Olli Rehn (the incompetent idiot), Europe's economic commissioner, welcomed news that the 17 nations that use the single currency had expanded collectively by 0.3% in the three months to June – the first pick- up in activity since the autumn of 2011.

But Rehn said celebrations should be put on hold given Europe's jobs crisis and the wide disparity in economic performance across the eurozone. "Yes, this slightly more positive data is welcome – but there is no room for any complacency whatsoever", Rehn said. "I hope there will be no premature, self-congratulatory statements suggesting the crisis is over. For we all know that there are still substantial obstacles to overcome: the growth figures remain low and the tentative signs of growth are still fragile."

Rehn (the conventional idiot) said the average number for the bloc hid substantial differences between states, with Germany's positive performance outstripping that of Spain and Italy, who remain in recession. He added that some member states still have unacceptably high unemployment rates, with economic reforms still in their infancy, leaving the region with a "very long way to go."

"A sustained recovery is now within reach, but only if we persevere on all fronts of our crisis response: keep up the pace of economic reform, regain control over our debt, both public and private, and build the pillars of a genuine economic and monetary union," he said. Figures released by Eurostat, the EU's statistical agency, showed that a stronger than expected performance by the single currency's two biggest economies - Germany and France - helped haul the eurozone out of recession. Financial markets had been braced for a rise in eurozone GDP following the increase in industrial production reported on Tuesday but were surprised by news that Germany grew by 0.7% in the second quarter and that France grew by 0.5%.  Along with the rest of the world, the eurozone fell into a deep slump in the winter of 2008-09 before recovering in 2010 and early 2011. But a second leg of the downturn then commenced as a result of the eurozone's sovereign debt crisis, which hit confidence, led to a mothballing of investment and resulted in the imposition of hardline austerity programmes.

Despite the growth in the second quarter, the European Commission still expects the eurozone to suffer a second full calendar year of falling output in 2013, with growth resuming in 2014.

Eurostat's figures showed that Italy and Spain - the single currency's third and fourth biggest economies - both remained in recession in the second quarter of 2013. Spain's economy shrank by 0.1% percent on the quarter, while Italy posted a 0.2% decline.

The Dutch economy also contracted by 0.2% but Portugal – one of the three countries that required a financial bailout – recorded the fastest growth of any eurozone country with 1.1% quarterly growth.Funny - some friends just returned from France on a hunt for bargain property - looked at a 3.5M Euro estate that was asking 1.2M.   They passed because as they stated, "you could smell desperation in the air - shops in the nearby town were shuttered - there was no activity on the street"... Can someone explain how France is growing?  The MSM is getting very desperate trying to create "green shoots"... Do you think we are stupid enough to believe this BS?....am so disillusioned with this its incredible. It's just a cycle which lasts 10-15 years. Growth-Depression, Growth-Depression. Couple this with increasing house prices which are doomed to crash again we have the same thing happening. Europe obviously hasn't learned and as the saying goes they will be doomed to repeat the past.

Greek unemployment rises to record 27.6%

The Greek jobless rate rose to 27.6% in May from 27% in April as austerity and recession continued to weigh on prospects.

It was the highest since the country's statistics agency started publishing the data in 2006, and more than twice the 12.1% eurozone average in June.

The number of unemployed people in the country is now 1.38m, an increase of 30,558 compared with April.

A breakdown of age groups shows unemployment among 15-24 year olds hit 64.9% in May:

15-24 - 64.9%

25-34 - 37.7%

35-44 - 24.7%

45-54 - 20.9%

55-64 - 16.2%

65-74 - 9.6%

Welcome to the USA Mr Samaras - where the FED (the cause of the Great Depression of 1929 and the rise of Fascism in Germany and Italy) resides and prospers! We really have a lot of sympathy for your poor downtrodden masses because the Fed-backed ECB and IMF have created the un-ending debt that caused them! We hope our little "media show" of sympathy will put food on everyone's plate in Greece real quick!

It is time to open central banking books for two overall reasons: either they are totally incompetent imbeciles or this depression is being orchestrated for financial gain and control of sovereign nations. Whatever the answer may be, banking officials need to be reviewed by independent government panels and then removed for crimes against humanity.

After all, these bankers have steeled themselves to loss of life and livelihood for generations – the rest of us need to steel ourselves to getting rid of them pronto before their scheme for ultimate control is finalized. For a start, fair referendums need to be allowed in all EU nations for an end to this “Euro Madness” and a return to individual currencies printed directly by government treasuries.

Silvio Berlusconi, Italy's longest-serving postwar prime minister, has railed against the country's "uncontrollable and uncontrolled" judiciary and accused them of persecuting him with a "fury that has no equal anywhere in the civilized world" hours after being handed his first definitive criminal conviction in more than two decades of legal battles. In a defiant video message broadcast on one of his own private television channels, the billionaire centre-right leader denied having committed the tax fraud of which he was convicted and for which he was sentenced to a four-year jail term by Italy's supreme court. "No false invoice exists in the history of [Berlusconi's television empire] Mediaset," he said. In the wake of the landmark verdict, which threatened to plunge the eurozone's third-largest economy back into political instability, he said: "In return for all this, in return for the commitment that I have lavished on my country in the course of almost 20 years, now almost at the end of my working life, I receive as a reward accusations and a sentence founded on absolutely nothing which deprives me of my personal freedom and my political rights."  As Italian politics reeled from the decision of the five judges at the court of cassation, Giorgio Napolitano, the 88-year-old president, and Enrico Letta, the centre-left prime minister in charge of a fragile coalition with Berlusconi's Freedom People (PdL) party, pleaded for calm to prevail. After more than seven hours of closed-door deliberations, the judges dismissed Berlusconi's final appeal against his convictions for the fraudulent purchase of broadcasting rights by Mediaset, ordering him to serve a jail sentence that had already been cut to one year according to a 2006 amnesty. Owing to Berlusconi's age – he will be 77 in September – it will not be served in prison but through house arrest or community service. The only element of the verdict which prevented it from being an unmitigated disaster for the three-times prime minister was the judges' decision to order another court to determine the length of his ban from public office. Prosecutors this week had argued that the ban, which their lower court equivalents had fixed at five years, should be cut to three.  Had the ban been upheld, it would have stymied Berlusconi's immediate political ambitions. As it is, he will be able to continue as a senator in Italy's upper house of parliament and leader of his party – although he made clear in his video message on Thursday night that that party would not be the PdL but a revamped Forza Italia, the party named after a football chant with which he entered politics in 1994. Even as Letta appealed in a statement for "a climate of serenity", the huge pressure that the conviction will place on his government was starting to show. Government under secretary Michaela Biancofiore, a member of the PdL, was reported to have said she would be resigning in protest at the verdict. Luca d'Alessandro, a PdL MP and secretary of the lower house of parliament's justice commission, said: "This country was famous for being the cradle of the law. Today it has become its tomb run by a corporation of grave diggers in gowns who have carried out the perfect crime. Honour and solidarity with Silvio Berlusconi, who is certainly more innocent and clean than those who unjustly convicted him." But the verdict was thought likely to prompt equally strong reactions within Letta's centre-left Democratic Party (PD), many of whose members were already squeamish about joining forces with their political bête noire and may draw the line at continuing in a coalition with a convicted criminal. Immediately after the verdict, Nichi Vendola, head of the opposition Left Ecology Freedom party, said it was "not possible" for the coalition to continue. "Faced with this conviction I think it is necessary to bear the consequences: it is not possible to imagine that the PD can remain an ally of Silvio Berlusconi's party. It is not possible to imagine that Silvio Berlusconi can remain at the centre of the political scene. I think that big changes are necessary to give a moral response to the country." Beppe Grillo, the figurehead of the anti-establishment Five Star Movement, declared on his blog: "The verdict is like the fall of the Berlin wall in 1989." Berlusconi's lawyers were led by Franco Coppi, a lawyer specialised in cassation appeals who successfully defended former prime minister Giulio Andreotti against charges of mafia ties. After the verdict they issued a statement saying they were evaluating all their options "even at the European level so that this unjust sentence is radically changed". Until Thursday night not a single one of Berlusconi's many court cases had ended in his definitive conviction. Several lower grade convictions were either thrown out, overturned on appeal or timed out owing to their statute of limitations. On Wednesday, his defence lawyers had argued that he should be acquitted because his political commitments meant he was not actively involved in the company. They also argued that the crime of which he was accused was not technically a penal offence. But prosecutors, supporting the verdicts of two lower courts which convicted Berlusconi in October last year and again in May, said Berlusconi's control over Mediaset was "ongoing" at the time, and he was "the mind" behind the system of tax fraud. Berlusconi was not present at the court but spent the day at his Rome residence, Palazzo Grazioli, reportedly with two of his children, his closest advisers, lawyers and girlfriend Francesca Pascale. It is not only with the court decision on his public office ban that his legal battles will continue. In June he was given a lower-grade conviction and sentenced to seven years in jail and a lifetime ban on public office for paying for sex with an underage prostitute and abusing his office to cover it up. He is appealing against the verdict – and, even if that appeal fails, he will be allowed a second.He is also appealing against a conviction for publishing the transcript of a leaked wiretap in his family newspaper, Il Giornale, for which he was ordered to serve a one-year jail sentence. In October, meanwhile, a court is due to rule on whether he should be tried for allegedly bribing a senator to switch political sides. He denies the allegations.

Silvio Berlusconi hausse le ton. L'ancien président du Conseil, qui ne se résout pas à son nouveau statut de repris de justice, exige la grâce présidentielle et menace de faire tomber le gouvernement si cette dernière lui était refusée. Ses émissaires ont proposé au président Giorgio Napolitano un plan pour sortir de l'impasse. Le Cavaliere se démet immédiatement de ses fonctions au Sénat, évitant ainsi au pays l'écueil d'un vote de la chambre haute sur la déchéance de son mandat. En effet, ce vote, prévu au mois de septembre, mettrait sérieusement en danger la cohésion de la majorité Parti démocrate (PD) et Peuple de la liberté (PDL) qui soutient le gouvernement d'Enrico Letta.    En échange du sacrifice de Silvio Berlusconi sur l'autel de la stabilité gouvernementale, Giorgio Napolitano s'engage à lui accorder au cours de l'automne la grâce, qui entre dans les prérogatives du président de la République. Berlusconi ne serait plus éligible, mais libre. Il ne pourrait pas être candidat de la droite à la présidence du Conseil, mais continuerait à dicter la ligne politique à son parti.
Un scénario improbable pour plusieurs raisons. La Constitution précise que la grâce ne peut être accordée qu'à des sujets "repentis" des délits qu'ils ont commis. Depuis sa condamnation, Berlusconi ne cesse de clamer qu'il est victime d'une magistrature politisée et n'a manifesté aucun repentir. En outre, la grâce est exclue pour les sujets impliqués dans d'autres procès que celui pour lequel ils ont été condamnés de façon définitive.   Or, le Cavaliere a encore une longue ardoise à solder avec la justice de son pays : prostitution de mineur (condamnation à sept ans en première instance), non-respect du secret de l'instruction (condamnation à un an en première instance) et une instruction en cours pour la corruption d'un parlementaire destinée à faire tomber le gouvernement Prodi. Enfin, si Giorgio Napolitano accordait rapidement la grâce au mépris de la Constitution, il délégitimerait la sentence de la Cour de cassation, instance suprême de la justice italienne, et se poserait comme une sorte de quatrième niveau de justice.  Qu'importe, Silvio Berlusconi veut passer en force. Les présidents des groupes parlementaires du Peuple de la liberté au Sénat et à la Chambre ont demandé audience dimanche au président de la République pour présenter officiellement la requête. Le PDL a appelé ses militants à manifester également dimanche - en plein mois d'août ! - à Rome. Les télévisions de l'empire audiovisuel du Cavaliere décrivent un pays plongeant dans l'abîme. Et Sandro Bondi, ancien coordinateur de Forza Italia, avertit : "Si le leader du plus grand parti italien ne retrouve pas l'intégralité de tous ses droits politiques, le pays risque la guerre civile." La grâce... ou le chaos.

...the German model is really a "beggar thy neighbor"

Schröder's economic "reforms" entailed gutting social security and unemployment benefits and eliminating the minimum wage in order to force young/unemployed Germans to go to work for one euro an hour (literally). Has this worked? Only sort of. True, the dramatic reduction of labor costs has been one of the keys to Germany's phenomenal export-oriented growth over the last decade. Combined with the artificial deprecation brought about by the adoption of the Euro, it's helped Germany maintain an extremely favorable balance of trade vis à vis other members of the Eurozone. What this means is that Germany's "success" has been built by selling more to their neighbors than their neighbors sell to them. (Internal demand on the other hand has flat lined; the German "model" is entirely predicated on exports.) Here's the thing though: it's impossible for all Eurozone members to maintain a trade surplus towards each-other; for one country to maintain such a surplus, another must have a deficit. Calls for the Mediterranean states to emulate the German model are thus deeply paradoxical; were the PIGS to run such a surplus, who would eat the deficit?

In other words, the German model is really a "beggar thy neighbor" policy, one which literally requires the impoverishment of the Mediterranean states. For ten years this kind of worked: Germany sold more to Spain et al than it purchased, then recycled those profits back to the periphery in the form of lines of credit, allowing those countries to purchase even more goods yielding greater profits, etc, etc. (Rinse and repeat.) Eventually the imbalance grew too deep for anyone to ignore and hey presto we had the start of the Eurozone crisis.

So, with shades of Plato's pharmakon, what the author is here calling for is to treat Europe with more of the poison that caused it's illness in the first place. What he identifies as Germany's "successful example" is actually the source of the crisis, not its resolution. A real solution would require the Germans to adopt a new policy based on internal demand, increasing domestic purchasing power by (for example) establishing a minimum wage and strengthening the working classes... Yes, the German mercantilist strategy cannot be maintained indefinitely and they do need to switch from an export driven economic strategy to one more balanced by domestic demand. And yes, the internal disparities and inconsistencies within the Eurozone make escape much more difficult (if not impossible) for the Southern periphery, including possibly France also.

But there are two further problems which are really at the genesis of the Eurozone's economic difficulties - one of which is shared with the UK. First, most of Europe (including the UK) has been running consistent deficits (trade and budget), and while one can argue about when and how and how fast these deficits are reversed, ultimately they will need to be for sustainability. It was not the economic disparities of the Eurozone per se which created their current difficulties, but the lack of flexibility to respond to the credit crisis. The other major problem is the sclerotic nature of a lot of Eurozone economies (eg France, Spain), with myriad obstacles and costs put in the way of enterprise and real job creation, and the disincentives to employment and inward investment.

 

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.

Initially the €Z and EU were the major players when Greek problems started in 2010.  DSK offered quite meaningful assistance in terms of liquidity from what he now called BRICS whom he had previously helped progress in the global economy. DSK had also indicated that a larger BRIC role in IMF should be put in place such that European directorship should not be automatic within 10 years. DSK even promised to renegotiate the World Bank = USA; IMF = Europe convention as best he could and to ensure that there would be at least 1 BRIC deputy director ASAP and the First Deputy director would be a BRICie within 5 years along with non-Europeanization of senior posts like Chief Economist and Head of Research and Statistics as quickly as possible. DSK made quick progress as China’s ZhiMin was appointed one of the 3 deputy directors and the stage set for the appointment of a second from Japan, I think, but forget – something like Saratonago. Needless to say BRIC investment was really useful as although all the money is promissory notes to the IMF, BRIC money is the result of growing economies not governmental borrowing at more and more punitive rates. DSK was a private and I believe seriously mentally ill, disaster but probably the best IMF director in 2 decades.  So DSK had ensured IMF power through new BRIC money and in return increased BRIC power and influence.  Then lots of things happened together. Sokrazy realized his UMP candidacy for 2012 presidency was endangered by his FinMin – Laggard. The size of the French exposure to Greece, around 80bn was seen. Clever semantics on the reporting request and use of French banks outside France allowed a much less €40-50bn to be reported, but it was clear that Greek default could not be allowed or France would fail. DSK had to go. May 2011. An opportunity to get rid of an election threat and relieve pressure on EU institutions and on the basis of exhibited Greek ‘attitude’ shown already, ‘une carte blanche’ to drive a country to an economic wasteland and political slavery exactly what the € was devised for, whilst defending France and perhaps persuading Germany to pay for the economically protectionist, anti-democratic, utterly globally non-competitive paradigm again.  Sarkozy sowed the seed and got what he wanted even to the point of getting agreement that an €Z director was the logical European choice. Next: Laggard insults and threatens RSA’s brilliant Trevor Manuel out of directorship contest, then gets Mexico’s Carsten disbarred through NAFTA links and David Lipton the first deputy because he’s American. Laggard installed June 2011. Olivier Blanchard becomes chief economist as well as his existing job of Head of Research and Statistics which gives him both dataflow and data interpretation control throughout the IMF – no need for anybody else. Laggard now able to impose her troika dominance over a blackened EU duo. She picks AH Thomsen, already versed in Ireland, to lead in Greece. She promises to furnish lots of BRIC money – much more than the ECB and EU and thus gets voting control of the Greek troika. She fails to get most of the BRIC money for Greece and has managed to divide a global rescue actor called the IMF into BRICS and mates like OZ versus the rest with a USA in the inert middle. She must go.  In summary all three troikista have failed the Greeks and others. The ECB and EU started it: the Laggard IMF has finished it in truly feudal robber baron fashion.

Oskar Lafontaine, the German finance minister who launched the euro, has called for a break-up of the single currency to let southern Europe recover, warning that the current course is "leading to disaster".  "The economic situation is worsening from month to month, and unemployment has reached a level that puts democratic structures ever more in doubt," he said.  "The Germans have not yet realized that southern Europe, including France, will be forced by their current misery to fight back against German hegemony sooner or later," he said, blaming much of the crisis on Germany's wage squeeze to gain export share.  Mr. Lafontaine said on the parliamentary website of Germany's Left Party that Chancellor Angela Merkel will "awake from her self-righteous slumber" once the countries in trouble unite to force a change in crisis policy at Germany's expense. His prediction appeared confirmed as French finance minister Pierre Moscovici yesterday proclaimed the end of austerity and a triumph of French policy, risking further damage to the tattered relations between Paris and Berlin.  "Austerity is finished. This is a decisive turn in the history of the EU project since the euro," he told French TV. "We're seeing the end of austerity dogma. It's a victory of the French point of view." ... Lafontaine is widely regarded as a joke and a failed politician in Germany, so its only fitting when AEP is basing his arguments on him .... The immediate problem with the Euro is essentially in not having a single borrowing authority issuing Euro bonds - as I argued. This does not require a single European government,  just better financial coordination.  The big problem with "Europe" is the need for a unanimous vote on big issues - and that's hard to overcome in the fractious atmosphere caused by the counter-productive austerity a outrange mind- set currently in fashion. But there are signs that this suicidal approach to finance and economics is coming to an end in Europe at least.  But where is the European leader (or couple of leaders) we need to push (for reducing waste of course) for investing in the future and making sure any "easing" goes to lending to those, government and private, entities that are investing and providing knowledge and jobs for the future? Investing in education, job training, research and development will bring in private investment.  But when people spoke of a president for Europe Tony Blair's name was bandied about! We in Europe need politicians who aren't smeared with the past or chained by ideology, but look out with clear eyes on what went wrong and how to put it right. The next generation must be given a chance towards meeting the immense challenges faced not just by Europe but by all humanity. 

Earlier this year, the Pentagon publicly accused China for the first time of being behind attacks on the US. The Washington Post reported last month that Chinese hackers had gained access to the Pentagon's most advanced military programs. The director of national intelligence, James Clapper, identified cyber threats in general as the top national security threat. Obama officials have repeatedly cited the threat of cyber-attacks to advocate new legislation that would vest the US government with greater powers to monitor and control the internet as a means of guarding against such threats. One such bill currently pending in Congress, the Cyber Intelligence Sharing and Protection Act (Cispa), has prompted serious concerns from privacy groups, who say that it would further erode online privacy while doing little to enhance cyber security. In a statement, Caitlin Hayden, national security council spokeswoman, said: "We have not seen the document the Guardian has obtained, as they did not share it with us. However, as we have already publicly acknowledged, last year the president signed a classified presidential directive relating to cyber operations, updating a similar directive dating back to 2004. This step is part of the administration's focus on cybersecurity as a top priority. The cyber threat has evolved, and we have new experiences to take into account. "This directive establishes principles and processes for the use of cyber operations so that cyber tools are integrated with the full array of national security tools we have at our disposal. It provides a whole-of-government approach consistent with the values that we promote domestically and internationally as we have previously articulated in the International Strategy for Cyberspace. "This directive will establish principles and processes that can enable more effective planning, development, and use of our capabilities. It enables us to be flexible, while also exercising restraint in dealing with the threats we face. It continues to be our policy that we shall undertake the least action necessary to mitigate threats and that we will prioritize network defense and law enforcement as the preferred courses of action. The procedures outlined in this directive are consistent with the US Constitution, including the president's role as commander in chief, and other applicable law and policies."

Christian Noyer, governor of the Bank of France, said the FTT posed a very real “risk” to the economy if not implemented correctly. France was one of a splinter group of 11 European Union countries to decide to press forward independently with a so-called Tobin tax earlier this year. The UK has opposed the move, which Sir Mervyn King, Bank of England Governor, said earlier this month does not even have the unqualified backing of the 11 members adopting the levy. He claimed there was “enormous scepticism” even among politicians in countries signed up to it, adding that he could “not find anyone within the central banking community who thinks it is a good idea”. Mr Noyer’s comments appeared to confirm Sir Mervyn’s analysis. Mr Noyer, who is also on the European Central Bank board, said: “It will be essential to define the base, interest rates and scope of a possible financial transaction tax in order to prevent the risk of destroying entire segments of our financial industry or the offshoring of jobs, as well as the highly counterproductive effects on government borrowing and the financing of the economy.”

Under the current plan, a 0.1pc levy would be charged on equity and debt transactions and a 0.01pc tax on derivatives. Germany, France, Italy and Spain are among those that have agreed to the plan, which the European Commission expects will raise €35bn (£30bn) a year and hopes will be in force by 2014.

To prevent business moving abroad, the FTT carries an “extra-territoriality” clause that would see the levy imposed on any euro-denominated transaction, even in countries that are not signed up to the FTT. The UK is challenging the decision in the European courts, and the US and other countries have vowed to block it – which would almost certainly make the FTT unworkable.... Well...

Monsieur Noyer .... most of us (being of sound mind if not body) have been saying this since the idea was first mooted. The concept of a financial tax applying only to Europe is hilarious. The progenitors must have shares in Singapore, NY and Shanghai.

It is of course barmy. All the French political elite knows how to do is impose more taxes. I am astonished theyhaven't yet got their grubby hands on e-mails! Imagine that - a 1p tax on all e-mails .... that would allow them for a while to continue with their insane spending before running out of money agfain and looking for another Milch Kuh..... Even the French socialists couldn't tax sex, could they?But better late than never, Mr Noyer, and GOOD LUCK with passing on your message to your President .... however, given A) his reception to new ideas and B) his general understanding of what is going on, I am not that optimistic.  No, I'll rephrase that; you are belching into the face of a hurricane ....

TARGET2 - Legal base - A Decision of the ECB of 24 July 2007 concerning the terms and conditions of TARGET2-ECB (ECB/2007/7)

The Governing Council of the ECB decided to legally construct  a multiple system with the highest degree of harmonization of the legal documentation used by the central banks within the constraints of their respective national legal framework, named TARGET2.  All ECB legal acts related to TARGET2 can be found on a dedicated website. TARGET2 is the real-time gross settlement (RTGS) system owned and operated by the Euro system. TARGET stands for Trans-European Automated Real-time Gross settlement Express Transfer system. TARGET2 is the second generation of TARGET. Payment transactions are settled one by one on a continuous basis in central bank money with immediate finality. There is no upper or lower limit on the value of payments. TARGET2 mainly settles operations of monetary policy and money market operations. TARGET2 has to be used for all payments involving the Euro system, as well as for the settlement of operations of all large-value net settlement systems and securities settlement systems handling the euro.  TARGET2 is operated on a single technical platform. The business relationships are established between the TARGET2 users and their National Central Bank. In terms of the value processed, TARGET2 is one of the largest payment systems in the world.

• TARGET2 had 999 direct participants, 3,386 indirect participants and 13,313 correspondents;
• TARGET2 settled the cash positions of 82 ancillary systems;
• TARGET2 processed a daily average of 354,185 payments, representing a daily average value of €2,477 billion;
• the average value of a TARGET2 transaction was €7,1 million;
• two-thirds of all TARGET2 payments (i.e. 68%) had a value of less than €50,000 each; 11% of all payments had value of over 1 EUR million each;
• the peak in volume turnover was 29 June 2012 with 536,524 transactions and peak value turnover was on 1 March 2012 with €3,718 billion;
• TARGET2’s share in total large-value payment system traffic in euro was 92% in value terms and 58% in volume terms;
• the SSP technical availability was 100%;
• 99.98% of TARGET2 payments were processed in less than five minutes.

Just a thought :

Europe just went through a debt crisis that was entirely avoidable. Iceland showed us the way in 2008, no sovereign debt crisis there.

Unemployment below 5%, 7 consecutive quarters of growth averaging 2.5% per annum as of January this year. More GDP growth than other Nordic countries.

No wonder the rest of Europe is disillusioned. People are fed up with paying through the nose for debts that don't belong to them.

The burden of banking debts is tearing apart social cohesion.

Commission published a web-based information guide....

Small and medium sized enterprises (SMEs) will drive the recovery in Europe, but they need improved and easy access to finance. Over the last few years the European Commission has been constantly working to improve their situation.  This commitment is reiterated in a joint European Commission/European Investment Bank (EIB) Group report published today. At a time when the situation remains difficult, the EIB Group's support for SMEs reached €13 billion in 2012. In addition, with a budget of €1.1 billion, Commission-funded guarantees helped to mobilize loans worth more than €13 billion, boosting nearly 220 000 small businesses across Europe. Today´s report covers the results of the current funding schemes as well as the new generation of financial instruments for SMEs. Financial resources for SMEs will be significantly enhanced through the €10 billion increase in the EIB’s capital.  As part of the Commission’s continuing efforts to support SMEs, European Commission Vice President Antonio Tajani, responsible for enterprise and industry policy, today also launched a new single online portal on all EU financial instruments for SMEs as well an information guide to promote SME stock listings, at a meeting of the SME Finance Forum on the eve of an Informal Competitiveness Council on 2 and 3 May in Dublin.  European Commission Vice President Antonio Tajani, Commissioner for Industry and Entrepreneurship, said: "

Access to finance of SMEs remains difficult and is one of the main reasons for the current economic downturn. Therefore we intend to enlarge our loan guarantees to SMEs under the new COSME  programme as of 2014. Each euro dedicated to our guarantees has the power to stimulate - on average – 30 euros in bank loans. This is crucial to help Europe's jobs engine, our small enterprises, to run smoothly again. It is they who create 85% of all new jobs."

The European Commission also launched today a targeted information campaign to promote SME listings and stimulate investors’ interest in SMEs and mid-caps. To this end the Commission published a web-based information guide for SME stock listings. This tool provides advice to small and medium-sized businesses on how to go public.

It will be combined with the creation of an award for the best European stock market listings among small and mid-cap companies.

EU Parliament adopts "most comprehensive and most far-reaching banking regulation in European history" with overwhelming majority

"Today's decision makes European banks more resilient, so that no more taxpayers' money has to be used to prop them up", explained Othmar Karas MEP, Vice-President of the European Parliament. The new set of rules for banks, which was adopted with an overwhelming majority, comprises more than a thousand pages and is the basis for the planned banking union. "The new single rule book for all 8200 banks in the EU is the foundation on which the house of the Banking Union is to be built. The single supervisory mechanism will be the roof. As walls to the house, we must now feed in the Resolution framework for banks and the deposit guarantee schemes. The new set of rules is the most comprehensive and most far-reaching banking regulation in the history of the EU", he said. Karas was Parliament's negotiator for the law known as the CRD (Capital Requirements Directive) or Basel III....Part of the new rules is that for the first time, there will be a cap on bankers' bonuses. Bonuses may not be higher than the salary. Only in exceptional cases, the shareholders of a bank may decide that bonuses may amount to a maximum of twice as much as the fixed salary. "The rules concerning bankers' bonuses do not regulate the amounts of the salaries. As legislators, we do not regulate salary levels. But we install fairness and transparency and we contribute to a change in culture", said Karas. The most important part of the new rules is tightened capital requirements for banks. From 1 January 2014 onwards, European banks have to put aside more and better capital to be prepared for possible crises. Unprecedented is the new rule that banks have to publish, country by country, what their profit is, how much tax they pay and how much they receive in subsidies. This increases transparency.

"The new capital requirements are key to an efficient banking supervision and therefore a crucial condition for the banking union", said Marianne Thyssen, EPP Group MEP responsible for the negotiations on the new single European banking supervision. "Today's large majority for the new banking regulation is a major success for Othmar Karas and an important step on the road to a safer banking sector. Both the new capital requirements and the reinforced European banking supervision will help to avoid crises. Prevention is better than cure", said Thyssen.  For the first time, criteria for the liquidity of bank capital are being introduced. Banks have to be able to fulfill their liabilities in stress situations for a period of at least 30 days. Particularly important to Othmar Karas has been making loans to Small and Medium-Sized Enterprises (SMEs) easier: "Banks must focus on their core business, which is financing the real economy." The new law reduces the capital requirements for loans to SMEs and business start-ups. Granting loans become easier this way. In addition, continental European banks are being strengthened in their competition with Anglo-American competitors by recognizing the characteristics of European banks as decentralized structures and loss-sharing agreements. "Our aim is to make European banks as firm as a rock on the global financial markets", concluded Karas.

As the Süddeutsche itself reports, news that Deutsche Bank conducts offshore operations isn't new. As the paper notes, such activities aren't as prolific at Deutsche as at Switzerland's UBS, where the records traced at least 2,900 offshore entities. Back in 2009, it was already public knowledge that Deutsche Bank had some 500 subsidiaries in places known to be tax havens.

Still, the paper claims, the government has done little to stop a German firm from engaging in the kind of financial behavior Berlin has been aggressively combatting in countries like Luxembourg, Switzerland and Cyprus. The paper quotes the financial policy point man in parliament for the Green Party, Gerhard Schick, criticizing both the government and the business model of firms like Deutsche Bank. He alleges the banks may be contributing to the shielding of money laundering activities, tax evasion and money linked to corruption. He also alleges that Chancellor Angela Merkel's conservative government "at the very least tolerates these illegal structures and is possibly protecting them." In an interview with SPIEGEL ONLINE published on Friday, the head of Germany's Federal Financial Supervisory Authority (BaFin), Elke König, said her authority, although not responsible for taxes, would investigate if banks appeared to be systematically violating or helping people to violate tax law. "Banks have a special responsibility," she said.

For Deutsche Bank, Germany's largest bank, the revelations are creating a second wave of unwelcome scrutiny this week. On Wednesday, the Financial Times reported that Germany's central bank, the Bundesbank, has launched an investigation into claims the bank hid billions of dollars of losses on credit derivatives during the financial crisis. Bundesbank investigators plan to fly to New York next week as part of the inquiry into claims that the bank miss valued credit derivatives in order to hide losses as high as $12 billion and avoid a government bailout.

It was always going to be an unusual but memorable moment as Italy's parliament reconvened after the recent inconclusive elections, with members of the maverick party founded by comedian Beppo Grillo taking their places for the first time.

And so it is proving. Southern Europe editor John Hooper writes:Not since the dawn of the Italian Republic after the Second World War, when ex-Communist partisans arrived in force, has there been an opening of parliament anything like today’s.The representatives of the Five Star Movement (M5S) unexpectedly respected the rule that male Italian lawmakers must wear ties (though, in line with the M5S’s enivronmentalist principles, many chose a black one bearing the words “No Coal”). But from the moment that the movement’s deputies entered the Chamber, it was clear they were going to be awkward to deal with.Instead of taking up a position on the left or right of the semi-circle in which the members of the lower house sit, the M5S’s deputies (who prefer to be called “citizens”) ranged themselves around the back.“Neither right nor left, but above (and beyond),” chirped one of their number, Tiziana Ciprini, on her Facebook page.The whole episode reflected the view that the movement’s co-founder, the comedian, Beppe Grillo, put to me in an interview last month: that the M5S cannot be fitted into conventional political categories.It is one of things that worries many Italians about the M5S. Most of the so-called grillini are passionately committed to progressive causes (they eschew the mineral water that is everywhere available in parliament in favour of tap water, for example).  But denying the existence of left and right is a classic sign of populism. And Mussolini did it all the time.

New revelations about the extent of the tensions between the EU and the IMF.  Speaking on Greek news channels, the economist Iannis Varoufakis said that officials at the IMF told him that in order to justify their participation in the bailout programme they used the wrong fiscal multiplier on purpose when calculating the terms of the Greek MoU. He suggested that powerful countries contributing to the fund have been putting pressure on the IMF to admit the mistake because it is now so blatantly obvious that the affects of the crippling austerity measures in Greece are in no-one’s interest.

 The EU on the other hand are determined not to rock the boat before the German elections by admitting to a faulty policy that will inevitably lead to a huge debt write down (this time it will actually affect the ECB and large bond holders). Hence Oli Rehn’s statement yesterday that they don’t care what ‘mistakes’ have been made – the Greeks have to abide by the terms of the MoU.

 Question: where does this leave the Greek people? How long can they carry on making such huge sacrifices to honour their commitments to a faulty fiscal programme which is ruining the lives of millions and driving the Greek economy into a depression of surreal proportions?

So what are we expecting from this summit? The leaders divide into two camps - the fiscally conservative northern countries and those in the south and east that stand to benefit from more money for infrastructure and agriculture. It is believed that in the build up to the summit some consensus was reached around a budget of €950m - which would be a reduction on the last seven-year spending cycle. This will please the northern bloc. But it is also believed that in a concession to the south, the bulk of the spending, around 40%, would still go on agriculture and related farm subsidies. Indeed, two of the biggest recipients of farm spending - France and Italy - have hinted they could block the budget unless their appropriations are maintained. It is far from clear that the leaders will reach an agreement this time round, though if talks collapse its possible no resolution will be reached until late 2014.,,,Angela Merkel seems pessimistic on the prospect of resolution at this summit. I can't say whether we will be successful, the positions are still far apart. For Germany I can say that we will do everything for such an agreement to materialize because it is very important in a time of economic uncertainty and high unemployment to have a plan. We have to be careful with the way we spend but also show solidarity between net contributors and recipients. Whether we will have a joint vote or whether we will get into a situation where we will have annual tranches in the future I can't say today. It would be desirable to have a joint result but we have to wait and work hard, and that's what I will do....Well now... Why do central bankers and Treasurers from around the world invariably insult our collective intelligence with bland assurances that the euro/US dollar/sterling is in good shape/has weathered the storm/will gradually recover when it is so blindingly obvious that these statements are untrue? Not only are these statements patently false but the people who make them are almost invariably implicated in the processes that created or exacerbated these problems in the first place. If they do it to try to convince the bond and currency markets, then they are doubly stupid because markets are operated by real people putting real money on the line that generally have a low tolerance for bullshit.... Dragi thinks we are the fools that his tin pot immoral and primitive theory of the justification of unaccountable rule by selfish self enrichers defines us as. We are ignorant little people to whom he can feed any lie he likes. He thinks we shall swallow it as if thinking Tizer were little more than a tasty form of the latest exotic continental Lager. He and his kind shall soon be spat out with the same force as a proper beer drinker would Tizer if anyone were so foolish to attempt such a wildly insulting trick. With apologies to Tizer for coming anywhere close to such unpleasant people, if only, by way of metaphor.

Just in – new survey data suggests that the eurozone's bruised economy has turned a corner.

Marki's Eurozone Composite PMI, which measures business activity across thousands of companies, hit a 10-month high of 48.6 In January, up from 47.2 in December

Markit reported that businesses were more optimistic about the future. However there are sharp differences between countries.

Reuters has the early details:

While still signalling a contraction as the index has been below the 50 mark that signifies growth since February last year, it has risen consistently in the last three readings.

Private industry makes up nearly two-thirds of the euro zone's economy and worryingly for policymakers, the data showed a widening chasm between Germany - Europe's largest economy - and France, the bloc's second biggest.

Chris Williamson, chief economist at Markit, said the eurozone is showing "clear signs of healing", having entered recession last year,

However, there were stark differences between Germany and France: Markit's composite German PMI chalked up its biggest one-month rise since August 2009, soaring to its highest since June 2011. But in neighbouring France it plummeted to its lowest in nearly four years.

At 43.6, France's services PMI was even below readings from Spain and Italy.

Gross domestic product (GDP) in the world's second-largest economy expanded 7.8pc last year in the face of weakness at home and in key overseas markets, the National Bureau of Statistics (NBS) announced on Friday.  But it grew 7.9pc in the final three months of 2012 as industrial production and retail sales growth strengthened at the end of the year, snapping seven straight quarters of slowing growth in a positive sign for the spluttering world economy.

The official statistics come as optimism grows among analysts that China will pick up steam in 2013 after two years of relative weakness, although they - and the government - caution that the improvement will not be dramatic. "The international economic environment remains complicated this year and... there are still unbalanced conflicts in the Chinese economy," NBS spokesman Ma Jiantang told reporters.  Still, Ma added: "We expect China's economy to continue to grow in a stable manner in 2013."  The problem is that the economic and social arrangements that have emerged in China on the back of a decade or so of double-digit growth don't work, ie are unsustainable when the growth rate subsides. This is what worries the hell out of the Chinese leadership. The risk is that Chinese society becomes unstable. It's really no different to us over here having got used to trend economic growth of, say, 2.0% - 3.0% pa trying to sustain our own massively indebted complex societies on annual growth rates of 1.0% - 1.5%. In essence, we're going bust....The fundamental issue in all of this is that politicians won't tell their societies that they/we are indeed going bust. By the same token, many/most folk don't fully appreciate that a society that has emerged on the back of 60 years of a trend of, say, 2.5% pa growth (as is the case in the UK) cannot survive in recognisable form for more than about 5 years, 10 years at the very most, without that society fracturing. China certainly has its problems; we certainly have ours. Our mutual predicament is that "infinite" economic growth predicated on "infinite" supplies of cheap energy, primarily cheap oil, is by definition unsustainable. .....We have entered interesting times.

French unions and businesses on Friday agreed on broad changes to labor laws, a key plank of President François Hollande's efforts to arrest rising unemployment and restore France's competitive edge. But after months of wrangling, only three of the five labor unions around the table gave their backing to the accord, depriving Mr. Hollande of the unanimous support that would give him a strong political boost.

New ways for employers to cut pay and working hours in tough times

• Simplification of legal procedures for layoffs
• Health insurance benefits extended to more workers
• Higher levies in fixed-term contracts to encourage permanent hires
• Incentives to hire young workers on permanent contracts.

"This is the first time in over 30 years that a negotiation at this level and with such depth has reached agreement," Mr. Hollande said. "This is a success for social dialogue." The government will now present the text to Parliament, where Mr. Hollande has a majority. French President François Hollande, right, speaks to Prime Minister Jean-Marc Ayrault after a meeting with French government ministers, focused on France's economic situation and employment, earlier this month. Negotiators still have to return to their unions to finally sign off on the agreement. Joseph Thouvenel, a representative for the Christian CFTC union, and moderate CFDT union negotiator Patrick Pierron said they will give a favorable opinion, and the CFE-CGC union negotiator Marie-Françoise Leflon said she had helped achieve a more balanced agreement. "The objective of creating conditions to fight insecurity and boost employment has been achieved," Mr. Pierron said. "We have met the challenge of getting extremely positive things for business and new points for employees," said Patrick Bernasconi, the negotiator for employers' group Medef. As expected, two more radical unions the CGT and the FO, said they won't sign the pact. Under terms of the agreement, business associations secured a victory that will allow companies to cut working hours and wages when times are tough, as German businesses have done during the global economic crisis to ensure their survival. Employees will have their jobs guaranteed during those periods of flexible wages and hours.