Both the general collapse brought on by the 2009 economic crisis and Germany's record-breaking recovery caught people here by surprise. The consensus among economists for 2013 is that Germany will face steep challenges -- though fewer than those expected in many other countries.

Most economists have already revised downwards their forecast for this year and are even presuming a contraction in economic growth for the final quarter of 2012. The prediction now is for a slight growth in performance in 2013 and -- most importantly -- that the country will avert a recession.

It's an outlook cautiously shared by most German business leaders. According to the Munich-based Institute for Economic Research (Ifo), the current business climate index is poor, but expectations for the next six months have improved significantly.

That sentiment is not rock solid, however. "We measure the uncertainty by determining how wide the variations between companies are in assessing the current situation," warns Ifo chief economist Kai Carstensen. "And that differential has recently increased considerably."

Such uncertainty may seem odd, since the situation is noticeably calmer than at the outset of the financial crisis. The collapse of the United States real estate market in 2008 sent tremors through the global economy, severely affecting German companies.

Yet that drama had the silver lining -- at least from a business perspective -- of having a clear cause and effect. Now, economic growth is dependent on several, much more amorphous factors, such as:

• The euro crisis
• The US and Chinese economies
• Domestic consumption and investment in Germany

The euro crisis is particularly complex and confusing, and thus threatening, to companies. A recent survey of chief executives conducted by the German news agency DPA found that, unanimously, their biggest wish for 2013 was an end to the crisis.

The Italian caretaker Prime Minister, Mario Monti, has promised to cut labour taxes in an interview seen as the launch of his election campaign. Mr Monti, who leads a centrist coalition while not standing as a candidate himself, also attacked conservative rival Silvio Berlusconi. In office he vowed to restore market confidence in Italy's finances. Wednesday saw him achieve his aim of halving the difference between Italy's and Germany's bond yields.

These indicate a country's cost of borrowing and reflect how nervous investors feel about lending to them. Germany is used as a benchmark as it is considered the safest bet in the eurozone.

The difference between Italy and Germany's yields dipped below 2.87 percentage points on Wednesday.

When Mr Monti took office as head of a technocratic government in November 2011, the spread had stood at 5.74 percentage points.

Mr Monti's centrist allies are in a three-way race with Mr Berlusconi's People of Freedom party on the right and the Democratic Party on the left. Speaking on radio, Mr Monti pledged to take measures to redistribute wealth in the country.  "We need to reduce taxes on the labour force, both on workers and companies, by cutting spending," he said. He defended his administration's record, saying that the "light at the end of the tunnel" was "much nearer".

Since withdrawing his party's support for the government in December, Mr Berlusconi has repeatedly launched attacks against the former European commissioner. "Berlusconi has made improper attacks against me - on areas like family values," Mr Monti said on Wednesday.

"I think I need make no further comment," he added, in an apparent reference to the string of sex scandals involving the veteran billionaire politician.  Mr Monti, a former economics professor, was chosen to impose financial rigour on the economy, after Mr Berlusconi quit the prime minister's job.  In power, Mr Monti made some progress early on, including raising the retirement age and structural reforms. However ordinary Italians have been hard hit by the combination of tax rises and spending cuts he imposed to repair Italy's public finances. Italians are due to go to the polls over the weekend of 24-25 February....
The Euro will survive even if the ECB has to kill Europeans and recycle them into Euro notes, bit like Soylent Green only bank notes instead of food. Interesting fact on the EU today, they have ordered all the cash machines in the Vatican City to be turned off because the Vatican has failed to comply with anti money laundering regulations. Is this the shape of things to come.

Winning the war against the people of Europe ...

Europe (Germany in fact) clinched a deal on Thursday to give the European Central Bank new powers to supervise euro zone banks from 2014, embarking on the first step in a new phase of closer integration to help underpin the euro. After more than 14 hours of talks and following months of tortuous negotiations, finance ministers from the European Union’s 27 countries agreed to hand the ECB the authority to directly police at least 150 of the euro zone’s biggest banks and intervene in smaller banks at the first sign of trouble. “This is a big first step for banking union,” EU Commissioner Michel Barnier told a news conference. “The ECB will play the pivotal role, there’s no ambiguity about that.” The euro rose to a session high in Tokyo of 1.3080 against the U.S. dollar on news of the deal. After three years of piecemeal crisis-fighting measures, agreeing on a banking union lays a cornerstone of wider economic union and marks the first concerted attempt to integrate the bloc’s response to problem banks. The new system of supervision should be up and running by March 1, 2014, following talks with the European Parliament, although ministers agreed that could be delayed if the ECB needed longer to prepare itself. The plan sets in motion one of the biggest overhauls of any European banking system since the financial crisis began in mid-2007 with the near collapse of German lender IKB. The focus is now on EU leaders, who meet in Brussels on Thursday and Friday, to give it their full political backing. In an about-turn, German Finance Minister Wolfgang Schaeuble dropped earlier objections that had led him to clash openly with his French counterpart, Pierre Moscovici, last week over the ECB’s role in banking supervision. With time running out to meet a year-end deadline, both sides managed to settle their differences and Germany won concessions to temper the authority of the ECB’s Governing Council over the new supervisor. Agreement on bank surveillance is a crucial first step towards a broader banking union, or common euro zone approach to dealing with failing banks that in recent years dragged down countries such as Ireland and Spain. The next pillar of a banking union would be the creation of a central system to close troubled banks. The decision also sends a strong signal to investors that the euro zone’s 17 members, from powerful Germany to stricken Greece, can pull together to tackle the bloc’s problems.

As there will now be another meeting of the eurozone finance ministers next Monday (November 26), the Greek Prime Minister Antonis Samaras has postponed a visit to the wealthy Gulf state of Qatar, which was due to happen next week. "The prime minister will stay in Athens to coordinate things," spokesman Simos Kedikoglou told Reuters. Samaras was due to meet Qatar's emir and prime minister as well as top officials from Qatar's sovereign wealth fund to discuss investment in the country's recession-mired economy.  The German Finance Minister Wolfgang Schaeuble also spoke after the meeting. He told lawmakers at a closed-door session that Greece's lenders remained divided over how to fill a €14bn hole in the country's finances through 2014 and how to define debt sustainability for the eurozone's weakest link, participants told Reuters. Schaeuble met members of parliament on Wednesday morning to explain the failure of the negotiations. One participant said Schaeuble had told members of his conservative party that lenders had failed to resolve the issue of whether 2020 or 2022 would be used as a benchmark for Greek debt sustainability. The source said Schaeuble had explained that the ECB believed Greece could raise €9bn itself by issuing short-term debt. Another Christian Democrat lawmaker said the minister had told participants that a debt buyback could be part of the solution.

The definition of incompetence and stupidity ....Herman van Rompuy

European Council President Herman van Rompuy has quashed reports yesterday which said that a deal on keeping Greece afloat and providing more bailout money for the near-bankrupt state is unlikely to be reached next week when eurozone finance ministers meet in Brussels.

Mr van Rompuy said a deal to keep Greece afloat by providing more bailout money will be agreed in "due time" once a report on the country is finalised by the troika of the IMF, reports Reuters.  "We need more time to reach agreements on privatisation law," Van Rompuy told reporters after a summit of Asian and European leaders in Laos. "In any case, the Europe group meeting on 12 November remains on the agenda."   Athens also needs to push through spending cuts and tax measures worth €13.5bn as well as a raft of economic reforms that will satisfy EU and IMF lenders but anger the Greek population, which has led to the anti-austerity strikes that we are seeing today in the country.  "The decision on this will be taken by the Europe group after analysis of the troika report, which is in the stage of finalisation in Athens," Van Rompuy added.   He urged the Greek government and leading political parties to decide on what is needed to reach an agreement with the troika, adding "I'm quite sure this will be done in due time"....Martin Koehring from the Economist Intelligence Unit has said these protests could convince to some MPs in the centre-left Pasok party to vote against the latest austerity package, but said he still expected the package to be approved.

The two-day general strike is yet another sign of the anti-austerity climate among the Greek population. However, the government has to pass further austerity measures to guarantee disbursement of a vital €31.5bn loan tranche from the EU and IMF.

The strike may convince more MPs from the centre-left Pasok party to vote against the latest austerity package; Pasok is part of the fragile three-party government coalition but has seen its support among voters eroded as a result of backing austerity.  The government has already suffered several setbacks in recent weeks, with the other left-wing junior coalition party, the Democratic Left, threatening to vote against the package. Wven the senior coalition party, the centre-right New Democracy party, has seen two MPs being forced out of the party for opposing further budget cuts. The government's majority is narrowing and the general strike further puts pressure on MPs to vote against the government's plans.  On balance, however, we expect the package to be approved by MPs because the alternative would be the government running out of cash by November 16 and facing default and potential euro exit.

Germany's finance minister Wolfgang Schaeuble has been talking to Reuters ahead of the G20 summit in Mexico this weekend. He said he did not want the two-day meeting in Mexico City to concentrate exclusively on the eurozone crisis to the detriment of other urgent issues such as the "fiscal cliff" facing the United States and Japan's debt problems.

"The United States and Japan bear as great a responsibility for (ensuring stability) as we Europeans," he said.

"The G20 economies must decisively win back confidence with structural reforms and sustainable financial policies. This is the most important precondition for strengthening global economic conditions," Schaeuble said.

"Without consolidation and reforms we risk further loss of confidence and still less growth. No sustainable growth can be built on a mountain of debt," said the minister, known for his advocacy of fiscal rigour even in times of recession.

Schaeuble has taken a tough line on Greece and other weaker members of the eurozone during the region's three-year sovereign debt crisis, insisting they swallow austerity medicine even as their economies sink deeper into recession.

But he had warm words for Spain, saying it was on the "right path" and that there were signs - seen for example in falling wage costs and in the current account - that its economic imbalances were improving.

Schaeuble reiterated that Greece, still locked in difficult talks with its international creditors aimed at averting bankruptcy, must implement the tough measures it has promised.

The European Central Bank is in "panic" over the eurozone crisis and acting outside its mandate with its new bond-buying plans, the bank's former chief economist said in comments published Saturday. "The break came in 2010. Until then everything went well," Juergen Stark, the German who resigned from the ECB in late 2011 after criticising its earlier round of buying up of sovereign debt, told Austrian daily Die Presse in an interview. "Then the ECB began to take on a new role, to fall into panic. It gave in to outside pressure ... pressure from outside Europe." Mr Stark said the ECB's new plan to buy up unlimited amounts of eurozone states' bonds, announced on September 6, on the secondary market to bring down their borrowing rates was misguided. "Together with other central banks, the ECB is flooding the market, posing the question not only about how the ECB will get its money back, but also how the excess liquidity created can be absorbed globally," Mr Stark said. "It can't be solved by pressing a button. If the global economy stabilises, the potential for inflation has grown enormously." He added that "panic" about the eurozone breaking up was "nonsense" but that the only way to end the crisis was for member states to bring down their debts and implement structural reforms to boost economic growth. "Governments have recognised that returning to budgetary discipline is indispensable. Markets focus much more on whether states will be able to service their debts in five years' time," he said. Mr Stark quit in late 2011, following in the footsteps of former Bundesbank head Axel Weber, who stepped down earlier in the year from Germany's central bank because of unease about the ECB's policies. Mr Weber's successor Jens Weidmann was the only member of the ECB's policy-setting governing council to vote against the bank's new programme earlier this month. "Weidmann's arguments ... should not be made light of," Mr Stark told Die Presse. "The way in which his position has been publicly commented upon by the ECB leadership has crossed the line of fairness." Source: AFP

SO MUCH FOR THE ECB plans...

MADRID--Mariano Rajoy, the Spanish prime minister, has said he is more determined than ever to avoid having to ask for a bailout – despite the insistence last week by ECB president, Mario Draghi, that it would be a condition of the central bank helping to keep down a country's borrowing costs.

"If there is one overriding priority for creating employment it's reducing the public deficit. That is far more important than what people like to call a bailout," Rajoy said in a televised interview on Monday night. Draghi announced last week that the bank would buy unlimited quantities of sovereign debt to ensure eurozone governments retained access to funding, but he made it clear that there would be strings attached. However, Rajoy said he was not prepared to accept such conditions. "I couldn't accept anyone else telling us what our policies should be or where we have to make cuts," he said. How this apparent intransigence is received in Brussels and Berlin remains to be seen, but Rajoy received some support for his stance on Tuesday during a visit to Madrid by the Finnish prime minister, Jyrki Katainen, who said a bailout could be avoided as long as the measures taken in Madrid were seen as credible. Rajoy is at pains to show that he is in charge, that he is not the victim of circumstance and that he is making decisions of his own free will and not because they have been imposed on him. He appears to have decided that, if he has to make spending cuts and other unpopular decisions, then he will do it without ceding sovereignty the way the Greeks have been forced to do.

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.

German politicians have reached an agreement that will allow parliament to approve the setting up of a permanent eurozone bailout fund and the fiscal pact which eurozone leaders agreed to last year.  Angela Merkel's government and the opposition Social Democrats said they had agreed on the measures, which will give the Chancellor the two-thirds majority in parliament she needs when it goes to a vote next week.  There's a bit BUT though - Volker Kauder, the parliamentary leader of Mrs Merkel's party said again there would ne debt mutualisation in Europe, aka no eurobonds ... The head of the International Monetary Fund has piled pressure on Germany by recommending a series of crisis-fighting measures that chancellor Angela Merkel has resisted.  IMF managing director Christine Lagarde warned that the euro is under "acute stress" and urged eurozone leaders to channel aid directly to struggling banks rather than via governments. She also called on the European Central Bank to cut interest rates.  The comments came as Italy's prime minister Mario Monti, warned of the apocalyptic consequences if next week's summit of EU leaders were to fail.  The stark message from Lagarde, delivered to eurozone finance ministers who met in Luxembourg, will increase pressure to come up with a unified approach to tackle problems including Spain's struggling banks. She urged the 17 eurozone countries to consider jointly issuing debt, helping troubled banks directly, and suggested relaxing the strict austerity conditions imposed on countries that have received bailouts.....

Luxembourg's Jean-Claude Juncker has said he'll step down as chairman of the forum of the eurozone finance ministers this year, citing the heavy workload and his health.  Schaeuble has said he wants the job but Hollande is thought to be anxious about appointing a champion of austerity to such a key role.   If Germany gets the Eurogroup job, France gets to appoint their man as head of the bailout fund the European Stability Mechanism and vice versa.  Hollande is expected to put his petitions to Angela Merkel, Italy's Mario Monti and Spain's Mariano Rajoy at their talks in Rome on Friday.

G8 - David Cameron has issued an ultimatum to the Greek people to accept austerity or leave the eurozone. The UK Prime Minister insisted failure to provide clarity could prove disastrous for the world economy, and told the Greek people that fresh elections must decide once and for all whether the country stays in the eurozone. The message came as his Cabinet colleague Ken Clarke said the European banking system was already "in tatters". Mr Clarke warned that Britain was "heavily exposed" to potential problems and could be among the next targets for market speculation. Deputy Prime Minister Nick Clegg also criticized the lack of leadership on the eurozone crisis, raising fears of a rise in extremism and civil unrest unless it was addressed. Mr Cameron, in America for back-to-back G8 and Nato summits, said talks with fellow world leaders had "crystallized" the problems.... Justice Secretary Mr Clarke, a former chancellor, said Greek voters had to "face up to reality". "These are hardships inflicted on them by the irresponsibility of their former politicians," he said. "But they cannot just vote for saying, 'could people just carry on giving us some money so we do not have to change anything'." Mr Clarke said the consequences would be "serious" if the Greek people elected "cranky extremists" and defaulted on their debts as a result. "No-one knows exactly what will happen in the rest of Europe. But the banking system is in tatters, it is weak in very many places," he went on. "We don't know what the knock on effects would be, they could be very serious and of course people will start barking at the door of Portugal, Ireland, Italy and here in Britain. "Our banks are heavily exposed to some of these countries, we have overcapitalized them so far... "I obviously hope the Greeks will vote responsibly and that we can avoid turmoil."

"The notion that you can renegotiate the pact from top to bottom and take substantial elements out of the text is a pipe dream,"

Eurozone finance chairman Jean-Claude Juncker has backed the idea of boosting the European Investment Bank (EIB)....It is one of several measures demanded by the leading French presidential candidate Francois Hollande to boost growth in the eurozone.

Mr Hollande has said he wants the measures added to newly agreed limits on European governments' borrowing.

However, Mr Juncker poured cold water on the idea that the "fiscal compact" could be amended.  Despite his opposition to renegotiating the fiscal rules, Mr Juncker appeared to offer an olive branch in a speech in Hamburg on Monday, by backing Mr Hollande's idea that the EIB could play a bigger role.

Mr Juncker said that the bank's capital - its buffer against loan losses - could be increased by 10bn euros ($13bn; £8.1bn), which would increase its lending capacity by several times that figure.

The EIB is jointly-owned by the 27 EU nations - including the UK - and finances infrastructure, small and medium businesses, and green projects among other things.

Mr Hollande is ahead of the incumbent President Nicolas Sarkozy in opinion polls, having already narrowly beaten him in the first round of voting a week ago...The other pro-growth measures called for by Mr Hollande include:

1 - the introduction of Europe-wide government bonds to finance infrastructure investment:

1 -  - a financial transactions taxa reallocation of unused structural funds in the European Commission budget

If elected, Mr Hollande has said he would veto ratification of the fiscal compact - which was agreed by EU governments, except the UK and Czech Republic in March - unless some of his demands were met.

BRUSSELS - In recent weeks, the European Bank for Reconstruction and Development (EBRD) has been in the news as rarely before, with a few important questions being raised about its accountability.  For the first time in its 20-year history of promoting democracy and market economies in central and eastern Europe, the bank has decided to apply some democratic principles to the selection of its own president: five candidates are vying for the job, which until now has been filled after behind-closed-doors negotiations between its largest EU shareholders.  In the meantime, EUobserver has brought to light allegations that EBRD money has ended up in the pockets of people associated closely with the authoritarian regime of President Alexander Lukashenko in Belarus, raising some doubts over the verification mechanisms in place at the bank to ensure the public money it disburses actually benefits ordinary people in its theatre of operations.

Opening up the presidential selection process and dealing with allegations of having benefited the allies of a dictator has hopefully brought on some soul searching at the bank.

It would be a good time for the institution to take a look at itself - last year it turned 20 and this year it will expand its mandate from former Communist-controlled Europe to also promoting reform in post-Arab-Spring north African and Middle East countries.  An honest self-assessment is necessary because the bank's record in post-Communist countries is at best mixed and its new turf marks an increase in political responsibility.

The Bank of Portugal said the use by domestic banks for the various facilities available from the ECB rose to €56.3bn in March – up from €47.5bn in February and greater than the previous record level of €49.1bn in August 2010.

Bailed out by the EU and International Monetary Fund in April 2011 for €78bn, Portugal has €12bn earmarked for bolstering its banks' capital positions if necessary in the months ahead. The plight of Portugal's banks was revealed following the cash injection by the ECB in February when the central bank lent €529bn to 800 banks across the eurozone through its long-term refinancing operation (LTRO).  Portuguese banks were among those frozen out from the wholesale funding markets – where banks borrow from each other or professional investors – during the height of the eurozone crisis and as a result are among a number in the eurozone that utilise ECB funding.  "I think it's natural and reasonable for banks to have taken advantage of these funds under the circumstances, especially after the ECB relaxed some collateral requirements before February's injection," Teresa Gil Pinheiro, chief economist at Banco BPI in Lisbon, told Reuters.  "The LTRO injection was in late February so it's natural that it is registered in March," she said.  The Portuguese continued reliance on ECB funding comes amid fresh concerns in the eurozone about the price at which the governments of Spain and Italy can borrow on the markets.  A weak auction of Spanish government bonds last week – when some €2.5bn rather than €3.5bn were sold – was regarded a sign that the initial confidence the ECB created through its injections of cheap cash was evaporating.

Germany runs riot in Europe, are the Greeks the new jew victims of the financial Holocaust ????

Evangelos Venizelos, the Greek finance minister and socialist leader, said the country had until Sunday to choose whether to swallow the eurozone medicine of more cuts – or default on its debt next month and be forced out of the euro. In an emotional speech he said: "The choice we face is one of sacrifice or even greater sacrifice – on a scale that cannot be compared. Our country, our homeland, our society has to think and make a definitive, strategic decision. If we see the salvation and future of the country in the euro area, in Europe, we have to do whatever we have to do to get the programme approved." Police ringed the Greek parliament building following the failure of eurozone finance ministers to approve the new bailout for Greece. Prime minister Lucas Papademos had offered new austerity measures worth €3.3bn to secure the euro lifeline, but he was told the cash would not be forthcoming until savings of an additional €325m were identified. He was told to get the €3.3bn programme endorsed and come up with a plan for the new cuts – to plug a gap in this year's budget – by Sunday. George Karatzaferis, a Greek coalition leader, spoke of national humiliation and said he would not accept the new cuts, adding that Greece was labouring "under the German boot". The eurozone's finance ministers are to meet again in Brussels on Wednesday to sign off on the bailout terms and the debt swap pact on condition that Athens has met the stringent conditions. I hope for the Greeks sake, they realize their PM, Papademos, is more interested in protecting the Banksters, than his own people.....Trying too scare the Greeks, it's the end of the world! No, a default is a tunnel with a light vs a deep dark hole of years, and years, and years of pain. ---- Bloomberg has seen an emailed transcript from tonight's Greek cabinet meeting, sent by Papademos's office -- The PM reportedly said: Some say default would be preferable. They are woefully mistaken. What is of the essence right now is to do whatever we can to approve the new plan and let the loan accord proceed. He added that a default would halt the payment of wages and pensions and shut down schools, hospitals and businesses. He spoke after five ministers resigned in two hours and protesters clashed with police in Athens...Well, Germany runs riot in Europe, are the Greeks the new jew victims of the financial Holocaust ????

What is the "true rule" of Vulture Funds in Greece ? Few people know what are Vulture Funds -- they buy bonds or debt of collapsed states for cheap and then legally, try to recover as much as possible or swap it with assets. My question is: what kind of role are these funds playing now? Why does the press not take them out of "grey areas", transparency is the first level of democracy isn't it! Do we kill Greece to satisfy Vulture Funds appetite for blood money ?

How very EU to blame everything on Greece. Remember it was the French who cheated to have Greece join the euro. France, with German co-operation decided to split up the plunder of the PIIGS. The EU Commission went along with the deal. Billions and billions were flooded into the PIIGS. In Greece, French banks led the rape of the Greek economy. The Port of Piraeus, the massive Inter Island Ferry Project, the super highways to all of Greece's borders. Billions which the EU and the Axis (France and Germany) knew could never be repaid. The safety net was the EU taxpayer – but the Axis got too greedy, the mega-loans got out of control. Come now Greece – to hell with them – default – enjoy it. Then Portugal, Ireland, Italy, Spain – unless of course the Axis powers get out first.

What amounts to a referendum on euro membership will be held in Greece this weekend as the parliament there votes on the austerity measures agreed by the country's leading politicians yesterday. Hopes the package of cuts and other austerity measures would be enough to persuade European finance ministers to release a new tranche of financial aid to meet the country's next debt repayment were dashed over night. Instead, eurozone politicians refused to make the €130bn payment until the new cuts had been passed into law by the Greek MPs, effectively holding a gun to the country's legislative. Europe also wants another €300m plus of cuts and a promise reforms won't be unwound after elections. Jean-Claude Juncker, the prime minister of Luxembourg, summed up the hardline stance of eurozone leaders fed up with Greece's failure to deliver on fiscal reforms. "In short: no disbursement without implementation," he insisted. So with a second general strike planned today in Athens in opposition to the cuts in wages, pensions and state spending, it's going to be another frantic few days in the eurozone crisis. Greece is well established on the road to a disorderly default and is playing a game of chicken with eurozone leaders over whether they will be willing to see Greece leave the euro. The emerging sense is that, actually, Germany and France would be willing to see Greece exit (and Portugal for that matter) so they could circle the wagons around Italy.

Conflicting news ...

• Greece's coalition leaders say they have accepted the terms of the country's second rescue package, ending days of deadlock. Having failed to agree €300m of pension cuts last night, last-ditch talks with international lenders have delivered 'success' – according to prime minister Lucas Papademos....

• But doubts remain over whether it will be enough to satisfy the rest of Europe. Eurozone finance ministers are meeting now in Brussels, but are not expected to reach a decision tonight. Germany and Ireland have both suggested that the deal agreed in Greece may not go far enough.....

• The agreement has sparked anger in Greece. Unions have called a two-day strike, beginning on Friday. A government minister has resigned, along with a senior member of the New Democracy party.

• The European Central Bank hinted that it could share any profits on its Greek bonds with the rest of the eurozone. However Mario Draghi ruled out taking part in the debt restructuring programme. For those that do not keep an eye on what is actually going on you should get ready for the ride we are about to go on together (well the 99%). Greece is going to default. Fact. The LTRO that the ECB did in January saw european banks borrow 0.5 Trillion euros at 1% and then put it straight back into the ECB at 0.25% because they do not want to lend it to other banks because they are all insovent. The ECB is going to do another LTRO soon that will be closer to 1Trillion euros!! and the reason for all this that Greece is defaulting in March and they believe that as long as they throw money at the banks before the credit event that all will be fine....I thought they'd spend 3-4 hours in the room, eating biscuits and shooting the shit, so they could come out, looking like they'd been fighting hard for the people. ... After all, how could they negotiate when the other side wasn't present? But, no, I was wrong, they have turned down the deal. Now we need to see if the Troika will budge. If not, then the politicians have to either cave, or turn down the money. » Ben Bernanke warned that America's labour market was still a "long way" from recovery, despite the unemployment rate falling to 8.3% in January, the lowest for three years. Stockmarkets had surged in response to the employment data, with the Dow Jones index reaching its highest mark since May 2008. But the Fed's chairman reminded Congress that the official figure "understates the weakness" of the labour market as it does not count people who have given up looking for work or can find only part-time employment. See article» » The trading of shares in Alibaba was suspended amid rumours that the Chinese e-commerce firm is to buy back the 40% stake held in it by Yahoo! It is thought that Alibaba has obtained loans from a syndicate of banks to buy back some or all of that stake, which could be worth $13 billion. Meanwhile, Yahoo! took more steps to restore investor confidence, as Roy Bostock announced he was stepping down as chairman. ? » China barred its airlines from taking part in Europe's emissions-trading scheme (ETS), hardening its opposition to an attempt to get carriers to pay for carbon emissions on flights into and out of the EU. Russia, America and India are also opposed to their airlines' inclusion in the ETS. See article» » Air France was forced to cancel about half its long-haul flights because of a four-day strike by pilots and crew, who walked out in protest against government plans to require them to give at least 48 hours' advance notice of strike action.

German finance minister Wolfgang Schäuble warns ahead of a eurozone meeting in Brussels that spending cuts agreed by the Greek coalition leaders do not appear to fulfill bail-out conditions. Germany's finance minister says that the Greek deal on spending cuts, approved by coalition leaders yesterday, doesn't appear to fulfill bail-out conditions. "German finance minister Wolfgang Schäuble warns ahead of a eurozone meeting in Brussels that spending cuts agreed by the Greek coalition leaders do not appear to fulfill bail-out conditions." The fuse on violent Greek revolution has already been lit, and Schauble wants more. ....This man is an imbecile !! So, first we're told by Juncker that the meeting won't produce a decision tonight, and now we hear that it's unlikely to be positive even when it does come... As the eurozone finance ministers settle down for what promises to be a very, very long meeting, it's worth stepping back a bit and looking at where we are: ...• Greek leaders struck a deal yesterday, after months of wrangling, to cut the monthly minimum wage by 22pc to €586, lay-off 15,000 civil servants and put an end to dozens of job guarantee provisions. ...• It's also close to a debt-relief deal with private investors which will see them exchange their €206bn in Greek bonds for €30bn in cash, plus €70bn in new (less lucrative) bonds. ...• These measures are all designed to put Greece's finances in order and convince Europe to release €130bn in bail-out cash. In fact, it's all a bit tangled because the €30bn in cash offered to private investors actually comes from that bail-out money... • Tonight's meeting is about approving those measures before they're passed to the Greek parliament for official ratification. But we hear from Schäuble that they may not cut deep enough... We also hear that a decision is not expected tonight...

Greek unions and employers' associations have blocked a critical element of a rescue deal put forward by the European Union, accusing negotiators of crippling the economy with wage cuts and tax rises that will undermine growth. In a joint letter to the Greek prime minister, Lucas Papademos, the employers and unions said a cut in the minimum wage was non-negotiable and the focus of talks should switch to the tax system, the complexity of regulation and corruption. Athens is under pressure to wrap up talks on a bond swap and a €130bn (£108bn) bailout to avert a chaotic default. But hopes of an imminent deal faded after eurozone finance ministers put off a meeting expected on Monday to finalise the rescue. The ministers may meet later next week instead, said its head, Jean-Claude Juncker. The unions' and employers' statement undermined efforts by the coalition government to agree a package of reforms as demanded by the country's international lenders if Athens is to receive the crucial €130bn second rescue package. The three main parties in the coalition will meet on Saturday to discuss the situation, though sources close to the talks said a quick resolution was unlikely. The refusal of unions to accept further wage cuts and the discovery earlier in the week of an extra €15bn hole in Athens's accounts are expected to force negotiators to rethink their tactics over the weekend. The troika of officials from the International Monetary Fund, European Central Bank and EU want Greece to agree a package of spending cuts and reforms before they release the fresh €130bn of funds.

MEANWHILE :

Snow and ice hits Britain as Europe freezes over Heavy snow and ice has raised fears of transport chaos on Sunday, with hundreds of flights cancelled and disruption expected on the roads.At Heathrow 350 flights - a third of today's total - were called off on Saturday even before the forecast snow began, while Gatwick also warned it could have to cancel services. The Met Office predicted up to six inches of snow and ice would fall overnight and early this morning, with temperatures falling to 10.4 Fahrenheit (-12C) and windchill making it feel significantly colder. It urged people to be prepared for heavy snowfalls.

Anger in Athens over leaked German plans

Troubled waters - Greek officials launched a behind the scenes attack on European Union and International Monetary Fund negotiators as talks in Athens over the country's mounting debts appeared to stall. Prime minister Lucas Papademos told aides that a crisis meeting of party leaders would be called as early as Thursday to thrash out a response to an increasingly intransigent negotiating team sent by Brussels, which is demanding severe austerity measures before sanctioning a further €130bn (£109bn) of bailout funds. Papademos, the economist temporarily heading a transition government in Athens, wants party leaders backing his administration to make further concessions to bring talks to a swift end. Papademos and his team of aides returned in sombre mood on Tuesday from a round of talks in Brussels and Frankfurt at the offices of the European Central Bank (ECB), despite relief that a German proposal to install an EU commissioner in Athens, with special oversight of Greek finances, had been quashed. While the rest of Europe reluctantly bowed to the German agenda, Berlin, however, found itself increasingly alone on how to fix Greece. Anger in Athens over leaked German plans last week that Greece should surrender power over its budget to the EU since it was incapable of delivering on its bailout pledges mushroomed into strong criticism from some of Berlin's habitual allies. .... Helle Thorning-Schmidt, the Danish prime minister who has just taken over the EU presidency, said that Brussels would defend Greece against any assault on its democracy, a reference to the German demand for Athens to forfeit control over budget policy. The Austrian chancellor, Werner Faymann, who has been on the German side of the creditor-debtor argument for the past 18 months, was also critical of Berlin. Jean Asselborn, Luxembourg's foreign minister, went further. "It's not in order that German politicians say that we need commissars and that Greece be put under supervision … The biggest country in the EU, Germany, should be more careful."

The director of Communications at Standard & Poor's, has cleared up the definition of "selective default" for us, after the ratings agency said Greece was likely to be downgraded to it: An obligor rated 'SD' (selective default) or 'D' has failed to pay one or more of its financial obligations (rated or unrated) when it came due. An 'SD' rating is assigned when Standard & Poor's believes that the obligor has selectively defaulted on a specific issue or class of obligations, excluding those that qualify as regulatory capital, but it will continue to meet its payment obligations on other issues or classes of obligations in a timely manner. ...To make a long story short, it means that Greece would default on bonds, but not other obligations... Louise Cooper of BGC Partners reckons that traders "clearly believe" the comments from politicians that a deal will still be done. She wrote today that: Equity and bond markets have barely reacted to the news today that Athens will have to go back to bondholders and like Oliver Twist, ask for more. Very publicly the head of the IIF said at the weekend that they had offered the "maximum" concessions - markets are taking the view that this was a negotiating position and the game of brinkmanship will continue. Cooper also pointed to the lingering effects of the European Central Bank's offer of almost €500bn of cheap loans last month. This liquidity injection is helping to push down bond yields (as banks buy up government debt). The Long Term Repo Operation (LTRO) is being compared to Quantitative Easing which had such a beneficial on the stock market in the US, suggesting there may be more to go. Today's debts auctions went smoothly. Spain sold €2.5bn of short-term debt at sharply lower borrowing costs, and received bids for €13.5bn worth of debt. The yield on Spanish three-month debt dropped to 1.285% (down from 1.735% at the last auction of this type), while it got its six-month paper away at 1.847% (down from 2.435%). The Netherlands, meanwhile, showed the value of a solid AAA credit rating. It sold thirty-year bonds at a yield of just 2.690%, down from 4.03% at its previous auction nine months's ago. The Netherlands also sold €495m of 2013 bonds at yield of just 0.074%, or almost zero. The Wall Street Journal is reporting that "investors, economists and politicians" fear the Portuguese government may not be able to access affordable borrowing in 2013, when it is due to return to the financial markets.