The need to redenominate contracts from euro into new currencies.

“...Europe a nest of squabbling nations. Even the continent’s democratic achievements seem under threat, as dire economic conditions create a favorable environment for political extremism. Who could have seen such a thing coming? Well, the answer is that lots of economists could and should have seen it coming, and some did...” Well if they did, their silence was f**king deafening---I, and many others didn’t need to take in the econo-babble of so-called experts – common sense told you it wouldn’t work – if you were lacking that, then the example of the Soviet Union rubbed your nose in the dog shit that is collectivism. Over countless centuries, the people of Europe divided themselves naturally into what became nation states. There was some squabbling and not a little bloodshed along the way – most of this was caused by politicians (in those days they called themselves Kings and Priests)  ... Left to their own devices, these nations created their own languages, culture, sexual deviations, food preferences and currencies – they traded with each other, and by and large, the market was self-regulating..And then, some twats invented the European f**king Union...

The rest, as they say, is bollocks – sorry I mean historyThe most realistic scenario for euro break-up.... is that Greece, or one or more of the weaker peripheral countries, will leave the eurozone, introduce a new currency which then falls sharply, and default on a large part of their government debt. Preparations for exit must be made in secret and acted on straightaway. Just before departure, some form of capital controls will be essential, including temporary closure of banks and ATMs. With no time to print new notes, euro notes and coins should continue to be used for small transactions. The new currency should be introduced at a one-for-one rate with the euro. But it will soon depreciate by something like 30-50% giving a boost to Greece's international competitiveness. The government should redenominate its debt in the new national currency and make clear its intention to renegotiate the terms of this debt. They must announce robust measures to keep inflation in check but, with them, markets may well lend to the exiting country again the medium term. Importantly, the exiting country has an opportunity to break free from a crippling debt strait jacket....A break-up of the eurozone implies a need to redenominate contracts from euro into new currencies. This is relevant for bonds, loans, deposits and other financial instruments. This process is complicated by various legal constraints. Different financial instruments are governed by different laws, and many euro denominated instruments are governed by foreign laws, especially English laws. Eurozone governments cannot change laws of foreign countries and they cannot easily redenominate foreign law assets. Since there are tens of trillions of euro-denominated contracts in existence under foreign law this is a very large potential problem. This plan stresses the importance of facilitating an orderly currency redenomination process in all break-up scenarios. This includes the need for an ECU-2 currency basket to settle euro claims in a full-blown break-up, where the euro ceases to exist. The ECU-2 would constitute a bridge between the euro (which no longer exists in a full blown break-up) and the new national currencies. The ECU-2 concept would thereby help avoid arbitrary currency conversions and prolonged legal battles about redenomination. In the absence of an efficient process for redenomination, a full-blown break-up of the eurozone is likely to be devastatingly disruptive and could see a complete freeze of the global financial system.
ATHENS NOW --- Greece's finance minister, Vassilis Rapanos, resigned on Monday after being ill in hospital for several days. The prime minister's office said that Mr Rapanos had sent a letter of resignation to the prime minister, Antonis Samaras, who had accepted it. The country's new coalition government, comprising Democratic Left, Pasok and New Democracy, was formed last week following months of political turmoil and two inconclusive elections.----- Now we know the truth, Samaras couldn't or didn't want to see what he was getting himself into and Rapanos fainted the moment he did. Great stalwart team to implement what their Greek countrymen and women elected them for; putting an end to Teutonic austerity while remaining in the EMU. Both gents must know this combination is not on Frau Merkel's menu. I'd give them a month, about the time it will take Greeks to realize their election manifesto was a fraud !!!!!
The developments so far today:

- Spain saw its short-term debt costs almost triple in an auction this morning as its request for a €100bn rescue package for the country's banks failed to stem market fears.

- A report compiled by Barroso, Van Rompuy, Draghi and Juncker ahead of this week's eurozone summit presents a plan for rescuing the eurozone including creating a closer fiscal and banking union that would turn Brussels into a finance ministry for all eurozone members. Under the plan, the European Union could be handed powers to change countries' budgets if they breach debt and deficit rules.

- Finance chiefs of the eurozone's four biggest economies - France, Germany, Italy and Spain - will hold last-minute talks in Paris on Tuesday evening to try to narrow differences on the currency area's future

- Mervyn King has warned that the outlook for the UK economy has worsened during recent weeks due to the eurozone turmoil; that came as public sector net borrowing rose much more than expected

As the Eurocrats toy with “Grexit”, Spain is trying to plug holes in regional budgets

If the World goes into a nose dive there will still be top dog countries or safer heavens. The time to worry is when people start to starve then civil war breaks out. AS long as they can keep bellies full then civil unrest will be held at bay.

Back in the 1970s, the eurozone economies, then among the most dynamic on earth, generated 20pc of global growth. Over the past decade, this growth share has fallen to 5pc. Yet the single currency area still accounts for more than a fifth of the global economy. More fundamentally, the region’s banking sector is so distressed, and many of its governments so close to insolvency, that “eurogeddon” could spark a worldwide shockwave every bit as damaging as Lehman. And this time, of course, there is far less scope for fiscal and monetary bail-outs – not only in Europe, but in the US and elsewhere, too. Of course, the UK, already in recession and reliant on the eurozone to buy more than half its exports, is among the most seriously exposed. In May, Britain’s manufacturing PMI index nosedive to 45.9, the weakest reading since May 2009, down from 50.2 the month before. This marked the second biggest one-month drop in 20 years. Global markets are clearly skittish. The only thing that has stopped asset prices falling further, perhaps, is the belief that escalating market turmoil could push central banks into action – not just the ECB, but the Bank of England and Federal Reserve, too. That’s why gold prices are firming up once again. It’s also why the dollar index, typically inversely correlated with investor risk appetite, has lately shown signs of reversal.... - Well, the week past, brought worrying signs, though, that while the eurozone’s woes are not easing, ongoing concerns about monetary union are now having an impact on alternative growth centers, too, imposing real damage on commercial activity in other parts of the globe.....There is no talk of firewalls, or of simply letting Spain go, or of the European banking system being re-capitalised to compensate for the losses that it would suffer. Nope. This is it. The cancer has now spread to the vital organs of the EU. Spain is not a peripheral Mediterranean country. It is not an insignificant player in the political project. It is not a marginal going-along-for-the-ride-and-the-free-money passenger on the euro train. Not only is its economy so large as to be indispensable, but its ties with Italy mean that the Italian economy (which is the third largest in the EU) would be fatally compromised by its fall. “Itexit” is almost unpronounceable, so perhaps it’s fortunate that it will never be required: after Spexit, there would be nothing left to exit from.

European Central Bank (ECB) president Mario Draghi says that eurozone leaders must decide what they want the bloc to look like in the future, because the current set-up is "unsustainable". He said that the ECB could not "fill the vacuum" left by governments on creating growth or structural reforms. EU economics commissioner Olli Rehn said more austerity was needed if the eurozone was to avoid disintegration. New figures showed eurozone inflation slowed more than expected this month. Inflation in the 17 countries that use the euro eased to 2.4% in May from 2.6% in April. The figure is still above the ECB's target to keep inflation below 2%, but the lower-than-expected number could fuel calls for an interest rate cut next week.

Worries over the eurozone debt crisis - and in particular Spain's banking sector - have been hitting markets all week. However, the markets were enjoying a respite on Thursday. The euro - which had fallen to near two-year lows against the dollar at $1.2358 - recovered slightly to $1.2410. European stock markets were mostly positive, with London's FTSE 100 share index up 0.8%, and the Frankfurt and Paris indexes registering similar gains. The pressure on bond yields also eased slightly, with Spain's 10-year bond yield - the rate of return demanded by investors - falling back to 6.61%, having reached 6.79% on Wednesday. In other figures released on Thursday, Germany's unemployment rate fell below 7% as Europe's biggest economy continued to perform strongly. The jobless rate dropped to 6.7% in May, from 7% in April, as the number of people unemployed fell by 108,000 to 2.86 million. However, there was more bad news from Greece as figures showed that Greek retail sales volumes fell by 16.2% in March compared with a year earlier. This followed February's decline of 12.9%.

Angela Merkel says Europe should be ready to consider all options to stop the debt crisis - but wouldn't comment on a banking union in the eurozone. She said member states should be ready to hand over more powers to the EC: There are integration steps which will require treaty changes. We are not at that stage today but nevertheless there are no taboos. I have always said we need more Europe and that means eventually giving more competences to the European Commission. We have to think about how we move forward over the next five to ten-year horizon. And if we are constantly coming up with new taboos, it won't work. An odd move here from Bankia. In an attempt to hang on to deposits it's offering a free Spiderman towel to young savers if they can put away €300 by the end of the month. There were reports of a bank run earlier in the month after the state takeover of the lender was announced.
WELL....The simple truth is that European Nations face solvency issues thanks to structural deficits, which means the ECB is broke. The EFSF has never been adequately funded, nor can the IMF come up with enough money to bail out every bank in Europe, therefore, eventually, the currency will be abandoned. The Euro exists currently only because of US Currency backstops. By the same token, here in the US, sooner or later bond clamping will fail, and cuts will be occurring here as well. The only thing that remains up in the air is the timing, not the eventuality....BBC is reporting that the head of the European Central Bank, Mario Draghi, declared the Eurozone is "... unsustainable..." and that the ECB cannot ..."fill the vacuum..." left by the failure of Eurozone to take necessary action on austerity and structural reforms.

FRANCE - As the election comes down to the wire, many voters are choosing to vote for their political leanings and not necessarily their candidate.

According to the Ipsos poll, Hollande will recuperate 80% of voters from people who actually support far-left candidate Jean-Luc Mélenchon. The Socialist party had serious concerns that Mélenchon, the trendy candidate who has inspired huge support from the left, would hurt Hollande’s chances at the presidency.

On the other hand, Nicolas Sarkozy is only expected to earn only 45% of votes from right-leaning supporters of Marine Le Pen (of the Front National).

Racing for third place  - Only two candidates will advance from the first round of French elections to the second, but the third candidate remains an important indicator of the election climate. Polls are reporting that the duel between Mélenchon and Le Pen for third place is turning in Le Pen’s favor. She is expected to get between 14% (reported by the BVA poll) and 17% (reported by the TNS Sofres poll). Mélenchon, on the other hand, is expected to get between 13% (TNS Sofres) and 15% (LH2).

I like how the pictures of riots and fires...

 EUROPE - SPANISH BONDS.... The yield on Spanish benchmark 10-year bonds rose to 5.8pc. The last time the yield was as high was the week before the ECB unleashed its long-term refinancing operation (LTRO) in November, which was designed to ease market pressure on the eurozone's "sinner states". .... Getting near the dreaded Satan six number already? That didn't take long. Spain is in the cross-hairs now. Didn't more than a few experts predict that would happen, unless they did like the US did, and say that the government would do whatever it takes? I watched several experts say the firewall needed to exceed 2.5 trillion, or the attacks would continue. Those European politicians must think all those multi-millionaire investors got rich by accident. What could they know about bond markets and traders?
I like how the pictures of riots and fires just happen to be next to the articles.... The high youth unemployment and austerity measures in Southern Europe are creating a very dangerous environment and it can only be a matter of time before civil unrest gets out of control. There seems to be an accepted view that the juggernaut of globalization cannot be stopped or reversed. Globalization was an accepted view in the 1920’s, until the bust. Globalization was stopped in its tracks and the opposite took its place, Nationalism. The imposition of austerity measures in the West is demonstrating to the vast majority that globalization has done them no favors at all. Nationalism will probably first raise its head in the club med countries and this will be the beginning of the end for the latest globalization phase

Member States providing further economic development....

At a very crucial and difficult time for the EU, irregular migration flows are increasing rapidly and forcing political debates over the functioning and the effectiveness of the Schengen area. Today's almost unanimous positive vote (51 for, 3 against, 2 abstentions) on the Report on the Amendment of the Schengen Borders Code in Civil Liberties, Justice and Home Affairs Committee of the European Parliament, gives a crystal clear message that MEPs want to protect and further empower the Schengen area.   The Schengen area is one of Europe's greatest achievements. It ensures the free movement of EU citizens by eliminating border checks carried out on people, thus enhancing the notion of solidarity and common European identity, and promoting better economic results and growth. By updating the rules and legal developments that have taken place since the establishment of Regulation 562/2006, and since the coming-into-force of the Lisbon Treaty, the current amended proposal takes into consideration legal and practical experiences gained over time from the Member States through the application of the Schengen Borders Code. MEPs regard the notion of the removal of controls at the internal borders between Members States as vital and goes hand in hand with the need for effective controls, deeper cooperation and mutual trust at the external borders of the Schengen area. In this context, the adopted amendments improve the existing frame and on the other hand strengthen the external borders which will also strengthen solidarity amongst the Member States by also providing further economic development.

GERMANY TODAY - National airline Lufthansa said it had scrapped more than 400 flights scheduled for Tuesday, mostly at Germany's biggest airport, Frankfurt.  The walkout is part of wider industrial action by public sector employees ahead of further talks due later this week.  Service workers' union Verdi is demanding a 6.5% pay rise for its two million members. About a third of flights were cancelled at Frankfurt, a spokesman said. Munich, Dusseldorf, Stuttgart, Cologne-Bonn and Hannover are also among the airports affected. In earlier talks, the union rejected an offer of a 3.3% pay increase over 24 months from public sector employers. Further negotiations are scheduled to start on Wednesday. The union says public sector workers are undervalued, and that their pay has been squeezed by national and local governments trying to keep spending down.

These debts -- across the Eurozone and the world -- are too big to ever be repaid.

Klaus Regling, head of the European Financial Stability Facility (EFSF), warned that the eurozone must reinforce its fire walls to avoid more market volatility. "More money would reassure markets. Wrongly or rightly the fact is that big numbers in the shop window create calm," he said over the weekend. Mario Monti, the Italian prime minister, told a conference that the rise in Spain's borrowing costs was a warning that "it doesn't take much to recreate risks of contagion". Last night, officials claimed Angela Merkel was prepared to yield to the pressure and agree to combine the firepower of the €440bn (£368bn) EFSF and its permanent replacement, the €500bn European Stability Mechanism (ESM). However, the German Chancellor is desperate not to anger her electorate by giving more support to the eurozone, especially after her coalition partners struggled in state elections yesterday. Eurozone finance ministers are due to meet in Copenhagan on Friday and Saturday to agree to combine the bail-out funds – or significantly increase their capabilities.....Perhaps Mr Regling is too clever for me, I see now, the bailouts will not cost German tax payers a "penny...Euros, now that's another story....I say: These debts -- across the Eurozone and the world -- are toobig to ever be repaid.The only solution to this mess is for nations to simply refuse to pay sovereign debts, and to move on like nothing happened.

It's very simple but few seem to learn - don't use a bank.

Credit card companies are using "shameful practices" to maximise profits from customers on interest-free balance transfer deals, the managing director of a bank has claimed. Brian Cole, of Capital One in the UK, the bank that first introduced zero-interest balance transfers to Britain in the 90s, says: "There's a lot of practice in the [banking] marketplace that is shameful, and credit card companies are not immune. [Balance transfer] customers think they're going to progress in getting out of debt, and get some relief from interest payments. But make a mistake and you will end up making money for your credit card company." Cole stopped Capital One making interest-free balance transfers available to mainstream customers in 2008. He says: "When we first introduced the interest-free balance transfer it was a very different product to now. The interest-free period lasted six months and it was a loyalty based play: we hoped the customer would stay at the end of the interest-free period, but if they didn't, we didn't lose lots of cash." Borrowers loved the idea of interest-free credit, and soon banks were vying for business by extending the interest-free period. The longer it became, the more difficult it was to make money, says Cole: "The pressure for issuers to find that revenue intensified, and on the back of that came sharp practices." Andrew Hagger of product comparison website MoneyNet says he was surprised that credit card companies not only continued offering zero-interest balance transfers after the credit crunch, but extended the length of the deals. In September 2007 there were 86 deals on offer with an average interest-free term of 9.14 months. Now there are 74, but the average term has increased to 12.64 months and Barclaycard and the Halifax are both offering 22-month deals. "It's surprising to see the balance transfer market still apparently thriving in this post-crunch era – however, while the number of deals remains high, the volume of people being declined is likely to have increased markedly as borrowers focus on consumers with a squeaky clean credit history. Offering long-term 0% balance transfer deals is a great way for card providers to get free advertising via the best buy tables," says Hagger. So how do banks make money out of what seems to be such a bargain for those who qualify? Banks lose money during the interest-free period, as they will be paying interest on the money lent to you. But they can recoup some of that with the balance transfer fee. Cole says: "If you're transferring £10,000 with a 2% balance transfer fee, that's costing you £200. That's quite a sizeable amount, but it still doesn't feel much to the customer because it doesn't come directly out of their pocket – it's added on to the credit balance.".....It's very simple but few seem to learn - don't use a bank. You want a better life - don't use banks. This is your choice. Credit Card use fuels the fractional reserve banking system which is the root of all the debt issues.

Post for ....3/25/2012

"To me, we are still in a crisis," Mr Trichet said. "It is not just the privilege of Europe to still be in a crisis." Starting 35 years ago with Latin America and Asia, the global economy remains in period of structural adaptation, he aid, with major western economies currently the focus. Mr Trichet : a mix of globalization and the instant transmission of information to investors made possible by the internet may have made a permanent change to the financial system. Without defining it, Mr Trichet suggested it may present a new "tail risk" to policymakers. "That is something to do with behavioural contagion that is not captured by traditional modelling." In a visit to Harvard University earlier this week, Mr Trichet insisted that "I don't regret anything " about the ECB's policy while he was leading it during the crisis. The ECB was widely criticised for raising interest rates last April. The increase has since been reversed.I would have thought that technological innovation and emerging markets should have boosted the real economy in the last decades. But unfortunately the real economy is infested with financial parasites, and the structural adaption he talks about is the transformation of the world into a latin american society - some mega-rich corrupt parasites, the rest starving and treated like domestic animals.

Tensions within the zone are mounting as we enter this week

Tensions within the zone are mounting as we enter a week in which Italy, Belgium, Spain and France plan to tap the markets for some €17 billion ($22 billion) in new loans and, says Goldman Sachs, the European economy slides into recession. Bankrupt Greece; junk-rated Portugal pleading with Angola for inbound investment; jobless Spain, facing some interest rates that have doubled in the past month; and recovering Ireland have already fallen to the bond vigilantes. Growth-free Italy is fighting a rearguard action, facing unsustainable interest rates despite the stellar reputation of its newly appointed technocrat prime minister, Mario Monti; Belgian debt, now equal to its GDP, has been downgraded, in part because of the inability of this seat of the EU to form a new government. France, consumer confidence dropping, is likely next. Some German IOUs were unsold, and prices of bunds are slipping. No euro-zone country and no euro-zone company can any longer escape the consequences of the structural flaw in the euro-zone architecture. German Chancellor Angela Merkel opposes measures that might stem the tide that is about to engulf the euro. Nor can countries outside the euro zone. Great Britain, with high deficits, mounting debt, and a deficit-reduction plan that just might not work, retains its triple-A rating because it has its own currency and the rating companies increasingly consider governance when deciding whether to downgrade.
Britain is considered governable, but that might change after Wednesday's strike of public service workers shuts down the country. The failure of the super committee to find some trivial deficit reductions means America might also slip into the ungovernable category. And the Federal Reserve Board is imposing new stress tests to determine whether leading banks can withstand a wave of sovereign- debt and bank defaults in Europe. One thing is certain: The euro cannot survive without a major change in the governance structure of the euro zone. The first prescription for what ails the zone was "austerity", but that has produced recessions and government oustings. Then came the European Financial Stability Facility, but it turns out to be too puny to halt the bond vigilantes' rampage through the euro zone, and anyhow rests in part on France's waning ability to join Germany as a guarantor by retaining its triple-A credit rating. The European Central Bank, operating within the legal limits imposed on it by thetreaties that govern the European Union, is providing some liquidity to the banks and a bit of relief on the interest-rate front for sovereign borrowers, but it cannot do much to prevent the insolvent from being forced to default. Ms. Merkel, Germany's latest Iron Chancellor, has set her face against any of the measures that might stem the tide that is about to engulf the euro. She is against allowing the ECB to become the lender of last resort, aka printer of money. She refuses to share her balance sheet with stressed countries by allowing the issuance of euro-bonds, until they reform, even though such reforms cannot be implemented in time to head off sovereign defaults that would take down many under-capitalized European banks, now desperately juggling their books to inflate their capital ratios.

Greece got a new finance minister

Greece got a new finance minister on Wednesday, days after the crisis-hit country's interim prime minister Lucas Papademos said he was convinced Athens was "more than halfway along the path" to economic growth and recovery. Filippos Sachinidis was promoted from deputy minister after Evangelos Venizelos stepped down to take over the helm of the socialist Pasok party ahead of parliamentary elections which could come as early as next month. Sachinidis is a moderniser and former banker widely seen as a pair of safe hands as the debt-stricken nation navigates its worst crisis in modern times. His appointment was welcomed by both Pasok and the centre right New Democracy, the two parties power-sharing under Papademos, himself a former vice-president of the European Central Bank. The change of guard came as the country that triggered Europe's debt crisis in December 2009 raced against the clock to implement reforms demanded by the EU, ECB and International Monetary Fund in exchange for €130bn in extra aid to prop up its moribund economy. A first instalment of rescue funds worth €7.5bn was disbursed to Athens this week. Receipt of the money, which included €1.6bn from the IMF, followed this month's unexpectedly successful bond swap between Greece, banks and other private holders of its debt. A further €35bn is lined up to be injected into the country's cash-starved banking system – widely seen as a vital step to reinvigorate an economy mired in austerity-driven recession.

Announcements coming out of Italy.

Announcements coming out of Italy. Monti and the unions are out of talks and I'm reading Monti has said unions accepted reform of article 18 firing restrictions for workers – except CGIL. CGIL is Italy's most important union with as many as 5.5 million members.Monti said he was "worried" by CGIL's dissent, but the question was now closed and after meetings tomorrow to finalise details the government would press ahead with legislation.The labour minister Elsa Fornero said protection will be lifted for all workers, not just new hires.....Meanwhile - Day eleventh hundred and six: Good news... no default in Greece. Only 30% of the population is in or around the destitution mark and it's not expected to rise above 50 or 60% in the next couple of years. The economy is picking up nicely with only a piffling full blown depression to handle... Easily sorted though once wages hit Bangladeshi levels later this year. Prices of course still as high as Northern European countries but there is evidence to suggest that children can manage on much lower amounts of bread and milk than once thought. Malnutrition still effects development of course, but seeing as future generations only have working as waiters or farm workers to look forward to for the next 30 years or so it might actually be better that they don't have the cognitive powers to get above themselves....So nice to see light at the end of the tunnel !!

A short story ...

At the end of 2007 beginning of 2008, $1.9 trillion was wiped off the value of securitized MBS and ABS products as credit rating agencies started to downgrade many thousands of trenches. S&P for example downgraded 16,381 trenches by July 2008 which they had originally given a AAA rating. At least that is my understanding. If I am in error, perhaps you can tell me where for there is nothing in your short response to indicate a lack of understanding on my part. Unfortunately, there is nothing in your response to demonstrate a more thorough understanding on your part either which is a very good example of what Bally was talking about. But it may be that you are not referring to the process but to the detail of how each tranche was given a rating, ie. the mathematics behind each securitized product. Is this what you hoped to challenge? How that works? If you don't know but wish to know, see this paper for a good overview:
Credit Securitization and Credit Derivatives: Financial Instruments and the Credit Risk Management of Middle Market Commercial Loan Portfolios
It specifically addresses the sub portfolio middle market and notes; "In recent years, the development of markets for credit securitization and credit derivatives has provided new credit risk management tools. However, in the addressed market segment adverse selection and moral hazard problems are quite severe." The important thing is the date, 1998. The risks are flagged ten years before the crash. They were known about before the crash as Belinda Ghetti's email to Nicole Billick (internal S&P) demonstrates: "Let's hope we are all wealthy and retired by the time this house of cards falters." If you have some additional knowledge of interest, please share it with us.

Post for march 20th.2012

The final results of today's Greek credit default swap auction are in! Greece's old bonds have been valued at 21.5% of their face value, following its debt restructuring. That means that CDS contracts should pay out 78.5 cents in the euro. The total net value of CDS contracts on Greek debt comes to around $3.2bn, which means (I think) that the banks who issued that debt must pay out around $2.5bn to those who took out the insurance. Credit default swaps are meant to protect against losses on bonds -- so today's auction has effectively found that Greek bond with a face value of €1m would only be worth €215,000. So, if the investor had also taken out €1m of Greek debt insurance through a CDS, s/he should receive €785,000 to cover the loss on the bond.
Or as Markit (which conducted the auction) explained: Market participants who bought protection against a Hellenic Republic default will receive the face value of their bonds in exchange for a payment of 21.5% of face value to protection sellers. UPDATE: Reuters has also calculated that the auction means CDS contracts will pay out around $2.5bn. In conclusion : Greece's creditors are due to receive $2.5bn in insurance payments, following the country's debt restructuring. A credit default swap auction that Greek bonds are worth 21.5% of their face value.

As far as I know, Germany is paying (roughly) 27.1% of the ESM; France is paying 20.4%; Italy 17.9%; Spain 11.9% etc. Of course the German contribution is the largest; it has the largest population and economy. But isn't both the credit given and the criticism given (depending on the person asked) a little disproportionate? a) Germany isn't paying an outsized portion but b) if Europe is on the wrong path then it must be said that the other countries aren't doing a lot better than Germany in coming up with answers. Why are so many people emphasising the German role, either positively or negatively? Is it the fact that the German contributions and agreements have had to go through lengthier domestic processes than those of France, Italy etc., so that the need for German agreement is kept in the news?Is it cultural differences? The Germans, like the Dutch, Finns and others with similar economies, having been more vocally unhappy from the start of the crisis than some of the EU's other wealthy countries. Or are the Germans actually going to pay the bulk of the money?

From Bismarck to the Reichs, Germany influenced by strong nationalist views, has sought to dominate Europe rather than exist peacefully besides the other European countries. No European project can succeed when one country constantly pushes its way through the others. There is the dream of Europe as a community of cultures and the view of a Europe dominated by the Germans. A lot of peoplewould prefer the first and would feel uncomfortably by the second. The Germans may want to forget but the thing is will the other countries forget what they went through as well? After all, remembering the past can only help us avoid the same adventures in the future. Germany is pretty forthright about it's past, though. I don't get the sense that their looking to erase it from history - but they're doing their best to ensure that it doesn't necessarily define their future. That said ... you're right: I never, ever want to diminish what was the closest example to pure evil history has witnessed in the modern age. The collective psychosis that gripped a modern, educated nation is something that should make us all shiver.

Eurozone leaders will inject more than €250bn (£207bn) into the single currency's protection fund in a desperate effort to prevent contagion from Greece, it emerged on Friday. Finance ministers will agree the package in a fortnight, although it will still leave the insurance scheme around €1.3tn short of City estimates of the firewall needed to protect Italy and Spain from a panic that would follow if Greece went bust. Officials said the main protection fund, the temporary €440bn European Financial Stability Facility (EFSF), will be increased to around €700bn, before the introduction next year of the permanent European Stability Mechanism. The extra funds are expected to be in place by the summer to insure against a lending freeze by private investors. Brussels has dismissed estimates that a €2tn fund would be needed to provide sufficient confidence in the eurozone. Officials believe a compromise between Germany and France, which wanted to put in place a bigger firewall, will safeguard the euro's future. The German government has lobbied for the fund to be restricted to protect its taxpayers from potential liabilities, which will mostly fall on Berlin.German officials believe the scale of the fund will be sufficient to ringfence Greece and allow it to go bust without spreading fears of contagion to other countries.

Here is the statement from IMF managing director Christine Lagarde: ---"Greece has made tremendous efforts to implement wide-ranging painful measures over the past two years, in the midst of a deep economic recession and a difficult social environment. The fiscal deficit has been reduced markedly and competitiveness has gradually improved. However, the challenges confronting Greece remain significant, with a large competitiveness gap, a high level of public debt, and an undercapitalized banking system. "The new Fund-supported program will enable Greece to address these challenges while remaining in the Eurozone. The program focuses on restoring competitiveness and growth, fiscal sustainability, and financial stability. The authorities are fully committed to these ambitious objectives and stand ready to take any additional measures as may be necessary. The successful debt exchange operation, debt relief and long-term support from Greece's European partners, and the commitment of the major Greek political parties to program objectives and policies provide important assurances for the new program. "Greece's priority is to undertake competitiveness-enhancing structural reforms. The government's bold labor market measures will play a crucial role in this regard, complemented by measures to liberalize professions and product markets, improve the business environment, and privatize state-owned assets. "Significant further fiscal adjustment is necessary to put debt on a sustainable downward trajectory. Reaching a primary surplus of 4½ percent of GDP by 2014 will require politically difficult cuts in government spending, as well as decisive measures to address tax evasion. It is important that the adjustment be both fair and sustainable, through strengthening the core social safety net and tax collection efforts. "Securing financial sector stability and depositor confidence is also a priority. The program secures liquidity support for Greek banks, and provides funds for their recapitalization, alongside incentives to preserve private ownership. The resolution framework and the governance of oversight agencies have been strengthened to ensure appropriate use of public funds and safeguard against conflicts of interest. "Risks to the program remain exceptionally high, and there is no room for slippages. Full and timely implementation of the planned adjustment—alongside broad-based public support and support from Greece's European partners—will be critical to success. The euro area leaders have reiterated their commitment to provide adequate support to Greece during the life of the program and beyond until it has regained market access, provided that Greece fully complies with the requirements and objectives of the adjustment program. Time to knock this blog on the head for the day (unless there are any exciting developments this evening, in which case it might roar back into life).

The Brussels top brass insist that we've entered a quiet patch. Yesterday, EC president Jose Manuel Barroso called for an end to "constant drama" over the euru. We'll see what we can do....Yes, it's a quiet patch. But it ain't going to last long. Greece has an awful lot of activities it's supposed to complete by end of march 2012. Now, call me cynical, but I don't think ministers minds are going to be on ticking off the action items for the Troika, with elections in late april / early may, and most of the electorate up for grabs.,,,,So come early april, the loud grumbling from Troika and various EZ finance ministers will resume.....A bit more on Evangelos Venizelos's resignation, which broke in the last few minutes. The finance minister made clear that he would resign by Monday, Helena Smith confirms. And here's a quote from the Pasok leader in waiting: I cannot continue to have a double role. As soon as I assume duties as the leader of the biggest party in parliament, I must dedicate myself to those duties. Helena adds that a poll in the satirical weekly To Pontiki, to be published tomorrow, shows that nine parties are expected to win seats in the next parliament -- a multi-party presence not seen since the 1950's in Greece. Speaking of double roles, I'm reminded that Mario Monti rebuffed the idea that he might chair the eurogroup (made up of eurozone finance ministers). Monti is a contender because he is Italy's economy minister, as well as being prime minister. The former European Commissioner has quite the CV, as financial reporter Fabrizio Goria of Linkiesta pointed out on Twitter last night.

Angela Merkel's constant mantra in recent months has been austerity, austerity, austerity. But apparently the German chancellor hasn't been quite as strict when it comes to her own country's budget. SPIEGEL reports this week that the German government didn't reach even half of its planned savings in the federal budget. Only 42 percent of the spending cuts named by Merkel's coalition government, comprised of the conservative Christian Democrats and the business-friendly Free Democratic Party, were actually implemented. Calculations made by the influential Cologne Institute for Economic Research indicate that only €4.7 billion ($6.16 billion) of the €11.2 billion in austerity measures stipulated by the savings package actually took shape in 2011. The government is also falling behind on its targets for this year. Of the originally planned €19.1 billion in savings, less than half has been implemented. For the coming year, the concrete measures that have been agreed on so far cover just one-third of the announced amount of savings. Merkel's cabinet is hoping to agree to the basic foundations of the 2013 federal budget in March.

The Brussels double standards are shameful

ROMANIA - According to market sources, in today's meeting, the government will decide on the price at which the 15% stake in "Transelectrica" (symbol: TEL), will be sold.
The final prospectus will include a minimum and maximum price, which will be set by the Government. At the end of the trading session, yesterday, the price of a TEL share was 17.06 lei, which means the 15% stake in the company was worth 187.58 million lei.
The intermediaries of the offering, which have met the foreign investors, in a "road-show" in Europe, will try to obtain the discount requested by investors. Domestic and foreign investors alike claim that in order for the offering of "Transelectrica" to be successful, the government needs to grant a discount of at least 10%. Some of the experts of the capital market feel that, if the state won't agree to offer a discount, the offering might be unsuccessful, which would represent a disaster for the stock market. Through the agreement with the IMF, the government has pledged to sell, through the "Office For The State's Interests and Industrial Privatization" (OPSPI), 10-15% stakes in the companies owned by the Ministry of the Economy. The first sale offering, which is part of this agreement, is the one conducted by the "Transelectrica" Romanian National Power Grid Company (symbol: TEL). The Romanian government currently owns 73.6% of the shares of the company, the Proprietatea Fund owns 13.4%, and the free-float is 12.8%.

The Brussels double standards are shameful: they refuse half a billion to poor Hungary whilst bullying her and at the same time they showered Defaulted, bancrupt Greece with 66 billion in the last few days alone. Also ,why they are not tough with Spain which deficit is already exceeding 5.8 % instead of the 4.4% as required by the just signed Fiscal treaty and will be probably/surpries, surprise/ double as much further down the line this year? How long the lazy, profligate PIIGS countries will get preferential treatment in Europe and be Europe's spoiled children that are allowed everything unlike Eastern Europe that is the foster kid, pushed aside , humiliated,bullied and ignored? That's the reason why I immigrated to America years ago and I would not give a single cent cent businnes to the criminal EU.....Barosso and Juncker, eat your hearts out....Will these EUSSR members ever wake up to what is being done to them?---- They are slowly being castrated by the parasites in Brussels, who are more interested in saving their beloved euro and their fat necks, than any mere country!! It only needs a handful of members to say enough is enough and the whole house of cards will come crashing down!

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 !!