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.

Ah yes - this morning, out of the ER room. Tonight, back in theatre. Why do hacks write nonsense about the EU being 'over the worst' ????

Twelve big lenders have confirmed their participation in the Greek debt swap, according to the catchily-titled Steering Committee of the Private Creditor-Investor Committee for Greece (PCIC). They are: Allianz, Alpha Bank, Axa, BNP Paribas, CNP Assurances, Commerzbank, Deutsche Bank, Eurobank EFG, Greylock Capital Management, ING Bank, Intesa San Paolo and National Bank of Greece. Following reports that German investor representative Deutsche Schutzvereinigung für Wertpapierbesitz has recommended that some holders of Greek debt should reject the proposed debt swap .... Reuters are reporting that most German lenders will accept the proposed haircut of 53.5pc. More from Reuters: While Greek sovereign debt owned by German lenders has a face value of roughly 15 billion euros ($20 billion), in most cases they have already written down that value in their books by about three quarters. FMS Wertmanagement, the biggest creditor with an exposure of nominally more than 8 billion euros, will accept the deal, a person close to the lender said on Monday. FMS, the bad bank set up to hold the toxic assets of bailed-out former bluechip lender Hypo Real Estate, is to formally decide on accepting the debt cut later this week, the person said. Commerzbank, which had originally invested almost 3 billion euros in Greek sovereign bonds but has written down its exposure to 800 million, said last month it had little choice but to take part in the bond swap. At the time, chief executive Martin Blessing said: "The voluntariness (of the Greek debt swap) is about as voluntary as a confession at a Spanish inquisition trial." A true analisys of the private sector activity across the eurozone suggested business activity contracted in February after showing tentative signs of growth a month earlier. Markit's eurozone composite PMI fell to 49.3 – revised down from an initial reading of 49.7 – from 50.4 in January, where anything below 50 shows a contraction. The poor data, which suggest the region is slipping back into recession, pushed markets lower, with the Ibex in Spain down 1.3pc and Italian markets 0.7pc lower. The data also heightened concerns that the austerity measures pushed by European policymakers are merely serving to cut off growth in already hard-hit countries. Markit said its reading for Spain's services sector, which accounts for 70pc of the economy, fell from 46.1 to 41.9, against forecasts for a decline to 45.9. The services sector in Italy fell from 44.8 to 44.1, with employment shrinking at its fastest rate since July 2009, while the Bank of Italy predicted the country's economy was set to shrink by 1.5pc this year. That compares with the Italian government's forecast of a 0.4pc contraction....Ah yes - this morning, out of the ER room. Tonight, back in theatre. Why do hacks write nonsense about the EU being 'over the worst' when (even if it was) this wouldn't excuse its undemocratic approach to every problem....??????

Ireland can now expect lies and threats from the EU

The Irish have anounced they are holding a referendum, meanwhile "Van Rompypumpy" stated; "In the old days, exaggerating just slightly, the European Community used to exist on one planet, and national politics on six, nine, twelve, fifteen other planets. This is over now. The debt crisis, difficult and painful as it is, brings home the fact that the Union is us," Van Rompuy told a gathering of national and EU deputies discussing economic policy across the bloc. He noted that decisions by one national parliament - be it in Germany, Ireland, Slovakia or Portugal - are now being watched all over Europe when it comes to approving tax-payer funded bail-outs or adopting deficit reduction measures."Maybe not formally speaking, but at least politically speaking, all national parliaments have become, in a way, European institutions," Van Rompuy said. I can only imagine he was smiling. EU Commission chief Jose Manuel Barroso, also present at the debate, said that what was needed now in Greece was for "leaders to speak the truth and confront people with the alternatives." Fiscal stimulus is not the solution, with markets watching every move, but "smart fiscal consolidation", he said, meaning more austerity. As usual No plan B. Uncaring inept idiots. ---- Greece and Ireland can now expect lies and threats from the EU. ----This time EU leaders, forseeing the risk of an Irish referendum defeat, agreed to make the treaty legally binding once 12 of the eurozone's 17 members ratify it. That way, if Ireland is alone to reject it, the other eurozone countries can still adopt it for themselves. "Ireland traditionally has been the only EU member bound by its constitution to subject each EU treaty to a nationwide vote".....In Ireland, democracy means that if you vote 'No' in any of these referenda then the ballot will be held again and again until you feckn' well vote 'Yes'Financial crises will come and go. On the other hand, sovereignty, freedom, democracy, self-determination are simply priceless. Which will you choose Ireland? We need one country, just one country to find the moral fibre to vote no, no, NO! ---------- NO to redundancy pay for 40,000 Eurocrats.......

There was little good news

The European financial crisis has moved into a new phase after Standard & Poor's cut the credit rating on nine euro zone countries, and Greece's debt talks collapsed without agreement. The long-awaited loss of France's AAA was the most high-profile move from S&P, which also cut Austria's triple-A rating and pushed Portugal and Cyprus into junk status. S&P's move, which was rumored for most of the afternoon, is a major embarrassment for Nicolas Sarkozy, and will also undermine Europe's bailout fund. There is a one-in-three chance of France being downgraded again by the end of 2013.

S&P criticized European leaders for not making more progress, and criticized the focus on austerity. Fiscal cutbacks alone, it said, will not solve Europe's problems and could make the crisis even worse. The nine countries downgraded were France, Austria, Malta, Slovena, the Slovak Republic, Spain, Italy, Portugal and Cyprus (details here). Meanwhile in Greece, the body representing private creditors admitted that it was struggling to reach a deal over the Greek debt reduction program. The news that talks had broken up without agreement was seen as very serious by several analysts, as it makes a disorderly default more likely. The double-dose of bad news sent shares falling and pushed the euro to a 16-month low against the dollar. There was little good news - although an auction of Italian bonds did go pretty well.

The CFO of the "United Europe"...

Reuters : ..."the new EU fiscal agreement states that primary budget deficits must not exceed 0.5pc of GDP over the economic cycle, while countries can be taken to the European Court of Justice if they fail to meet targets...." US stocks have opened higher as investors shrugged off a Fitch downgrade of major banks and focused on the market debut of social games giant Zynga. The Dow Jones Industrial Average rose 93.02 points (0.78pc) to 11,961.83 in early trade. The broader S&P 500 climbed 11.66 points (0.96pc) to 1,227.41, while the tech-heavy Nasdaq Composite jumped 29.48 points (1.16pc) to 2,570.49. Ratings agency S&P has revealed that five exporters are vulnerable to recession or may suffer a larger drop in GDP next year. The five are: Germany, the Netherlands, Belgium, Austria and Finland. Meanwhile, a US Treasury official has reiterated that the EU debt crisis is a serious risk to America's outlook. The official adds that the US has no intention of seeking additional funding for IMF.

Regling (in fact the designated CFO of the "United Europe") is full of opinions today since he has added that Italy's and Spain's borrowing needs are manageable and he doesn't believe they will lose market access. Regling also finds it surprising to constantly hear that only the ECB has the resources to tackle the debt crisis. Klaus Regling, chief executive of the European Financial Stability Facility, has said Greece may need €100bn for its second programme. He has also said that bank recapitalisation in the EU may total €50bn and that €600bn of uncommited funds is already available to fight the debt crisis. Will it be enough?

Red carpets, pageantry, tuxedos, and "Deutschland Uber Ales".

THE RUSSIAN BEAR - Widespread reports of fraud in last Sunday's national parliamentary election have galvanized an opposition long marginalized by repressive policies and by state-run news media that virtually ignored them. Protests, some attracting thousands, rolled on for three consecutive nights in Moscow and St. Petersburg after the election showed unexpectedly fierce anger against the government and Prime Minister Putin's ruling United Russia party. United Russia suffered losses of more than 20 percent of seats it previously held in the State Duma, and critics and local election observers say even that result was inflated by fraud. Smoldering resentment caught fire, largely through social media, and the country on Saturday expects to see a massive protest rally in Moscow and demonstrations in some 70 other cities."This will be a watershed step in the development our democracy. We expect it to become the biggest political protest in 20 years," Ilya Ponomarev of the Left Front opposition group said Friday.There may soon be a symbol to the protests: white ribbons. A group of activists sent up a web site urging people to wear them in support of Saturday's demonstrations. They're not yet visible on Moscow's streets but some opposition leaders and even TV presenters are wearing them in their lapels.....

But... we are more into red carpets, pageantry, tuxedos, and "Deutschland Uber Ales". All of this goes to prove that the Ribbentrop -Molotov treatie is being implemented with vengeance and that the Russian Bear will fish the European ponds and The German Boot will stamp allover our nations without remorse !!! Beware of the German criminal record !

Let us all fervently pray for a failure to find a solution so that we can have the end of the European Union.

Where are they going to find over 2 trillion when they couldn't manage it before?... The EFSF cant manage to raise money.. The Germans are against Eurobonds and Printing because it is unconstitutional..... The IMF is not a tool to be used like this and the shareholders will not allow it....Tell us where are they are going to get the money from !!!...Torn between the need for stability and the desire for solidarity, EU leaders have to find an immediate fix for the broken euro zone and embrace a longer-term plan for fiscal union by Friday night. Portuguese premier Pedro Passos Coelho set the tone for the week in an interview on Sunday: "We have to find a response, a much stronger response than so far. If we don't, clearly that could represent the end of the European Union." Senior opposition politicians put severe pressure on French president Nicolas Sarkozy and German chancellor Angela Merkel ahead of their pre-summit talks in Paris on Monday to approve a "grand bargain" or, at least, workable plan that will gain the support of partners such as the US. Timothy Geithner, Treasury secretary, will be in Europe for talks all week. Sarkozy's main opponent in next spring's presidential election, socialist leader François Hollande, accused him of caving into German demands for a new EU treaty on budgets that was bound to fail, exacerbating French weakness in an unbalanced relationship with Berlin and ignoring the need for immediate solutions. "We cannot wait," he told Le Journal du Dimanche, setting out his stall for a "pact of governance and growth," greater scope for intervention by the European Central Bank, turning the bailout fund, the EFSF, into a bank "to help out the most vulnerable countries" and huge investment in infrastructure. At the social democrats' (SPD) congress in Hamburg, ex-chancellor Helmut Schmidt warned Merkel against a "show of strength" or leadership role for Germany that would simply isolate it. CONCLUSION : The Euro zone crisis is demonstrating what any sub A level economics student should have said when the Euro was launched - you can not have monetary union without central fiscal policy control. So events have proved. Hence the choice is clear. Either the Euro zone breaks up or Europe is ruled by Germany.

Debts imposed by "fiat", by governments or foreign financial agencies in the face of strong popular opposition may be tenuous...

Addressing the German parliament on Friday morning, Merkel insisted treaty changes and tighter regulation of erring eurozone members were the only way out of what she described as "the most difficult chapter in the history of the euro, if not the most difficult in the history of the European Union". To a packed Bundestag, Merkel said it was "absurd" to claim Germany was trying to "dominate" Europe – an accusation which has become ever more widespread after one of her MPs made goading comments that "Europe was now speaking German". Despite criticism that her indecisiveness is accelerating the possibility of a collapse of the single currency, Merkel preferred to focus on what had been agreed in recent months. "It's no exaggeration to say that we have achieved an incredible amount," she said. "In Europe we are now arguing and wrestling over the fine print, not about the plan as a whole," she added. "Anyone who, a few months ago, had said that at the end of the year 2011 we would have taken very serious and concrete steps towards a European stability union, a European fiscal union with powers of enforcement, would have been considered crazy," she said. On the euro zone bailout fund, the European Financial Stability Facility (EFSF), Merkel said: "I don't think we should talk ill of the EFSF, but think we should be realistic about what the EFSF can do." Germany was not trying to take over Europe, she said. "It's important for me to say to you this morning that you don't need to worry about the fears you hear or read about at the moment – that Germany wants to lead or dominate Europe or similar. It's absurd. It's true that we are pushing for a certain stability and growth culture, but we're doing this in the European spirit of Konrad Adenauer and Helmut Kohl. European and German unification were and are two sides of the same medal and we will never forget it."...And I say : It is becoming more and more obvious that the financial sector is using successive financial crises to convince governments that that the economy will collapse if they do not “save the banks.” In doing so, the financial sector is consolidating its control over policy by way of financial proxies called technocrats.

Mr Schauble said eurozone finance ministers, who are meeting in Brussels, could not agree on the terms of the European Financial Stability Facility (EFSF). He told Germany's Handelsblatt that although Europe desperately needed a fund "capable of action", plans for the EFSF were too "intricate and complex" for investors to understand. The finance ministers, who were meeting ahead of a full Ecofin summit today, admitted the €440bn (£376bn) fund was unlikely to win support to leverage it up to €1trillion. It would be closer to €625bn instead. There was also disagreement about whether the bank recapitalisation programme should be carried out nationally or by Brussels. However, Mr Schauble concurred that the €8bn of international aid to Greece should be disbursed before Athens runs out of cash in two weeks. Evangelos Venizelos, Greece's finance minister, said: "In Greece we have all the necessary conditions in order to go ahead with the next disbursement. It was seen as a small advance amid the worsening crisis. Italy was forced to pay a crippling 7.89pc - the highest level since 1996 - to raise €3.5bn of three-year debt. Meanwhile, the ECB admitted it had failed to attract enough deposits from European banks to balance out the sovereign bonds it has recently bought. As part of its strategy called "sterilisation" the bank said it had asked European banks for €203bn of deposits for a week but had only attracted €193bn. Although small, the €9bn shortfall was a rare failure.Here's what Didier Reynders, Belgian finance minister , said on his way in: ""We will discuss with the ECB. The ECB is an independent institution, so we will put on the table some proposals and after that it is for the ECB to take the decision." Jan Kees de Jager, his Dutch colleague, said that the main bailout find, the EFSF, could only be boosted 2.5 times at most (that is, to around €626bn, rather than the hoped-for €1 tn) and added: ""We will have to look at the IMF, which can also make available additional funds for the emergency fund. I think countries in Europe and outside of Europe should be prepared to give more money to the IMF. Then you have more money but it's still not enough." Greece hopes they will now get their long-delayed "sixth trance" - or €8 bn - after tonight's meeting. The French prime minister François Fillon has dismissed a report in the French newspaper La Tribune that suggested credit ratings agency Standard & Poor's could cut its outlook on France within day. Fillon told Reuters: "I can tell you that La Tribune is reporting nonsense."...The Euro-zone project was just another case of the elites being detached from the majority of the population.....In the UK, the upper tiers of society have no regional identity or loyalty. From an early age, any traces of a regional accent and identity are removed. From this section of society, someone from Cornwall and someone from Manchester, will sound the same and have a similar outlook on life. For the majority of the UK population you can tell where they come from as soon as they start speaking....The elites in Europe, probably have the same outlook on life and to them the Euro-zone made sense. It did make sense in their little world. But, the outlook on life, of the majority in the Mediterranean countries and those of the Northern nations are fundamentally different. Trying to make them the same over a few years is never going to work, no matter what regulations you try and put in place.....I love the way the Italians & the Greeks are told by Merkelozy via their unelected new governments are going to give grief to their populations. Already the Greeks riot! Let's wait until the italians understand what is being planned for them! Come on let the Euro die!!! Better to have the grief which we are told will happen with their local currency BUT at least they are in control of their grief & will better understand! Can't wait for France to lose its AAA!! Who will Merkel have meetings with ? Luxembourg???

Amazing. The EU politicians now promise to enforce the rules a decade too late and they actually think that's an advance. It’s like a bad SciFi novel where everyone does everything in exactly the reverse order and in slow motion to boot. Merkel used the three-way summit with France and Italy in Strasbourg to insist that new treaty powers to intervene and punish sinner states remained the key focus of Europe's rescue efforts. She said: "The countries who don't keep to the stability pact have to be punished – those who contravene it need to be penalized. We need to make sure this doesn't happen again." Even suggestions that the ECB could extend longer loans to countries over a period of up to three years appeared to be ruled out. Ms Merkel said: "The ECB is independent, the modification of the treaty does not concern the ECB, which is dealing with monetary policy and financial stability. We are worried about a fiscal policy. It's a very different chapter. It has nothing to do with the European bank." At the beginning of the day, Jean Leonetti, French minister for European affairs, said: "France wants the ECB to have the same role as the Federal Reserve... Why is the euro under attack? It's simple. In the US there's a Federal Reserve. Europe has the ECB, but the ECB does not buy up sovereign debt if needed."

BERLIN—German Chancellor Angela Merkel on Monday responded to growing criticism of euro-zone bailouts from within her Christian Democratic Union party with a passionate call for Germany to shoulder the burden of saving Europe's most ambitious project and to step up to the challenges of these uncertain times. During a party convention in the eastern German city of Leipzig, where in 2003 Ms. Merkel made a pledge to return Germany to its role as Europe's undisputed economic leader within a decade, the chancellor rebuffed accusations she had abandoned the conservative party's long-standing positions on core issues—from social policies to nuclear energy and now minimum wages and euro-zone bailouts. German Chancellor Angela Merkel at the CDU party congress Monday in Leipzig, Germany. "We live in times of epic change," Ms. Merkel said. "Our political compass has not changed. But the context is constantly changing." Some party members called for Ms. Merkel to make it possible to boot profligate euro-zone nations out of the 17-member club. Ms. Merkel told her party that 30-year-old policies couldn't supply the appropriate answer to Europe's "most difficult hours since World War Two." She insisted that the party must go with the times. In a one-hour speech at the two-day convention that is being held under the motto "For Europe, For Germany," Ms. Merkel pounded the themes that have become a steady drumbeat in her daily messages back in Berlin about resolving the euro-zone debt crisis: that the euro crisis will take years of hard work to fix and that the crisis offers the opportunity to recreate the European project. "We need to send a clear signal," Ms. Merkel told the delegates. "We don't whine; we don't complain. We know instead that we have a job to do." ...I ask : What job ? : THE JOB IS TO FULFILL THE RIBBENTROP - MOLOTOV PACT PROVISIONS and TAKE OVER EUROPE !!!!!!! The Russians already met their task of taking over the European Energy resources !!!

Trying to keep the euro going is like trying to breathe life into a corpse.

The latest bit of euro fantasy has been that a few changes in the top personnel would transform matters. Yet even if you installed a coalition of Pericles and Alexander the Great in Athens and Cesare Borgia and the Emperor Hadrian in Rome it wouldn't make a blind bit of difference. What ails these countries is the irresistible arithmetic of the debt trap. The idea of a euro break-up frequently meets with the objection that this would crucify German industry. This is nonsense. The new German currency would certainly go up, I grant you. Indeed, it would need to; that is a key part of the adjustment mechanism. But it would not go up without limit. The Germans were reluctant to give up their Deutschmark which, they said, had been the secret of their post-war success. And now they are reluctant to give up the euro which, they say, is the secret of their post-Deutschmark success! In fact, German business proved immensely good at bearing the strains created by a strong D-mark and it would again be like this under the "son of D-mark". Anyway, what German business wants should not be the sole arbiter. A high German exchange rate would transfer income within Germany from businesses to consumers and this would help to boost consumer spending. Trying to keep the euro going is like trying to breathe life into a corpse. Europe's leaders should not be propping the single currency up, like El Cid strapped to his steed, but rather preparing to dismantle it at the lowest possible cost. Trying to keep the euro going is like trying to breathe life into a corpse. Europe's leaders should not be propping the single currency up, like El Cid strapped to his steed, but rather preparing to dismantle it at the lowest possible cost.

Fears that Europe's sovereign debt crisis was spiralling out of control have intensified as political chaos in Athens and Rome, and looming recession, created panic on world markets. Reports emerging from Brussels said that Germany and France had begun preliminary talks on a break-up of the eurozone, amid fears that Italy would be too big to rescue. Despite Silvio Berlusconi's announcement that he would step down as prime minister once austerity measures were pushed through parliament, a collapse of investor confidence in the eurozone's third-biggest economy sent interest rates in Italy to the levels that triggered bailouts in Portugal, Greece and Ireland. Italian bond yields surged through the critical 7% mark, at one point hitting 7.5%, amid concern that the deteriorating situation had moved the crisis into a dangerous new phase. In Athens talks to appoint a prime minister to succeed George Papandreou were in deadlock, and will resume on Thursday morning. The Italian president, Giorgio Napolitano, sought to reassure the markets by promising that Berlusconi would be leaving office soon. Angela Merkel, the German chancellor, said the situation had become "unpleasant", and called for eurozone members to accelerate plans for closer political integration. "It is time for a breakthrough to a new Europe," she said. "Because the world is changing so much, we must be prepared to answer the challenges. That will mean more Europe, not less Europe."

The G20 is planning to increase the crisis-fighting firepower of the International Monetary Fund after the start of its summit was dominated by the first open admission from EU leaders that it might be necessary for Greece to leave the eurozone if the single currency is to survive. George Osborne said there was a "real sense of urgency" on a day that saw an emergency interest rate cut from the European Central Bank, backtracking from Greece over a referendum on its bailout conditions, and a recognition that the IMF may need extra resources to cope with a deteriorating global economy. Amid distinct echoes of the financial market meltdown in the autumn of 2008, European leaders put massive pressure on the embattled government of Greek prime minister George Papandreou, forcing the abandonment of plans to hold a referendum and triggering a political showdown in Athens. Downing Street sources said "strong political pressure to sort itself out" had been put on Greece, while Barack Obama said it was time to "flesh out" Europe's bailout plan. Share prices rose towards the end of the day as it became clear that Papandreou had been forced to shelve his referendum plans and was seeking to put together a government of national unity that would agree to Europe's bailout conditions. How could Greece leave the eurozone? There are two scenarios for Greece to leave the euro. The first would be if Greece was unable, or refused, to abide by its EU-IMF austerity programme. The refusal would lead to EU-IMF payments being withheld and Greece defaulting, a catastrophic event for both the Greeks and the EU. The second scenario involves a Greek referendum on the EU-IMF austerity programme, the economic pain and the loss of sovereignty entailed with it. As the EU has made clear, via Angela Merkal and Nicolas Sarkozy, a No vote or even the referendum itself would be taken as a decision to exit the euro. Can Greece leave the euro? Does it mean leaving the EU? The EU lawyers are not sure. "It's a legal minefield in uncharted waters," said one EU legal advisor. The confusion might be a deliberate ploy. A European Central Bank document examining the possibility two years ago decided that "some lack of legal certainty is desirable" to stop countries walking away too easily. "The hitherto silence may therefore be preferable to clarity," it said. George Papandreou, the Greek prime minister, seems to think it is all or nothing. "If we leave the euro we will have to leave Europe," he told MPs.

The new central bank boss, Mario Draghi, defied the expectations of most analysts, who said a rate cut was more likely next month. The former head of the Italian central bank, who took over from Jean-Claude Trichet this month, instead asserted his authority. The ECB also cut the interest rate on its deposit facility to 0.5% and the rate on the marginal lending facility to 2%. Trichet was widely criticised for raising rates by 0.5% in the spring. Spanish and Greek politicians condemned him for make borrowing costs higher at a sensitive time for the single-currency bloc. Trichet said the hikes were necessary to tackle inflation. In his valedictory speech, he said the ECB's task of maintaining low and stable inflation had been achieved in his eight-year term and over the 12-year life of the euro. Ian Kernohan, an economist at the investment firm RLAM, said: "Although the market was expecting a rate cut in December, it can't have been a huge surprise that the ECB cut rates today, given the very poor run of economic data in Europe. "I don't think this move has much to do with change at the top of the ECB. The economic backdrop has altered dramatically since the summer, and I suspect Trichet would have agreed to this move, if he was still president." Natalia Aguirre, research director at Renta 4 brokerage in Madrid, said: "There's no doubt it's good for all of the heavily indebted economies such as Spain. Now we just need it to be transferred to the Euribor review. "The markets right now needed help from every side." Pierre Ellis, global economist at Decision Economics in New York, said: "This is a response to the weakening European economy. There is not a situation to further roil the market, given the situation in Greece. They are in a situation that makes conforming to a pure inflation target a charade."

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.

Capitalism is like a pure glass of water. Then govt drips the sewage of socialism into the pure water until it becomes toxic, and then they blame the capitalism for the toxic outcome. Hours after an all-night summit of euro governments ended, flaws began to emerge in a package that was billed as a “grand and comprehensive” solution to the European debt crisis. The concerns were led by Germany’s powerful central bank, which expressed fears that a plan to leverage a €440 billion eurozone rescue fund to amass a “fire power” of €1 trillion, or £880 billion, resembled the risky finance methods that triggered the crisis in 2008. EU leaders are expected to sanction the establishment of a so-called special purpose investment vehicle, or SPIV, to be set up in the coming weeks. It is aimed at attracting investment from countries such as China and Brazil. Jens Weidmann, the president of the Bundesbank and a member of the European Central Bank, sounded the alarm over the plan to “leverage” the fund by a factor of four to five times without putting any new money into the pot. He warned that the scheme could be hit by market turbulence with taxpayers left holding the bill for risky investments in Italian and Spanish bonds. The important thing to remember is that we get what we deserve, we wanted our houses to increase in value, we wanted to make out we were middle class, we were fed lies so others could gain, like little children we were taken advantage of, but do you know that 90% of you wont want to see that, with heads in sand you will lie to yourselves till the end, you are lambs to the slaughter. The problem is the same one you have suffered from for 1000's of years, usury(interest) many times though history you have been told, but like the thick monkeys you are you cant work it out, look it is easy 1+1 = 2 and not 1+1 = 2.2, now until you can work that one out I suggest you give up money and go back to bartering. “Their priority is that we pay back our loans.”" WOW! Who' "da thunk"? Novel concept. Why is it the Left thinks the world owes them a living? Why is it even when the bondholders are willing to take a haircut at 50%, the Socialists still whine? It sucks when socialists run out of other peoples money. Socialism will bankrupt a country in time. You can only rob Peter to pay Paul so many times until Peter is broke too. The underlying cause of our global economic mess is government socialism interfering in the markets like when the US Congress, via social(ist) engineering, forced banks to make loans to people who should have never gotten the loans in the first place & government buying votes through excessive spending for everyone with a handout.

IN CONCLUSION : The statement from the EU heads of state does not provide the hard details that the markets might have hoped for. It starts by stating the obvious: "Measures for restoring confidence in the banking sector are urgently needed and are necessary in the context of strengthening prudential control of the EU banking sector". It makes clear that more needs to be done to guarantee funding for banks – and, as my colleague in Brussels David Gow revealed earlier, requires banks to hold a 9% capital by June 30 2012. The memo spells out: "Banks should first use private sources of capital, including through restructuring and conversion of debt to equity instruments. Banks should be subject to constraints regarding the distribution of dividends and bonus payments until the target has been attained. If necessary, national governments should provide support , and if this support is not available, overcapitalization should be funded via a loan from the EFSF in the case of Euro zone countries." The paragraph that is important for UK banks, which found themselves bound by state rules during the October 2008 bail out, re latest to whether banks receiving state aid this time round will also be subjected to tough rules. Lloyds, for instance has to sell off 632 branches and Royal Bank of Scotland has been forced to sell off branches, entire businesses and wind down parts of its balance sheet to meet Brussels rules. On first reading, the memo appears to show a more tolerant approach on this score. "Any form of public support, whether at a national or EU-level, will be subject to the conditionality of the current special state aid crisis framework which the Commission has indicated will be applied with the necessary proportionality in view of the systemic character of the crisis." No doubt, the lawyers are about to get busy.

I am very much in favour of a U. K. referendum on Europe, despite being pro-Europe. I'm fed up with peoples conviction that "the majority want out of Europe" or vice versa - I just want to get the issue voted on, dealt with and move on, I do however think it is a shame that the Tories didn't keep the costs down by tacking it onto the first referendum - it isn't like they couldn't have anticipated it coming up... Hopefully the press will behave with slightly more decorum this time around too... (I won't hold my breath) - Conservative rebels pushing for an in-or-out referendum on Europe are riding the tide of public opinion, according to a Guardian/ICM poll. Some 70% of voters want a vote on Britain's EU membership, and by a substantial nine-point margin respondents say they would use it to vote for UK withdrawal. Forty-nine per cent of voters would vote to get Britain out of Europe, as against just 40% who prefer to stay in. There is a clear majority for staging a referendum on Britain's relationship with Europe in each of the social classes and across the regions and nations of the UK. Men and women are similarly keen, as are supporters of all three main parties, although rather more Conservative (71%) than Labour voters (65%) are calling for a poll. Overall, just 23% of all voters say they would be against a vote that "could ask the public whether the UK should remain in the European Union or pull out instead". On the crunch question of which way they would vote, there are marked differences across the age range, and by party support. Where just 28% of the youngest voters aged 18-24 would vote to quit the EU, 63% of those aged 65+ would do the same. An outright majority of Tory voters – some 56% – would vote to leave, as against 34% who would prefer to stay in. By contrast among Labour and Liberal Democrats, there are majorities for staying in Europe, although there are also sizeable minorities among both parties' supporters – of 38% and 44% respectively – who indicate that they would vote to get out.

Angela Merkel says countries who want a rapid solution to the eurozone debt crisis should not oppose Robin Hood tax. Germany's Angela Merkel criticises opponents of a financial transaction tax in Karlsruhe on 14 October. Photograph: Franziska Kraufmann/AFP/Getty Images Germany's chancellor, Angela Merkel, led European Union critics of US and British attacks on their plans on Friday to resolve the sovereign debt and banking crises. Merkel criticised both Barack Obama and David Cameron for opposing EU proposals for a financial transaction levy, or Tobin tax, and demanding "big bang" solutions. Spain's economy minister, Elena Salgado, smarting from a cut in the country's credit rating from Standard & Poor's, insisted it would meet its tough deficit target and accused rating agencies of being too swayed by exaggerated eurozone problems. Merkel, speaking at a conference of the engineering trade union IG Metall in Karlsruhe, said: "It cannot be that those outside the eurozone who press us again and again for comprehensive action are, at the same time, comprehensively working together to prevent the introduction of a financial transaction tax." She added: "This is out of order. We must ensure that financial market actors share in the costs of fighting the crisis. I will push for this until it happens, at least in Europe but preferably worldwide." - The IVth. Reich is upon us, europeans !!!!!!!!!!!!