UniCredit and Intesa Sanpaolo announced on Tuesday night that they intend to sell their holdings in the LSE to institutional investors.
Combined, their stakes account for more than 11pc of LSE shares. Morgan Stanley has been appointed to act for both banks and the sale is expected to take place via an “accelerated bookbuild”, where most shares are likely to be offloaded overnight. It is understood the shares have been offered at between 960p and £10.00, a sizeable discount to Tuesday’s closing price of £10.21.....UniCredit and Intesa Sanpaolo have been shareholders in the LSE since 2007, when the exchange bought its Italian equivalent, the Borsa Italiana, for €1.63bn (£1.31bn). Neither bank offered a reason for the surprise sale but the move comes a week after they were both downgraded by rating agency Moody’s amid mounting gloom over the stability of Italy’s financial system. Today starts the most important EU- Summit-since the last G8-summit three days before. In line with his few days as new French president, Hollande will convince all other Presidents, that he is unable to marshal the French economy as he is lacking any experience and training and interest in economy, which is normal for a Socialist, but he feels fully committed to the Socialist principle of pick pocketing, now in the wallets of the rich North, Britain included, and spending the picked money for the poor in the South, France included...In the mean time - what was his "price" ..."The leader of Greece's radical left coalition, Alexis Tsipras, has appealed to Germans to show solidarity towards the embattled, debt-ridden Greeks, telling them that his country's economic woes were those of a whole continent. On the Berlin leg of a charm offensive to win over European politicians, the 37-year old, whose Syriza coalition has a good chance of securing victory at a repeat election on 17 June, stressed that he wanted to work with the Germans to "find a solution to our joint problem". Following a visit to Paris on Monday, Tsipras met likeminded, anti-capitalist far-left politicians in Berlin. He said the trenchant views of Angela Merkel's German government on the eurozone debt crisis and her adherence to unpopular austerity measures were part of the problem. "It would be helpful if we focused on this as a geographical problem facing the whole of Europe rather than concentrating on one country and looking to destroy a nation of peoples," he said.
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Germany rules out common euro bonds
Berlin deaf to pleas from IMF and OECD ahead of summit
BRUSSELS—European leaders meeting here Wednesday are expected to back a package of initiatives to jumpstart growth across the flagging euro zone. But the planned display of harmony masks deep divisions within the currency bloc over more aggressive steps many policy makers believe must be adopted if the euro is to survive.
The divide is a familiar one, pitting a bloc led by France and Italy against Germany and the dwindling group of small northern European countries that support Berlin's rigid course. At issue are radical reforms to the euro-zone's architecture, from common bond issuance to a more potent bailout fund.
The election of Socialist François Hollande as French president this month has upended the euro zone's balance of power, lending a more powerful voice to supporters of bold action.
So far, Berlin has batted back calls for more radical steps. Germany, Europe's only healthy major economy, has over the past few years repeatedly rejected the idea of bonds issued jointly by Europe's government and similar ideas for fear that German taxpayers would end up underwriting the entire euro-zone. But worries that a Greek exit from the euro area could unleash a global panic and trigger the currency's collapse have forced a new debate and put the measures back on the table.
No major decisions are expected to be announced at the informal dinner meeting of the 27 European Union leaders. But the tenor of the discussions could offer clues on whether and under what conditions Berlin would compromise.
The ECB has opposed this step, because the ESM's only mandate is lending to crisis-hit euro-zone nations. The ECB's opposition would likely soften if the ESM were allowed to recapitalize euro-zone banks, say people familiar with the debate. The ECB then wouldn't be lending to an entity that lends only to governments, easing concerns that the central bank would violate rules barring it from directly financing government debts.
Under current rules, ESM funds can be used to recapitalize banks, but only via lending to the government that is the home country of the bank in question. That's a problem for countries like Spain, afflicted by worries about its banking system and rising borrowing costs, that wouldn't want to increase its government debt with money used for bank recapitalization.
The third is a plan to borrow money against the EU budget that would be dedicated to infrastructure-investment projects. The plan would create a pilot project using €230 million in EU budget money that could leverage funds of up to €4.6 billion. After two years, the program will be reviewed and possibly increased.
Analysts say none of these ideas is enough to have a significant, near-term macroeconomic effect in the bloc's troubled economies.
"These ideas don't materially improve trend growth prospects in the euro zone," said Mujtaba Rahman, an analyst at the Eurasia Group, a political risk consulting firm. "It's a lot of rhetoric and not a lot substance."
Thilo Sarrazin, the former board member of Germany's central bank who caused outrage two years ago with a bestseller criticizing the impact of Muslim immigrants on German society, presented a new book on Tuesday that could strike a similar chord with Germans: "Europe Doesn't Need the Euro."
In his latest work, the combative politician, a maverick member of the opposition center-left Social Democratic Party, controversially argues that Germany is being pressured to bail out the euro zone because it perpetrated the Holocaust.
Sarrazin writes that supporters of euro bonds in Germany "are driven by that very German reflex, that we can only finally atone for the Holocaust and World War II when we have put all our interests and money into European hands," according to excerpts published in German media ahead of the book launch.
Politicians lined up to dismiss the comment as an attempt to whip up publicity for his book launch with crude rhetoric laced with far-right undertones.
"It is pitiful that he invokes the Holocaust to secure the maximum possible attention for his theories on euro bonds," the parliamentary floor leader of the opposition Greens, Jürgen Trittin, told the newspaper Die Welt on Monday, adding that Sarrazin was engaging in "deutsche mark chauvinism."
The figures give no insight into how trade inside the euro zone would have developed without a single currency. Many economists argue that Germany has been the main beneficiary of the euro. They say it has spared the country rapid currency appreciations that would have made German industry uncompetitive inside and outside Europe. They also argue that devoting hundreds of billions of euros in guarantees for ailing euro members doesn't stem from altruism but is in Germany's best economic interest.
Nevertheless, many of Sarrazin's arguments are widely accepted. He says it was a mistake to launch the currency before Europe had a common fiscal policy, and that it was wrong to let countries like Greece join because their economies weren't ready.
He concludes that Europe can only get out of its mess if it rapidly moves towards political union, which he opposes, or that the union should be transformed into a looser formation that allows troubled member states to quit so that they can regain competitiveness through currency devaluation.
In other comments, he uses terms such as "culture" and "mentality" to explain the lack of budget discipline in southern member states of the euro zone. Many Germans will share that view and approve of Merkel's strict insistence that ailing states must undergo stringent austerity. It is a stance which is leaving her and Germany increasingly isolated in Europe.
Despite the Holocaust comment, Sarrazin's book is less provocative and better argued in parts than his 2010 book "Germany Does Itself In" in which he claimed that Germany was in decline because of the rapid growth of an underclass of poorly educated Muslim immigrants who were unwilling to integrate into society.
Sarrazin, a former finance minister for the city-state of Berlin, quit his position at the Bundesbank in 2010 after reaching a settlement with the central bank, which had tried to fire him for damaging its reputation with his repeated provocative comments about immigrants.
He has since embarked on a lucrative career as an author. Sarrazin sold over 1.3 million copies of "Germany Abolishes Itself."
INTEREST rates could be slashed to zero for the first time and delight millions of home owners with the possibility of interest-free mortgages.
The dramatic plan was urged yesterday by Christine Lagarde, the boss of the International Monetary Fund, to kick-start the economy and protect Britain from the eurozone crisis.
She warned that the UK must cut rates below the current record low of 0.5 per cent to reduce the cost of borrowing for businesses and home owners.
Her intervention raises the possibility of the first zero per cent interest rate since the Bank of England was founded in 1694.
Experts were predicting last night that interest rates might not now rise until 2016. However, further cuts would come as a crushing blow to savers.
Ms Lagarde also urged Britain to prepare a contingency plan which would feature temporary tax cuts and increased spending to support the economy in case the euro should fall.
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