two main components of the problem confronting us today: a sovereign debt crisis and a banking crisis which are closely interlinked.
 
The creditor nations now want out: ". . . the creditors are in effect shifting the burden of adjustment on to the debtor countries and avoiding their own responsibility for the imbalances." Of course they do. And everyone wants a bailout from the central bank.
 
BLAME GERMANY!
 
He blames the center, meaning the Eurocrats and politicians in the North.
 
The "center" is responsible for designing a flawed system, enacting flawed treaties, pursuing flawed policies and always doing too little too late. In the 1980's Latin America suffered a lost decade; a similar fate now awaits Europe. That is the responsibility that Germany and the other creditor countries need to acknowledge. But there is no sign of this happening.


The European authorities had little understanding of what was happening. They were prepared to deal with fiscal problems but only Greece qualified as a fiscal crisis; the rest of Europe suffered from a banking crisis and a divergence in competitiveness which gave rise to a balance of payments crisis. The authorities did not even understand the nature of the problem, let alone see a solution. So they tried to buy time.
 
He has this much right. The authorities do not understand the nature of the crisis. He blames politics, not central banking. ". . . the financial problems were reinforced by a process of political disintegration." Now, it's every nation for itself! Soros hates this. He is a globalist.
 
While the European Union was being created, the leadership was in the forefront of further integration; but after the outbreak of the financial crisis the authorities became wedded to preserving the status quo. This has forced all those who consider the status quo unsustainable or intolerable into an anti-European posture. That is the political dynamic that makes the disintegration of the European Union just as self-reinforcing as its creation has been. That is the political bubble I was talking about.
 
At the beginning, the disintegration of the euro was inconceivable. Today, it is quite conceivable. The system is coming apart. There is no time to fix it if there is not immediate action. The banks are de-leveraging. They are selling assets outside their nations. "So the crisis is getting ever deeper."
 
The real economy of the eurozone is declining while Germany is still booming. This means that the divergence is getting wider. The political and social dynamics are also working toward disintegration. Public opinion as expressed in recent election results is increasingly opposed to austerity and this trend is likely to grow until the policy is reversed. So something has to give.
 
Something has to give. But what? Or, more to the point, who? Answer: Germany.
 
In my judgment the authorities have a three months' window during which they could still correct their mistakes and reverse the current trends. By the authorities I mean mainly the German government and the Bundesbank because in a crisis the creditors are in the driver's seat and nothing can be done without German support.
 
But will German politicians bite the bullet and bail out the PIIGS? If they wait until this fall, it will be too late. "By that time the German economy will also be weakening so that Chancellor Merkel will find it even more difficult than today to persuade the German public to accept any additional European responsibilities. That is what creates a three months' window."
 
The treaties must be revised, now. But how? The crisis is here.

There must be bank insurance. "Banks need a European deposit insurance scheme in order to stem the capital flight." Paid for by whom?
 
"They also need direct financing by the European Stability Mechanism (ESM) which has to go hand-in-hand with eurozone-wide supervision and regulation." Paid for by whom?
 
"The heavily indebted countries need relief on their financing costs. There are various ways to provide it but they all need the active support of the Bundesbank and the German government." All roads lead to Berlin. It's bailout time!
 
German voters say no. "That is where the blockage is." Got that? Blockage! People hanging onto their wallets! Why, the short-sighted fools! It's time to bail out the PIIGS again. Time is running out. It will never stop running out. Germany must suck it up and fork it over. Again.
 
The authorities are working feverishly to come up with a set of proposals in time for the European summit at the end of this month. Based on the current newspaper reports the measures they will propose will cover all the bases I mentioned but they will offer only the minimum on which the various parties can agree while what is needed is a convincing commitment to reverse the trend. That means the measures will again offer some temporary relief but the trends will continue. But we are at an inflection point. After the expiration of the three months' window the markets will continue to demand more but the authorities will not be able to meet their demands.
 
What will happen next? "It is impossible to predict the eventual outcome." The system could break down. "But the trends are clearly non-linear and an earlier breakup is bound to be disorderly. It would almost certainly lead to a collapse of the Schengen Treaty, the common market, and the European Union itself."
 
In other words, the entire experiment in European central government is on the line. They have three months to put the system back together. "Unenforceable claims and unsettled grievances would leave Europe worse off than it was at the outset when the project of a united Europe was conceived."

HOPE SPRINGS ETERNAL
 
Is all lost? No. Deliverance is coming.
 
But the likelihood is that the euro will survive because a breakup would be devastating not only for the periphery but also for Germany. It would leave Germany with large unenforceable claims against the periphery countries.

Germany dares not return to its own currency. Why not? That would reduce exports. "And a return to the Deutschemark would likely price Germany out of its export markets – not to mention the political consequences."

Soros is a Keynesian mercantilist. They all are. "So Germany is likely to do what is necessary to preserve the euro – but nothing more. That would result in a eurozone dominated by Germany. . . ."

There must not be budget cutting. There must not be austerity. There must be spending, spending, spending – all at Germany's expense.
 
The German public cannot understand why a policy of structural reforms and fiscal austerity that worked for Germany a decade ago will not work in Europe today. Germany then could enjoy an export led recovery but the eurozone today is caught in a deflationary debt trap. . . . In these circumstances it would require an extraordinary effort by the German government to convince the German public to embrace the extraordinary measures that would be necessary to reverse the current trend. And they have only a three-month window in which to do it.


We need to do whatever we can to convince Germany to show leadership and preserve the European Union as the fantastic object that it used to be. The future of Europe depends on it.
 
CONCLUSION
 
Soros is just another Keynesian. He is just another mercantilist. He is just another globalist. What makes him different is his willingness to say that time really is running out on Europe. The politicians must get something in place to replace the disintegrating euro, which will in turn break up the European Union. It all boils down to this: centralized control over each nation's spending and taxing, and Germany's endless trade surplus, i.e., the German banks' willingness to buy foreign governments' IOUs.
 
I hope we get to test his theory: three months to go, maximum. I hope he loses his bet.
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« Reply #217 on: June 13, 2012, 01:47:18 pm »

Europe may agree transactions tax in '12: report
13 June 2012, (MarketWatch)
http://www.marketwatch.com/story/europe-may-agree-transactions-tax-in-12-report-2012-06-13

European states could yet agree on a financial transactions tax by the end of the year, German newspaper Sueddeutsche Zeitung reports Wednesday, citing people close to European Tax Commissioner Algirdas Semeta.

A financial transactions tax could be decided upon this year provided at least nine countries present a corresponding application at next week's meeting of European Union finance ministers in Luxembourg, or at their meeting in July, people close to Mr. Semeta told the newspaper.

According to European treaties, a group of nine or more countries can work together on an issue that hasn't found broad agreement among all 27 EU states.

The financial transactions tax has been blocked by the United Kingdom, among others.

The European Commission is ready to prioritise the examination of any application for a financial transactions tax, Sueddeutsche Zeitung reports.

Still, the tax could only actually be levied at the start of 2014 because extensive preparatory work would be needed, the newspaper said.
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« Reply #218 on: June 13, 2012, 01:52:42 pm »

Industrial output down in euro zone and broader EU
13 June 2012, by Robert Daniel - Tel Aviv (MarketWatch)
http://www.marketwatch.com/story/industrial-output-down-in-euro-zone-and-broader-eu-2012-06-13

Industrial production in the 17-nation euro area fell 0.8% in April compared with March, the Eurostat statistics agency reported on Wednesday.

Industrial output for the 27-nation European Union fell 0.4%, the agency reported.

Compared with the year-earlier month, industrial production fell 2.3% in the euro zone and fell 1.7% within the broader EU.

Year over year, production of durable goods for consumers slumped 6.2% in the euro zone and dropped 4.5% in the broader EU.

Capital-goods output declined 0.3% in the euro zone and rose 0.4% in the EU27, Eurostat reported.
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« Reply #219 on: June 14, 2012, 10:33:04 am »

http://www.guardian.co.uk/business/2012/jun/13/eurozone-crisis-banking-sector-wiped-out

6/13/12

Eurozone crisis: Banking sector could be 'wiped out' if weakest nations leave

Analysis by Credit Suisse estimates that up to 58% of the value of Europe's banks could be wiped out by the departure of the 'peripheral' countries

Few large eurozone banks would be left standing and the banking sector could face a €370bn (£298bn) lossif the euro crisis results in the single currency bloc breaking apart, according to one of the first indepth analyses of what might happen if the eurozone disintegrates.

The analysis by Credit Suisse estimates that up to 58% of the value of Europe's banks could be wiped out by the departure of the "peripheral" countries - Greece, Ireland, Italy, Portugal and Spain - from the eurozone.

Even if the single currency remains intact some €1.3tn of credit could be sucked out of the system as banks retrench to their home markets, unwinding years of financial integration, the Credit Suisse analysis warns. his represents as much as 10% of the credit in the financial system.

"We find that a Greek exit could be manageable ... but in a peripheral exit, few of the large listed eurozone banks would be left standing," the Credit Suisse report said.

The banking sector could need capital injections of as much as €470bn if the three scenarios considered by the Credit Suisse analysts - a Greek exit, an exit of the periphery countries and a situation where banks retrench domestically - happen at once.

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« Reply #220 on: June 26, 2012, 06:14:18 pm »

Plan would give EU national budget powers: report
26 june 2012, Frankfurt (MarketWatch)
http://www.marketwatch.com/story/plan-would-give-eu-national-budget-powers-report-2012-06-26

European leaders meeting later this week will consider a plan that would allow the European Union to rewrite national budgets for euro-zone countries that fail to meet debt and deficit rules, the Financial Times reported Tuesday, citing a draft report.

The plans call for the European Commission, the EU's executive arm, to present detailed budget adjustments for countries in violation of the fiscal rules, the report said.

The proposals would then be voted on by all other EU countries.

Germany has insisted that tighter fiscal union be a prerequisite for any move toward joint issuance of euro-zone debt, or eurobonds.
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« Reply #221 on: July 02, 2012, 01:31:48 pm »

http://www.marketwatch.com/story/euro-compromises-likely-to-unravel-2012-07-02

Euro compromises likely to unravel
Commentary: Merkel weakened at home by Brussels concessions


7/2/12

MADRID (MarketWatch) — The major German concessions (above all, over the use of ESM European rescue funds directly for Spanish banking recapitalization) agreed at the euro summit are unlikely to enter into force. The compromises announced on Friday between creditors and debtors will fall apart because they are mutually contradictory.

The good news (of sorts) is that the European Central Bank is out of the firing line for the moment. It can cut interest rates by ¼ percentage point on Thursday without being accused of kowtowing to government pressure. ECB bond purchases, hotly opposed by the Germans and a steadily growing band of other countries, are off the agenda as the focus switches to taxpayer-backed rescue devices.

The bad news is that these taxpayers, and their parliamentary representatives, are about to revolt. Chancellor Angela Merkel arrived back in Berlin on Friday afternoon from her Brussels sojourn and ran into a firestorm of criticism. A fierce political and constitutional battle lies ahead. Whatever happens, the outcome will gravely weaken Europe’s most powerful leader.

What happened over the past few days is a mockery of euro summitry and a travesty of parliamentary procedures in Germany. Merkel was forced into the Brussels agreement by a coalition of opposing interests who grouped together to blackmail her into submission. She was caught in a pincer movement.

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« Reply #222 on: July 04, 2012, 01:57:23 pm »

Slovenia Heads for Euro-Area Bailout Request to Aid Banks
3 July 2012, by Boris Cerni and Radoslav Tomek (Bloomberg)
http://www.bloomberg.com/news/2012-07-02/slovenia-heads-for-sixth-euro-area-bailout-request-to-aid-banks.html

Excerpt:

Slovenia is headed toward becoming the sixth euro-area nation to seek a bailout as faltering banks strain the finances of the first post-communist nation to adopt the common currency, said economists from London to Warsaw.

The nation, which adopted the euro in 2007, is assessing the fiscal burden of covering the liabilities of its financial industry after Nova Ljubljanska Banka d.d., the largest bank, got a capital boost.

Premier Janez Jansa, who said on June 27 that Slovenia risks a “Greek scenario,” told reporters two days later in Brussels the government is “doing everything to find a solution” and avoid the need for assistance.

“It’s increasingly likely that Slovenia will be the next small economy asking for a European Union bailout, which would be focused on the banking sector,” Michal Dybula, an economist at BNP Paribas SA (BNP) in Warsaw, said by phone.

Cyprus last week became the fifth euro-area country to ask for help from the 17-nation region’s firewall, while Slovenian borrowing costs soared last month to the highest level since February, with the yield on the 2021 bond reaching 6.1% on June 29. Greece, Ireland, Portugal and Spain were forced to seek financial aid after their borrowing costs surged.

Slovenia’s benchmark bond dropped today, pushing the yield on government notes maturing in 2021 to 6.003% at 10:12 a.m. in Ljubljana from 5.808% yesterday, according to mid-pricing data compiled by Bloomberg.
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« Reply #223 on: July 19, 2012, 04:08:28 pm »

Negative yields imply euro-zone breakup risks
19 July 2012, by Deborah Levine (MarketWatch - Blogs)
http://blogs.marketwatch.com/thetell/2012/07/19/negative-yields-imply-euro-zone-breakup-risks/

Germany recently sold 2-year schatz at a negative yield, and the Netherlands, Denmark, Finland and Switzerland have also all sold debt at negative yields.

The situation is pretty good for governments borrowing money.

But the trend signals rising worries about the future of the euro zone and the euro, said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

He wrote:

To simply say these countries are safe havens may make analysis superfluous. 

It may help to conceptualize the negative yields as insurance against a euro-zone breakup. 

One might be willing to accept negative yields on the grounds, for example, that if the euro zone were to disintegrate, these countries would likely see a marked appreciation of their currencies.

This also has implications for how far negative rates can go. 

This conceptual framework suggests that if the fear of disintegration increase, yields can go much more negative.
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« Reply #224 on: July 24, 2012, 07:09:30 pm »

http://www.telegraph.co.uk/finance/financialcrisis/9424793/Europe-is-sleepwalking-towards-imminent-disaster-warn-top-economists.html

The euro has completely broken down as a workable system and faces collapse with “incalculable economic losses and human suffering” unless there is a drastic change of course, according to a group of leading economists.

7/24/12

Europe is “sleepwalking towards disaster”, according to the 17 experts, who warned that over the past few weeks “the situation in the debtor countries has deteriorated dramatically”.
 
The sense of a neverending crisis, with one domino falling after another, must be reversed. The last domino, Spain, is days away from a liquidity crisis,” said the economists. They include two members of Germany’s Council of Economic Experts and leading euro specialists at the London of School of Economics, all euro supporters.
 
“This dramatic situation is the result of a eurozone system which, as currently constructed, is thoroughly broken. The cause is a systemic failure. It is the responsibility of all European nations that were parties to its flawed design, construction and implementation to contribute to a solution. Absent this collective response, the euro will disintegrate,” they added in a co-signed report for the Institute for New Economic Thinking.
 
The warning came as contagion from Spain pushed Italy’s borrowing costs to danger levels, with two-year yields rocketing 40 basis points to more than 5pc. The Milan bourse tumbled 3pc, led by bank shares. Italian equities have been in freefall since it became clear two weeks ago that the EU’s June summit deal had failed to break the nexus between crippled banks and sovereign states.
 
The crisis is starting to ricochet back into Germany, where the PMI manufacturing index for July fell to its lowest since mid-2009. Doubts are emerging about the creditworthiness of the German state itself.

The giant US bond fund PIMCO said on Tuesday that it would retreat further from the German bond market after Moody’s issued a negative watch on the AAA ratings of Germany, the Netherlands and Luxembourg. “We’re expecting a further ratings downgrade in the future,” said the group.
 
Moody’s warned that Germany faced the “risk of a shock” from a Greek euro exit and the likely knock-on effects through Spain and Italy, as well the “German banks’ sizeable exposure to most stressed euro area countries”. The warning had no immediate effect on German debt markets. Two-year yields remained below zero due to safe-haven effects.
 
Moody's cut the outlook on the Eu's bailout fund, the European Financial Stability Facility, to negative from stable on Tuesday night.
 
The 17 economists said Europe’s political waters have been muddied by disputes over eurobonds, debt-pooling, subsidies and fiscal union. None of this was necessary to break the logjam, they said.
 
They claimed the system could be stabilised immediately by creating a lender of last resort to back-stop the bond markets, either by mobilising the ECB or by giving the eurozone bail-out fund (ESM) a banking licence to borrow from the ECB.
 
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« Reply #225 on: July 24, 2012, 07:17:08 pm »

http://www.marketwatch.com/story/euro-crisis-brings-world-to-brink-of-depression-2012-07-24?link=MW_latest_news

7/24/12

Euro crisis brings world to brink of depression
Commentary: Parallels to 1930s’ missteps unmistakable

WASHINGTON (MarketWatch) — Europe is a tinderbox waiting for a spark.

The financial volatility in Europe may have created a situation that is now beyond the capacity of policy makers to control or curb.

When an accomplished fixer like Pascal Lamy, the head of the World Trade Organization and the longtime chief of staff for former European Commission President Jacques Delors, describes the situation in Europe as “difficult, very difficult, very difficult, very difficult,” you know it is time to run for cover.

The crisis has now gone well beyond the prospect of breaking up the euro /quotes/zigman/4867933/sampled EURUSD -0.03%  to the threat of a full-fledged financial and economic collapse in Europe that could plunge the world into a second Great Depression.

Few Americans are aware that a worldwide banking crisis started by cascading bank failures in Austria and Germany was one of the major causes of that earlier Depression.

It was in the summer of 1931 that the collapse of Creditanstalt in Vienna forced one of Germany’s big banks, Danatbank, to fail, leading to a credit crisis that prompted bank holidays around the world and exacerbating an already severe economic crisis
.

The spark in the current crisis could come from a bank failure, and not necessarily in Spain. It could be a bank in Italy — or Austria, or Germany. German banks are notoriously undercapitalized and poorly supervised and have created a number of mini-crises in the past few decades since the collapse of the Herstatt Bank in 1974.

German economist Fabian Lindner drew the parallel to 1931 in an op-ed last fall when he compared his country’s intransigence toward southern Europe now to the misguided harshness of the U.S. and France toward Germany in the earlier crisis.

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« Reply #226 on: July 25, 2012, 01:04:29 pm »


EBRD Sees Negative Impact of Euro-Zone Crisis Spreading East and South
By Paul Hannon

LONDON--Russia's economy is set to succumb to the baleful effects of the euro zone's fiscal and banking crises as commodity prices fall, the European Bank for Reconstruction and Development said Wednesday.

As long ago as October of last year, the EBRD slashed its growth forecasts for eight economies in central Europe and the Baltics, or CEB, and seven economies in southeastern Europe, or SEE, citing their close trade and financial links to the euro zone.

With strong growth elsewhere in the global economy supporting prices for oil and other raw materials, the EBRD's forecasts for Russia were ...

http://online.wsj.com/article/BT-CO-20120724-719313.html
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« Reply #227 on: August 09, 2012, 09:29:02 pm »


http://finance.yahoo.com/news/austeritys-cost-abandoned-children-europe-150243995.html
Austerity's Cost: Abandoned Children in Europe

8/9/12

As the euro zone debt crisis deepens and austerity measures take their toll across Europe, the number of young children and babies abandoned across the region has increased, according to local charities.

The rise in the abandonment of infants across Europe is most visible in the spread of "baby hatches" or "boxes" across Europe, where unwanted infants are left anonymously.
 
The phenomenon was previously more prevalent among immigrants, but it is becoming more widespread among financially desperate members of the local population.
 
The hatches are sensor-activated so when a baby is placed, an alarm is activated and a carer comes to collect the child. Despite the practice being widely viewed as contravening the 1953 European Convention on Human Rights, of the 27 EU member countries, 11 countries still have "baby hatches" in operation, including Germany, Italy and Portugal.

In those countries where hatches are illegal, the number of infants abandoned in hospitals, clinics and churches has also risen, raising concerns among European charities, the UN and the European Commission that austerity measures and increasing social deprivation are the catalyst for the rise in child abandonment.
 
According to SOS Villages, a European charity that attempts to help families in financial hardship before abandonment occurs, in the last year alone 1,200 children in Greece and 750 in Italy have been abandoned. That is almost double the 400 children abandoned in Italy a year ago, and up from 114 children abandoned in Greece in 2003.
 
With the cost of raising children estimated to be 20-30 percent of an average household budget (per child) in Europe, more families are now struggling to cope with the costs.

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« Reply #228 on: August 13, 2012, 04:36:47 pm »

Spiegel: Investors Prepare For Euro Collapse
13 August 2012, by Tyler Durden (Zero Hedge)
http://www.zerohedge.com/news/spiegel-investors-prepare-euro-collapse

Banks, investors and companies are bracing themselves for the possibility that the euro will break up -- and are thus increasing the likelihood that precisely this will happen.
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« Reply #229 on: August 14, 2012, 08:08:52 pm »

Europe on the edge of recession
http://news.yahoo.com/europe-edge-recession-102625704--finance.html

8/14/12

LONDON (AP) — Europe is edging closer to recession, dragged down by the crippling debt problems of the 17 countries that use the euro, official figures showed Tuesday.

Eurostat, Europe's statistics agency, revealed that the economies of both the eurozone and the European Union, which has 27 countries, shrank by a quarterly rate of 0.2 percent in the second quarter of the year. In the first quarter, output for both regions was flat. A recession is officially defined as two straight quarters of falling output.

Europe's debt woes have been blamed for the sharp deterioration in the global economic outlook over the last few months. The region is the U.S.'s largest export customer and any fall-off in demand will hit order books — as well as President Barack Obama's election prospects.

The 17-country eurozone is grappling with sky-high debt levels and record unemployment of 11.2 percent. Compared with the second quarter of last year, the eurozone's economy is 0.4 percent smaller.

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« Reply #230 on: September 03, 2012, 08:00:07 pm »

http://www.cnbc.com/id/48888752

Moody’s Changes Euro Zone Rating Outlook to ‘Negative’

9/3/12

Moody's Investors Service has changed its outlook on the Aaa rating of the European Union to “negative,” warning it might downgrade the bloc if it decides to cut the ratings on the EU's four biggest budget backers: Germany, France, the U.K., and the Netherlands.
The move will add to pressure on the European Central Bank (learn more) to provide details of a new debt-buying scheme to help deeply indebted euro zone states at its policy meeting on Thursday.

Back in July, Moody's changed its outlook for Germany, the Netherlands, and Luxembourg to “negative” as fallout from Europe's debt crisis cast a shadow over its top-rated countries. The outlook on France and the U.K. are also “negative.”
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« Reply #231 on: September 04, 2012, 01:22:37 pm »

http://www.cnbc.com/id/48883704

9/4/12

Depression, Suicides Rise as Euro Debt Crisis Intensifies

Europe is approaching a crisis as the region’s debt crisis and austerity measures increase the rates of depression, suicide and psychological problems – just as governments cut healthcare spending by up to 50 percent, according to campaigners, policy makers and health organizations.

A growing number of global and European health bodies are warning that the introduction and intensification of austerity measures has led to a sharp rise in mental health problems with suicide rates, alcohol abuse and requests for anti-depressants increasing as people struggle with the psychological cost of living through a European-wide recession.

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« Reply #232 on: October 25, 2012, 09:27:43 am »

http://news.yahoo.com/lending-still-weak-slack-eurozone-economy-115543517--finance.html

Lending still weak in slack eurozone economy
By DAVID McHUGH | Associated Press – 2 hrs 25 mins ago

FRANKFURT, German (AP) — Another drop in lending to companies in the 17-country eurozone showed the economic downturn is deepening, as a brighter mood on financial markets fails to catch on with businesses.

The European Central Bank said Thursday that loans to non-bank businesses shrank 1.4 percent year on year in September, double the 0.7 percent contraction reported the month before.

The numbers show the economy is struggling despite efforts by the central bank to stimulate credit and calm financial markets fearful that the eurozone might break up. The ECB has cut its main interest rate to a record low 0.75 percent and made €1 trillion ($1.3 trillion) in cheap loans to banks that don't have to be paid back for three years.

Even so, that easy money is not making it from banks to businesses and consumers, largely because demand for credit remains weak.

Businesses see no reason to borrow to invest in expanding production. Meanwhile, banks in some countries have less to lend because they are struggling to recover from losses on real estate loans that didn't get paid back and on government bonds that have fallen in value due to fears about those governments' finances.

The eurozone economy shrank 0.2 percent in the second quarter after zero growth in the first quarter, and the outlook for the rest of the year remains poor. A drop in output in the third-quarter — for which numbers are due Nov. 15 — would put the eurozone in a technical recession, defined as two consecutive quarters of contraction.

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« Reply #233 on: November 15, 2012, 09:45:28 am »

http://finance.yahoo.com/news/eurozone-back-recession-q3-100356213.html
Eurozone back in recession in Q3
Eurozone back in recession as official figures show 0.1 percent quarterly contraction in Q3


11/15/12

LONDON (AP) -- The 17-country eurozone has bowed to the inevitable and fallen back into recession for the first time in three years as a sprawling debt crisis took its toll on the region's stronger economies.

And with surveys pointing to increasingly depressed conditions across the eurozone at a time of high unemployment in many countries, there are fears that the recession will deepen, and make the debt crisis even more difficult to handle.

Official figures Thursday showed that the eurozone contracted by 0.1 percent in the July to September period from the quarter before as economies including Germany and the Netherlands suffer from falling demand.

The decline reported by Eurostat, the EU's statistics office, was in line with market expectations and follows on from the 0.2 percent fall recorded in the second quarter. As a result, the eurozone is officially in recession, commonly defined as two straight quarters of falling output.

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« Reply #234 on: January 16, 2013, 04:08:42 pm »

Russia Says World Is Nearing Currency War as Europe Joins
16 January 2012, by Simon Kennedy & Scott Rose (Bloomberg)
http://www.bloomberg.com/news/2013-01-16/russia-says-world-is-nearing-currency-war-as-europe-joins.html

Excerpt:

The world is on the brink of a fresh “currency war,” Russia warned, as European policy makers joined Japan in bemoaning the economic cost of rising exchange rates.

“Japan is weakening the yen and other countries may follow,” Alexei Ulyukayev, first deputy chairman of Russia’s central bank, said at a conference today in Moscow.

The alert from the country that chairs the Group of 20 came as Luxembourg Prime Minister Jean-Claude Juncker complained of a “dangerously high” euro and officials in Norway and Sweden expressed exchange-rate concern.

The push for weaker currencies is being driven by a need to find new sources of economic growth as monetary and fiscal policies run out of room.

The risk is as each country tries to boost exports, it hurts the competitiveness of other economies and provokes retaliation.

Yesterday “will go down as the first day European policy makers fired a shot in the 2013 currency war,” said Chris Turner, head of foreign-exchange strategy at ING Groep NV in London.
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« Reply #235 on: January 16, 2013, 04:15:14 pm »

Euro at 10-Month High Poses Economic Threat, Juncker Says
16 January 2013, by Stephanie Bodoni (Bloomberg)
http://www.bloomberg.com/news/2013-01-16/euro-exchange-rate-is-dangerously-high-juncker-says.html

Excerpt:

The euro’s 8% gain against the U.S. dollar in the past six months is posing a fresh threat to the European economy just as it shows signs of escaping the debt crisis, said Jean-Claude Juncker, who leads the group of euro-area finance ministers.

Echoing policy makers from Switzerland to Japan in bemoaning strong exchange rates, Juncker late yesterday called the euro’s value “dangerously high” after the 17-nation currency this week traded above $1.34 against the dollar for the first time since February last year.
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« Reply #236 on: February 20, 2013, 11:30:53 am »

http://news.yahoo.com/analysis-core-problem-europe-france-germany-drift-apart-160810650--business.html

Analysis: Core problem for Europe as France, Germany drift apart

2/20/13

LONDON (Reuters)- Even as the euro zone periphery starts to spy some glimmers of hope, concern is mounting that Germany is drifting apart from other countries at the core of the single currency bloc, notably France.
 
Economically, the worry is that insistence on fiscal austerity by an out-performing Germany will delay an upturn in France, which has been steadily losing competitiveness to its larger neighbor.
 
Politically, the risk is that already uneasy relations between French President Francois Hollande and German Chancellor Angela Merkel could come under further strain when the euro zone needs strong, cohesive leadership to create a new institutional framework for the euro.
 
Philippe Waechter, chief economist at Natixis Asset Management in Paris, said signs of a solid recovery in Germany's economy were bolstering Merkel's position on economic policy going into September's general election.
 
Hollande, by contrast, was forced to acknowledge on Tuesday that growth would fall short of his government's 0.8 percent forecast. His government has already admitted it will miss its deficit target this year.
 
"The issue is how the balance of power evolves between Francois Hollande and Angela Merkel, knowing that France and Germany are extremely important in the political construction of the euro zone," Waechter said.

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« Reply #237 on: February 27, 2013, 11:56:13 am »

2/27/13

Italy’s electoral earthquake is ‘‘a catastrophe for the euro and the European Union’’, according to Luxembourg’s foreign minister, Jean Asselborn.
 
Italy is big enough to bring down the eurozone if mishandled.
 
The verdict was much the same in chancelleries across the eurozone, especially in those countries already starting to feel the first wave of contagion.
 
‘‘The result touches us all,’’ said Spain’s foreign minister, Jose Manuel Garcia-Margallo. ‘‘It is a jump into the void that bodes well for nobody, neither for Italy, nor for the rest of Europe.’’

Almost 57 per cent of the Italian vote went to parties that have vowed to tear up the EU austerity script. Together they control a majority of senate seats.
 
The Five Star movement of comedian Beppe Grillo, which won 25 per cent of the vote, has called for a euro referendum and has a return to the lira as one of its manifesto pledges, while ex-premier Silvio Berlusconi has threatened to pull Italy out of the currency bloc unless the EU switches to a reflation strategy.
 
Even if the centre-left leader, Pier Luigi Bersani, can put together a ‘‘grand coalition’’ with Mr Berlusconi, there is no going back to the hairshirt regime imposed by Mario Monti’s technocrat government at the EU’s behest over the past 15 months.
 
‘‘A deal with Monti is impossible,’’ said Mr Berlusconi yesterday. ‘‘His austerity policies have put the country into a dangerous recessionary spiral, with rising debt and unemployment, and the closure of a thousand firms a day.’’
 
The great fear is that the European Central Bank (ECB) will find it impossible to prop up the Italian bond market under its Outright Monetary Transactions (OMT) scheme if there is no coalition in Rome willing or able to comply with the tough conditions imposed by the EU at Berlin’s behest. Europe’s rescue strategy could start to unravel.
 
Andrew Roberts, credit chief at RBS, said: ‘‘What has happened in these elections is of seismic importance.
 
‘‘The ECB rescue depends on countries doing what they are told. That has now been torn asunder by domestic politics in Italy. ‘‘The big risk is that markets will start to doubt the credibility of the ECB’s pledge.’’
 
It is a widely shared view. Luigi Speranza, from BNP Paribas, said: ‘‘We fear the markets could lose faith in the OMT’s effectiveness.’’
 
Bond buying under the OMT can begin only after countries in trouble request a rescue from the EU’s bail-out fund under strict terms.
 
This then requires a vote in the Bundestag.Germany’s ECB board member, Jorg Asmussen, backed the plan when it was unveiled in August, signalling the crucial acquiescence of Chancellor Angela Merkel. The concern is that Germany could withdraw that assent if provoked.
 
Mr Roberts said: ‘‘The big unknown is how much Germany is going to buckle over the next six months. German leaders want to keep up the appearance that the eurozone crisis has been solved, at least until their elections in September.’’
 
In one sense, Italy is in a weak bargaining position. It must raise 420 billion euros this year, making it acutely sensitive to the latest surge in borrowing costs. Yields on 10-year bonds surged 34 basis points yesterday, pushing the spread over German Bunds to 330, with traders eyeing the 400 level where stress begins in earnest. Italian bank shares tumbled in Milan, with Intesa Sanpaulo down 8.4 per cent on fears of losses on sovereign bonds.
 
Yet Italy is big enough to bring down the eurozone if mishandled. It is also the one Club Med country with enough fundamental strengths to leave EMU and devalue, if it concludes that would be the least painful way to restore 35 per cent of lost competitiveness against Germany since the launch of the euro.
 
It has low private debt and euros 9 trillion of private wealth. Its total debt level is 265 per cent of GDP, lower than in France, Holland, the UK, the US or Japan.
 
Its budget is near primary balance, and so is its International Investment Position, in contrast to Spain and Portugal. It could in theory return to the lira without facing a funding crisis, and this may be the only way to avoid a crisis if the ECB withdraws support. Any attempt to force Italy to knuckle down risks backfiring disastrously for EMU creditors.
 
The question is whether the election will prompt a radical rethink in Brussels and Berlin. Martin Schulz, the European Parliament’s president, said the vote had shown the intellectual bankruptcy of current EU policies.
 
‘‘People will make sacrifices, but not at any cost,’’ he said.
 
Defenders of the Monti policy say in retrospect that it was an error to push fiscal tightening of 3 per cent of GDP last year when Italy was already in depression - and did not have a deficit crisis - and neglect the greater task of marshalling public support behind reforms.Critics are harsher.
 
Nobel economist Paul Krugman said the EU policies imposed on Italy and others has been ‘‘a disastrous failure’’. If there is no change in strategy, this election will be ‘‘just the foretaste of the dangerous radicalisation to come’’.


Read more: http://www.smh.com.au/business/world-business/catastrophe-for-euro--europe-frets-over-italy-20130227-2f4ua.html#ixzz2M7i2davM
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« Reply #238 on: February 28, 2013, 05:53:55 pm »

http://news.yahoo.com/van-rompuy-tells-britain-leaving-eu-not-free-215722179--business.html

2/28/13 Van Rompuy tells Britain: leaving EU "not free"

LONDON (Reuters) - One of Europe's most powerful officials cautioned Prime Minister David Cameron on Thursday that leaving the European Union could cost Britain dear and that the bloc's other leaders do not want to renegotiate Europe's founding treaties.
 
European Council President Herman Van Rompuy said Britain had a chance to play a leading role in building the European economy now the euro zone had the "artillery" of economic tools to get itself out of the worst crisis in its history.
 
But Van Rompuy laced his speech in London's financial district with a clear warning to Cameron: Europe will not countenance any attempt by Britain to win an a-la-carte membership, picking and choosing which of the European Union's rules it will follow and which to reject.
 
"Leaving the club altogether, as a few advocate, is legally possible," he said. "We have an 'exit clause'.
 
"But it's not a matter of just walking out. It would be legally and politically a most complicated and unpractical affair. Just think of a divorce after 40 years of marriage."

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« Reply #239 on: March 01, 2013, 04:41:29 pm »

http://seekingalpha.com/article/1241591-a-bad-week-for-the-euro?source=yahoo

A Bad Week For The Euro

3/1/13
So much for the big support in the euro versus the USD at 1.30. The high was made on Monday and the market reversed and has since plunged lower. The catalyst for this week's sell off of course was the Italian election of candidates who do not want to take orders from Frankfurt or Brussels. In fact, the ex-comedian, Beppe Grillo, leader of the populist Five Star Movement, does not want to form an alliance with anyone.

Over 55% of the voters cast their ballot for those voicing opposition to the austerity policies imposed by the by the technocrat Monti. Grillo's refusal to compromise and form a government with other parties has created a political stalemate, with chaos resulting. Should there be a quick resolution, this would give us a rally in the euro, but this seems unlikely.

The evolving political vacuum in Italy has hurt both the Italian equity and bond markets. Despite the political uncertainty Italy was successful selling €6.5B of debt though at higher prices. The Italian ten year bond sold to yield 4.83%, a big premium to the German ten year rate of about 1.45%. Italy is the world's third largest issuer of debt. This year the total borrowing needs of the Italian government to cover the deficit, and the refinance maturing debt will be about 25% of the GDP, or about €390B.

Today the unemployment numbers were announced for Europe. Total EU unemployment is now at a record of 11.9%, or about 19M people. For the four largest economies the rates are Germany 6.9%, France 10.6%, Italy, 11.7%, and Spain at 16.2%. Clearly, the austerity policies as recommended by the Northern Europeans, is causing harm for many. This coming Wednesday the EU GDP numbers will be announced, estimated to be -0.6 for the most recent quarter and -0.9 for last year.

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