BRUSSELS - In recent weeks, the European Bank for Reconstruction and Development (EBRD) has been in the news as rarely before, with a few important questions being raised about its accountability.  For the first time in its 20-year history of promoting democracy and market economies in central and eastern Europe, the bank has decided to apply some democratic principles to the selection of its own president: five candidates are vying for the job, which until now has been filled after behind-closed-doors negotiations between its largest EU shareholders.  In the meantime, EUobserver has brought to light allegations that EBRD money has ended up in the pockets of people associated closely with the authoritarian regime of President Alexander Lukashenko in Belarus, raising some doubts over the verification mechanisms in place at the bank to ensure the public money it disburses actually benefits ordinary people in its theatre of operations.

Opening up the presidential selection process and dealing with allegations of having benefited the allies of a dictator has hopefully brought on some soul searching at the bank.

It would be a good time for the institution to take a look at itself - last year it turned 20 and this year it will expand its mandate from former Communist-controlled Europe to also promoting reform in post-Arab-Spring north African and Middle East countries.  An honest self-assessment is necessary because the bank's record in post-Communist countries is at best mixed and its new turf marks an increase in political responsibility.

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

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

The Greek prime minister Lucas Papademos has conceded that the crisis-plagued country could require a third bailout only weeks after it secured a second package of rescue funds following months of hand-wringing in Brussels. Athens may have received the biggest bailout in history but another lifeline could not be ruled out, the technocratic leader said in an interview. So far, the EU and International Monetary Fund have committed a total €240bn (£200bn) to the near-bankrupt nation.  "Some form of financial assistance might be necessary but we have to work intensely to avoid such an event," Papademos told the Italian business daily Il Sole 24 Ore.  Addressing the Greek parliament on Friday he warned of further spending cuts, saying whatever government emerged after forthcoming general elections it was vital that it prepared for the measures.  "In 2013-2014, a reduction in state spending of about €12bn is required under the new economic programme," Papademos told MPs in what is expected to be one of his last appearances before the 300-seat house.

"Every effort must be made to limit wasteful spending and not to further burden salaries of civil servants."Well-placed sources said the prospect of further aid would be "a given" if Greece was unable to service its debt by borrowing on international markets. Papademos, a former vice president of the European Central Bank, said even if Athens enforced all the reforms being demanded by its "troika" of creditors at the EU, ECB and IMF, it remained far from certain that it would be able to access capital markets by 2015, when the country's latest financial support program ends.

Kicking a "huge can" into a blind alley

Anyone who doesn't understand that electronically creating $1 trillion (the total of both tranches of EU LTRO=long term refinancing operation ) isn't kicking a huge can into a blind alley, really needs their head looking at.keep the banks going, sure, but even more importantly, gotta keep the 'European Project' going!.....however high the price economically, financially, socially....... ....Buying time..... ...and time got very, very expensive in the last year. Gotta keep those banks operating, gotta keep bailing them out with $1 trillion of LTRO (Long-Term Refinancing Operation) and several $ trillions of QE. Gotta keep them going so they don't lend to businesses, gotta keep 'em going so they can charge extortionate rates of interest on the money they got at 1%, gotta keep them going so they can make unlawful charges on their 'customers' accounts so as to keep them on the bread line and desperate for the kindness of the strangers who run banks, gotta keep them going so they can continue to avoid paying tax, gotta keep them going so they can donate a small percentage of their profits to political parties. Gotta keep them going so they can pay you 0.5% of interest on your life savings when inflation is running at 5%......CAN'T YOU SEE THAT IF WE DON'T KEEP THOSE BANKS GOING THEN IT'LL BE THE END OF SOCIETY AS WE KNOW IT !!!......There is no amount of poverty or deprivation, social unrest or unemployment that is not worth it when you really understand what the banks do for us. We must keep the young out of work, preferably in further education but if they aren't smart enough then, well, maybe we could find SOME work for them if they aren't going to expect a wage and we must 'encourage' the elderly to keep working. A ninety year old is the only one with the 'valuable life experience' to work in our fast food outlets and DIY superstores.----We gotta keep those banks operating or the whole pyramid scheme that our society is built on will collapse..........Italian and Spanish banks have borrowed from the ECB in record quantities and appear to have made sizable investments in domestic sovereign debt because they can make a profit off the difference between the interest rate on that debt and the one percent interest charged by the ECB. This makes a lot of sense; if one of the countries were allowed to default, domestic banks would be dealing with complete economic collapse. Default on sovereign bonds would prove just a trivial piece of a much greater catastrophe. In a closed economy, increasing domestic bank exposure to sovereign debt in order to pull an economy out of a trouble spot makes sense. So long as banks are there to buy up government debt, the government can issue as much debt as it wants and always find buyers. It can even give money to fund people and businesses and that excess money will eventually find its way back through the system as it's pumped through the financial system via saving and lending. Even in an economy with a single currency, currency risk will discourage (though not completely deter) investors (people, businesses, and banks) from putting money abroad. The structure of the eurozone, however, completely eliminates this currency risk, and in fact encourages investors in one country to keep their money in another if its economic prospects are better. And despite currency risk, the prognosis for the euro area—and thus the euro—is so uncertain in the long term that many investors are willing to overlook the currency risk of holding American or Japanese assets because of the assurance that those investments will be worth something someday.

New Challenge Could Be Launched at Highest Court

GERMANY - A new panel of lawmakers set up by the German parliament to reach quick decisions on the release of rescue funds from the European Financial Stability Facility (EFSF) may be in breach of the German constitution, a study by the parliament's research unit has shown. The panel is intended to ensure that parliament has a say in the release of funds from the EFSF, following a Constitutional Court ruling last month which said the parliament must be involved in measures to bail out other euro-zone member states. The nine-member body, to be selected from the parliament's budget committee, is to approve bailout decisions with the necessary speed and confidentiality to avoid fanning financial market turmoil. New Challenge Could Be Launched at Highest Court - But the study, undertaken by legal experts and commissioned by a member of parliament from the opposition center-left Social Democrats, Swen Schulz, has cast doubt on whether the panel will preserve an adequate degree of parliamentary sovereignty on budget decisions amounting to billions of euros. "Delegating this authority to a special body shifts responsibility onto a small number of people and obstructs the involvement of all members of parliament in the parliamentary process," the study says. Schulz is now considering taking the matter to the Constitutional Court, which is Germany's highest judicial authority. "A nine-member panel can't replace the Bundestag in such an important question," he says. Last month, the court rejected lawsuits filed by eurosceptics aimed at blocking the participation of Europe's biggest economy in bailout packages for Greece and other euro-zone countries. But it said the government must seek the approval of parliament's budget committee before granting aid.

Traditionally, Europe closes for business in August unless there is a good reason policymakers should be shackled to their desks. This year there is. When the heads of the 17 eurozone governments met in Brussels on July 21, they agreed not just to bail out Greece for a second time but to put together a war chest that would enable them to take pre-emptive action in countries seen as vulnerable to attack. The message to the markets was clear: monetary union will be protected come what may, so think twice before turning on Italy and Spain. But it did not take long for the financial markets to unpick the Brussels agreement. They quickly discovered that while there was the promise of more money for the European Financial Stability Facility, it would take months for the funds to arrive, and then only if national parliaments agreed to pony up the cash. What looked on the surface a once-and-for-all solution was exposed as a naked attempt to buy time. Events in the United States over the past week mean the respite has been short. The threat that even the world's biggest economy might welsh on its debts has reignited concerns about the weaker members of the single currency. Dismal growth figures from the US have made matters worse, since the chances of countries like Spain and Italy growing their way out of trouble will be impaired if the recovery in the global economy stalls. That now looks much more probable than it did a fortnight ago.

The US faces the prospect of a "catastrophe" as President Barack Obama stands firm against Republican demands for deep spending cuts without any tax increases as the condition for raising the country's borrowing limit and avoiding a debt default. With Washington gripped by a growing sense that it may be too late to avert a crisis, the president has said he will give the increasingly rancorous negotiations until the end of next week to reach agreement on the terms for raising the US's $14.3 trillion (£8.9tn) debt ceiling. The White House has said that if there is no agreement by 22 July, then discussion about budget cuts and taxes should be abandoned in favour of legislation dealing solely with raising the debt ceiling before the borrowing limit is reached on 2 August. But the Republicans have rejected legislation without agreement on budget cuts. With European leaders also facing a potentially ruinous debt crisis, a leading Wall Street figure described the prospect of a US default as catastrophic. Jamie Dimon, chief executive of JP Morgan, one of Wall Street's biggest banks, said: "No one can tell me with certainty that a US default wouldn't cause catastrophe and wouldn't severely damage the US or global economy. And it would be irresponsible to take that chance." On Wednesday, Ben Bernanke, the chairman of the Federal Reserve, warned of a "huge financial calamity" if a political agreement is not reached. He told Congress a default would "send shockwaves through the entire financial system". Hours later, the credit ratings agency Moody's warned that it may downgrade the US's AAA credit rating, saying there is a "rising possibility" that no deal will be reached by next month's deadline. (source the guardian.uk)

Jean-Claude Trichet, president of the European Central Bank, tightened the screws on Greece, Portugal and Ireland on Thursday by pressing ahead with an increase in interest rates, and insisting the single currency's weakest members must avoid a default at all costs. Trichet also attempted to keep Portugal away from the abyss by pledging to keep accepting its bonds, despite some rating agencies regarding such securities as no better than junk. This stance pushed shares higher across Europe and helped the euro to strengthen, as fears abated that Portuguese banks would soon struggle to finance themselves. Speaking after the ECB's governing council met in Frankfurt, Trichet warned eurozone governments against pursuing any plan that the credit ratings agencies would deem a default. "Our message is no credit event, no selective default, no default. As simple as that." The ECB is nervous that a default would trigger billions of pounds-worth of complex financial instruments such as credit default swaps, and destabilise the European banking sector. Trichet's staunch defence of the ECB's stance came as he announced a quarter-point increase in interest rates, to 1.5%, to clamp down on inflation, despite some of the single currency's members – including Greece – remaining deep in recession. Trichet said he would "monitor very closely" price developments – usually regarded as code for another rate rise in the pipeline, though not at the next meeting. The ECB is tightening policy in response to above-target inflation, driven by the strong recovery in the eurozone's largest member, Germany, as well as other northern economies including France. Inflation across the eurozone hit 2.7% in June. Analysts said higher borrowing costs would make life even harder for the struggling "peripheral" economies of Greece, Portugal, Ireland, Italy and Spain, which are all imposing tough austerity measures to deal with budget deficits, at the same time as coping with sickly economic growth, or outright recession.

Eurozone finance ministers are sharply divided over how to handle the spiralling Greek debt crisis, Dutch finance minister Jan Kees de Jager revealed as he attacked France's plans for a new rescue package. Speaking in London after a meeting with the chancellor, George Osborne, de Jager said it was "illusory" to hope that Europe's banks would voluntarily bear their fair share of the costs of a new bailout for Athens, and that President Sarkozy's current proposals let Greece's private sector creditors off too lightly. Any evidence of a fresh split among European policymakers will increase anxiety in the financial markets, which were rattled on Wednesday by news that ratings agency Moody's had downgraded Portugal's debt to junk status. "We do have concerns about the French scheme," de Jager said. "I think it's illusory to think of such a scheme as voluntary, so we have to work on solutions so that banks reach a level playing field." As a non-eurozone member, Britain is on the sidelines of talks about a new bailout for Greece, but de Jager said Osborne was "very close to our position". The cost of insuring Portuguese government debt through credit default swaps hit a record high after the downgrade, while the yield on Portuguese 10-year bonds jumped by more than a percentage point to 12.07%, ratcheting up the pressure on Lisbon. European commission president José Manuel Barroso criticised Moody's announcement, saying: "In this context, and the absence of new facts on the Portuguese economy that could justify a new assessment, yesterday's decisions by one rating agency do not provide for more clarity. They rather add another speculative element to the situation."

Germany's constitutional court has begun hearing a case that will decide whether Angela Merkel's government was right to agree to last year's multimillion-euro bailout of Greece and the accompanying rescue package for other faltering EU countries. In the unlikely event that the complainants win, the payments will be blocked, an outcome experts say would shake the foundations of the European Union. "If the court were to restrict the government's leeway to act, the consequences for the EU and the financial markets could be extremely serious," said Commerzbank analyst Eckart Tuchtfeld. Plaintiffs include MP Peter Gauweiler, a renegade member of Chancellor Merkel's conservative bloc. He has a history of challenging European Union initiatives and in 2009 he brought a complaint against the integration measures dictated by the Treaty of Lisbon, with limited success. Gauweiler, along with a group of professors, argues the measures violate EU no-bailout provisions and German constitutional clauses protecting property and democracy. They have the support of the majority of ordinary Germans, who were fiercely opposed to "their money" being used to bail out less prudent countries. The case is so crucial that Merkel dispatched her finance minister, Wolfgang Schäuble, to give evidence at Tuesday's hearing in Karlsruhe. Inside the court, he defended the rescue packages for Greece and other eurozone countries, arguing that "the stability of the euro is of paramount significance". He pointed to the risk of financial instability across Europe and beyond at the time when the government signed on to the initial Greek rescue of May 2010 and also the wider eurozone fund created shortly afterward. Those plans foresee Germany, Europe's biggest economy, guaranteeing loans up to €22.4bn for Greece and €147.6bn (£20.1bn) for other countries. The constitutional court's president Andreas Vosskuhle said the court did not want to hear a debate on the measures' economic merits, and that the right economic strategy was a matter for politicians and not judges. But, he said, his court "has to consider the limits that the constitution sets for politicians." Eurosceptic law professor Karl Albrecht Schachtschneider insisted that "what is economically wrong can't be legally right". He argued that the rescue measures violated a no-bailout provision in the European Union's Lisbon treaty without sufficient justification. He also contended that they violated German constitutional clauses protecting property and democracy, the latter by restricting the German parliament's control over its own budget. "A union of liability and debt favouring other states has been created," he said. Gauweiler's representative, Prof Dietrich Murswiek, pointed to current efforts to set up a second Greek rescue package, arguing that loans would sink into a "bottomless pit". "It's like trying to repair water damage by blowing up the house," he said. Murswiek contended: "The rescue fund serves in reality to take risks away from certain big banks," which would be unconstitutional. Schäuble said the government was on solid legal ground, and argued that "we Germans benefit even more than other Europeans from the currency union".

German and French proposals to restructure up to €30bn (£28bn) of Greek government debts were thrown into disarray after ratings agency Standard & Poor's said they amounted to a "selective default". The decision placed Germany and France on a potentially disastrous collision course with the European Central Bank (ECB). The proposals would have seen investors inject billions of euros into Greece by rolling over maturing Greek debt into new 30-year bonds. They are part of a broader €110bn rescue package, the details of which have yet to be finalised. The debt-swap proposals were designed to meet Berlin's demand that investors bear some of the costs of the bailout, since the terms of the agreement meant bondholders would end up out of pocket. However, because the proposals left bondholders nursing losses, S&P yesterday ruled that they would amount to a default on the debt. This sets up Germany and France for a clash with the ECB. The proposals are contingent on Greece not defaulting on its debt, because the central bank has said it will not accept defaulted bonds as collateral for loans. But any deal that satisfies German demands that bondholders take a share of the losses is doomed to failure since, based on the S&P ruling, it would trigger a default.

Juncker said Greece needed to adopt a process similar to the Treuhand agency, used by Germany to sell off 14,000 former East German firms between 1990 and 1994 – even though Treuhand failed to deliver any profit, oversaw huge job losses and eventually closed its books with a deficit. But he did appear to acknowledge that the Greeks were hostile to foreign officials appearing to take charge: "One cannot be allowed to insult the Greeks. But one has to help them. They have said they are ready to accept expertise from the eurozone." Athens, together with European leaders and the IMF, must now start work on a second €110bn bailout for Greece, which must be finalised by September and is likely to include private-sector involvement. The European commission conceded on Saturday, after the two-hour Eurogroup teleconference agreed the fifth tranche payout, that any plan to cut Greece's debt of 160% of economic output would be at risk of being derailed by internal unrest or external economic conditions. Growth just one percentage point below expectations, it said, would push Greece's debt to 170% of GDP, and rising, past 2020. For the first time, the commission's report also discusses debt restructuring, including a possible 40% "haircut" – a forced reduction in the value of Greek bonds – which would devastate Greek banks and, the report warns, could reverberate on Ireland, Portugal and Spain.

Analysts are increasingly questioning the French and German governments' plan for holders of Greek bonds to swap them for new loans as part of a fresh aid package. The Greek prime minister, George Papandreou, met his side of the rescue bargain last week by winning MPs' approval for radical new austerity measures, including €50bn of privatisations, public sector wage cuts and widespread civil service job losses. But eurozone ministers have so far failed to agree details of a new rescue, expected to be up to €110bn. The debt-swap proposal, which French and German banks have agreed to, involves offering new 30-year loans in exchange for expiring bonds, to meet Germany's demand that investors bear some of the costs of a new Greek bailout. But analysts say it is likely that ratings agencies could still brand the plan a default. That would trigger chaos in world markets, as investors were forced to slash the value of their Greek debts - and could also lead to Portugal and Ireland, the other bailed-out eurozone states, having their debts downgraded. Simon Derrick, chief currency strategist at BNY Mellon, said: "When you compare the French plan to what the ratings agencies have said, it looks as though they would make it a default." Standard & Poor's said no final decision would be made on the scheme until the full details were published but pointed out a recent statement setting out the reasons a debt-swap might still constitute a default. "While an exchange offer for longer-dated bonds may appear to be 'voluntary', we may conclude that investors have been pressured into accepting because they fear more adverse consequences were they to decline the exchange offer," S&P said.

Global economic recovery slips into lower gear as industrial activity dips - A sharp bounce in stock markets following agreement in the Greek parliament to pursue EU-sponsored austerity measures became more muted after it became clear a global slowdown in manufacturing was firmly under way. "Over the past two months, [euro-zone manufacturing] output growth has weakened to the greatest extent since late-2008," said Chris Williamson, chief economist at Markit, which compiled the surveys. The US was the only bright spot, adding to expectations the economy may be recovering from a recent slowdown. The US Institute for Supply Management said its index of national factory activity rose to 55.3 from 53.5 the month before. The reading beat expectations for a decline to 51.8, according to a Reuters poll of economists. The UK's Markit/CIPS purchasing managers' index showed a bigger than expected drop to 51.3 from 52 in May, revised from 52.1. David Noble, chief executive at the Chartered Institute of Purchasing & Supply, said: "The UK's manufacturing sector is slipping into 'growth-lite' mode, a far cry from the strong expansion seen earlier in the year." For the second quarter as a whole, the average PMI reading of 52.6 is the lowest since the recovery began in the autumn of 2009. Export orders and employment slowed to the weakest growth rate since last September. Rob Dobson, senior economist at Markit, said: "It is worrying to see that slowdown is not just being driven by the demise of domestic market strength, with growth in new exports having also slowed since the start of the year as the global economic recovery drifts into a softer patch." Input price inflation slowed sharply to the slowest rate in one-and-a-half years, reflecting recent falls in the cost of oil and other commodities. Output price inflation – measuring the prices charged by manufacturing – was the weakest since last December.

Total Lloyds job cuts now almost 45,000 - Lloyds Banking Group boss announces 15,000 job cuts - António Horta-Osório stamped his mark on Lloyds Banking Group on Thursday, cutting 15,000 jobs and pledging to revitalise the Halifax brand in an effort to help taxpayers make a profit on their £20bn investment in the bailed-out bank. On a bleak day for employment in the banking industry, HSBC also cut 700 jobs at its UK arm to save £9m – a sum officials at Unite noted was the same as the bonus of chief executive Stuart Gulliver. While unions were furious about the scale of the job losses at Lloyds – which are now on track to touch 45,000 as a result of the rescue of HBOS during the 2008 crisis – the City applauded the actions of Horta-Osório, who was presenting the outcome of a strategic review he conducted after taking the helm of Lloyds on 1 March. The Portuguese-born banker, who was lured from Spanish bank Santander, was at first unrepentant about the scale of the job cuts although later admitted: "I do regret that we have to do this. I would prefer to put this bank back on its feet without reducing staff." But, he insisted the cuts were essential. "We have to do this. This bank has lost money, it's losing money this year on an after-tax basis. "We have to get this bank back on to its feet to support the UK economy and we have to pay taxpayers' money back," he said.

Research published today by Ricoh Europe reveals that European businesses could be missing out on potential profit increases of €46 billion, due to the existing, inefficient methods used to process information. TheRicoh Process Efficiency Index shows that employees across Europe responsible for managing business critical document processes spend approximately 362 million hoursof their time per year on the function, which amounts to an overall business cost of €147 billion. The Index examines how European organisations are managing their business critical document processes; those that occur regularly and repeatedly and have a direct impact upon businesses interactions with clients and employees. For example, purchase orders, patient records or invoices. The study also identifies the areas for improvement and the economic return that those improvements could deliver. Carsten Bruhn, Executive Vice President, Ricoh Europe said: "This report is essential reading for every European CIO. It highlights that if European businesses are to meet the challenge of competing with emerging markets, it is essential that they look at the efficiency of their business critical document processes." "The Index clearly illustrates how outdated, manual processes have multiple impacts on the business. For example, if critical information is processed using traditional hard-copy methods, business risk is enhanced as they are less likely to be backed-up. They are also easier to lose, making them more prone to security breaches. It is also inevitable that employees are spending unnecessary time processing business documents, instead of focusing on the core business transactions and customer service."

GREECE - The votes are just in, and the €28bn (£25bn) austerity bill has been passed, but Greece's troubles are still a long way from being resolved. What has the Greek parliament just voted through? The programme covered €28bn of spending cuts and tax rises, and permission for €50bn of asset sales. Measures include cuts to public sector pay, a new solidarity levy on income, and cutbacks in government spending. Here's a full rundown of the key measures. Does this mean victory for prime minister George Papandreou? Not yet. The Greek parliament will reconvene on Thursday to vote on an enabling law that will allow the government to speed up the pace of reform. This will also include a specific breakdown of some of the fiscal measures, including the tax changes and a €50bn privatisation programme. Analysts believe this could be even tighter than Wednesday's vote, given Papandreou's narrow majority. Why did MPs agree to these measures? Greece has been struggling to meet the conditions of the original €110bn rescue loan agreed with the EU and the International Monetary Fund last year. Eurozone finance ministers had insisted on tougher austerity measures in return for the next slice of the package, worth €12bn. What would happen if Greece did not receive the €12bn? More than €6bn of Greek government bonds mature in July, meaning they must be repaid then. Another €6.6bn matures in August. Greece cannot roll the debt over by issuing new bonds, as the financial markets are now demanding ludicrously high interest rates on Greek government borrowing. The €12bn tranche of aid is already earmarked to cover these payments – without it, an immediate disorderly default looked inevitable.

French finance minister Christine Lagarde has become the new head of the IMF after the fund's board confirmed her appointment following a meeting in Washington. Lagarde, who takes over from Dominique Strauss-Kahn, is the first woman to hold the post. She will begin her five-year term on 5 July. After the board's announcement, Lagarde tweeted: "The results are in: I am honored & delighted that the Board has entrusted me with the position of MD of the IMF!" Official confirmation came after the US hadformally endorsed Lagarde's candidacy. Treasury secretary Tim Geithner said: "Minister Lagarde's exceptional talent and broad experience will provide invaluable leadership for this indispensable institution at a critical time for the global economy. We are encouraged by the broad support she has secured among the fund's membership, including from the emerging economies." French president Nicolas Sarkozy was quick to show his support for his compatriot. He said in a statement: "The French presidency rejoices that a woman is taking on this important international role." Chancellor George Osborne hailed Lagarde's appointment as "good news for the global economy and for Britain." He said: "She is the best person for the job, which is why Britain was one of the first countries to propose her. She has been a strong advocate for countries tackling high budget deficits and living within their means." Lagarde has the support of most European countries, and is seen as an ideal candidate to handle the IMF's ongoing bailout of weak eurozone countries. Many observers felt the time had come for a non-European to take the post, but despite initial coolness towards her candidacy China and Russia backed Lagarde's appointment. Along with the US, she has the explicit support of nations including Indonesia and Egypt, representing more than half the IMF's 24 voting board members. The executive board represents the 187 members of the IMF.

EUOBSERVER / BRUSSELS - European lenders are considering the 'first draft' of a plan put forward by French banks for a rollover of some 70 percent of the banks' holdings of Greek debt. Unveiled by French President Nicholas Sarkozy on Monday (27 June), the plan would involve private bondholders agreeing to re-invest back in Greece half the amount of their holdings as they matured, swapping the debts for new longer-dated bonds. The maturity on the new bonds remains up for discussion, with some German sources saying the suggested extension to 30 years is too long, but the aim is to partially free the country from having to repay its debts in the near term, relieving some pressure from the insolvent nation. A further 20 percent of debts coming due would be invested in triple-A bonds via a special purpose vehicle. EU nations are hoping to convince private creditors to engage in such voluntary rollovers amounting to around €30 billion, representing just under a third of the amount of a potential second bail-out of the country. The French scheme was considered alongside other options at a meeting in Rome on Monday night of some of the most powerful figures in international banking, with executives flying in to talks with eurozone and European Central Bank representatives regarding the voluntary rollover.

CITIZEN ADVICE - The economic downturn is pushing consumers into the hands of con merchants and rogue traders who have "never had it so good", Citizens Advice warned this week. The national charity says the current economic conditions have led to an unprecedented boom in that exploit people's need to save money on bills, increase their income, and find work and affordable housing. It says there is a growing problem with unscrupulous employers advertising fake "jobs" that require fees to be paid in advance. Increasingly, it adds, "phantom flats" are offered to would-be tenants, who are then asked to prove they can pay the rent by transferring money to the landlord: money they never see again. It also warns that some money transfer services and classified ad websites can sometimes be channels for fraud. The warning chimes with Guardian Money's postbag, which is increasingly seeing complaints about bogus websites offering desirable products such as cameras at low prices. Fraudsters set up the sites, trade for a short time and then disappear with the cash. If a camera or pair of designer jeans looks too cheap, there is usually a reason why, say police. Meanwhile, as the summer music festival season gets underway, fans are being urged to be on their guard against sophisticated online rip-offs run by organised gangs of "cyber criminals", in which they are duped into buying fake or non-existent tickets. Experts at Get Safe Online, a government-backed initiative, are warning that the problem will get worse as the wave of events provides rich pickings for the fraudsters. More than one in 10 people (or their friends and family) say they have already been a victim of an online ticketing scam. According to Get Safe Online, criminals are increasing efforts to dupe consumers into visiting fake ticket websites. They are passing off their operations as supposedly genuine businesses, and are often willing to make significant investments for high returns. For example, they will often pay for search advertising (such as Google AdWords) so their fake sites appear at the top of event search results. And they even enlist professional web designers so that their sites appear genuine. One method used by scammers is targeting band websites, forums and social networking sites. Posts will be displayed from "fans" claiming they have bought tickets from a certain site and encouraging those not yet successful in getting theirs to visit it. More consumers are then driven to the fake site.