As eurozone ministers prepare for yet another painful negotiation about how to prevent Greece plunging into its own catastrophic default, the fate of the Libertad – and a controversial US court judgment last week in favour of the vulture funds pursuing Argentina – is a reminder that the world desperately needs a better way of coping with countries that owe more than they could ever repay.

More than a decade after it suspended repayments on more than $90bn (£60bn) of debt, and long after its economy began to emerge from deep financial crisis, Argentina is locked in a seemingly intractable row with the "holdouts", as they are known, about how much is owed to them.  Vulture funds, which specialise in buying up the debts of countries already in distress at a fraction of their face value, when most investors have given up on being repaid, are actively pursuing Buenos Aires through the legal systems of scores of countries.  In a decision that sent shock waves through financial markets, a New York circuit judge ruled last week that even the banks handling Argentina's repayments to other bondholders would be "in active concert" with the country if they fail to co-operate in ensuring that the vultures – in this case, Elliott Capital Management – have their feast.

After years of negotiations, over 90% of creditors signed up to two separate deals, in 2005 and 2010, which wiped out 70% of the value of the unpayable debts but at least meant some repayments would be made.

The groundswell feeling of injustice is heightened because governments have ratcheted up borrowing to fund aid and guarantees worth £3.7 trillion to failing European banks while making deep and painful cuts to social provisions. To add insult to injury, the austerity programmes for the eurozone have been drafted and imposed by the European Commission in Brussels and the EU’s Central Bank in Frankfurt. Debt programmes have been directly imposed by the EU and International Monetary Fund “troika” in Greece, Portugal and Ireland, which have effectively been stripped of their economic sovereignty. It is going to get worse. EU forecasts predict that joblessness rates will climb even further, hitting 11pc in the EU and 12pc in 2013. In Greece, unemployment is 23.6pc, and 54pc among young people. One thousand Greeks are losing their jobs every day. In Spain, once an EU pin-up for growth and a country that was not in debt before the banking crisis, youth unemployment has hit 55pc and the recession is still deepening. Tens of millions of Europeans blame austerity for suppressing demand and acting as a dampener on growth at a time of economic recession triggered by the financial crisis. The deadly combination of slowdown plus austerity, compounded by economic imbalances built into the EU’s single currency, has pushed countries, especially the southern European economies at the heart of the eurozone debt storm, into what looks like a deep and protracted slump.

The Single Market is like a customs union. Tax and duty paid in one member country is deemed as tax and duty paid in another member country and so goods are free to move across borders between members. Many readers eher will not remember the bad old days when trucks crossing borders had to queue and wait for a customs official to measure the amount of diesel in the fuel tank and then the driver had to pay tax on the import of that fuel into that particular country. Only passenger vehicles were exempt.

Hannah is simply playing word games. He admits the EU is internally a free trade area but, the fact that it is not free and open to the world is not unusual. Most of the world is not free and open to the EU or to many other parts of the world.

Hannah provides examples of free trade areas, Nafta (Canada, the United States and Mexico) and ASEAN (ten South East Asian states). The EU is setting up similar Free Trade Agreements, EU-Japan Free Trade Agreement, EU- Canada Comprehensive Economic and Trade Agreement, EU-US Transatlantic Economic Council, EU-India Free Trade Agreement, EU-Mercosur Free Trade Agreement.

Hannah says nothing but he does demonstrate his naivety; "The optimum deal for the United Kingdom is surely to be in a European free trade area but not in a customs union." That's like saying that the optimum deal for the United Kingdom is one where the UK is the sole winner.

We'd all like unlimted freedoms but with no attached responsibilities but you will never ever eliminate 'if you sell to him, I won't sell to you' and very quickly, 'and I'll ask my mate not to supply you at all'. Deals are struck, bargains are made. No one allows a single trader to take all the profit.

Brussels- The EU agreement on banking union is "no triumph". The evidence sits hidden in plain sight in the difference between the summit text before and after yesterday's negotiations...

The summit deal on banking supervision was no triumph. It was another EU exercise in decision dodging and fudge as German procrastination won the day.

Angela Merkel wanted to postpone a new European Central Bank banking supervisor because that in turn delays decision on using the euro’s bail-out fund to recapitalise banks until after German elections.

To see the tricksy, evasive, responsibility-doging fudge – a tortuous linguistic exercise that went into the early hours of today – it is necessary to contrast before and after.

Here is the original draft that the leaders began discussing yesterday: “We need to move towards an integrated financial framework, open to the extent possible to all Member States wishing to participate. In this context, the European Council invites the legislators to proceed with work on the legislative proposals on the Single Supervisory Mechanism (SSM) as a matter of priority, with the objective of completing it by the end of the year:”

Here is the agreed summit text: "We need to move towards an integrated financial framework… In this context, the European Council invites the legislators to proceed with work on the legislative proposals on the Single Supervisory Mechanism (SSM) as a matter of priority, with the objective of agreeing on the legislative framework by 1 January 2013. Work on the operational implementation will take place in the course of 2013.”

This is no triumph. The EU has gone from a deadline to “complete” from one to “agree” with the schedule slipping from December 2012 to anytime next year. This will mean that Chancellor has deferred the issue of using the ESM to directly recapitalise banks until after elections in September 2013, significantly reversing a June summit decision.

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

"The Godmother"

A new book discribing Angela Merkel as a power-obsessed egomaniac whose authoritarian tactics threaten the foundations of democracy is creating a stir in Germany and focusing attention on opposition to the chancellor inside her party. "The Godmother" probably would have drawn little attention were the book's author, Gertrud Höhler, not an influential conservative voice in the chancellor's own Christian Democratic Union. Gertrud Höhler, presenting her new book Thursday, was a longtime adviser to Helmut Kohl and other conservatives in Ms. Merkel's party.A former adviser to Helmut Kohl and other senior German politicians and business leaders, Ms. Höhler is a frequent presence in the German media. She is a fixture of the old guard of Ms. Merkel's CDU.   In the book, which hit stores on Friday, the author assails Ms. Merkel's pragmatic governing style as a betrayal of core conservative values and accuses the chancellor of trying to consolidate her power by crushing internal opposition. In one passage, Ms. Höhler appears to draw a parallel between Ms. Merkel's solitary style of ruling and past authoritarian German rulers such as Hitler and Communist leader Erich Honecker. "System M," as Ms. Höhler describes the chancellor's governing style, "is establishing a quiet variation of authoritarian power." Ms. Höhler's extreme views of Ms. Merkel aren't shared by many conservatives. Yet she is not alone in accusing the chancellor of abandoning conservative ideals in the name of political expediency and for purging the party's senior ranks of anyone who could challenge her authority. While frustration with Ms. Merkel's governing style has been palpable for some time within her conservative base, the chancellor is more popular than ever with Germans overall. That broad popularity—Ms. Merkel enjoys the highest approval ratings of any elected German leader—has made it nearly impossible for her internal critics to gain traction....(source WSJ)

I have yet to meet any French or Germans who want to keep the Euro.

Germany led the way with regard to the Euro, due mainly to the enormous financial benefits it would reap. There is no problem with that if we accept that nation states should act in their own best interest...."Bundestag president Norbert Lammert said parliament’s integrity cannot be subordinated to the ups and downs of the markets. Free Democrat (FDP) leaders said Italy’s unelected prime minister is playing with political fire by trying to circumvent democratic legitimacy.

The dispute comes as relations between Germany and Italy touch the lowest ebb since the Second World War, with Il Giornale publishing a front-page picture of Chancellor Angela Merkel under the headline “Fourth Reich”. "..This is funny... the Germans complaining about Mr Monti not being elected... He was elected... by Merkel and Sarkozy!!! and their puppy Barroso...Wait for Berlusconi to come back with a proper election in Italy and see where you are with your Euro! However, Germany now insists that there must be financial union to support this currency; but on Germany's terms, and with no risk to their financial systems. It is not good enough to state that they are paying for the bailouts - the idea of the EU is that all are equal and it is their DUTY to give this support. If they believe differently then they can hardly be called "good europeans".The euro, as predicted from the very beginning, has proved to be in nobody's long-term interests; it gave a short term limited boost to to weaker economies but has ended up being the agent of destruction for their economies. It was only ever the zealot's attempt to create the EUSSR as a single country. Well, hell mend them. Let it go and stop pouring good money after bad keeping it up. I've yet to meet any French or Germans who want to keep the Euro.

The Euro and the EU itself have never been about what the 'Germany' or 'Spain' or 'The UK' wants, it is only what the leaderships of those countries want, even in the face of popular votes against the EU.

"Germany" ( read Germans ) will not decide anything, the people will never be given a say, much like the rest of the peons across Europe.

Of course Germany wants to save the Euro, but will only do so if they are able to maintain their 'advantage' in the export markets to other Euro and EU states. One disadvantage for Germany would be if the Eurozone countries decided to allow the ECB to start buying the sovereign bonds of the indebted countries. Germany will never allow that to happen as it would mean that they would have to share a much bigger burden of the Eurozone "collaterized" debt than they do at present. It's called German self preservation....Unfortunately, it still appears as though Europe’s top policymakers – that is, the Germans – are trying to “muddle through”, as opposed to coming up with a good, powerful solution. To understand this situation, it is instructive to reflect on Spain’s “problems” in comparison with those of Greece and perhaps Ireland. While Spain’s widely cited problems of high unit labour costs and current account deficit are symptoms of it sitting inside a rigid currency zone, before 2007-08 these problems existed but were not highlighted. They were seen as an understandable consequence of a monetary union such as the euro area.

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.

World leaders meeting at the weekend’s G8 summit in the US are to focus heavily on the European crisis Saturday, after President Barack Obama aligned himself with the new French president’s drive for more economic stimulus. ...AFP - Leaders of the world's most powerful nations were to focus their attention on Europe's economic woes Saturday after President Barack Obama threw his weight behind French calls for more pro-growth policies. Obama set the stage for a fractious G8 summit here by forging an alliance with new French President Francois Hollande over the need to jolt Europe back to growth. Fearing Europe's economic crisis is poised to worsen -- with dangerous repercussions for the US economy and perhaps his chances of re-election -- Obama weighed in, risking the ire of German Chancellor Angela Merkel who has championed an austerity-first approach. Shortly before welcoming Merkel and other leaders to the famed presidential retreat outside Washington, Obama noted Friday that events in Europe held "extraordinary" importance for the United States. The G8 needs to discuss "a responsible approach to fiscal consolidation that is coupled with a strong growth agenda," he said. To kick-off the summit a tie-free Obama greeted leaders shortly after dusk Friday at the threshold of his wood cabin for an informal dinner that lasted more than two hours. But the dressed-down atmosphere did little to relieve tensions, which have been stoked by the belief that two years of painful cuts demanded by Germany and others have undercut Greek growth and made recovery more difficult. In what may have been a telling moment, Obama greeted Merkel at his Laurel Lodge with a cordial: "How've you been?" When her response came: a shrug and pursed lips, Obama conceded: "Well, you have a few things on your mind." Publicly European leaders have attempted to smooth over the splits within the G8, insisting austerity and stimulus need not be mutually exclusive. "We need to take action for growth while staying the course in terms of putting our public finances in order. Stability and growth go together, they are two sides of the same coin," European Commission chief Jose Manuel Barroso said ahead of the summit. But with Greece's fiscal crisis apparently approaching denouement, those good words may be sorely tested....
The euro zone crisis is set to dominate four days of intense diplomacy which began in Washington Friday morning and continued through a meeting of G8 leaders at the presidential retreat Camp David on Friday evening. Discussions will continue there on Saturday and on to a Nato meeting in Chicago.
In talks at the White House, only hours before the Camp David summit, Obama met the new French president, François Hollande, for a one-to-one conversation in which he explored the possibility of a new approach to the eurozone crisis based on a pro-growth, stimulus strategy. Obama has been pressing for such a strategy for the past three years and has a potential ally in Hollande.
The White House welcomed what it sees as a change in the debate since Hollande's election that tilts the balance slightly more in favour of a growth strategy. The French president is proposing an EU-wide financial transaction tax (FTT) that could raise up to €57bn a year that could be used to stimulate the 27-nation bloc. After meeting Obama, Hollande was scheduled to meet David Cameron in Washington before flying to Camp David.
However on arriving in the US, Cameron said: "On the financial transactions tax I'm very clear. We are not going to get growth in Europe or Britain by introducing a new tax that would actually hit people as well as financial institutions. I don't think it is a sensible measure. I will not support it."

Spanish borrowing costs have hit 6pc, according to Bloomberg data...

Spanish shares tumble 4pc after the country's borrowing costs rose again on worries over its banks, triggering sell-offs in European and US markets as slowing growth in China added to fears for the world economy ---- Spanish borrowing costs have hit 6pc, according to Bloomberg data....The sell-off has taken hold. Spain's benchmark index has now fallen by almost 4pc, while Italy is down by 3.5pc. Just over half an hour of trading left....and the cost of insuring the country against default has hit 500 basis points for the first time. This means it now costs £500,000 a year to insure £10m of Spanish debt over five years. This compares with £433,000 for Italian debt, and around £70,000 for German debt. Spain's borrowing costs are also threatening to breach 6pc. --- Benchmark 10-year bond yields are currently at 5.978pc - and rising, at 16:45 PM on Friday the 13th.apr. 2012.

Mme Lagarde earlier this week reiterated her call for the USA and Japan to fashion credible plans for reducing government debt over the medium term. [She] has been taking a different line with hard-pressed sovereign debtors in the euro zone. Though economic demand in these countries has typically been weaker than in the USA or Japan, the IMF has backed EU authorities in insisting on immediate action to effect swingeing cuts in government deficits. Mme Lagarde is far from willing her prescription as a universal rule, however, probably because she is well aware that if all countries with large government deficits and rising public debt were to act as the peripheral euro zone nations have been coerced into doing, the global economy, or at least the advanced sector of it, would be locked in a prolonged downturn. Clearly, then, the IMF’s priority in enforcing fiscal restraint on euro zone member-states is the preservation of the euro arrangements. Though we may suspect that political motivations lurk behind the position the IMF has adopted, that need not be the case. It could be that the IMF genuinely sees significant benefits for the world economy from keeping the present euro currency system alive in Europe.

The Copenhagen meeting degenerated into acrimony and some chaos when the Austrian finance minister, Maria Fekter, upstaged the eurozone leaders by first announcing an €800bn firewall. The deal agreed on Friday conformed to German prescriptions for a minimalist bailout fund, a recipe that the European commission in advance described as inadequate to the challenges confronting the euro. Ministers endeavored to impress the bond markets, the Americans, and the Chinese, trumpeting the agreement as worth "more than a trillion dollars" in the hope that this will press the big IMF donors into doubling the monetary fund's reserves to a similar figure next month. "We are now in a strong position for discussion on the IMF in April. It is a good signal," said the French finance minister, Francois Baroin. "All together the euro area is mobilising an overall firewall of approximately €800 bn, more than $1tn," said a Eurogroup statement. Jena-Claude Juncker, the veteran Luxembourg prime minister who has been chairing the eurogroup for eight years and whose term expires in June, threw a wobbly and abruptly cancelled a media conference at which he was to unveil the decisions. The new money comes in the form of the European Stability Mechanism (ESM), the permanent eurozone bailout kitty and embryonic European Monetary Fund which starts in July. The ESM's launch has already been brought forward and ministers on Friday also agreed to speed up the process of paid-in capital to get the fund fully operational within two years. Its lending capacity was capped at €500bn, as has long been planned. Friday's agreement represented yet another win in the long-running euro saga for Berlin in dictating the terms of the eurozone's response to the crisis. France and others had argued for a trillion-euro firewall. Germany insisted the permanent fund should not exceed €500bn and on Monday conceded the €200bn of current bailouts could run concurrently. "The euro area made substantial progress over the past 18 months to address the challenges stemming from the sovereign debt crisis," the ministers declared. "Important improvements were made to improve the governance of the euro area … robust firewalls have been established. This comprehensive strategy has paid off." I may have missed a statement somewhere, but I'm not aware of either Barroso or Rehn saying any such thing - the calls for an (even) bigger firewall, at €1 trillion or so, were from the head of the OECD and the French Prime Minister Barroin, I think. That's not the way the German press reported the concession, about ESM and EFSF to run concurrently, that Germany made on Monday. Lots of talk about "climb-downs" and "bowing to unprecedented international pressure" and so on.
Mircea Halaciuga, Esq.

Romania - New Government ( made of very young inexperienced individuals)

Romania’s new Government, led by Mihai Razvan Ungureanu, received a confidence vote in Parliament Thursday, allowing it to continue reforms pledged by the previous government under a deal with the International Monetary Fund, EU and World Bank. Lawmakers voted 237 to two to instate the new Cabinet. The Cabinet required the confidence vote of at least 232 lawmakers. The opposition did not attend the vote. STRAGE as it may be, the new cabinet is very young, and made of the former communist sibilings...HAVING NO EXPERIENCE IN ADMINISTRATION, or background in runing anything !!!!

So,....The ECB is buying...

Spain auctioned bonds due in 2016 at an average yield of 4.023pc, compared with 5.276pc when securities of a similar maturity were offered on December 1, the Treasury said. It priced bonds due in 2020 at 5.239pc, compared with 5.006pc in September, and sold an April 2021 bond, the current 10-year benchmark, at 5.545pc, less than the 5.696pc on the secondary market before the auction. After the auction, Spanish bonds erased declines. The yield on the five-year benchmark fell 27 basis points to 4.69pc with the 10-year yield declining 16 basis points to 5.53pc, the lowest in more than a week. That narrowed the gap with German equivalents to 359 basis points from as high as 382 basis points before the sale. The auction marked the second time in a week that Spain managed to sell more bonds than targeted, easing concern that the spread of the region’s debt crisis would make it harder to finance the country’s rising debt. Prime Minister-elect Mariano Rajoy pledged “important decisions” next week at his first Cabinet meeting to tame public finances and end the country’s three-year economic slump. Demand for the 10-year bond was 2.16 the amount sold, compared with 1.76 in October, while investors offered 1.99 times the amount of the four-year bonds sold, compared with 2.83 on December 1, and the bid-to-cover for the April 2020 notes was 1.52 compared with 2.01 times in September.

Free as long as ...accept, pay, agree...

EUROPE will speak german - "Free" as long as you: Pay 50 million a day membership fees ; Agree to sanctions if your GDP debt deficit is more than 3 % ; Accept that we shall oversee and approve your budgets from Brussels/ Frankfurt HQ ; Rob you of the right to vote ; Impose further Tobin taxes on your financial transactions ; Impose the will of a European Commision of 27 unelected Kommisars and its Communist President many of whom have been Communists or former Supreme Soviet activists upon you.The EU is an evil institution. It is systematically removing the power of people to have any say in what happens to them. It is turning people into slaves rather than free people. It removes the democratically elected leaders of nations which criticize it, and then it replaces them with their unelected puppets. And all to further the agenda of the financial and political elites who hide in the shadows behind it. SHUT IT DOWN NOW, AND TRY THE LOT OF THEM FOR THEIR CRIMES AGAINST THE PEOPLE. The powers behind the EU (read banking elites) are removing democratically elected leaders of nations and then replacing them with their unelected henchmen (more bankers). And all to further their power mad agenda. You sir, need to get treatment in order to remove your head from your anus. Maybe then, you would be able to remove the crap from your eyes, which would in turn allow you to see what is actually going on. Free trade zone my backside, everything is being controlled by those who have been wrongly given the power to issue our currencies. Standard & Poor's warned France, Germany and 13 other eurozone members before last week's summit they faced a possible downgrade amid worsening economic conditions. But economists said France, which has been under the shadow of a downgrade for months, could fall further and faster than others despite the agreement reached in Europe on rules for budget-tightening. France, the second-biggest economy in the eurozone, was the only AAA country singled out for a possible two-notch credit downgrade because of growth predictions seen as too optimistic, the threat of recession, budget cuts judged to be inadequate and the exposure of its banks to the sovereign debt crisis in Greece, Portugal, Italy and Spain. A Reuters survey of 13 economists found 11 thought France would be downgraded by one of the major ratings agencies within the next three months. That would cause serious difficulties for Nicolas Sarkozy's 2012 re-election battle because he has staked his campaign on his personal ability to lead France out of the economic crisis. A downgrade could push the government to hurriedly introduce a third austerity plan, after two rounds of limited budget cuts and tax rises in recent months. Unlike Britain, France has focused chiefly on tax rises rather than sweeping spending cuts. "If we lose the triple A, I'm dead," the president was recently reported saying in private. A poll this weekend found just over half of French people feared a credit rating downgrade would have a big impact on their daily lives. A one-notch cut would hit the country with extra interest payments of up to €3bn (£2.5bn) a year if the markets react by pushing up bond yields.

If anyone thinks things are getting better then they simply don't understand how severe the problems are.

Everyone talks about the amount of CDS's that have been issued and how they could all be paid without a collapse of the entire banking system. I would expect that every financial institution that has issued CDS insurance has themselves hedged the risk with another institution that has itself hedged the risk they took and so and so on. The NET liabilities of each financial institution would therefore be far less than the CDS's they have issued. The way to do with this is by setting up of clearing house for CDS claims in the event of a default. Any thoughts on this idea, how it would work and how effective it would be? The European Central Bank admitted it had held meetings about providing emergency funding to the region's struggling banks, however City figures said a "collateral crunch" was looming. "If anyone thinks things are getting better then they simply don't understand how severe the problems are. I think a major bank could fail within weeks," said one London-based executive at a major global bank. Many banks, including some French, Italian and Spanish lenders, have already run out of many of the acceptable forms of collateral such as US Treasuries and other liquid securities used to finance short-term loans and have been forced to resort to lending out their gold reserves to maintain access to dollar funding. "The system is creaking. There is a large amount of stress," said Anthony Peters, a strategist at Swissinvest, pointing to soaring inter bank lending rates. MY COMMENT IS : Since The ECB has already acted this week to help the bank liquidity crisis in Europe, bu it did not get the prominence in the media I felt it deserved but it provided 50.7 billion US dollars of 84 day liquidity, I'm publishing this on this blog of mine. Perhaps in these days of numerical inflation 50 billion isn’t what it was! This was from the central bank liquidity swaps I have been discussing for a couple of months and as the funds are in effect borrowed from the US Federal Reserve if the crisis was a western film this stage would see the arrival of the US Cavalry! Whether this will turn out to be Little Big Horn or a triumph remains to be seen."

Finland has objected to a Franco-German plan to make decisions on using the

Finland has objected to a Franco-German plan to make decisions on using the eurozone bail-out fund easier, saying it is an "alarming" move. Finnish finance minister Jutta Urpilainen on Wednesday (7 December) said she could not accept Paris and Berlin's push, outlined in a letter sent to Brussels on Wednesday evening, that decisions on the eurozone's rescue mechanisms should be made by majority vote rather than by unanimity. ”In the future, consensus would no longer be required. From the Finnish perspective, it is a very alarming arrangement, and one that Finland cannot accept," she said, according to YLE, Finland’s public broadcaster. The Finnish parliament on Thursday (8 December) will decide on the constitutionality of the proposal, hours before the start of summit negotiations in Brussels, expected to last until the early hours of Friday morning. The country's constitutional law committee heard constitutional law expert Kaarlo Tuori on Wednesday, who said that the proposal would infringe upon the rights of Finnish taxpayers. “Finland will give up its veto rights when it comes to [the still-to-be-implemented, permanent bail-out fund, the European Stability Mechanism] decisions,” Tuori said. “Without its own consent, Finland could be committed to decisions that concern using tax money paid by Finnish taxpayers.” The committee’s chair, Miapetra Kumpula-Natri, said the committee's decision will tie the hands of Prime Minister Jyrki Katainen when he negotiates at Friday’s crucial EU summit, YLE reports. The Franco-German plan, put forward on Monday, aims to avoid having the decision-making held up by just one country, as happened earlier this year when Slovakia's domestic politics delayed ratification of the current bail-out fund. Under the proposal, a super majority - corresponding to 85 percent of capital in the European Central Bank - would be enough to secure use of the fund's money. Critics, however, point out that this would still give a de facto veto to the big countries. Separately, the biggest opposition party in the Netherlands on Wednesday said that elections should be called if the Franco-German plans, which include suggestions for tighter economic governance, are put in place.

Oh dear, yet more huffing and puffing from Frau Merkel and her toy pig Psycho-Sarko... They talk and try oh so hard to sound as if they know what is going on but fail to face reality each and every time. To say no more "haircuts" is a bit "rich", given how they mugged bond holders only a few weeks ago - can these two be trusted ever again?? ... They miss the point, in my humble opinion - they must have full fiscal union to make the You - Owe work... however, a small problem is that the people (oh no not them again!!!) do not wish to have full fiscal union depriving them of sovereignty...
Alternatively they can accept the grim reality, that Delors little idea born with flaws can never get better and is occupying a vital bed in Intensive Care...Here are the main points of the new treaty include:

1 - Automatic sanctions for breaching deficit ceilings of 3pc of GDP and a requirement for balanced budgets.
2 - Speeding up implementation of the permanent bailout funds, the European Stability Mechanism, to 2012, with the introduction of qualified majority - 85pc - for decisions, instead of unanimity.
3 - No more haircuts for bondholders.
4 - A monthly meeting of euro zone leaders until crisis ends, focusing on growth in Europe.
5 - ECB's role to remain unchanged - will not be lender of last resort - and there will be no eurobonds.

As the two spoke yields on 10-year Italian bonds, which last week were trading at "unsustainable" level above 7pc, slipped below 6pc.

Confidence that European leaders will come up with a credible plan to end the debt crisis at a crucial summit this week also buoyed stock markets. PRESS REACTION : -- Bruno Waterfield, the Telegraph's Brussels Correspondent, tweeted, citing a diplomat: "Looks like Sarko caved on most points, EU 27, automatic sanctions, ECB." -- While Simon Nixon, European editor of the Wall Street Journal's Heard on the Street column, suggested that France was a big winner. -- "Amid all the bluster from Merkozy presser, big winner seems to be Sarkozy (and de Gaulle), losers are Germany and UK."

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???

The panic engulfing Europe’s banks is alarming. Their access to wholesale funding markets has dried up, and the interbank market is increasingly stressed, as banks refuse to lend to each other. Firms are pulling deposits from peripheral countries’ banks. This backdoor run is forcing banks to sell assets and squeeze lending; the credit crunch could be deeper than the one Europe suffered after Lehman Brothers collapsed. Add the ever greater fiscal austerity being imposed across Europe and a collapse in business and consumer confidence, and there is little doubt that the euro zone will see a deep recession in 2012—with a fall in output of perhaps as much as 2%. That will lead to a vicious feedback loop in which recession widens budget deficits, swells government debts and feeds popular opposition to austerity and reform. Fear of the consequences will then drive investors even faster towards the exits. Past financial crises show that this downward spiral can be arrested only by bold policies to regain market confidence. But Europe’s policymakers seem unable or unwilling to be bold enough. The much-ballyhooed leveraging of the euro-zone rescue fund agreed on in October is going nowhere. Euro-zone leaders have become adept at talking up grand long-term plans to safeguard their currency—more intrusive fiscal supervision, new treaties to advance political integration. But they offer almost no ideas for containing today’s conflagration.