European leaders early Friday agreed to have a new supervisor for euro-zone banks up and running next year, a step that will pave the way for the bloc's bailout fund to pump capital directly into banks throughout the single-currency area......
Friday's announcement is a disappointment for some officials at the European Commission, the EU's executive arm, who had hoped to have the supervisor operational at the start of 2013.
The leaders also discussed plans for a common budget for the 17 euro-zone nations that could be used to absorb economic shocks impacting one part of the euro zone but not others. But José Manuel Barroso, the commission president, said: "This is something for the medium and longer term.

The man who died in Greece :
The death came as protesters lobbed flares, petrol bombs and chunks of marble at lines of riot police, who responded with tear gas and stun grenades, in confrontations which have become all too familiar in the Greek capital over the last three years.

The clashes erupted in and around Syntagma Square, in front of parliament, during protests against a new wave of austerity cuts that the government plans to introduce in November.

"A 65-year-old man was taken to hospital where efforts to revive him failed," a health ministry official told the AFP news agency.

One report said the man had been found dead in Syntagma Square while another said he was found on a bench several hundred yards from the violence.

Over in Germany, cracks are starting to widen in the Angela Merkel's government. In the magazine Stern (in German), Horst Seehofer – who is head of the CSU, the Bavarian partner of Merkel's CDU party – sharply criticized decisions taken at the recent eurozone summit and threatened to break the coalition if further financial commitments were made to crisis-hit countries. Greek Socialist Pasok leader Evangelos Venizelos said today that he hoped Greece would be able to benefit from a European Union concession – already extended to Spain, Ireland and possibly Italy – allowing the use of EU rescue funding for the direct recapitalization of banks.---- Venizelos said:....I would like to hope that this will apply to Cyprus, Portugal and Greece. This would help reduce (Greek) debt. If it were to apply to Greece, it would reduce the country's debt, now somewhere above €330bn, by as much as €50bn, which has been earmarked for the country's banks as part of an earlier debt restructuring deal. The Pasok chief also presented a 10-point plan for Greece, which includes honouring the country's commitment to the country's creditors but extending the adjustment period by three years.,,,,Over to Athens, where Horst Reichenbach, the head of the EU taskforce created to speed up Greece's recovery using EU support funds, said Greece must prioritize paying out arrears it has racked up with suppliers to get funds flowing again to cash-strapped businesses. The EU task force, which is working to help Greece reform its bloated public sector, said the lack of financing risked undermining any progress achieved through reforms. Elsewhere ekathimerini.com reports that the government is ready to negotiate with the troika of the ECB, the EU and the IMF. It cites a government spokesman who said:We will present data that cannot be doubted, which will prove the dead-end we have been led to by the current policies, especially with regard to the recession and unemployment. Using this data as our weapon and presenting our alternative proposals, we believe that we will succeed in a new path being approved.We are making every effort to ensure there won't be any more sacrifices or job losses. The Greek government is expected to present its policy program in parliament on Thursday or Friday. Separately, the labor institute has warned that the actual number of unemployed Greeks, including the long-term jobless, will reach 1.6m, or close to 30% by the end of the year, rather than the 1.48m originally expected. The gloomy forecast comes a day after eurozone data showed that more than one in two Greek young people are already out of work.

...fulcrum of Merkels German Dream - to rule Europe without a shot being fired

The reason that the Euro will NOT be put to the sword is that it is the (well they can't can they because they are not allowed guns anymore). Merkel is a typical Prussian - NEVER WRONG - and that will soon lead to the impoverishment of most of the less powerful in Europe, which in turn will lead to massive civil unrest. And who will "take charge", or "come to the rescue"?...Why the very person who caused it - Angela Merkel.

Ring any bells Greek people?".... Meanwhile, The Greek coalition seeks two extra years to NOT meet bailout deficit targets!""The general target is for there to be no further reductions in wages or pensions and no more taxes"  A good target for a country with budget in red for years and still in red and it seems has no intention getting out of red and asking basically EU taxpayers to cover its unbalanced budget for next two years or more probably forever . "They ask extra two years' grace to meet the tough deficit targets laid down in the bailout deal, and was hoping to reverse cuts in the minimum wage and cancel planned civil service layoffs."....So,minimum wages upwards, regardless of the fact that even now with all the "cuts" their minimum wage is higher than in Spain. Promised excess state administration lay-offs to be cancelled,actually they have not even started with the cuts, and is still only a promise to IMF, EU of 150,000 out of 1 milion public sector workers. ... And, aaa, taxes, not to be forgotten, Please, no more taxes!!!....Is it only me, or it just doesnt really makes sense? I mean how do they plan to run their country like this? Who do they think should foot the difference between their overspending and taxes they (dont) collect??? To whom they think they can go and make this "case" with straight face??? To EU taxpayers??? I somehow dont think their "argument" will work.

Whatever you believe, the latest phase of the rescue should at least allow Greece to repay a €14.4bn bond due in just over a week's time

Unfortunately the restructuring merely signalled the end of the first act. Yes, the €206bn bond exchange - the largest in history - is a step forward with investors agreeing to take a significant haircut. The International Swaps and Derivatives Association belatedly announced that this was a credit event meaning holders of Credit Default Swaps (insurance against this happening) would be paid some $3.2bn. However, the restructuring is only likely to be the first of many.German Finance Minister Wolfgang Schaeuble has said Greece is a "completely unique" event and praised Spain for making "great progress". He stated that "Spain is not the next Greece". He added that the second Greek bailout is to be signed this week and that his goal is a financial transaction tax at EU27 level "The deal has wiped some €105bn off Greece's €350bn debt mountain and secured a next round of financial support. Eurozone finance ministers have already agreed to lend €35bn upon completion of the exchange and may make a further €95bn available. "But the aim of reducing the country debt-to-GDP ratio from 160pc to 120pc by 2020 still looks an impossible task without further write-offs; Greece's economy contracted by 7.5pc in the last quarter of 2011. This comes at a time when the government is pushing through further austerity measures, including spending cuts equal of 1.5pc of output, meaning more job losses. The country may well be in the midst of one of the longest recessions in modern history.German Finance Minister Wolfgang Schaeuble has said Greece is a "completely unique" event and praised Spain for making "great progress". He stated that "Spain is not the next Greece" ....Portugal has already been sacrificed by the eurocrats, I see, as their talk now jumps to "Spain is not Greece"... They're already trying to draw up a defensive line at Spain. Yeah, that'll work - especially after the financial world will have by then already broken two eurozone countries, and is then focusing all its attention on Spain.-----It's going to be a long, hot summer I'm afraid !!

The resolution of the Greek financial crisis

"Where are the 130 billion euros of aid to Greece going?" The response by Die Gazette is unequivocal: financial institutions outside of Greece will get 40 percent of the rescue package, Greek banks 23 percent, and the European Central Bank 18 percent. The remaining 19 percent are earmarked for financing needs in Greece itself. In other words, more than 80 percent of the rescue package is going to creditors – that is to say, to banks outside of Greece and to the ECB. The billions of taxpayer euros are not saving Greece. They’re saving the banks. For the German quarterly, the ambition to reduce the country's debt from 160 percent to 120 percent of GDP by 2020 is an “illusion”.... In Douglas Adams' novel “The Hitchhiker's Guide to the Galaxy”, the Earth is a kind of gigantic computer built by a higher intelligence to ponder the eternal questions of the universe. This higher, extra-terrestrial intelligence is therefore constantly setting up tricky and complex experiments to test mankind’s skills and level of development. If this conjecture by Douglas Adams were true – that is, that this is the deeper meaning of human existence – then our handling of the euro crisis would probably be setting us back many, many places in the interplanetary IQ rankings. For months now the eurozone has been stepping again and again through the same hoops of the experiment at ever increasing speed and rising panic.

Greece slashes its debt burden and qualifies for fresh bailout money as part of the €130bn (£109bn) package from the IMF

Greece has won sufficient support from its private-sector creditors to clinch a new bailout package, as it announced on Friday morning that 85.8% of bondholders had agreed to take heavy losses on their investments....At the end of several months of wrangling with creditors, the government reassured markets that it saw take-up for its bond swap deal rising to more than 95% once special clauses were triggered to enforce the agreement. Market players are hopeful the move that will at least briefly quell fears that the Greek crisis will send more shockwaves across Europe and beyond and further harm the global economy....For the bondholders the deal means taking losses of as much as 74% on their holdings but European policymakers have insisted that is a relatively small price to pay for containing the eurozone sovereign debt crisis. Greece is now expected to enforce so-called "collective action clauses" on any holders who had not accepted the bond swap deal.....The deal will mean embattled Greece slashes its debt burden and qualifies for fresh bailout money as part of the €130bn (£109bn) package from the IMF, the E.U. and European Central Bank.....Greek finance minister Evangelos Venizelos thanked creditors for help returning "Greece to a path of sustainable growth".

OK still working this out this morning.... My thoughts, the Greek bond holders have agreed the haircut. But all bonds are insured by CDS----BUT its now up to the banks, the same ones who sold the CDS to decide if they will pay out the insurance? ... This debt swap and the recent flooding of EU banks with a trillion cheap euros seems to be a desperate face saving attempt by EU politicians to keep the increasingly Frankenstein like eurozone patient alive....wowwwww
Surly that can't be right ...!!!!

GREECE - THE FARCE !!!!...So who's swapping their bonds and who isn't?

A miracle:----95pc of Greek bondholders accept deal allowing a purely "voluntary" restructuring to go ahead --- Athens is desperate to secure a "voluntary" agreement from bondholders - crucial to protecting its word and reputation in international markets, as well as avoiding a dreaded "disorderly" default. Both the hurdle and the deal - creditors are being asked to swap their bonds for new ones worth around a third of the value - are tough. The International Institute of Finance (IIF), the body that has negotiated with the Greek government on behalf of bondholders, said its members "intend to participate" in the deal. The group released several tallies on Wednesday - in the latest of which they said they spoke for bonds "amounting in aggregate to €84bn, or 40.8pc of the €206bn total PSI eligible debt". A raft of international banks have announced their intention to accept the deal, too. But we already know some are voting against. Let's have a stab at it. I think I had a go at this once before. There is surely the risk of a systemic bank run unfolding across the European continent if Greece is "allowed" to leave the Euro? As soon as people realise that if Greece can leave the euro, then why not Portugal, Ireland, Spain and Italy, at which point the value of the euro collapses. The euro becomes infungible overnight. Clearly, anybody at all holding euros in any of those countries would want out as their holdings would potentially be on a trajectory towards a massively devalued currency (the new escudo, the new punt or whatever). A bank run is one thing of course; a systemic bank run is uncharted territory, I assume. If you then throw in all of the euro commercial contractual arrangements threatened by the extinction of the contractual currency itself and you have the mother-of-all catastrophes on your hands. People tend not to behave rationally if they perceive that events are likely to get seriously out of hand imminently. Of course, "allowing" Greece to leave the euro might not have any or all of these unintended consequences, but will Europe's politico-banking mafia take the chance? I don't know. What I do know is that if Greece leaves the euro, Europe is stuffed; and if Greece stays in the euro, Europe is stuffed. This is what happens when politicians and bureaucrats convince themselves that economic fundamentals don't matter when driving through a grand political dream (or nightmare in the case of the EU) without popular awareness and understanding, and democratic consent. Economics always wins in the end because economics describes how people live their lives. Politicians merely fantasize for their own ends, and the apparatchiks feed off them like parasites; the EU in a nutshell.

So who's swapping their bonds and who isn't? .... According to Bloomberg (writing before the latest PCIC statement was released), investors with 58pc of the Greek bonds eligible for the debt swap have so far indicated they'll participate. AP suggests the figure is closer to 48pc, while one Greek website has calculated a participation rate of 76pc. The 32 financial institutions that have signed up to the debt swap aren't necessarily the only ones participating (so far). Other investors that are not affiliated with the IIF committee on Greece may have tendered their bonds privately. I've just had a chat with Nick Matthews, senior European economist at RBS who says "the situation is too liquid" to say whose sums are correct. Investors have until 8pm tomorrow to decide whether to accept the bond swap deal. This will be followed by a conference call held by the Eurogroup of finance ministers at 1pm on Friday. The two banks added are Landesbank Baden-Wurttemberg and the Bank of Cyprus, which issued a separate statement earlier. In case you're wondering why Credit Foncier has disappeared off the original list, it's not because they've changed their mind - the name now appears as parent group BPCE.

Here is the updated list of financial institutions: Ageas, Allianz, Alpha Bank, AXA, Banque Postale, Bank of Cyprus, BBVA, BNP Paribas, BPCE, CNP Assurances, Commerzbank, Credit Agricole, DekaBank, Deutsche Bank, Dexia,, Emporiki Bank of Greece, Eurobank EFG, Generali, Greylock Capital Management, Groupama, HSBC, ING, Intesa San Paolo, KBC, Landesbank Baden-Wurttemberg, Marfin Popular Bank, Metlife, National Bank of Greece, Piraeus Bank, Royal Bank of Scotland, Societe Generale, Unicredit.

The Greek Ministry of Finance released on Friday the highly anticipated offer document, firing the start on a colossal effort to find Greek bondholders and persuade them to participate in a €206bn debt swap. Athens needs bondholders to agree to the deal within days as part of its effort to unlock the €130bn bail-out funds needed to avert default on March 20. Wolfgang Schaeuble warned that the bailout, which was agreed late on Monday night, might not work. In a letter to German politicians, the finance minister said: “It may also not be the last time the German Bundestag will have consider financial aid to Greece. However, the chances of success with alternatives appear to me to be significantly lower at the current time.” Before heading to the G20 finance ministers’ meeting in Mexico this weekend, Mr Schaeuble suggested he was prepared to consider combining the eurozone’s two bailout funds, the European Financial Stability Mechanism (EFSF) and the European Stability Mechanism (ESM), to protect Spain and Italy. Lucas Papademos, Greece’s technocrat interim prime minister, chaired a cabinet meeting on Friday afternoon that approved the deal after the Greek parliament voted it through on Thursday evening. “We are making a titanic effort to secure financial support for the country,” said Mr Papademos as he left the meeting. Bondholders will be asked to voluntarily take a 53.5pc hit on their bonds by swapping them for new instruments worth 46.5pc of their current value. Bondholders will receive two-year bonds issued by the EFSF and new Greek bonds that will mature over 20 years from 2023. The new bonds will pay a coupon of 2pc for three years and 3pc for another five, followed by 4.3pc for the final 20 years. Saturday 25 February: Group of 20 finance ministers, central-bank governors meet in Mexico Monday 27 February: Belgian bond auction, Italian T-bill auction. German lower house extraordinary session to vote on Greek bailout. Wednesday 29 February: Allotment of ECB three-month, three-year long-term refinancing operations. Finland due to vote on Greek bailout. Thursday 1 March: Euro-zone finance ministers meet. Euro-zone February manufacturing PMI data. Spanish and French bond auctions. Thursday 1 March 1 to Friday 2 March: E.U. leaders' summit. Wednesday 7 March: German bond auction. Thursday 8 March: ECB interest rate decision. Monday 12 March: Euro-zone finance ministers meet. Greece aims to complete PSI by this date. Tuesday 20 March 20: €14.4bn of Greek government bonds mature.

The International Monetary Fund is likely to offer minimal funds for a second Greek aid package

A dangerous development (for the whole Europe) - the faith of Greece is decided in the German Parliament - (is this the IVth. Reich ?) - Government spokesman Pantelis Kapsis, speaking to AFP: --We have a very, very good cooperation with the German government and it has contributed a lot in finalising the accord. Greece relies on this cooperation and hopes this will be borne out by the vote of the German parliament...The Greek Parliament meanwhile, has just passed a law on the debt swap with private bondholders. To complicare the issues, the IMF has consistently underestimated the depth of the Greek recession. At some point, it becomes rational for Greeks to ask, is the euro worth this kind of punishment? The new law - just passed by the Greek Parliament - is a key piece of the Greek plan and will help push through €107bn in debt write downs. The Government hopes that 66% of private creditors will agree to the haircut, allowing Athens to impose a Collective Action Clause to force the rest to follow. AFP points out that the Parliamentary vote was not in doubt as the two coalition government partners, the Socialists in PASOK and the conservative New Democracy party, have 193 of 300 seats in parliament. Three leftist parties as well as the extreme right opposed the bill, saying it would "be profitable for banks and monopolies and not the population," according to deputy Thanassis Pafilis. The package is no guarantee that the problems in Greece will be solved. Greece will have to take extensive measures and show that it implements the necessary reforms. By the way, it is uncertain when Greece will again get market access, making it therefore impossible to rule out that Greece needs extra public sector support.

Die Griechen sollen ihr Defizit 2009 falsch ausgewiesen haben - allerdings nicht zu niedrig, sondern zu hoch. Die angeblich falsche Zahl bekam allerdings den Segen der EU. Das Parlament untersucht den Fall. Ein parlamentarischer Untersuchungsausschuss soll in Athen untersuchen, ob die Zahlen zum griechischen Staatsdefizit 2009 manipuliert worden sind. Die Einsetzung des Gremiums beschloss das Parlament in der Nacht zu Donnerstag. Ermittlungen des Athener Staatsanwaltes Grigoris Peponis brachten die Affäre ins Rollen. Er verdächtigt den Chef der griechischen Statistikbehörde Elstat, Andreas Georgiou. Aber auch der frühere Ministerpräsident Giorgos Papandreou könnte in Misskredit geraten.

La récession frappe à nouveau les pays de l'euro, pour la seconde fois en trois ans. La zone monétaire verra son PIB se contracter de 0,3% en 2012, d'après des prévisions de la Commission européenne qui ne paraissent épargner que les deux plus grosses économies: la France et l'Allemagne. La révision en baisse - Bruxelles tablait encore à l'automne sur une hausse de l'activité de 0,5% - s'étend à l'ensemble de l'Union européenne. La France échappe au retournement avec un pronostic de croissance de 0,4%, à peu près en ligne avec les dernières prévisions du gouvernement Fillon (+ 0,5%). À défaut d'être une locomotive, l'Allemagne permet à l'UE d'éviter le pire. Avec une croissance attendue de 0,6 %, la première économie européenne tire ses voisins directs de l'enlisement, à l'image de la France, de l'Autriche (+ 0,7%), du Danemark (+ 1,1%) ou encore de la Pologne (+ 2,5%). Il existe deux exceptions de taille à l'effet d'entraînement: les Pays-Bas qui plongeraient de 0,9%, et la Belgique de 0,1%.

Fitch downgraded GREECE - the proposal to reduce Greece's public debt burden constitute a rating default

Greece will default. That is the verdict of ratings agency Fitch, which has just downgraded the country two notches to "C" on the back of the "haircuts" announced yesterday in Greece's bailout package. This lowers the country further into "junk" status (or below investment grade) - where it has been since January 2011. Fitch says it will re-rate Greece once the debt-swap has completed, likely to "RD" - or restricted default. More from Fitch: In Fitch's opinion, the exchange, if completed, would constitute a 'distressed debt exchange' (DDE) in line with its criteria and consequently yesterday's announcements set in motion the agency's process for reviewing Greece's issuer and debt securities ratings. The sovereign IDR has accordingly been lowered to 'C' from 'CCC' indicating that default is highly likely in the near term. The ratings of the securities subject to the exchange have also been lowered to 'C' from 'CCC'. Fitch considers that the proposal to reduce Greece's public debt burden via a debt exchange with private creditors will, if completed, constitute a rating default, and result in the country's IDR being lowered to 'Restricted Default' ('RD') upon completion. The ratings of GGBs affected by the exchange, including those not tendered but restructured under CACs, which are expected to be imposed retrospectively on bonds issued under Greek law, will also be lowered to 'D' ('default') at this time.

Germans don't want to be Greeks; Greeks don't want to be Germans.

The NEWS... Jean-Claude Juncker, President of the Euro Group, has released a statement following the EU finance ministers conference call.... He says substantial progress on Greece has been made and is confident decisions will be made at a Euro Group meeting on Monday. Greece's Finance Minister Evangelos Venizelos says his country has met all prior actions with the Euro Group and all the issues on 2012s €325m fiscal gap have been decided. He adds that those arguing for a Greek euro exit do a disservice, and hopes for a plan on Monday, including debt swap. However, he says some technical issues are still to be resolved. Venizelos says implementation of bail-out plan depends on the country's two main parties. The full statement for Jean-Claude Juncker reads: As announced yesterday, I convened the Eurogroup to a conference call today in order to discuss the outstanding issues regarding the second adjustment programme for Greece. Substantial further progress has been made since yesterday. "First, we received the strong assurances provided by the leaders of the two coalition parties in Greece's government. Second, the Troika finalized and presented its analysis on the sustainability of Greece's public debt. Third, further technical work between Greece and the Troika has led to the identification of the required additional consolidation measures of €325m and the establishment of a detailed list of prior actions together with a timeline for their implementation. "Further considerations are necessary regarding the specific mechanisms to strengthen the surveillance of programme implementation and to ensure that priority is given to debt servicing. This will strengthen debt sustainability further. "On the basis of the elements that are currently on the table and the above-mentioned additional input, I am confident that the Eurogroup will be able to take all the necessary decisions on Monday 20 February. "I am confident that the Euro Group will be able to take all the necessary decisions on Monday," he said. The troika has finalised and presented its Greek debt report and has received strong assurances from Greek political leaders. Juncker says "further considerations are needed on specifics", and European finance minsiters see a need for stronger surveillance of Greece.

Several comments ...:
- Greece agrees to all conditions
- 70% Haircut issue 'fudged' (IMF/ECB secretly bail them out)
- Bailout given to Greece
- Greece pays debts due 20 March 2012
- April Elections in Greece
- New Greek Gov breaks all promises and blames past Gov
- New Bailout required for next debt(s)
- EU issues new conditions for NEXT bailout
- Repeat ad nauseum until Greece finally goes Bankrupt in 2013

The Heart of problem: Germans don't want to be Greeks; Greeks don't want to be Germans. The Greek default is coming, the rest of the Eurozone is merely buying time to shore up their capital reserves so they can bail out the Greek debt being carried by their own financial institutions. In the long run, it'll probably be cheaper than continually topping up the Bail Out fund.

European Union negotiators have yet to settle key elements of a complex bailout and debt-restructuring package for Greece

Tomorrow's meeting to discuss the second Greek bail-out has been called off amid accusations that a top politician in the debt-stricken country has failed to sign off agreed austerity measures....Tomorrow, Samaras is expected to deliver a letter agreeing to adhere to the Troika (German) plan. And pigs may fly!

Which will it be:

1.- The letter does not arrive in time (lost in the mail)
2.- A further letter is dispatched but to the wrong address
3.- The letter arrives but is ambiguous and is rejected by the EU - (my most likely outcome)
I think the letter is not ever written but there is enough talk about it for the can to travel down the road for another day......The head of the eurozone countries has downgraded an eurozone finance ministers meeting on Wednesday, saying Greece has not yet given the necessary assurances about its austerity plan. Ministers, who had demanded Greece find an extra 325m euros of savings, had been set to meet in Brussels. But Eurogroup President Jean-Claude Juncker said the talks would be replaced by a conference call. He said technical work with Greece was still needed "in a number of areas". .... Finance ministers had not received assurances from leaders of Greek political parties on a programme of proposed cuts, Mr Juncker was quoted as saying by Reuters news agency. He said that "against this background, I have decided to convene ministers to a conference call tomorrow in order to discuss the outstanding issues". There is pressure on Greece to make progress, as the country will not be able to pay debts due on 20 March unless it can qualify for more bailout funds by satisfying its European partners. By that date Greece needs to repay 14.5bn euros to lenders. When and if eurozone ministers are convinced Greece is making progress on cuts, and if the German parliament agrees to the bailout (as it must under national law), then any new bailout could be signed off in early March. Meanwhile, an official report on Tuesday showed that the decline of the Greek economy accelerated in the final three months of 2011.

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

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

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

Joe Ackermann of Deutsche Bank is confident of a settlement

French TF2 ... with a special appearance by Sarkozy to explain the current state of the French economy. He has been talking for over an hour now with two TF2 newscasters and an invited audience is present. He has said that the finance sector is past the danger stage but it's now job losses and lack of jobs for young people that are the danger to the French economy. (Britain has the same problem - the increase in youth unemployment - as we know). Re the UK, Cameron's speech and opinions voiced by him at Davos have been described in some of the German media as "deplaziert" - out of place. A headline in one German paper today asks "Where are the good capitalists?" - and goes on to report from Davos that it is now socially acceptable (salonfähig) to criticise the "present system". A major news item is that Berlin is demanding control over Greece's budget. This sounds like the "Treuhandanstalt solution" by which a "Treuhandanstalt" type of organization was specially set up to reorganize the way East German economy was run, to turn it from a command economy into a free market economy. In effect the West German government took charge of a collapsing East German economy from 1990 until 1994 when the task was completed. Seems to me the Greek economy is in the same state of near-collapse right now and the Treuhand solution would work (and more rapidly imo) with Greece. For one thing, in Greece there is not the communist/command economy mentality as in East Germany, but on the other hand, corruption and nepotism (in East Germany it took the form of jobs for Communist party members) is endemic in the Greek economy. One result would surely be that foreign capital would be more confident about investing in the Greek economy, which is necessary for economic growth. Regarding opinions on who will take what size of a haircut in a settlement on Greek debt, I saw a comment from a banker that "psi" can also mean "public sector involvement". At any rate, top banker Joe Ackermann of Deutsche Bank is confident of a settlement - at least he said that a couple of days ago.

Europe's political leaders have spent most of the euro crisis denying there's a euro crisis. A "specific Greek problem", that they'd give you. Irish and Portuguese aberrations. As for the Spanish, that really was hard manchego. Wherever disaster struck over the past two years it was always the member's fault, never the club's. The denialism ended this summer, as the financial bushfire moved to Italy and even began to menace Belgium and France. Sequestered in their conference rooms in northern Europe, policy-makers found it easy to wave away catastrophe in the distant, poorer periphery – but far harder when the second and third-largest economies in the entire bloc were under threat. If the rhetoric and the not-so-faint snobbery have vanished, to be replaced by panic about "a last wake up call" and "a crucial crossroads", the actual policy-making is as clueless as ever. At the last major summit, the one where David Cameron pressed the eject button, little was agreed apart from a restatement of Maastricht rules on budget deficits. Markets got excited about the promise of a $200bn loan to the IMF; until it transpired that the figure had been plucked out of thin air and no one knew where it would come from. Rather less predictable is at what cost to the rest of us. In that respect, what's really scary is just how tribal many people become in the face of bad news. The right wing press here has already gone into xenophobic overdrive, and both here and abroad sound judgement - or what passed for it - seems to have leapt out of the window before it's even had chance to see the new year in. At a time when the World's problems have never needed more co-operation to resolve, everywhere you look nation states are acting increasingly like the kind of blinkered, selfish, short term egotists who stitched us all up so badly in the first place. My best hope for 2012? That when it falls, out of the wreckage of this sham of a global financial system we find the sense to build an economic model that doesn't belong in an asylum. That this will eventually happen I am confident about; when, and quite what pain we'll have to go through to get there, far less so. But one thing is for sure - 2012 won't be dull... I wish good to all of us!!!

Federal Reserve "coordinates" with ECB and Bank of England to allow banks cheaper access to dollar.

Everything is now starting to make sense to me at least. The Federal Reserve is trying to bail everyone out and this will produce a lot of downward pressure on the US dollar. Eventually the pressure will become too great leading to a collapse of the currency.An international reserve currency will be organised in the aftermath with an international Central Bank probably led by the IMF.This bank will 'prevent' the bank runs that are taking place at this very moment. The carbon tax scheme will then be the instituted worldwide with the proceeds going to the international bank. I may be wrong but it looks like this may happen....However : the next step in the "Hollywood script", soon the USA will own and control all of europe, and they will get us paying for their defense budget, but i said this almost a year ago, but i am simple. Another step towards the super dollar. ...IN REAL LFE : Greece will see another general strike tomorrow, with ferries and public transport disrupted, schools closed and state hospitals running with reduced staff. The cause, again, is the painful package of austerity measures that the state was forced to take on in return for bail-out cash. Just yesterday eurozone leaders approved the next €8bn payment. Ilias Iliopoulos, deputy leader of the civil servants' union AEDEDY, spoke to AP television: They are creating a situation that can no longer be tolerated, can no longer be endured. Unfortunately people are in a state of somewhere between poverty and despair. The measures are supposed to improve the country's financial situation, but the country is getting deeper into debt, unemployment is rising, and the recession - unprecedented in recent times - is worse than anywhere else in Europe. People are falling apart.

Italy - trouble in paradise

Italian bonds rise past 'unsustainable' 7% barrier and the country enters bail-out territory, with the ECB reportedly buying country's debt and Germany under pressure to act to save monetary union. The spread between French and benchmark German bonds hits new record high of 148 basis points. When, like Italy, you have a €1.9 trillion debt pile should it really matter if the market charges you 6.7pc or 7.4pc to service it? The Telegraph's Louise Armitstead believes it may not matter to the country but it does matter to the EU. Once yields go above 7pc they rarely come down again because a self-fulfilling spiral takes hold. Once above the 7pc mark, Greece lasted just 13 days before requesting a bail-out. Ireland lasted 15 days. Portugual held out longer but succombed after 49 days. The reason that the Italian public have a right to be angry over how their country has been run: In the past, Italy used to devalue its currency to regain its competitive position, in the Euro, it cannot do that. To increase competitiveness within the Euro involves painful reform, like the wage cuts seen in Ireland. Can you see the Italians going for that solution? They have been mislead by their politicians for years, promising them the Dolce Vita. And just like the Greeks they are slowly waking up to the realisation that this promised life of pleasure was a dream that is fast disappearing as dawn breaks ... or until "the german governor" is appointed , just like in Greece's case !

The Greek government is expected to be unable to pay wages for state workers and pensions next month without a planned injection of £8 billion of EU cash. George Papandreou, the Greek prime minister, met his French and German counterparts ahead of today’s G20 summit of world leaders. Mr Papandreou has called a referendum on whether the Greek public supports the bail-out. The decision has plunged the rescue into turmoil. David Cameron said yesterday that the world was facing a “financial storm” as Greece may now be forced out of the single currency. Simon Johnson, former chief economist at the International Monetary Fund, said that “we are now looking straight into the face of a great depression”. A showdown between the most powerful leaders in the eurozone and George Papandreou is under way amid increasing concern about the Greek prime minister's plan to hold a referendum and the impact it is having on financial markets. Ahead of a crunch two-day summit of the leaders of the G20 in Cannes, the German chancellor, Angela Merkel, and French president, Nicolas Sarkozy, were holding make-or-break talks with Papandreou. Greece was warned it will not be handed €8bn (£6.9bn) of bailout money due this month unless there is a swift yes vote in the referendum. Officials at the Greek interior ministry have identified two potential dates in December for the vote – which cannot take place until ratified by parliament. That, in turn, requires Papandreou to survive night's crucial vote of confidence in his fragile government in Athens. The European leaders met their international counterparts amid signs that a new recession is now stalking the eurozone – blamed in part on the sovereign debt crisis. A report showed factories in the 17-nation euro area suffered their sharpest decline in output in two years. I hope the Euro will dissapear and the European Union as it is will realize that it will be impossible to fulfill germany's dreams of ruling our sovereign nations !

...Greek papers this morning are saying the famous 6th tranche of aid (the €8bn euro needed to cover public sector payments by Nov 10th when the government has admitted it will run out of cash) is now in question following Prime Minister George Papandreou's deeply controversial decision to put last week's latest EU/IMF rescue package for the country to popular vote. Prominent commentator Ioannis Pretenderis, in the usually pro-government Ta Nea, wrote that: The prospect of a referendum is catastrophic. First because it throws the agreement struck on October 26th up in the air and will lead the country to bankruptcy. At this moment, in the general European uproar, not even the sixth aid installment is guaranteed. Secondly, because it cunningly turns the question of the governance of the country into one about its European perspective. Third and worst of all, because it turns the European future of Greece that was always a given into something that is questionable. Already, the damage is huge almost irreparable. I don't know the motives or thought process that lead Papandreou to make this decision. Already, the damage is huge, almost irreparable. Such stinging rebukes are being much echoed in the ranks of Papandreou's ruling Pasok party which has been in melt-down since the surprise announcement was made. An emergency meeting of the entire cabinet, called by the embattled leader after the defection of an MP showed all the signs of becoming a full-on mutiny, went on into the early hours as ministers voiced their shock and disgruntlement over the decision. With tensions running so high Pasok insiders say it' far from assured that the government will receive a make-or-break vote of confidence that Papandreou has called for midnight Friday...

Resque - Europe's leaders are claiming a victory in the eurozone crisis after agreeing new deals that halve Greek debt and increase the firepower of the main bailout fund to around €1trn. Athens will be handed a new €100bn bailout early in the new year. The accord was reached in the early hours of Thursday after hours of fractious debate. At one stage talks broke down with holders of Greek debt but they ended up accepting a loss or "haircut" of 50% in converting their existing bonds into new loans. Investors are likely to welcome the breakthrough. Sharp gains are predicted for European markets on opening, with the FTSE 100 being called up 75 points and similar rises expected on the German and French stock markets. Angela Merkel, the German chancellor, helped broker the deal in talks with the bankers that also included the French president, Nicolas Sarkozy, and the IMF managing director, Christine Lagarde. Merkel said the swap would take place in January. Sarkozy said private sector investors would refinance Greek's remaining debt at preferential rates while governments would find €30bn to go alongside €100bn from the private sectors. The French president and German chancellor both insisted that the €440bn bailout fund, the European Financial Stability Facility (EFSF), could find its firepower increased by four to five times. Since the fund has about €250bn left this could amount to €1trn – or US$1.4trn in Sarkozy's words. "We have reached an agreement which I believe lets us give a credible and ambitious and overall response to the Greek crisis," Sarkozy told reporters as the meeting broke on Thursday morning. "Because of the complexity of the issues at stake it took us a full night. But the results will be a source of huge relief worldwide."