A bizarre interview that Bannon gave to the liberal magazine the American Prospect – in which he claimed there was no military solution for North Korea, called the far right a “collection of clowns”, and said the left’s focus on racism would allow him to “crush the Democrats” – may have altered the balance of the power inside the West Wing. For an aide long suspected of leaking freely about rivals, Bannon’s excuse that he thought the call was off the record was not helpful.  Bannon’s departure leaves a major void in the White House, depriving it of a man once seen as Cardinal Richelieu in cargo pants, an unkempt schemer adept at manipulating the president, who was famously depicted as a childlike naif to his aide’s Grim Reaper in a Saturday Night Live sketch. The characterization – summed up in a Time magazine cover that hailed “the great manipulator” – reportedly annoyed the famously thin-skinned president and contributed to his fall from grace.  Josh Green, the author of the book Devil’s Bargain about Bannon and Trump, told the Guardian: “Bannon may be the only person in the White House with clear and distinct politics of his own.”  His absence means more power and influence for figures such as Trump’s son-in-law Jared Kushner and the national economic council chair, Gary Cohn, who have few, if any, ideological ties to the Republican party and the conservative movement.   Bannon has long occupied an unusual position in the White House. In an administration that one outside ally compared to Baskin Robbins, “composed of 31 flavors,” Bannon represented “the nationalist Trump coalition” as opposed to “a lot of people that were not only not Trump supporters but anti-Trump people”.  One Bannon ally told the Guardian that the West Wing had seen a “four-on-one fight” recently, with Bannon taking on a coalition of Kushner, Ivanka Trump, Cohn and national security adviser HR McMaster. In the ally’s eyes Bannon represented the populist “burn it all down” path while others in the administration wanted Trump to “move the center” and work with the establishment.  A White House source claimed to Axios: “His departure may seem turbulent in the media, but inside it will be very smooth. He has no projects or responsibilities to hand off.”  Bannon had also stood out as the lone White House staffer to defend Trump’s comments on Charlottesville in recent days.

   After the countless institutions and committees created on a European level, but also at the level of the EU member states, to ensure financial stability, why is the ECB bringing back the issue of state aid for banks?  Doesn't this automatically discredit the central bank in the Eurozone as overseer of the banks of systemic importance?  A day after the statements of the ECB officials, it was the turn of the governor of the Bank of Italy, Ignazio Visco, to mention that "in times of high uncertainty, the intervention of the state cannot be ruled out", because there is a risk of confidence in the banking system decreasing, as Financial Times writes. The questioning of the application of the European banking resolution framework, just a few months after its coming into effect, shows that indeed, the situation of the banking system in Europe is much more dire than the authorities will admit. Nevertheless, it is quite unlikely we will see defaults, in the classic sense of the word, among banks of systemic importance, but the escalation of the tensions between the governments of the Eurozone and the "separatist" tendencies is very likely. Until the market is allowed to function and to "clean up" the bank balance sheets, the European crisis will continue, despite the states' interventions, because it is increasingly clear that the printing press of the ECB will not help with financial stabilization and does not resolve the problem of the banks' solvency.  Any other "solution" does nothing but impose unbearable costs on European citizens and transform the resumption of economic growth into an impossible dream.

GERMANY - Timmermans these days is having to exercise his utmost diplomatic skill in order to avoid an escalation of tensions. When, during a visit to Amsterdam on Thursday, Timmermans was asked about the Polish foreign minister's jibe, he could have struck back. But there is already enough tension, so he chose to take a different tack, instead praising the transformation of Eastern European countries from socialist dictatorships to free societies. But, he added, true democracies include two important elements: the protection of human rights and adherence to the rule of law. The fact that Timmermans had to utter something that obvious says a lot about the current state of the European Union -- and developments in Poland. In less than two months, the country's new nationalist-conservative government has succeeded in disempowering the constitutional court, passing a law establishing government control over public broadcasting and installing party-aligned political appointees at the head of its intelligence services. "We want to cure our country of a few illnesses," Foreign Minister Waszcykowski told Germany's tabloid Bild earlier this month.

The International Accounting Standards Board^® (the Board) today issued a new accounting Standard, called IFRS 16 Leases. It replaces accounting requirements introduced more than 30 years ago that are no longer considered fit for purpose and is a major revision of the way in which companies account for leases. Leasing provides an important and flexible source of financing for many companies. However, the old lease accounting Standard (IAS 17 Leases) makes it difficult for investors and others to get an accurate picture of a company’s lease assets and liabilities, particularly for industries such as the airline, retail and transport sectors.  Listed companies using IFRS Standards or US GAAP are estimated to have around US$3.3 trillion of lease commitments; over 85 per cent of which do not appear on their balance sheets*. That is because leases to date have been categorized as either ‘finance leases’ (which are reported on the balance sheet) or ‘operating leases’ (which are disclosed only in the notes to the financial statements).  This somewhat arbitrary distinction made it difficult for investors to compare companies. It also meant that investors and others had to estimate the effects of a company’s off balance sheet lease obligations, which in practice often led to overestimating the liabilities arising from those obligations. IFRS 16 solves this problem by requiring all leases to be reported on a company’s balance sheet as assets and liabilities.  Accompanying the Standard, the IASB has also published a separate Effects Analysis, which outlines the costs and benefits of the Standard. It clearly demonstrates the need for the Standard and that the benefits outweigh the costs.  The Board has given careful consideration to feedback received and has introduced several cost-saving measures for preparers, such as exempting ‘small ticket’ items as well as leases of 12 months or less. The publication of a separate Effects Analysis follows on from a report to the IFRS Foundation Trustees in November 2014 by the Effects Analysis Consultative Group. The Effects Analysis can be accessed here. A separate Project Summary, including an overview of the project history and how the Board has responded to stakeholders’ comments during the development of the Standard, can be found here. *Based on a sample of 30,000 listed companies using IFRS or US GAAP, over 14,000 companies disclose information about off balance sheet leases in their 2014 annual reports. The future payments for off balance sheet leases for those companies totalled US$2.9 trillion (on an undiscounted basis).

Confidence among shoppers in Germany has dipped according to a survey, amid worries over Europe's largest economy.  The forward-looking GfK consumer sentiment indicator fell to 9.3 points for December from 9.4 points in the previous month.  The score is the lowest since February, but was above analysts' predictions.   Confidence in the economy among German consumers dropped for the sixth consecutive month, although the pace reduced.  Concern about the labour market led the way, according to the survey of 2,000 shoppers, with 69% of all those surveyed expecting an increase in unemployment due to the influx of asylum seekers this year.   This month's survey was conducted before the attacks in Paris on 13 November.  In contrast to general sentiment, optimism for making a big purchase improved, with the sub-index for willingness to buy climbing by three points to 48.9.

GfK analyst Rolf Buerkl said he was optimistic for this year's Christmas sales, as customers might be tempted to shop online if they are concerned for public safety.  "It is possible that a few people here and there will avoid going to the Christmas market or visiting a shopping mall," Mr Buerkl said.

Paris shooting: Many people killed and injured after 'Kalashnikov and grenade attacks' across French capital...Many people killed after several shootings and explosions across central Paris

 

 

"We are open to a whole menu of monetary policy instruments," Mr Draghi said, noting that further interest rate cuts had been discussed. "The discussion was wide open."" Sounds like he has Yellen's Disease, but printing money is always the solution for the left to fix fiscal abnormalities... “The ECB will almost certainly be delivering an early Christmas present this year,” said Nick Kounis, the head of markets and macro research at investment bank ABN Amro. Draghi is an enthusiastic proponent of “forward guidance”, the strategy of sending strong verbal policy signals in order to shift financial markets – in this case, driving down the euro.  His dramatic pledge in the summer of 2012 – in the middle of the Greek debt crisis – that the ECB would do “whatever it takes” to save the single currency helped to reassure panic-stricken investors. Jeremy Cook, the chief economist of international payments company World First, said ECB policymakers were likely to have become increasingly concerned in recent weeks about the strengthening of the currency, which makes eurozone goods less competitive on international markets. “Draghi and the executive council couldn’t have been clearer that additional policy easing was coming if they’d had the words ‘sell the euro’ tattooed on their faces,” he said. Euro area GDP rose 0.4% in the second quarter of 2015, a slight slowdown from 0.5% growth in the previous quarter. We must all call attention to the salient fact that the EU, US, UK and Japan are riding along using debt to sustain their economies. QE and other nostrums directly related to money printing thus monetizing the debt must be clearly understood...A number of reasons they do this:

1) kicking the can in the hope some visionary guides us to economic enlightenment before the global economy implodes in it's entirety

2) this is simply a response to the US' decision not to raise rates as well as the Yuan's devaluation a number of months ago. Given the Euro depends on exports, a weaker Euro will prop up the currency. Make no mistake, we're at war, a currency war

3) this is also being pushed as a solution by those who seek to gain the most, ie banks and investment funds. Governments in the aforementioned states are too large and expensive, too inefficient, too prone to spend without consideration of how the debt is affected by the deficits and too prone to call for more taxation in every case where they run short of money.So now it is completely safe to say that the relationship between stocks and underlying fundamentals now NO LONGER EXISTS.

No if's, no maybe's, just absolute fact. Stock valuations are entire fiction. The entire purpose of the Fed / ECB / BoE/ BoJ is to make something levitate. What they cannot do is make anyone with a brain believe a word of it. It is almost game over, pension fund over, banking system over, savings over.  Quantitative easing is not the answer, reality is the answer. Let's just accept that our standard of living is going to fall. QE will delay it and make matters worse, facing reality on the other hand will ensure that the fall in our standard of living will happen now, but won't be as painful in the future when compared to the QE option. The reality is - Too much debt

One of the three following options are open to the central planners.

1. QE for as long as possible - outcome - Dreadful economic future.

2. Attempt to reduce the deficit to zero by the end of this Parliament. - outcome - significant reduction of our standard of living and civil unrest.

3. Attempt to reduce the deficit over a long period of time, bearing in mind the paradox of thrift will make this a slow and relatively painful process, but from my point of view, this is the best option open to us.  A tipping point passed many years ago, we needed brave politicians dealing with the debt issue. However. I can understand why politicians did not grasp the nettle, a fickle public would not vote for them, after all, who wants harsh reality.

Useless, useless, useless - Germans have "Dachau and such" ready !!!!

Blowing hot air = UK Prime Minister David Cameron spoke of a comprehensive approach; Viktor Orban, the normally fiery Hungarian leader told me everyone had to co-operate and Angela Merkel insisted, "What we cannot say is Europe cannot deal with this. I say it again and again, we WILL do this!"

EU leaders do actually agree on a number of key issues:

 

 

• Cracking down on people smuggling rings
• Getting asylum claims processed faster, so failed claimants can be deported more rapidly
• The need to secure Europe's external borders
• Boosting aid to the sprawling, squalid refugee camps around Syria, so fewer people feel tempted to come to Europe
• Stepping up attempts to try to end the war in Syria

But common resolve is one thing. Effective, immediate action is quite another. And some of the leaders' goals are more realistic than others. At a press conference after the summit, the German chancellor spoke of the need to talk to Syria's President Bashar al-Assad as part of a new European push for peace in his country. The conflict has now reached Europe, and Germany in particular. It is the European country of choice for Syrian refugees. In the past, Germany has joined other Western leaders in calling for President Assad to step aside. So these talks would be delicate and controversial, they will not happen overnight and their chances of success are limited, to say the least. Then there's the question of building what is often dubbed Fortress Europe - or what Donald Tusk described last night as "closing Europe's doors and windows".

We all live in a fiat money regime. So what is to stop the Greeks adding €377bn to their Bank of Greece accounts and repaying everyone?  Alternatively create the New Drachma. Valued (by sovereign decree) at par with the euro. And repay with that. I know that the secondary market wouldn't accept that it's valued at par but that's not the point. A sovereign state says their drachma is worth a euro. They give their creditors (except the IMF) lots of them. Lots of red faces and indignation but so what?  Alternatively Greece still has the mandate to print small denomination euro notes. So, provided that they have the paper, print loads and repay in cash. Super Mario would huff and puff and say that they were counterfeit but that would have the whole of Europe worried about their cash....The effect of a default would be extremely serious. Nobody lends money to a government that has just defaulted on existing debts. Rich Greeks have removed their Euros from Greek banks and cannot be forced to bring them back. Greeks in general simply do not pay their taxes. Where can they go now? When they have stripped the pension funds, there will be no pensions. When they leave the Euro, they will print Drachmas which will be devalued continuously until they are worthless. Greeks have mortgages denominated in Euros. The Drachma will be worth a few centimes, if that. I think life will get a lot harder for Greeks before it gets better. = This is false - did anybody hear about Brazil and/or Argentina ??? - these countries periodically file for bankruptcy !!!...Of course the great Europeans especially the "unionists" didn't today's Europeans are just as ill informed as the Americans ! - Well ...We are where we are. Hindsight is invariably quoted by opponents of how things have panned out. There is no doubt that matters could have been better planned from the start or the early days. In which case the whole movement might well never have got off the ground.

I see the EU and Euro as, say, 25% positive. It is a job in progress, not made easier by the ongoing crisis which did NOT started in the US, but in the "world". For whatever reason, there are 28 democratically elected (more or less) national governments who want their countries to stay in the EU with another half-dozen applying for membership (stupid). To date no-one has left. Can they all be wrong?

A possible Greek exit from the euro zone is not, obviously, a new concern. Three years ago, it looked like a realistic possibility until Berlin became convinced that the risks of contagion for other euro-zone countries was too great. But since then, the situation has changed dramatically. Both Greece and the euro zone are in better shape than they were in 2012 and would be better prepared to handle a Grexit.   Still, Greece's departure from the common currency union would almost certainly be more problematic than Schäuble has made it sound. Josef Ackermann, the former head of Deutsche Bank who led the debt haircut negotiations in 2012 on behalf of Greece's private creditors, continues to believe that a Greek exit "is still a very risky proposition. It would very probably lead to bank insolvencies and enormous social costs in Greece."

Euro-zone countries may have established a functioning bailout fund and made progress on a banking union scheme, but a Greek exit could attract speculators. "International investors would quickly begin asking which country might fall next," Ackermann believes. Markets could gain the impression that the currency union is a club that countries could join or leave as they liked.

Speculators could begin testing just how durable the rest of the euro zone really is and focus on countries like Portugal, Spain or Italy. "Their interest rates would increase drastically, which would thwart the policies of ECB head Mario Draghi, who would like to prevent exactly that," says Jochen Felsenheimer, CEO of the investment firm Xaia.

Greece's departure would also be just as expensive for the remaining euro-zone member states as a debt haircut because Athens would hardly be in a position to fulfill its financial obligations. Its currency would be drastically devalued and its economy would be threatened with collapse.

The Economist 2015 cover - At first glance, we see political figures like Obama and Putin, references to the Rugby cup and the new Spider-Man movie. But a closer look reveals a plethora of disturbing elements. - The Economist is not a random newspaper that publishes quirky 2015 predictions to sell a few additional copies. It is directly connected to those who shape global policies and who make sure that they are applied. The publication is partly owned by the Rothschild banking family of England and its editor regularly attends Bilderberg meetings. In other words, The Economist is connected to those who have the means and the power to make “predictions” a reality.  The 2015-themed cover basically reflects the overall Agenda of the elite and is peppered with cryptic symbols that appear to be included for “those in the know”. And the masses, like Alice watching the Cheshire Cat disappear, will focus on illusions while the wolf in sheep’s clothing will strike … and strike hard....The presence of the Pied Piper on this 2015-themed cover is downright unsettling. The Pied Piper of Hamelin is a German legend about a man who used his magical flute to lure away the children of the city of Hamelin, never to be seen again....This folkloric figure dating from the Middle-Ages is said to represent either massive death by plague or catastrophe, or a movement of massive immigration. It also perfectly represents today’s youth being “lured” and mystified by the “music” of mass media. Conveniently enough, there’s a small boy right under the Piper’s flute.

VATICAN CITY (Reuters) - Pope Francis sacked the five-man board of the Vatican's financial watchdog on Thursday - all Italians - in the latest move to break with an old guard associated with a murky past under his predecessor. The Vatican said the pope named four experts from Switzerland, Singapore, the United States and Italy to replace them on the board of the Financial Information Authority (AIF), the Holy See's internal regulatory office. The new board includes a woman for the first time. All five outgoing members were Italians who had been expected to serve five-year terms ending in 2016 and were laymen associated with the Vatican's discredited financial old guard. Reformers inside the Vatican had been pushing for the pope, who already has taken a series of steps to clean up Vatican finances, to appoint professionals with an international background to work with Rene Bruelhart, a Swiss lawyer who heads the AIF and who has been pushing for change. Vatican sources said Bruelhart, Liechtenstein's former top anti-money laundering expert, was chafing under the old board and wanted Francis to appoint global professionals like him.

"Bruelhart wanted a board he could work with and it seems the pope has come down on his side and sent the old boy network packing," said a Vatican source familiar with the situation.

The new board of the AIF includes Marc Odendall, who administers and advises philanthropic organisations in Switzerland, and Juan C. Zarate, a Harvard law professor and senior advisor at the Center for Strategic and International Studies, a think tank based in Washington D.C. The other two board members are Joseph Yuvaraj Pillay, former managing director of the Monetary Authority of Singapore and senior advisor to that country's president, and Maria Bianca Farina, the head of two Italian insurance companies.

Francis, who was elected in March 2013 after the resignation of former Pope Benedict, in February set up a new Secretariat for the Economy reporting directly to him and appointed an outsider, Australian Cardinal George Pell, to head it.

In January he removed Cardinal Attilio Nicora, a prelate who played a senior role in Vatican finances for more than a decade, as president of the AIF and replaced him with an archbishop with a track record of reform within the Vatican bureaucracy.

He also replaced four of the five cardinals in the commission that supervises the Vatican's troubled bank, known as the Institute for Works of Religion (IOR).

Since the arrival of Bruelhart in 2012, the AIF has been spearheading reforms to bring the Vatican in line with international standards on financial transparency and money laundering. But Vatican sources say he has encountered resistance from an old, entrenched guard.

A report last December by Moneyval, a monitoring committee of the Council of Europe, said the Vatican had enacted significant reforms but must still exercise more oversight over its bank.

Francis, who has said Vatican finances must be transparent in order for the Church to have credibility, decided against closing the IOR on condition that reforms, including closing accounts by people not entitled to have them, continued.

Only Vatican employees, religious institutions, orders of priests and nuns and Catholic charities are allowed to have accounts at the bank. But investigators have found that a number were being used by outsiders or that legitimate account holders were handling money for third parties.

Monsignor Nunzio Scarano, a former senior Vatican accountant who had close ties to the IOR, is currently on trial accused of plotting to smuggle millions of dollars into Italy from Switzerland in a scheme to help rich friends avoid taxes.

Scarano has also been indicted on separate charges of laundering millions of euros through the IOR. Paolo Cipriani and Massimo Tulli, the IOR's director and deputy director, who resigned last July after Scarano's arrest, have been ordered to stand trial on charges of violating anti-money laundering norms.

Ukrainian President Viktor Yanukovych has defended his move to put on hold a historic deal with the EU, amid continuing mass protest rallies.  He said he was forced by economic necessity and the desire to protect those "most vulnerable".  The EU has accused Russia of exerting heavy economic pressure on Ukraine. Clashes between protesters and police continued on Monday. Meanwhile, jailed opposition leader Yulia Tymoshenko announced an indefinite hunger strike.  'No alternative'  Mr Yanukovych was speaking publicly for the first time since the announcement on Thursday that his government was halting preparations to sign the association and free trade agreements with the EU.  More confrontations between protesters and police early Monday morning in front of Ukraine's government building indicate that the situation remains very volatile.  In an echo of the Orange Revolution nine years ago, protesters set up a tent camp in front of the main demonstration's stage.  Ukrainian opposition leaders say political actions will continue through the week until the Vilnius summit, where Ukrainian officials were supposed to sign the free trade agreement with the EU. Many demonstrators say that they believe President Yanukovych will succumb to the pressure of the rallies and complete another about-turn - and sign the agreement.   This of course depends on whether the protesters can maintain their own momentum over the coming days.  The decision triggered mass protests in Kiev and a number of other cities across Ukraine.  "I want peace and calm in our big Ukrainian family," Mr Yanukovych said in a video statement, describing himself as a "father".  He stressed that his government had not given up attempts to bring closer ties between Ukraine and the EU.  "I would like to underline this: there is no alternative to the creation of a society of European standards in Ukraine and my policies on this path always have been, and will continue to be, consistent.  "But I would be dishonest and unfair if I had not taken care of the most disadvantaged and vulnerable, who may carry the brunt during a transitional period."  Mr Yanukovych's government last week said it was halting preparations for signing the treaties, amid concern for possible mass job losses in the short-run.  Opponents are accusing the president of keeping talks with the EU alive while never intending to sign the deal at an EU summit in Vilnius, Lithuania, on 28-29 November. They also say he has bowed to growing pressure from Russian President Vladimir Putin, who wants Kiev to join the Moscow-led Customs Union. The grouping also includes Belarus and Kazakhstan.  Mr Putin denies the claims, instead accusing the EU of trying to force Kiev into singing the agreements. European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso said on Monday the door was still open for Ukraine to sign the agreements at the summit in Vilnius.

Investing in Federal Bonds a Losing Proposition - Some €900 billion of monetary assets consist of deposits, which can be withdrawn immediately and earn an average of about 0.42 percent in annual interest. At an estimated inflation rate of 1.6 percent this year, these assets will see a 1.18-percent decline in value, or about €11 billion. The situation is slightly more favorable for savings deposits or fixed deposits with terms of up to two years, but even here the real rate of interest is often negative. Investing in federal bonds is also a losing proposition for Germans. In the case of five-year bonds, for example, interest rates have also fallen below inflation. This also affects many insurance companies and pension plans, which together account for more than €1.8 trillion of German monetary assets. They, too, invest most of their money in government bonds, which means that the returns on life insurance policies are declining from one year to the next. Guaranteed interest rates, which were at 4 percent in 2000, had dropped to 1.75 percent by 2012. "Savers still benefit from the fact that their policies are backed by previously acquired bonds with higher fixed-interest coupons," Kater explains. "But the longer the low-interest-rate phase lasts, the more fixed interest rates will expire, and the bigger the losses will become from year to year." If the structure of monetary assets doesn't change and the low interest-rate policy continues for another 10 years, the total loss to savers could grow to €60 billion. "In Germany today, people can no longer provide for their retirement by saving," says Walter Krämer. A statistics professor in the western city of Dortmund, Krämer initiated a call for protest by 282 German economists against the euro bailout policy last year, and this summer he followed up with a letter of complaint titled "Cold Expropriation." Krämer assigns the blame to the ECB. "Savers pay the price for the fact that the ECB is determined to rescue comatose banks," he says. According to Krämer, banks are being charged too little to gain access to ECB funds, so that they have no incentive to offer more to savers.

The head of Slovenia's central bank, Bostjan Jazbec, has said it will consider asking for outside help if the country's funding costs stay high. He also said Slovenia's GDP would shrink by 2.6% this year, more than April's 1.9% forecast.

Slovenia's banks are largely state-owned and saddled with bad loans worth 22.5% of its GDP.

Mr Jazbec's comments are likely to fuel speculation over whether Slovenia will be bailed out by the EU.

Still hope

Mr. Jazbec said he would consider asking for aid if yields on Slovenia's bonds remained high.

During a news conference, he said the country was doing everything it could to bring its funding costs down.

"If that is not successful, then there is a possibility to ask for help within various programmes," he added.

Meanwhile, Slovenia's Prime Minister, Alenka Bratusek, has admitted to parliament the amount needed to rescue the banks is "completely unknown".

But Ms Bratusek told STA, the state-owned news agency: "We are very intensely preparing measures that are needed, so as to avoid asking for help."

The results of the bank's stress-tests, out at the end of November, will indicate whether or not a bailout is needed.

Eurozone members can ask for help from the European Stability Mechanism, set up in 2012.

Talks on forming a new German coalition between Chancellor Angela Merkel's conservatives and their main leftist rivals are under way in Berlin.  Her Christian Democrats (CDU) fell just short of an outright majority at last month's polls, when their liberal partner won no seats at all.   Seven leading figures from the CDU are meeting seven counterparts from the Social Democrats (SPD).   The SPD is seen as their likeliest new partner despite sharp differences.  Also present at the talks are seven members of Mrs Merkel's Bavarian allies, the Christian Social Union.   Key issues are taxation and a proposed national minimum wage.   If a grand coalition is forged by the two main parties, like the one Mrs Merkel led in 2005, it faces the twin tasks of rebalancing the eurozone's biggest economy and winning the support of the German public to tackle the eurozone's debt and banking problems.  The SPD, which has not won an election since 2002, has said that any deal must be approved by its membership.   Keeping its options open, Mrs Merkel's party is also holding preliminary talks next week with the Greens. At the election on 22 September, the CDU took about 41.5% of the vote, the SPD won 26%, the Greens 8.4%, and the former communist Left Party 8.6%.   The CDU's previous coalition partner, the Free Democrats, narrowly failed to cross the 5% threshold for entering parliament.

"There will have to be another programme in Greece," said Mr Schaeuble, addressing a campaign audience in northern Germany. However he maintained that, despite this, there would be no further debt haircut for Athens. Just hours before Mr Schaeuble spoke, German Chancellor Angela Merkel was quoted in a regional newspaper dismissing questions about further aid for Greece, saying there was no point in discussing the matter until its second package expires at the end of next year. However, economists have long predicted a third rescue package for Greece, which is struggling to control its mounting debt burden as the economy shrinks under tough austerity measures. Opposition leaders, who have relentlessly accused the government of hiding the truth about Greece, pounced on the finance minister's comments. Peer Steinbrueck, leader of Germany's Social Democrat Party, declared it was "time that Frau Merkel tells people the truth". Juergen Tritten, head of the country's Green party, also seized the opportunity to hit out at the Chancellor.While a third bail-out for Greece, paid for by eurozone taxpayers, will anger German voters, the sums involved are set to be much lower than the previous two rescue packages, which run to €210bn (£179bn).

Any new aid money would be funnelled towards an expected shortfall in Greece's public finances in the next two years, according to a Greek finance ministry official. Athens is also looking at using leftover funds from a bank bail-out programme to help plug the funding gap. In Frankfurt, the European Central Bank said Joerg Asmussen, one of its most senior officials, would visit Greece on Wednesday to discuss progress on reforms needed to ensure more bailout money.

The only hope for Italy is to leave the EuroZone now - otherwise = bankruptcy!

Thousands of workers and unemployed people marched in Rome on Saturday to protest against record unemployment and call on Enrico Letta's two-month-old government to deliver more than empty rhetoric on the issue.

The rally, organized by the country's three largest unions was the first major protest since Letta's broad, left-right coalition took office following an inconclusive election in February.

Italian unemployment rose to 12% in April, the highest level on record, and joblessness among people under 24 is at an all-time high above 40%.

Union chiefs, speaking before a flag-waving crowd estimated at more than 100,000 by the organizers, criticized Letta for what they called a lack of action on an urgent problem.

"We can't accept these continuous promises that aren't translated into decisions that give a change of direction," said Susanna Camusso, leader of the country's largest union CGIL.

Luigi Angeletti, head of the UIL, said the country could not afford the piecemeal approach to policy adopted so far, especially when the ruling coalition is so fragile...The unionists called on the government to intervene to prevent plans by white-goods manufacturer Indesit to lay off 1,400 workers in one of the most recent labor disputes....
Big deficits in time of recession are nothing new. They are not desirable, but calling them "dangerous" is ridiculous. The only way to reduce them is through growth, which isn't going to happen with taking so much money out of the economy. Growth has got its own problems, I don't think a society can run for ever on people/states buying stuff they don't really need with money they have really got, but the present "solution" isn't going to work. It is indiscriminate cutting, with no thought for the cost this "cutting" is storing up for the future. The present crew hasn't got the skills, imagination, intelligence to think out of their narrow ideology. They still think putting state services to tender to private businesses is going to solve all. It isn't....

Mediobanca, Italy’s second biggest bank, said its “index of solvency risk” for Italy was already flashing warning signs as the worldwide bond rout continued into a second week, pushing up borrowing costs.

“Time is running out fast,” said Mediobanca’s top analyst, Antonio Guglielmi, in a confidential client note. “The Italian macro situation has not improved over the last quarter, rather the contrary. Some 160 large corporates in Italy are now in special crisis administration.” The report warned that Italy will “inevitably end up in an EU bail-out request” over the next six months, unless it can count on low borrowing costs and a broader recovery. Emphasizing the gravity of the situation, it compared the crisis with when the country was blown out of the Exchange Rate Mechanism in 1992 despite drastic austerity measures.
Italy’s €2.1 trillion (£1.8 trillion) debt is the world’s third largest after the US and Japan. Any serious stress in its debt markets threatens to reignite the eurozone crisis. This may already have begun after the US Federal Reserve signaled last week that it will begin to drain dollar liquidity from the global system.

Christine Lagarde, one of the most powerful women in the world as head of the International Monetary Fund, is facing acute embarrassment after a letter in which she urged former French President Nicolas Sarkozy to "use me" was found during a police raid on her Paris flat. An undated copy of the letter was found at Mrs Lagarde’s flat in Paris during a raid by police investigating a spiraling financial scandal surrounding payments to businessman Bernard Tapie.

"I'm on your side to serve you and serve your projects for France," she said in the letter.

"Use me during the time that suits you best and fits your action and your cast....If you decide to use me, I need you as guide and supporter: without guide, I might be ineffective, without support I might be implausible."

She signed off: “With my immense admiration, Christine L.”

She also claimed that she does not have "personal political ambitions" and remarked she does not want to become "an ambitious servant", referring to some members of Sarkozy's entourage.

The letter was leaked to French newspaper Le Monde, and its publication has caused acute embarrassment for the head of the IMF.

Ms Lagarde was finance minister during Mr Sarkozy's term as President, before stepping down to become managing director of the Washington-based IMF in 2011.

Her Paris flat was raided as part of an investigation into her handling of a 2008 compensation payment to a businessman supporter of ex-president Nicolas Sarkozy, her lawyer said.

Police are investigating claims that Lagarde, when French Finance Minister under Sarkozy, acted illegally in approving the €285m arbitration payout to Bernard Tapie. Ms Lagarde denies any wrongdoing.