Germany has asked a panel of top advisers to examine
France's economic problems.
Finance minister Wolfgang Schaeuble (pictured, below) has
asked its panel of economic advisers, known as the "wise men", to look into
France's reform proposals, amid concerns that weaknesses could spread to
Germany and the rest of Europe, according to Reuters.
More from the newswire: Schaeuble's request denotes growing concern in Berlin and
among private economists over the health of the French economy, which is set to
miss a European Union goal for reducing its public deficit next year.
"Concerns are growing given the lack of action of the French government in
labour market reforms," Lars Feld, an economist who sits on the panel, told
Reuters.
Although Schaeuble raised the prospect of a report on France with members
of the council this week, Feld and the finance ministry made clear that the
government had not submitted a formal request. The ministry declined comment on
the minister's "unofficial discussions" in general.
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The official raised the prospect of extending that deadline to 2022. Eurozone officials had been seeking to "decouple" the debt sustainability issue from the release of the tranche of loans, but have given into IMF pressure to link the two factors.
Several eurozone governments would only be prepared to release the loans "once [the debt] is seen as sustainable and we are convinced of this," said the official.
Some €5bn of Greek short-term debt will mature next Friday, and it will not have the money to repay the loans unless the next aid tranche is released. The ECB is under pressure to give Greek banks permission to hold more of the country's sovereign debt, allowing the €5bn of bills to be rolled over.
The official emphasised that Athens would not be allowed to default on the debt, meaning that the ECB may act.
Despite IMF pressure on the eurozone and the ECB to write down their loans to Greece and take losses, the official said the ECB "won't tolerate any haircuts on its Greek bond holdings." The German government takes a similar stance.
There is broad agreement that the Greek bailout regime has to be extended by two years to 2016, generating a financing gap of up to €30bn. But there is no deal on how to fill that hole. Debt buybacks ("much more complicated than you can imagine"), lower interest rates on the eurozone loans and extending their maturities were all being considered.
But the official said that Greece's cash needs for this month and next should be "easily covered".
"There will not be any defaults on 16th November."
Greece faces a week of tense brinkmanship with its international paymasters after officials in Brussels conceded that a long-awaited deal to release €31.5bn of bailout cash is unlikely to be finalised on Monday.
Athens is due to repay €5bn-worth of debts next week, and had hoped to unlock the latest tranche of rescue funds at Monday's meeting of eurozone finance ministers.
But privately senior officials in Brussels say that the Europeans and the IMF are in deep dispute about Greece.
Monday's meeting, postponed from this week, had been expected to sign off on the payout delayed since the summer, after the Greek parliament's adoption of a controversial new austerity package at the behest of its creditors. The parliament is also expected to pass a new budget on Sunday.
But the Brussels official said: "One round of discussions may not suffice to come to a final decision on the whole package. I am not pretending we'll come to a result and a solution on this."
World news
Greece
Greek bailout cash 'unlikely to be unlocked on Monday'
Brussels officials say deal to release latest rescue funds may not be agreed at meeting of eurozone finance ministers
Portugal to introduce higher taxes to meet EU bailout terms
31 Oct 2012: Biggest tax hike in democratic history proposed in parliament but plan to help cut budget hinges on constitutional court
Greek lawmakers have approved a 2013 budget involving fresh spending cuts, despite mass public street protests.
The budget was backed in by 167 votes to 128. The bill was a pre-condition for Athens to be granted a 31.5bn euro (£25bn; $40bn) EU/IMF loan necessary to stave off bankruptcy.
Another austerity package of tax rises and pension cuts was passed last week.
Ahead of the vote, more than 10,000 protesters rallied outside the parliament in the capital, Athens.
Prime Minister Antonis Samaras earlier warned that without the new loan, Greece would start running out of money on Friday.
Eurozone finance ministers are due to meet just hours after the vote in Athens, and Mr Samaras is now expected to travel to Brussels for a series of meetings.
The problem that he faces is that it could take some weeks before the EU backs the new instalment, BBC Athens correspondent Mark Lowen reports. The measure will have to be approved first by some parliaments, including Germany's.
greece ---The budget passed by a 167-128 vote in the 300-member Parliament. It came days after a separate bill of deep spending cuts and tax hikes for the next two years squeaked through with a narrow majority following severe disagreements among the three parties in the governing coalition.
Prime Minister Antonis Samaras pledged that the spending cuts will be the last Greeks have to endure.
"Just four days ago, we voted the most sweeping reforms ever in Greece," he said. "The sacrifices (in the earlier bill and the budget) will be the last. Provided, of course, we implement all we have legislated. "
"Greece has done what it was asked to do and now is the time for the creditors to make good on their commitments," he stressed.
Athens says that with the passage of the two bills, the next loan installment, worth 31.5 billion euros (about $40 billion), should be disbursed. Without it, the government has said it will run out of cash on Friday, when 5 billion euros ($6.35 billion) worth of treasury bills mature.
Greece has moved another step closer to receiving the next slice of its bailout package, after its parliament approved the 2013 budget in a crucial vote late last night.
Antonis Samaras's government managed a fairly comfortable victory, attracting 167 votes in the 300-seat parliament. Speaking afterwards, the prime minister claimed that the Greece was 'turning a corner'.
Samaras said:
The sacrifices included in that law and in the budget we are voting today are the last.
We will start rectifying the injustices included in them once we get out of the deficits ... But the reforms we passed will be permanent and will boost the economy.
But arguably the really difficult work now starts for Greece's fragile coalition, as it must implement unpopular measures that will worsen the debt-stricken country's recession and living standards for a nation that has endured three years of relentless austerity.
As we reported last night, the budget contains a large portion of the €13.5bn austerity package agreed last week -- and also predicts another year of deep recession and soaring debts.
The immediate question, though, is whether Greece will now finally receive the €31.5bn tranche of bailout cash which it has been awaiting for months.
Eurozone finance ministers are due to meet in Brussels this evening to discuss the issue, but it still appears that a decision will NOT be made today.
Samaras's aides have told our correspondent in Athens, Helena Smith, that last night's comfortable victory are a 'very strong card' for Greece to play with the eurogroup -- a sign that the government is still in control.
But public opposition remains strong, with thousands of people protesting last night in Athens.
We'll be tracking reaction to the Greek vote, and developments in Brussels, through the day.
German Chancellor Angela Merkel is off to Portugal today to meet with Prime Minister Pedro Passos Coelho in Lisbon, to discuss the €78bn bailout they received last year and their austerity measures.
Portugal has won Germany's praise for enacting economic reforms and cutting expenditure. But the Portuguese government predicts a third straight year of recession in 2013, and the jobless rate has risen to almost 16pc.
Protest marches are planned during Merkel's six-hour stay.
Ellen Brown : It's the Interest, Stupid!
Ellen Brown, the author of "The Web of Debt" (which is probably N° 1 on my list of must read books!), has just posted another very good piece called "It's the Interest, Stupid! Why Bankers Rule the World".
She takes some figures from the 2012 edition of Margrit Kennedy's book "Occupy Money", which came out last week, and which show that "a stunning 35% to 40% of everything we buy goes to interest. This interest goes to bankers, financiers, and bondholders, who take a 35% to 40% cut of our GDP."
It's a stunning revelation. People naturally think that if they pay their credit card bills on time, and keep out of debt, that they are avoiding interest charges. But it's not true. The reason is that virtually everything you buy includes hidden costs for interest charges. That's because the farmer who produces the milk is nearly always in debt to the bank, and paying interest. And so is the transport company that takes the milk to the bottling plant. And so is the company doing the bottling. And the shop that sells the milk. At every step on the way, the banking system is taking a major slice of the pie. And that is because of the insane way in which the banking system has been given an effective monopoly on creating the money in the system.
Margrit Kennedy's numbers actually come from the work by Helmut Creutz, author of "The Money Syndrome" and she cites interest charges that range from 12% for garbage collection, to 38% for driking water and 77% for rent in public housing in Germany.
But it is clear that the situation is the same everywhere. And it is particularly obvious in the case of government debt - where the interest charges are costing taxpayers vast sums every year. For example, the interest payments on US Government debt since 1988 total $8.58 trillion - more than half the entire national debt. And in Europe, the interest payments on government debt for the 27 European Union countries since 1995 total €5.6 trillion - again more than half the total government debt.
Just imagine what would happen if the money supply was created debt free, rather than being created by the commercial banks. Given the figures, it is clear that once the interest charges have been worked out of the system, we can expect a 35-40% drop in the cost of everything. The economy would be liberated. People would get the just rewards for their work. And we would not have to accept the obscene situation where 1% of the population have been creaming off all the rewards.
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