Smoke and smoke....

Every day I read in the Greek press about the bills that have not been paid by the government (doctors, pharmacists and other suppliers of services and goods. Their deficit for the first 7 months of this year is some 13bn. They are still predicting a shortfall of 1bn by year end - the difference made up by increased tax payments in 'second half' (it is 5 months - another Greek accounting error?) Dream on!  This is without accounting unpaid bills. For which they announced nearly 2 weeks ago that the government were only going to pay 'salaries and pensions' (so not doctors and pharmacists who are not employed).  There are differing reports about when the Troika will report - end Sept earliest, maybe Oct. Every day Greece is bleeding actual cash, apart from the increasing liabilities that it is incurring due to non-payment.  We all know that Greece has a Governor - Horst Rechengach , however as this subject is taboo, i'l say : even a Troika report, which one assumes will be based on a certain date snapshot, will be out of date before the print is dry.Hopefully they will include a cashflow prediction for the future months (negative?).  Never mind what Junker said about wanting Greece to stay in the EZ and waiting for the Troika report (I am sure he knows what it will say) instead concentrate on his comments on 'credibility' - he is a Banker and when bankers doubt credibility be "Very Afraid'

Smoke and mirrors...

Lord Rothschild has taken a near-£130m bet against the euro as fears continue to grow that the single currency will break up. --- If Lord Rothschild doesn't know what is going on, well, then nobody does..... As a wise man once said "watch where the wise money goes".The member of the banking dynasty has taken the position through RIT Capital Partners, the £1.9bn investment trust of which he is executive chairman. The fact that the former investment banker, a senior member of the Rothschild family, has taken such a view will be seen as a further negative for the currency. The latest omen follows news in The Daily Telegraph late last week that the government of Finland is already preparing for the euro’s break-up. RIT, which Lord Rothschild has led since 1988, had a -7pc net short position in terms of principal currency exposures on the euro at the end of July, up from -3pc at the end of January. Given a net asset value of £1.836bn at the end of July, the position is worth £128m. Sources close to RIT suggested that the position was not a dogmatic negative view on the euro as a currency, but rather a realistic approach on a currency that remains relatively weak....Meanwhile, Germany and France, the eurozone’s two biggest economies, did better than expected, even if their second quarter performances were far from being success stories. Germany’s GDP grew by 0.3%, beating its own forecasts, and France flat-lined at 0% growth, but avoided slipping into a much feared recession…..On news of Germany and France’s numbers, stock markets bounced up and share prices rose across the continent. Britain’s FTSE 100, Germany’s DAX and France’s CAC-40 all finished with slight gains on Tuesday.  According to Jeremy Batstone-Carr, director of client research for Charles Stanley, a financial advising firm, the figures as a whole should be a cause for worry. “According to further looking projections, data for Germany suggests the next six months will be just as bad if not worse,” he said.  The data also showed a clear divergence between the region’s northern core countries and weakness in the southern periphery countries, which threatens to exacerbate existing problems. Hard-hit over the past three months were Italy (-0.7%), Finland (-1.0%) and Portugal (-1.2%).  On another gloomy note, Britain’s economy shrank by 0.7 percent, according to Eurostat. That compared to .03% negative growth for the first quarter of the year, which meant that Britain has been in recession for the last nine months. Recession is defined by economists as two consecutive quarters of contraction.  During the same three-month period, GDP increased by 0.4% in the United States and 0.3% in Japan - Europe’s main economic partners.

Romania's president faces impeachment

Romania's president faces impeachment after the governing coalition called for him to be suspended.

Centre-right (wrong - he's a former securitate officer an still active in the that community, therefore he's NOT center-right) President Traian Basescu has been at loggerheads with Prime Minister Victor Ponta, who heads the opposing Social Liberal Union (USL), which has a majority in parliament.

If parliament votes for Mr Basecu's suspension, a national poll on his impeachment can follow.  Mr Ponta himself is under pressure to resign over allegations of plagiarism. The USL party has asked parliament to hold an extraordinary meeting to suspend Mr Basescu, a party member told a Romanian news agency.  Mr Ponta's USL party passed a law to simplify the process of having the president impeached. That law still needs to be considered by the Constitutional Court. The Constitutional Court itself has accused Mr Ponta of trying to dismantle it, and on Tuesday complained to the European Commission that he was threatening the court's independence. The USL, in power since May, says that the court is heavily influenced by Mr Basescu, whose popularity has dropped since he imposed austerity measures agreed with the EU and IMF in 2010.  The political conflict between the president and prime minister has stalled decision-making processes in Romania at a time when it is finalising agreements on an IMF-backed aid package for its economy. Mr Basescu has accused Mr Ponta of trying to interfere with Romania's legal and state institutions in order to secure his indictment. On Tuesday the US ambassador to Romania, Mark Gitenstein, expressed deep concerns about any attempts to affect state institutions.

A global economic storm is set to unleash in 2013 and there are no safe harbors to ride it out, says New York University economist Nouriel Roubini. The European debt crisis continues to build, while Asian economies are cooling and Middle East tensions involving Iran's nuclear ambitions are likely to flare up again. That leaves the United States as an investment safe harbor — for now. Yields on the 10-year Treasury note recently plunged to below 1.5 percent on demand from investors seeking shelter from Europe. Yields fall when bond prices rise, and falling yields reflect investor perception of lower risk. But the United States carries its own problems, Roubini says. "U.S. economic performance is weakening, with first-quarter growth a miserly 1.9 percent – well below potential. And job creation faltered in April and May, so the U.S. may reach stall speed by year end," Roubini writes in a Project Syndicate column.
Furthermore, tax breaks are set to expire at the end of this year when automatic spending cuts kick in, a combination dubbed as a fiscal cliff that could send the country into recession next year even if Congress acts now to prevent it. "Worse, the risk of a double-dip recession next year is rising: even if what looks like a looming U.S. fiscal cliff turns out to be only a smaller source of drag, the likely increase in some taxes and reduction of some transfer payments will reduce growth in disposable income and consumption," Roubini says.
"Moreover, political gridlock over fiscal adjustment is likely to persist, regardless of whether Barack Obama or Mitt Romney wins November’s presidential election. Thus, new fights on the debt ceiling, risks of a government shutdown, and rating downgrades could further depress consumer and business confidence, reducing spending and accelerating a flight to safety that would exacerbate the fall in stock markets." The U.S. economy grew 1.9 percent in the first quarter of this year, down from an original estimate of 2.2 percent. Economists worry the country might not be growing fast enough to achieve escape velocity and break free from the pull of a fresh slowdown. Like a plane that moves too slowly, the economy may hit stall speed and tank, and that doesn't bode well for President Barack Obama, experts say. "Historically, presidents don't usually get re-elected when the economy is performing as sluggishly as it is now," says Nigel Gault, chief U.S. economist at IHS Global Insight, according to Reuters. "Many people out there, if you asked them in surveys, they'd say they still view the economy as being in recession."

As the Eurocrats toy with “Grexit”, Spain is trying to plug holes in regional budgets

If the World goes into a nose dive there will still be top dog countries or safer heavens. The time to worry is when people start to starve then civil war breaks out. AS long as they can keep bellies full then civil unrest will be held at bay.

Back in the 1970s, the eurozone economies, then among the most dynamic on earth, generated 20pc of global growth. Over the past decade, this growth share has fallen to 5pc. Yet the single currency area still accounts for more than a fifth of the global economy. More fundamentally, the region’s banking sector is so distressed, and many of its governments so close to insolvency, that “eurogeddon” could spark a worldwide shockwave every bit as damaging as Lehman. And this time, of course, there is far less scope for fiscal and monetary bail-outs – not only in Europe, but in the US and elsewhere, too. Of course, the UK, already in recession and reliant on the eurozone to buy more than half its exports, is among the most seriously exposed. In May, Britain’s manufacturing PMI index nosedive to 45.9, the weakest reading since May 2009, down from 50.2 the month before. This marked the second biggest one-month drop in 20 years. Global markets are clearly skittish. The only thing that has stopped asset prices falling further, perhaps, is the belief that escalating market turmoil could push central banks into action – not just the ECB, but the Bank of England and Federal Reserve, too. That’s why gold prices are firming up once again. It’s also why the dollar index, typically inversely correlated with investor risk appetite, has lately shown signs of reversal.... - Well, the week past, brought worrying signs, though, that while the eurozone’s woes are not easing, ongoing concerns about monetary union are now having an impact on alternative growth centers, too, imposing real damage on commercial activity in other parts of the globe.....There is no talk of firewalls, or of simply letting Spain go, or of the European banking system being re-capitalised to compensate for the losses that it would suffer. Nope. This is it. The cancer has now spread to the vital organs of the EU. Spain is not a peripheral Mediterranean country. It is not an insignificant player in the political project. It is not a marginal going-along-for-the-ride-and-the-free-money passenger on the euro train. Not only is its economy so large as to be indispensable, but its ties with Italy mean that the Italian economy (which is the third largest in the EU) would be fatally compromised by its fall. “Itexit” is almost unpronounceable, so perhaps it’s fortunate that it will never be required: after Spexit, there would be nothing left to exit from.

I wouldn't be surprised to hear that Greece has already started printing Drachmas in secret and that Germany had been printing DMs

The Pew Global Attitudes Project polled 8,000 people in France, Germany, Spain, Italy, Greece, Poland, Britain and the Czech Republic from mid-March to mid-April and identified unprecedented levels of discontent with the EU. "The European project, which began with the creation of a small common market in 1957, grew to a larger single market in 1992 and then created the single currency in 2002, is a major casualty of the sovereign debt crisis," the report concluded. "Majorities or near majorities in most nations now believe that the economic integration of Europe has actually weakened their economies." At a time when the EU is pushing closer to an economic and fiscal union for the eurozone, popular opinion is pulling the other way. That contradiction has led to electoral upsets across Europe, from Greece to the Netherlands and France in the past three months alone. Majorities in most countries now blame EU integration for damaging their economies, but the figures hit 70% in Greece, 63% in France and 61pc in Italy, all countries once regarded as staunchly pro-European. Just one third of the people – 34% – believe that economic integration, a central plank of the EU's raison d'etre, is a benefit.
De La Rue, the money printer, failed to dampen speculation that it has been secretly awarded a contract to start printing drachmas the moment Greece is forced out of the euro. The company said that its order book had increased by 14pc, to £248m, but its policy was to never reveal which specific contracts it was working on. The chief executive Tim Cobbold said: “We have people in every region in the world. We are very close to all geopolitical conditions that develop.”

He said, however, that in most circumstances it took six months between an initial order being placed by a central bank or government, and the notes being delivered. This was the time it took when South Sudan introduced the South Sudanese pound after it gained independence last year.

To print a new currency in the space of a couple of weeks “would be impossible”.

Sergey Shvestov, the vice president of Russia’s Central Bank, said that Greece already has a plan to introduce its own currency, in parallel to to the euro. He said it with high certainty.

Making contingency plans for different options is the right thing to do for anyone, but saying it about Greece and with such a degree of certainty is new.

Shvestov didn’t want to share more details, but said that leaving the euro-zone is a necessity for Greece. He said it would be a “good example” for other countries.

The Russian Center for Strategic Studies in Moscow said that a Grexit will ignite a global crisis affecting the price of oil. They see a a chance of more than 50% that Greece will leave the euro-zone and that it will cause other countries will leave as well. El Economista brings this report. Rumors about fresh polls show that anti-bailout SYRIZA is in the lead, with 30% support. The situation in Greece is so bad that the country may leave the zone even if pro-bailout parties win.

EUR/USD is struggling between 1.25 and 1.26. Is another fall coming?

The European Union has abrogated the Rule of Law

Poor Angela - Her early years as an organizer in the East German socialist party must have left her deeply disappointed with the end of the Soviet Union and reunification. Now, her dream of creating an EUSSR seems doomed to end in failure too !!!!..... "The new EU bank plan states clearly and without remorse that the decisions for any bank insolvency will be made by Regulators. This would be people appointed by European politicians, this would be bureaucrats, this would be employees of the State as Europe returns to the governance of the old Soviet Union where the Rule of Law was subordinated to the designs of the nation.....The only question is "do we have to go down with RMS Titanic, or are there enough lifeboats available?" To mangle the metaphor, just as the last thing the Titanic needed was more ice, the last thing the economies need is more debt.

"The European Union has abrogated the Rule of Law for the good of the State. This is the second such abrogation with the first being the exemption of certain European institutions and the IMF from the Private Sector Involvement of Greece. Greece may be a one-off exemption as they claim but we now have a second instance where jurisprudence has been overturned for the good of the nations of Europe. This is not Socialism or Capitalism but rather some sort of Fascist governance which I publicly decry as the echo of the jackboots sounds across the Continent once again."...As this eurozone meltdown deepens, a chronic lack of "periphery" bank capital raises the risk of acute liquidity crises. Spain's fourth largest bank has just asked for a €19bn bail-out. Catalonia, the country's wealthiest region, says it is bust and central government must pay its bills. According to some people in Spain this is Anglo Saxon propaganda, here is a piece from El Pais, the DT is top billing. On its website, Britain’s Daily Telegraph interpreted Mas’ comments as a call for a bailout, prompting the Catalan government, known as the Generalitat, to issue a statement complaining that the some media has misinterpreted the premier’s remarks and had taken them out of context....Shocking stuff - is this for real? I suspect it is.

There has been very little democracy about EU ...

The European Commission is run by 32 people, all of whom are now billionaires (Vivian Reding was the last one into the billionaires club). ...Not a single one is competent in any way....Note that none of them come from a major country - it's all rats and mice stuff - making it easier for France at first and Germany now to tell them what to do.

Democracy? The EU spends a fortune keeping democracy or democratic expression in check. We have allowed the EU to become a machine that serves itself and many thousands of well paid staff - keeping themselves occupied by standardizing everything right across the region via endless regulations. There has been very little democracy about this - save for occasionally carefully calculated rubber stamp exercises - usually by those desperate to get their snouts in the trough. Politicians at the national level have, without the authorisation of the People, serially signed away more and more of the sovereignty of their countries. Snatching back currency sovereignty would be a reversal of this process. You can expect the machinery of the EU to move Heaven and Earth (and every allegedly fixed goalpost the EU has) to avoid it happening. The EU is designed as a one way street. Democracy is greatly feared by these politically elite puppets - Democracy spells the end of their Princely style and worse, Democracy would challenge the source of their wealth and why the Commission found it necessary to protect themselves and their ill-gained personal assets with a Law which prohibits any examination or investigation of them. They are immune to prosecution for any and ALL crimes and misdemeanors.  The last Commission was ignominiously forced to resign en masse - because - they stole £1.4 Billion - yes billion.   Not a penny was recovered.  Not a prosecution was enforced.  They got away with grand theft Scot free....Most of them still work within the EU Commission.
"The European Union has abrogated the Rule of Law for the good of the State. This is the second such abrogation with the first being the exemption of certain European institutions and the IMF from the Private Sector Involvement of Greece. Greece may be a one-off exemption as they claim but we now have a second instance where jurisprudence has been overturned for the good of the nations of Europe. This is not Socialism or Capitalism but rather some sort of Fascist governance which I publically decry as the echo of the jackboots sounds across the Continent once again."

" The EU summit fails to provide answers"

The EU continue to whistle in the dark and kick the "Big Can" down the Alley?!?..."the Mad Foools"... they've created A Financial-Socio-Economic...D O O M S D A Y Device!!!Markets had expected the latest EU summit to disappoint and it did" - they expected the exact opposite on Tuesday as the FTSE jumped 50 points supposedly on Europe hopes. The markets are not really interested in the politics. In a no win solution, its a catastrophe if Greece stays in the Euro and a catastrophe if they leave. Given this then it is obvious that the only thing that markets are interested in is QE and liquidity injections. Today market 'reality' is that they go up on bad news as that increases the likelihood of more QE/LTRO etc and they go down when there is any kind of positive news as that lessens the probability of QE. Central Bank interference in markets has completely reversed how they should function. Worse still, the TBTF banks are bigger than ever and taking bigger and bigger leveraged spread bets because central banks have taken risk off the table. Sheer insanity. The EU and the EZ are a failure, a very expensive failure.
Surely our elected politicians must come to reality, start thinking for themselves instead of listening to the likes of Christine Lagarde, who while lecturing us, her only thought is the French banks, if Greece leaves the EZ the French banks will be hammered. Hollande is a sly socialist fox, not to be listened to, and his ideas must never be entertained, and to listen to the unelected Van Rom Puy and Barrosso is sickening and an insult to all free peoples. The whole stinking, corrupt edifice that is the EU has to be dismantled. The tools to do the job are simple and free. Truth and Democracy. Truth and Democracy are the biggest enemies of the EU. now is the time to use them. There are too many peoples' (very lucrative) careers tied up to this project and these very same people and going to make sure that their income stream continues as long as possible. The only economic growth they care about is the size of their own wallets. I'm not sure how this nightmare will end but rest assured that turkeys do not vote for Christmas. I think they will need to be "physically" removed. Ridiculus van Rompuy, Fatboy Barroso, Hideosa Ashton and all their attendant spokespersons, advisors and offices make rather less impact than a fart in a thunderstorm.

The summit was a polite showdown between Germany and the emerging "Latin Bloc"

In what appeared to be a shot across the bows of the French, meanwhile, Germany's central bank warned for the first time that if the Greek crisis came to a head, Germany's and the eurozone's interests would be best served by Greece's exit from the currency. According to the Reuters news agency, the 17 governments of the eurozone were told on Monday to draw up individual contingency plans for a Greek exit. The Greek government denied that such an instruction was issued, but not before investors, fearful of a disorderly break-up of the euro, led a sell-off on global stock markets. The FTSE 100 fell 136 points, or 2.53%, while the leading indexes in France and Germany saw similar declines The Bundesbank in Frankfurt said that Greece was threatening to renege on the terms of its €130bn (£104bn) euro bailout. "The challenge this would create for the euro area and Germany would be considerable but manageable," the statement said. "By contrast, a significant dilution of existing agreements would damage confidence in all euro area agreements and treaties … calling into question the institutional status quo."....The timing of the Bundesbank warning appeared to be directed at the talks. It said that given the risks involved in bailing out Greece, eurozone governments should reconsider their lifeline to Athens. No decisions were expected. Herman Van Rompuy, who was chairing the summit, said there should be no taboos and appeared to support French pressure for a discussion of eurobonds by calling for a debate on longer-term integration measures in the monetary union.  Merkel and Hollande disagree on tactics towards Greece, with the French favouring sending a signal on easing the schedule for Greek deficit reduction while the Germans believe this would encourage Athens to compromise on the austerity measures....Disarray in Europe and fears of an unstoppable Greek exit sent markets into a tailspin. The FTSE 100 lost 2.53pc, and the German DAX dropped 2.3pc. Spain's IBEX slumped 3.3pc to a nine-year low. The euro tumbled almost a cent to $1.2566 against the dollar, the lowest since August 2010. Spain's 10-year bond yields jumped to 6.14pc.

The summit was a polite showdown between Germany and an emerging "Latin Bloc" led by France, Italy and Spain, determined to force a change in the Europe's strategic direction. The Latin coalition wants eurobonds to kickstart growth and mutualise debts, anathema to Germany, as well as EMU-wide deposit guarantees and an activist ECB. Chancellor Angela Merkel has ruled out eurobonds, although there could still be room for project bonds or short-term "euro-bills".

Same , same, no answers , just tricks, smoke and mirrors...

Same crisis, different summit. What is estimated to be the 18th emergency summit of the eurozone crisis gets under way today. Rather than agree any constructive plans to alleviate the currency region's problems, the meeting will give vent to the new political divisions that have arisen since elections in Greece and France. In the spotlight will be the latest supposed panacea for the eurozone's woes - so called eurobonds. The idea is that eurozone countries club together and issue debt collectively which will ultimately carry a credit rating underwritten by Germany. That would help insolvent countries such as Greece borrow on the international capital markets and allow extremely hard up nations, such as Spain, raise capital to bail out their banks. What it won't do is address the fundamental imbalances and policy differences within the eurozone. Angela Merkel is implacably opposed to euorbonds while other major nations such as France and Italy are in favor, as are the likes of the IMF. What is new this morning is the personnel at the summit where Merkel will find herself increasingly isolated now Nicholas Sarkozy is out of office. His successor, Francois Hollande, will meet his Spanish opposite number ahead of the summit to agree tactics and agenda items. We are now witnessing the start of political fracturing within the euro system with the anti and pro-austerity camps creating two broad groupings which will shape the immediate debate around the currency and could provide an obvious fault line along which the eurozone may ultimately split.
Christine Lagard , managing director of the IMF, has told BBC Radio this morning that Greece will have to do more if it wants to stay in the euro. We have to be prepared for all situations, she said, referring to a possible Greek exit.
Adding to the sense of economic unease, the World Bank has cut its Chinese growth forecasts over night to 8.2pc from 8.4pc. That still sounds robust but the World Bank said a slowing China will drag growth in emerging East Asia to two-year lows this year, warning Europe's seething debt crisis could inflict even bigger damage if it worsens.

Greeks needed a programme that supported growth, creation of work places and investment, Tsipras said....

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.

What "THE EUROPEN ELITE" will do is buy a tiny bit of extra time, at a cost that is catastrophic.

Greek banks have been obtaining ECB funding by issuing bonds guaranteed by the Greek government. But what will this guarantee still be worth if Greece becomes insolvent? "The central bankers are caught in a moral conflict. Cutting off the flow of money would have disastrous consequences: Greece would quickly run out of money. The population would soon not even have enough cash to pay for its daily purchases." Another fine mess....This whole fiasco in Europe is partially the fault of France who, after Germany was totally defeated after WW1 & WW2, forgot to keep Germany in it's place. President Mitterand, although originally opposing the reunification of east and west Germany, changed his mind and supported it thinking that a single currency, controlled by France, and the rest of Europe could keep a united Germany in check. How wrong he was. Only Britain, under Margaret Thatcher, stood firm and continued to oppose German reunification as she could see what a united Germany would become. Both my grandfather, a First World soldier , and my father, a second WW soldier use to say that the only way to control Germany was to ensure that "..once they were defeated and down someone needs to keep a boot on their throat to keep them there, because if you didn't they would get up and start all over again..". Were they right?. I don't necessarily agree with those sentiments, but then I am the first of two generations that hasn't had to go off to fight a war against Germany.

THE OTHER  HOT SUBJECT :

Eurobonds will not save the Euro Zone.  They will not solve any of the problems that led to the Euro crisis in the first place, which is the fact that an economic union of 17 vastly different economies in a single currency and a one size fits all interest rate makes no economic sense. The Euro has not brought about convergence of the economies of the EZ but the exact opposite. Eurobonds will not solve the lack of competitiveness of the Club Med countries: all they will do is help finance the deficit and the richer nations will have to continue to do this year after year after year, in fact for ever!  Eurobonds may be a short term fix but they are no solution. Instead they are likely to harm the richer nations of the EZ by pushing up their yield rates and consequently the deficits they have!

Well, it seems almost every analyst accepts that Greece right now is truly "on the edge" and that anything could happen, as it has before. Many people in Greece appear to be concerned about SYRIZA because it isn't actually one democratic political party but rather a coalition of SYN, AKOA, DEA, KEDA, "Active Citizens", and a number of other assorted independent left-wing groups and activists. Most of these groups have had no political experience and a history of squabbling amongst each other and voters in Greece are concerned that if SYRIZA is given power it will then enter into extremely treacherous and difficult times as the leading force in the government and it may not have the strength and unity required to simply stay together. In other words, if any party is likely to fall apart under the pressure and stress it's SYRIZA. For all the bold things that Tsipras did and said last week, he also demonstrated some political naivety. I also note that quite a lot of ordinary people in Greece are now saying that it's time to stop punishing ND & PASOK, that they've been given a good shock, but that it's now time to put together a government that actually has some experience of successful business and government. Personally, I would like to think that SYRIZA will win the election and will successfully guide Greece through the turbulence, saying "No!" to all of the transnationals that have previously been allowed to plunder the country and addict the Greek people to excessive consumerism. But like most Greeks all I can have is hope. I see that the other parties are now fighting very hard to win on June 17. Samaras made me snort yesterday when he declared, trying to take the ground from under SYRIZA, rather like an angry schoolboy, that he was the first person to object to the memorandum. And Venizelos has been doing a lot of angry shouting of late. The other possibility of course is that if Greeks in Greece keep draining the banks of cash as they have been, then the banks may run dry well before June 17. It's May 18 today and a month is a long time in Greece these days. If the money does run out at the banks, some people will survive on the money they have stashed under the mattress, but a lot of others simply won't have any money at all and that could spell trouble on the streets. And the tanks COULD roll in. It's an extraordinary situation. 80% of Greeks want to stay in the Eurozone but between 30 and 40% currently support the party that has said it could quite easily tell Brussels that the bailout agreements are "null and void"....I think the most dangerous outcome of all this is in fact Greece NOT leaving. Although departure will be hard for Greece, the massive over-valuation of the economy does in one way or another have to happen. If Greece is bankrolled to stay in, the danger is that countries like Spain and Italy will then believe that they too can be bailed out. The problem is that the EU (i.e. Germany) can afford to bail out Greece but it cannot afford to do this for either Spain or Italy. Also, the price of Greek exit is manageable, perhaps more so than the price of a full bailout.  If Greece is forced out and restructures, this should hopefully focus minds in Madrid and Rome. They will realise that they MUST take serious and painful steps to correct their own failures and mispricing.... It of course comes down to Germany, and really Angela Merkel's electoral calculation. Germany can save the Euro, but only by cutting Greece loose. If it insists on bailing Greece out, the Euro is doomed to failure and with it, probably, the EU as we know it.

Poor manufacturing data from Italy, Spain, France and Germany erodes early gains on European markets, while eurozone unemployment hits a record high of 10.9pc.....Unemployment in the eurozone reached a record high again in March as spending cuts continued to hit the working population. For all 17 nations in the eurozone, the jobless rate rose again to 10.9%, the highest since the euro was formed in 1999, Eurostat said. For the eurozone, 17.4 million are now looking for work and more than 3 million of those are under 25. Italy's unemployment rate reached a 12-year high, up to 9.8%. And in a surprise move, the jobless rate in Germany rose to 6.8% in March, official figures showed, having been expected to stay at the previous month's 6.7% after six months of declines. The number of Germans out of work is now at 2.87 million.For the whole of the European Union, including countries such as the UK and Denmark, the jobless rate is 10.2%.

Austerity or growth ... Last week, Spain said that the number of job seekers rose for the eighth month in a row in March to hit 5.6 million, a record rate of 24.4%. Spain has the highest unemployment rate in the European Union and it is expected to rise further this year. Spain and Italy are both in recession and have seen borrowing costs rise, raising the prospect that they may need help or even bailouts. A debate is raging in Europe about whether politicians have prioritized austerity at the expense of economic growth, making recovery even harder for themselves.

FRANCE - As the election comes down to the wire, many voters are choosing to vote for their political leanings and not necessarily their candidate.

According to the Ipsos poll, Hollande will recuperate 80% of voters from people who actually support far-left candidate Jean-Luc Mélenchon. The Socialist party had serious concerns that Mélenchon, the trendy candidate who has inspired huge support from the left, would hurt Hollande’s chances at the presidency.

On the other hand, Nicolas Sarkozy is only expected to earn only 45% of votes from right-leaning supporters of Marine Le Pen (of the Front National).

Racing for third place  - Only two candidates will advance from the first round of French elections to the second, but the third candidate remains an important indicator of the election climate. Polls are reporting that the duel between Mélenchon and Le Pen for third place is turning in Le Pen’s favor. She is expected to get between 14% (reported by the BVA poll) and 17% (reported by the TNS Sofres poll). Mélenchon, on the other hand, is expected to get between 13% (TNS Sofres) and 15% (LH2).

The Telegraph  : - commentator Jeremy Warner is in Washington DC and points out the appropriate nature of Christine Lagarde's latest accessory - a crutch.....Christine Lagarde calls on all IMF member states to "finish the job" and pledge more cash to tackle the euro zone crisis, saying that bailout funds be sent directly to banks rather than struggling countries....Ms Lagarde is seeking donations to boost a firewall to protect the euro zone, but she faces an uphill task and there's no certainty such protection will even work, Jeremy writes. ----  There always seems to be some kind of accoutrements on hand when Christine Lagarde, the International Monetary Fund's managing director, makes her public appearances. In Davos this year, she'd brought her "little bag" to collect money for euro zone bailouts. For this week's spring meeting of the IMF in Washington DC, she's brought a crutch. This time it's not deliberate. She's recently undergone a knee operation. Yet it seems no less appropriate. The world economy is on crutches too....In requesting additional funds, Madame Lagarde has stressed again today that no country has ever lost money lending to the IMF. This is of course true, but then there is always a first time, and the eurozone crisis, an advanced economy fiscal meltdown quite without precedent in the IMF's 67 year history, may well be it. The amounts at stake are also much larger than ever before, and the possibility of an eventual break-up of Europe's monetary union make the risks much higher......I wonder if bailing out countries and bailing out banks is really the same thing? If major banks go under, that would represent 2 to 3 times the economy of most Eurozone nations and the countries would go down as well. Also, banks are required to buy their own countries bonds, so it so intertwined as to be virtually the same thing....In Europe Banks Are the States....The whole charade will keep going on untill there are gullible people out there ready to pour money into the EU.

Risk sharing: an effective anti-crisis instrument.

Strasbourg, 19 April 2012 - "The sooner we put into operation risk-sharing instruments, the quicker the recovery of countries worst hit by the financial crisis, such as Greece," said Danuta Hübner, Chairwoman of the Regional Development Committee in the European Parliament and author of a report on risk-sharing instruments adopted today in plenary...."Austerity packages in economies most strongly hit by the crisis have not generated growth because of dysfunctional banking sectors and high risk aversion. There is an urgent need therefore to unlock EIB loans and guarantees to enable private sector involvement in important growth and jobs-creating projects, especially those co-financed by EU cohesion policy. And this is what the risk-sharing instrument is about," said Danuta Hübner MEP. The aim of the instrument is to increase the involvement of the private sector in funding important projects in EU crisis-hit countries. Part of the risk associated with lending to banks will be covered, in collaboration with the European Commission (EC) and the European Investment Bank, in order to maintain the involvement of private investors in implementing cohesion policy programmes. Countries eligible for support are Ireland, Greece, Portugal and Romania. These Member States can transfer part of their allocation of EU regional funding to the EC to use in the risk-sharing scheme. The EC then concludes a risk-sharing partnership with the European Investment Bank, with the aim of encouraging private investors to back projects partly funded by the European Regional Development Fund and Cohesion Fund. Risk-sharing will not result in any change in the overall allocation under cohesion funding for 2007-2013.

Britain will grow by 0.8pc this year, the IMF said in its World Economic Outlook, drawing its prediction into line with the Treasury’s Office for Budget Responsibility. The Bretton Woods institution’s forecast for the UK is now better than in January, when it was slashed to 0.6pc, but worse than September’s estimate of 1.6pc. Its 2013 forecast was unchanged at 2pc. The UK’s improved prospects reflected a sunnier outlook for the global economy as a whole. The IMF said there had been a “reacceleration of activity” and that “high frequency indicators point to stronger growth”. It added: “Growth in the UK, where the financial sector was hit hard by the global crisis, will be weak in early 2012, before recovering.” I wonder what the report would have been if Osbourne had said NO to the IMF? They've had another £10 billion, I'd like to know where the money's coming from? Yet, in today's Times, there is an article on Food Banks, where the unemployed and some working people, who are lacking basic things have free food. In this nation, where we keep lending to others, give £29 billion per year in foreign aid, yet we have our own who don't have enough money to feed themselves. Its a national disgrace. And if anyone accepts it then they too are a disgrace. We will see things get much worse when the new benefits set in and the rest of the cuts take place. We may even see soup kitchens appear on our streets. Who can we blame? Well I don't blame the unemployed who may have worked until this crisis, I don't blame the sick and the disabled who have been targeted by this government. I don't even blame the rich who have had tax cuts, if they are offered anyone would take them, that's human nature. However, I do blame this government and past ones who have brought this country down to this level through their policies and actions. The political elite, who have no idea what they have done to people in this country and don't even care in many cases. So, what can we now do while we are in this mess?I wonder what the report would have been if Osbourne had said NO to the IMF? They've had another £10 billion, I'd like to know where the money's coming from? Yet, in today's Times, there is an article on Food Banks, where the unemployed and some working people, who are lacking basic things have free food. In this nation, where we keep lending to others, give £29 billion per year in foreign aid, yet we have our own who don't have enough money to feed themselves. Its a national disgrace.

The euro has fallen against most major currencies this morning, as euro zone debt fears loom over the foreign exchange markets. Against the dollar, the euro slipped below the $1.30 mark for the first time since mid-February, and also hit a two month low against the yen. And while the euro slides, Spanish bonds are also being hit. The yield (effectively the interest rate) on the 10-year Spanish bond has jumped over the 6% mark this morning, to 6.09% at pixel time. Italian bond yields have also risen, with the 10-year yield nudging 5.62%. German bonds, through, are in demand, driving down the yield on the 10-year bund to a new record low of just 1.628%. These are all signs that the crisis is heating up again. As Brenda Kelly, senior market strategist at CMC Markets, comments: The pressure on its bond yields and over-dependence on ECB funding is adding to the mounting evidence that Spain will in fact need a bailout. This has re ignited the fears that should this occur, that the Euro zone will be courting disaster with what is deemed by the markets an insufficient firewall, particularly if Italy follows suit. It's a pretty quiet agenda today. We get the latest euro zone trade data this morning, and the details of the European Central Bank's bond purchases this afternoon. US retail sales data could move the markets this afternoon: In the bond markets, France and the Netherlands are holding debt sales this morning. And the announcement of the next leader of the World Bank should also come this afternoon. You need to sell a lot of Euro denominated debt, easier the cheaper the Euro. You need to create millions of jobs for unemployed Europeans, easier the cheaper the Euro. You need to pay back millions of trillions of Euro's and you don't have them, well who invented the printing press?