More about BIS from "The Tower of Basel" an excellent book..

"The BIS is a unique institution: an international organization, an extremely profitable bank and a research institute founded, and protected, by international treaties. The BIS is accountable to its customers and shareholders—the central banks—but also guides their operations. The main tasks of a central bank, the BIS argues, are to control the flow of credit and the volume of currency in circulation, which will ensure a stable business climate, and to keep exchange rates within manageable bands to ensure the value of a currency and so smooth international trade and capital movements. This is crucial, especially in a globalized economy, where markets react in microseconds and perceptions of economic stability and value are almost as important as reality itself.The BIS also helps to supervise commercial banks, although it has no legal powers over them. The Basel Committee on Banking Supervision, based at the BIS, regulates commercial banks’ capital and liquidity requirements. It requires banks to have a minimum capital of eight percent of risk-weighted assets when lending, meaning that if a bank has risk-weighted assets of $100 million it must maintain at least $8 million capital. The committee has no powers of enforcement, but it does have enormous moral authority. “This regulation is so powerful that the eight percent principle has been set into national laws,” said Peter Akos Bod. “It’s like voltage. Voltage has been set at 220. You may decide on ninety-five volts, but it would not work.” In theory, sensible housekeeping and mutual cooperation, overseen by the BIS, will keep the global financial system functioning smoothly. In theory....The BIS is now the world’s thirtieth-largest holder of gold reserves, with 119 metric tons—more than Qatar, Brazil, or Canada. Membership of the BIS remains a privilege rather than a right. The board of directors is responsible for admitting central banks judged to “make a substantial contribution to international monetary cooperation and to the Bank’s activities.” China, India, Russia, and Saudi Arabia joined only in 1996. The bank has opened offices in Mexico City and Hong Kong but remains very Eurocentric. Estonia, Latvia, Lithuania, Macedonia, Slovenia, and Slovakia (total population 16.2 million) have been admitted, while Pakistan (population 169 million) has not. Nor has Kazakhstan, which is a powerhouse of Central Asia. In Africa only Algeria and South Africa are members—Nigeria, which has the continent’s second-largest economy, has not been admitted. (The BIS’s defenders say that it demands high governance standards from new members and when the national banks of countries such as Nigeria and Pakistan reach those standards, they will be considered for membership.)"

In Spain ...a real tragedy..

As Spain mourned the 80 dead in Europe's worst rail crash this century, questions were being asked about how the train had been able to hit a tight curve at such a speed that it spun off into a concrete security wall.  Analysis of video of the accident in the northern city of Santiago de Compostela suggested the train was going faster than 85mph on a bend where drivers are supposed to slow down after a straight stretch that allows them to reach up to 125mph.  "We were going strongly when we got into the curve," one driver was reported to have admitted shortly after surviving the accident on Wednesday, which killed more than a third of the passengers and left 168 injured.  A spokeswoman for the Galicia supreme court said the driver, who was only slightly injured, was under investigation.  The man, who has been named, is not believed to be under arrest but is expected to face questions from a judge with access to the train's data recording black box.

While trapped in the cab, the driver was reported to have given an account over the radio to officials at Santiago station. He was quoted saying, "I hope there are no dead because they would fall on my conscience" and having repeated over and over: "We're human. We're human."  Rail safety experts said such accidents are usually the result of more than one failure, and questions will inevitably be asked about how warning signals about the train's speed were not picked up and acted on.  On Thursday evening the death count looked set to creep up, with 36 of the 95 victims in hospital said to be in a critical condition.  One of the survivors, Sergio Prego, told Cadena Ser radio station that the train "travelled very fast" just before it derailed and the cars flipped upside down, on their sides and into the air.  "I've been very lucky because I'm one of the few able to walk out," he said.

Forensic scientists were last night still trying to identify the most mutilated corpses. Groups of families and friends gathered at the city's Cersia hospital waiting for news of loved ones – though there was little chance they were alive as all survivors had been identified and their families informed.

"It's a major challenge to identify the people who have died," Rajoy said. "Unfortunately, in many cases, this isn't easy, but we are very conscious that the families cannot live in a state of uncertainty."  The Alvia 730 series train started from Madrid and was scheduled to end its journey at Ferrol, about 60 miles north of  Santiago.  Alvias do not go as fast as Spain's AVE bullet trains, but still reach 155mph on AVE tracks and travel at a maximum 137mph on normal gauge rails.  The accident came a day before a public holiday in Galicia: the feast of St James, after whom the region's capital Santiago is named.  "24 July will no longer be the eve of a day of celebration but rather one commemorating one of the saddest days in the history of Galicia," said Alberto Núñez Feijóo, the region's president.  Residents of the semi-rural neighbourhood by the accident site struggled to help victims out of the toppled cars on Wednesday night. Some passengers were pulled out of broken windows as rescuers used rocks to try to free survivors from the wreckage.

Cyprus’s central bank said lenders would remain closed until at least Tuesday amid growing speculation the Meditterranean island could become the eurozone member to exit the currency bloc.

Officials at the ECB were reported on Wednesday to be considering pulling the plug on Cypriot banks unless the country agreed to a new bailout package.

Jörge Asmussen, the ECB’s chief negotiator, warned that Cyprus’s decision to reject the terms of an €10bn (£8.6bn) bailout meant it could not guarantee support to domestic lenders for much longer.

“We can provide emergency liquidity only to solvent banks and... the solvency of Cypriot banks cannot be assumed if an aid programme is not agreed on soon, which would allow for a quick recapitalisation of the banking sector,” said Mr Asmussen in an interview with a German newspaper.

The threat followed the unanimous voting down by the Cypriot parliament of a rescue package that would have seen the authorities levy a “tax” of up to 10pc on deposits of more than €100,000.

Senior European politicians have expressed hope that a new bailout could be organised, however some have begun to openly discuss the possibility of Cyprus exiting the euro. Austrian Chancellor, Werner Faymann, said he could not “rule anything out for Cyprus”.

German Chancellor Angela Merkel said she expected the Cypriot government to come up with a new rescue plan, but continued to insist it was fair for large depositors in Cypriot banks to face a loss on their savings.

Banks in Cyprus have remained closed since last week and on Wednesday the country’s central bank said lenders would not open their doors until next Tuesday, leaving Cypriots dependent on using ATMs for day-to-day cash.  The prolonged closure of banks has led to widespread fears among senior industry executives that it could undermine confidence in the financial system. Christian Clausen, president of the European Banking Federation, said a way had to be found to reopen Cypriot banks before it was “too late”.

“Everything needs to be solved very quickly. This is a matter of a very few days before it gets too late,” Mr Clausen told Reuters... While the eurozone finance ministers are busy having their conference call, Bloomberg reports that the currency bloc's finance chiefs are pressuring Cyprus to shrink its banking system. Here's what the newswire had to say:

Finance ministers for the 17 euro countries are considering a plan to shutter the two biggest banks in Cyprus and freeze the assets of uninsured depositors, said the four officials, who asked not to be named because the talks are ongoing. The ministers are holding a teleconference tonight.

UPDATE : Cyprus Popular Bank and the Bank of Cyprus would be split to create a so-called bad bank, one of the officials said.
Insured deposits -- below the European Union ceiling of 100,000 euros -- would go into a so-called good bank and not sustain any losses, while uninsured deposits would go into the bad bank and be frozen until assets could be sold, said the four officials.

Losses to unsecured creditors, including uninsured depositors, could reach 40 percent under the plan, which has support from the International Monetary Fund and the European Central Bank. hile the eurozone finance ministers are busy having their conference call, Bloomberg reports that the currency bloc's finance chiefs are pressuring Cyprus to shrink its banking system. Here's what the newswire had to say: Finance ministers for the 17 euro countries are considering a plan to shutter the two biggest banks in Cyprus and freeze the assets of uninsured depositors, said the four officials, who asked not to be named because the talks are ongoing.

Russians in Cyprus are getting tired of suggestions from Germany that anyone with a Russian accent here is a Mafioso. They say that claims that the island is simply a money-laundering post for Mob cash are wide of the mark, and that the EU strategy has been purely a political one.
"Since this started happening the German, Dutch, and Scandinavian treasuries have been doing very well while the quotes for southern European ones have gone down," says Andrei Surikov, 30, a financial manager from Moscow who moved to Cyprus three years ago.
"The whole thing is just a dirty political game, and I don't think the EU has estimated the impact of what they have done. The trust has gone now in the whole system."  

 

EU leaders have agreed on a roadmap for eurozone integration beyond the deal on centralised banking supervision, German Chancellor Angela Merkel said.

Specific dates have not yet been agreed for the phases of integration. But the EU summit chairman, Herman Van Rompuy, said a deal should be reached next year on a joint resolution scheme for winding up failed banks.

Mr Van Rompuy's far-reaching roadmap was the main topic of the two-day Brussels summit. Speaking after the summit talks, French President Francois Hollande said: "There is no doubt today about the integrity of the eurozone - Europe cannot now be taken by surprise."

But beyond the banking reforms, he said, Europe must address the problems of unemployment and feeble growth.

The deal to make the European Central Bank (ECB) the chief regulator should pave the way for direct recapitalisation of struggling eurozone banks by the main bailout fund, the 500bn-euro (£406bn; $654bn) European Stability Mechanism (ESM). Spain is especially anxious to get that help for its debt-laden banks.

Direct recapitalisation would help break the "vicious circle" in which bank debts have put a crippling burden on national budgets and led to massive taxpayer-funded bailouts. However, Germany insists that the ESM should not be used to write off the existing "legacy" debts that have burdened Spain, Greece and the Republic of Ireland. Any ESM loans will be accompanied by tough rules on budget discipline.

At least the Greeks, the Spanish and the Portugese are starting to fight against the rape of their countries by the EU and the IMF.
Unlike the spineless Brits who just bend over and take it, from Cameron and his Atlantic Bridge coterie.
The fire-sale is under way, and the taxpayer will be paying for the largesse enjoyed by the shareholders and parasites of the multinationals.

It isn't going to be a two-speed Europe; it is going to be Greater Germany and the rest. And sooner or later, if Angie is still in office, she is going to be kowtowing to a (German) president of Europe. Only vassal states need apply. And they have. It's just that one or two are choking on the small print....Anthee Carassava is on the ground in Athens and she writes:

Thursday's protests are part of a 24-hour nationwide strike the country's two biggest labour unions have organised as European leaders meet in Brussels to decide the fate of the single currency. It is the second job walk out millions of Greeks have taken to in three weeks; the 20th since the financial crisis here erupted nearly three years ago.

“Just once,” said Yannis Panagopoulos, head of the GSEE private sector union, “the government should reject [international] lenders’ absurd demands. “Agreeing to catastrophic measures means driving society to despair and the consequences as well as the protests will be indefinite.”

From taxi drivers to doctors and diplomats, the strike is expected to paralyze an already suffocating economy. Ships remained docked, hospitals were operating on skeleton staff, and dozens of domestic and international flights face cancellations leaving travelers stranded as air traffic controllers joined the protest, keeping aircraft grounded and the country isolated from the rest of the world for three hours.

At least 4000 police have been deployed in the city centre alone. At least 12 buses of riot police and three water canons were propped outside parliament, shielding the building -- a favourite target of protests -- from militant demonstrators.

You can't have your cake and eat it...

Given that the overall public debt of Greece is approximately Euro 360 billion, this means an effective annual interest rate of approximately 3.7% for Greek public debt . A better interest rate than many other countries would get.  None of the above denies that Greece's economy is in a terrible mess and that many of its poorer citizens suffer.  Posting agitprop on Guardian bulletin boards won't change that, dear Kouros, neither will the stopping of paying taxes in Greece change that, which you also advocate for frequently in your comments. Paying no taxes means no money for schools to educate children, no money for medicines to be given to sick people, no money for pensions to be given to old people in Greece.

Well, otherwise .... For too long in Europe (and elsewhere) governments have run deficits, and have added to their overall debt. The only way to run those deficits and have that level of debt is through the bond market. All of us have enjoyed high standards on living, and some of that is paid for on tick, where are children will end up picking up the tab.   I don't see how anyone can blame the bond traders for charging higher interest rates if through their own risk assessment it looks like that debt will either never be paid back, or will be swollowed up through inflation.  Either a government runs near on balanced budgets which means the electorate not voting for high public spending 'free monkey in every office' political parties, so the bond markets have very little to do with economic decisions, or the electorate go for those parties and accept high debts and deficits which leaves them beholding to the bond markets.  You can't have your cake and eat it.

Germany and France are heading towards financial problems, but as yet these are not as serious as the problems in Italy, Spain, Portugal, not forgetting Eire, and of course Greece, along with a few others. At the behest of the EU, but mainly Merkel pretty well every country in the euro zone have been forced to apply austerity measures, shed jobs, and make things so tight that many businesses have closed down. Add to this that in almost every euro zone country personnel, and business taxes have risen dramatically, along with ever increasing fuel bills. Not surprisingly the this means that the working public, assuming people still have a job, just do not have the money to buy in some cases not even basic food, and certainly not new cars, TV’s, fridges etc., etc. When you drive most Europeans down to near poverty levels there is no way they will spend. Even the pensioners, who had money to invest, can now only get a meager return on investments, because of the very low interest rates. Against this background it is not surprising that sales of both products and services are in serious decline. For me the question is, why did we get to this state of affairs? The answer is to try and keep the euro alive. For me this is the root problem all across Europe. If you look at Europe as a whole we have many different and divergent economy bases, some based on manufacturing, and some based on tourism, with many others. To expect each and every one of these very different economy bases to be able to hold the value of the euro to within such very tight limits is just not practical. To turn their economies round, what most of Europe needs is not increased borrowing leading to unsustainable debt, but growth and increased tax revenue, and this can only comes from creating a climate of stimulating higher employment levels, and investment in business by lower taxes, on both people and business. Most of the euro zone countries need to devalue their currency to create this climate for growth, but the single currency prevents this, which leads to the inevitable conclusion that the euro is in fact a dead duck.

REUTERS - Standard & Poor’s raised Greece’s credit rating out of default territory on Wednesday, as expected after Athens slashed its debt by about a third by completing the biggest sovereign debt restructuring in financial history. But the firm kept Greece firmly in the junk category with a CCC rating and warned that a deep recession, unpredictable elections on May 6 and popular anger against austerity could threaten Athens’ efforts to put its finances back on track. “While the exchange has, in our view, alleviated near-term funding pressures, Greece’s sovereign debt burden remains high,” S&P said in a statement, adding that it expected the debt to stay as high as 160-170 percent of GDP in the next three years. S&P assigned Greece’s rating a stable outlook, indicating it was not planning to change the rating again soon, but it warned that risks remained. “The ratings could be lowered if we believe that there is a likelihood of a distressed exchange on Greece’s remaining stock of commercial debt,” it said. The three major rating firms have repeatedly slashed Greece’s rating throughout the debt crisis, cutting it to default over the debt deal in which private bondholders lost most of their investments in the country’s government bonds. S&P had flagged as early as February that it was likely to raise Greece’s rating to the CCC category after the debt swap was completed. Fitch assigned Greece a slightly higher B-rating in mid-March, becoming the first major rating agency to upgrade Athens’ rating after the swap cut its debt by about 100 billion euros. Moody’s is the only one of the three major rating agencies to have kept its Greek rating unchanged at the lowest level. It has said it would revise the rating “in due course” and that any upgrade would likely be small.

The German Bundestag must vote to approve the Greece package, probably on February 27th.

Greece must still clear four hurdles before it receives its €130bn bailout package.

1) The eurogroup of finance ministers, which meets on Wednesday night, must agree that it has now met the terms of the package
2) The leaders of its political parties must pledge in writing that they will implement it.
3) The German Bundestag must vote to approve the package, probably on February 27th.
4) The long-running negotiations with its creditors over debt restructuring (the Private Sector Involvement) must be concluded.

Gilles Moer of Deutche Bank told Bloomberg TV this morning that it is essential for Greece to maintain its credibility with its international partners. He said that the demand for Greece's leaders to make a commitment in writing "shows the pressure that the Troika is still prepared to put on Greece".

Speaking earlier this morning, Phillip Rösler said the vote was merely a "necessary condition" on the path to Greece's second rescue package, as Athens must also prove that the measures will be implemented. Rösler added that the German parliament must receive a report on Greece from the Troika [the IMF, the EU and the ECB] before deciding whether to give its approval for the bailout fund. That vote is expected to take place in the Bundestag on 27 February.

IT'S OVER, GREECE FELL UNDER THE GERMAN BOOT - Democracy ended where it started - The IV Reich is upon EUROPE NOW!!!

IT'S OVER THIS MORNING ...GREECE FELL UNDER THE GERMAN BOOT ...the IVth. Reich recorded it's first victim - Greek MPs pass an unpopular austerity bill crucial for a 130bn euro ($170bn; £110bn) bailout, as protesters clash with police outside parliament.---The eurozone bloc (Germany in fact) wants a further 325m euros in savings for this year and also insists that Greek leaders give "strong political assurances" on the implementation of the packages. Greece cannot service its huge debt, and there are fears that a default could endanger Europe's financial stability and even lead to a break-up of the eurozone. But many Greeks feel they are already squeezed almost to breaking point and cannot take any more cuts, our correspondent says. Some are even saying Greece should leave the eurozone to be able to devalue its former currency, the drachma, and ease the debt stranglehold. Are you in Greece? Have you been protesting in Athens? What is your reaction to the austerity plan? You can send us your views and experiences using the comments link - I than you for that!

The Germans seem to be coming around to the idea of jettisoning the Greeks, but unless they can isolate that country, the whole house of cards will come down. If that happens, Ireland, Greece, Portugal and maybe Spain will renege on their debts, and the Germans will find themselves bailing out their own banks for a change. They'll also assume a share of the ECB liabilities currently being created, and their state will be as indebted as any other. There's a German word for how the rest of us will feel when that happens, but I can't spell it. ..... "Germany may, however, decide that the moral of this story is that it is suffering too high a price for keeping the single currency together – and that the stragglers need to be cut loose, perhaps once the French presidential election is over". Don't count on it. Germany will fight this to the bitter end, even if it means the ultimate financial ruin of their country. Unless Germany changes direction soon, and makes moves to pull out of the Euro soon, irrespective of the howls of horror from the French, Germany could soon be on the road to the break up of Germany itself into its 16 Lander. Merkel must have been told a million times to put Germany's self interest first, but once she gets into the company of French politicians in the Elysee, her logical mind goes to pieces.

Greek Finance Minister Evangelos Venizelos submitted on Friday the budget plan, which would provide the course of the country before PSI program and objectives on revenue, expenditure and deficit after the haircut of 50%. In the afternoon, the budget plan will be presented to the Troika senior officials, who arrive in Athens to meet with Prime Minister Lucas Papademos and FinMin Evangelos Venizelos. The General Index of Athens Stock Exchange recorded a 2011 low on Friday, while the net trading turnover marginally exceeded €27 million. In a weak session, the General Index moved into negative territory throughout the trading session with intraday losses of 2.02%, recording a 20-year low. It finally ended down 1.68% at 712.63 units, a 2011 low. Cumulative losses for week amounted to 5.69%. Although Greek banks attempt to keep on positive grounds, the banking index ended at the session low (281.19 units) with losses of 3.71%. Banks lost 15.72% for the week. The growing concern, which reflected daily in the bond markets by increasing borrowing costs, has minimized any positive dynamics created by the agreement of Greek political parties, said Beta Securities in a report, adding that the domestic market moves more and more aligned with the foreign bourses. On Friday, approximately 46.57 million units of total value €36.37 million traded. Excluding a transaction for a 3% stake in MIG of total value €9.24 million, net turnover stood at €27.13 million. A total amount of 78 shares moved downwards, 60 rose and 137 remained unchanged. Marfin Popular Bank and MIG topped FTSE20 with profits of 1.44% and 1.14% respectively. Viohalco rose by 0.99%, while Piraeus Bank and Coca Cola 3E posted minor profits of 0.46% and 0.08% respectively. Ellaktor and PPC remained unchanged. On the other hand, Hellenic Postbank and Titan suffered the heaviest pressures with losses of 8.74% and 6.08%, while National Bank and Alpha Bank fell by 4.76%. Eurobank’s losses also exceeded 4%, while OPAP, Bank of Cyprus and Hellenic Telecoms declined by 3.63%, 3.38% and 2.37% respectively.

Europe is in trouble because you, THE UNION MEMBERS ( amusing thought - union- what union?) borrowed too much money. If your politicians had not spent so much of your money, and borrow more to boot, to buy the votes of various constituencies, you would not have these problems now. You continue to blame everyone but yourselves. The EU will collapse because European society is a welfare state that could never be sustained. There is no way to fix it without pain (i.e., spending cuts). The reason every plan your "leaders" dream up fails is because they try to fix debt by more borrowing. You're finished. Your society is a failure. I hope the US does not follow you, but our current leadership seem bent on doing just that. You're spoiled just like Americans are spoiled. Don't take my word for it. Rather, listen to the head of the Chinese Sovereign Wealth Fund, to whom your leader went begging last week? “I think if you look at the troubles which happened in European countries, this is purely because of the accumulated troubles of their worn out welfare societies,” Jin Liqun said in an interview with Al Jazeera television. “I think the labour laws are outdated – the labour laws induce sloth, indolence rather than hard working. The incentive system is totally out of whack.”

I'm quite impressed with Mr. Pappandreou's performance. As I thought earlier, this pantomime seems to be designed entirely to allow him a somewhat dignified exit.
He 'negotiated' (i.e., 'had imposed on him') the EU debt relief package and then, when the conservatives railed against him for the terms of that package, floated the idea of a referendum (although I doubt he ever intended there to be one). That caused sufficient panic among his opponents that he proposed a 'government of national unity' (i.e. 'a government not led by him') to do the dirty work of actually implementing the requirements of the EU package. Now he can place the leader of the conservatives squarely in the gunsights for the duration of the worst of the cuts that must hit Greece, walk away and say, "But I wanted the people to choose!"
They shouldn't clean out his office as he or his successor will be back within two years.

TWO NAMES : Horst Reichenbach = GREECE'S APPOINTED GOVERNOR and Klaus Regling = CEO - ESFS !!!! THE GREEKS ARE WRIGHT !!! ...At a press conference Mr Sarkozy said: "Our Greek friends must decide whether they want to continue the journey with us. "We cannot commit European taxpayers' money unless the rules unanimously adopted in Brussels are respected to the letter." He was flanked by Mrs Merkel, who added: "The referendum will revolve around nothing less than the question: does Greece want to stay in the euro, yes or no?" David Cameron said that the world was facing a "financial storm" as Greece may now be forced out of the single currency. Simon Johnson, the former chief economist at the IMF said Europe was "looking straight into the face of a great depression". The National Institute of Economic and Social Research said that Britain had a 70 per cent chance of falling back into recession under the "increasingly more likely" scenario that the euro crisis will not be resolved imminently. The Prime Minister will travel today to the G20 summit but is expected to be little more than a bystander as key meetings take place between European and American leaders. The British government has refused to contribute money to help the euro but European leaders are expected to lobby the Chinese, Russians and Brazilians for loans. An EU diplomat claimed last night that European leaders thought they had been misled by the Greek prime minister – as he had used the threat of a referendum during a eurozone summit last week in order to win concessions. "Everyone thought the threat had been dropped. Only one way to describe this: 'absolute bloody fury'," said the diplomat. "If it wasn't a case of mutually assured destruction this would be the moment that it is game over for Greece." With Greek national opinion currently against perceived European interference in its affairs, the country could be forced out of the single currency in a disorderly and chaotic manner. The removal of EU support comes as Greek politicians begin discussions on whether to vote in favour of a no–confidence motion in Mr Papandreou, which could trigger the government's collapse. European leaders are hoping that, by increasing dramatically the pressure on Greece, politicians may demand that the referendum is scrapped. An IMF source said: "The [IMF] board would not want to give money to Greece and then wonder what will happen. The board will want comfort that Greece will fulfil its commitments and right now Papandreou is unable to give that." There are mounting fears that the Greek crisis will fatally undermine Italy's economy in the coming days.

Responding to the riots that followed last week's proposal as well as dissent from within his own Socialist party, Prime Minister George Papandreou said: "The command of the Greek people will bind us. Do they want to adopt the new deal, or reject it? If the Greek people do not want it, it will not be adopted." Staging a referendum threatens to throw the euro zone further into crisis as the majority of Greeks object to the bail-out, according to a survey published last week. If Greece were to reject the plan, which requires deep spending cuts, it would risk a full-scale default and possible ejection from the euro. The country could even run out of money to pay civil servants or state pensions if the troika decided to pull the plug. European leaders and the IMF have struck a deal that would see banks take a 50pc write down on Greek loans, cutting the country's debt by up to €100bn, alongside a €130bn international rescue effort on top of the existing €110bn package. No dates have been set for the referendum, which would include a confidence vote in the government. Yields on 10-year bonds jumped to 6.18pc on Monday, while spreads over German Bonds reached 410 basis points, nearing the critical level where LCH Clearnet raises margin requirements. This, in turn, triggers further selling. However, The Greek Constitution permits referenda EXCEPT for questions involving potential revenue measures including taxation. On that basis any referendum in Greece on the aid package and accompanying revenue measures is unconstitutional.

Mario Draghi has little latitude for monetary stimulus. Germany has imposed a de facto veto on large-scale purchases of Italian and Spanish bonds, viewed by orthodox monetarists as a slippery slope towards debt monetization. Intesa Sanpaolo Giovanni Bazoli said the spreads are un stainable "not just in the medium run, but in the short run as well". He warned of a credit crunch in Italy as banks struggle to meet higher capital ratios set by EU leaders. The renewed jitters came as the OECD club of rich states slashed its euro zone growth forecast for next year from 2pc to just 0.3pc, implying an outright recession over the winter. The body called on the ECB to cut interest rates and deploy its full lending power to head off debt contagion to Italy and Spain. The OECD said the world risks a fresh crisis of equal magnitude to the Great Recession if authorities fail to act in time, with GDP contractions of up to 5pc in some big economies by early 2013. The ECB's new president The Bundestag voted last week to upgrade the EU's bail-out fund (EFSF) to around €1.2 trillion but only on condition that the ECB steps back from its support role. This pits Germany against much of the world. The US Treasury, the International Monetary Fund, and most leading economists fear the fund will fail without a central bank prop.

Greece has a "governor" - Horst Reichenbach

BRUSSELS (Dow Jones)--Some Greek banks may have to be nationalized after the application of the agreed 50% write down in nominal value of Greek bonds held by the private sector, as part of new euro-zone package for the country, Greek prime minister George Papandreou said Thursday. Speaking to reporters after the conclusion of a marathon euro area leaders΄ summit, Papandreou said Greek banks would be re capitalized with official funds that would come out of the country΄s fresh EUR130B bailout package. "If the private sector can overcapitalize the banks they can do that but if they can΄t it means the official sector will need to. That will mean a temporary passage of ownership to the state. After restructuring they will be sold back to the private sector," Papandreou said. He also said the details of the new package would be worked out over the next few weeks. "We want to be done with this," he added. Asked if he was contemplating calling an early election or seeking the formation of a government of national unity, Papandreou said that Greeks want changes, not elections. "We will continue to seek the maximum level of consensus possible," he added.

Germany(the IVth. Reich) takes over Greece, according to the Ribbentrop - Molotov Pact !!!

The European Commission Task Force, headed by Horst Reichenbach, launches officially today initiatives to support Greece proceed with reforms. This Task Force is considered more powerful than Troika’s team. This is a group of technocrats with Commissioner Olli Rehn as a direct supervisor. The team would consist of European Commission and EU member states officials, and requests for participation have already exceeded 500, according to Rehn. Middle-level executives have already visited ministries and public organizations seeking issues for technical support. Although, officially the main agenda item is the National Strategic Reference Framework, it is considered clear that the substantial objective is to implement the terms of Memorandum of Understanding and promote necessary reforms. The meeting between Reichenback and Greek FinMin Evangelos Venizelos is scheduled for Tuesday, the first day of his arrival in Athens, is considered indicative. The former vice president of the European Bank for Reconstruction and Development is a man of Barroso’s absolute confidence, while his team would include also representatives of Greece’s lenders, who can propose measures. EU officials say that the Task Force’s role would expand as time passes, while there would be increased collaterals in case Greece receives the next aid instalment and the second bailout loan. The aim is to avoid the repeat of slowdowns and delays in implementation of the memorandum, which provides reforms in public utilities and sector, healthcare system, insurance system, closed professions, etc. Many government officials anticipated this team in order to overcome intraparty and union pressures in areas of great influence. But there are also government executives who clamour for loss of national sovereignty in exchange for a new loan....And so, Germany(the IVth. Reich) takes over Greece, according to the Ribbentrop - Molotov Pact !!!

Mark Pritchard, the secretary of the 1922 committee of Conservative MPs, is the most senior Tory yet to demand a vote on Britain’s membership of the European Union following the eurozone crisis. Writing in The Daily Telegraph, Mr Pritchard says that the EU has become an “occupying force” which is eroding British sovereignty and that the “unquestioning support” of backbenchers is no longer guaranteed. He says the Government should hold a referendum next year on whether Britain should have a “trade only” relationship with the EU, rather than the political union which has evolved “by stealth”. He warns that the Conservatives will see constituents “kick back” if taxpayers are forced to foot the bill for the failure of “unreformed and lazy” eurozone countries to introduce fully-fledged austerity measures. Mr Pritchard is a leading figure in a group of 120 Conservative MPs who are pushing the Prime Minister to set out a “clear plan” for pulling back from Europe.

Goldman Sachs Asset Management warning

Jim O'Neill, chairman of Goldman Sachs Asset Management, warned that the Irish rescue package did not solve the problems at the heart of the single currency.
"Unless there's an underlying solution to not just the debt challenge, but also to … how European monetary union sits together involving all these domestic political partners, how can we forget about the problems lurking with Portugal and Spain," O'Neill said in a TV interview.
Other market experts were also concerned about the eurozone. Graham Turner of GFC Economics said the solution for weak members might be for Germany to walk away from the single currency.
He suggested that Austria, Finland, the Netherlands and Germany could form a new deutschemark bloc which would allow the other 12 members of the eurozone to devalue and reflate their way out of the crisis. "It has to be a better option than the present straitjacket of a single currency," said Turner.
Stock markets tumbled as anxiety about contagion from Ireland was exacerbated by news, just as European trading began, that North Korea had shelled the South Korean island of Yeonpyeong, near their disputed western border.Wall Street Journal,The Washington Times,Athens News,The New York Times,USA Today