"Citigroup said it now expects Spain's economy to contract by 2.2pc this year and another 2pc in 2014, pushing unemployment to 28pc.The effects of the slump will overpower any gains from fiscal austerity. The bank said public debt will surge from 88pc to 110pc of GDP in just two years." "Premier Mariano Rajoy has so far resisted a full rescue from the EU bail-out fund (ESM), fearing a political backlash and loss of sovereignty. Yet the ECB cannot purchase Spanish debt until Madrid pulls the trigger and signs a "memorandum"." "Julian Callow from Barclays said the ECB’s Mario Draghi is “itching” to buy Club Med bonds, seeing this as a way of targeting monetary stimulus on the countries in trouble - without an causing inflationary spillover in Germany - but he is paralyses until Madrid relents." Ah, when it all collapses the EU socializes private debt and gets to appoint another country's leader. Now I see what the strategy is. Meanwhile, Ireland has now a debt to GDP ratio of 120% and rising are now predictably making noises such as, forgive us our debt or else the best boy in the class is going native! Put "precautionary" loans in place as we will not be able to exit the bailout without a second bailout i.e. "precautionary loans" or if you prefer a "bailout extension" call it what you like, just make sure the money is there for us! The government are back in talks to extend their sweet heart deal Croke Park deal with the 23 public sector unions that represent government workers, so no surprises. They will be requiring additional funding to finance the Labor trade union government nexus. Labor are in coalition. As for Spain they will get their bailout from the ESM with a vicious MOU attached. They will underestimate (deliberately) how much they require, the further austerity will cause even greater unemployment and they will be on the road to Greece and the EU will be on the road to either break up or an admission that democracy has been overthrown and that you cannot rule a democratic EU. The whole project has been derailed because it was never possible to unite countries of such diverse cultures and work ethics. France wants to be socialist, therefore it needs Germany which is capitalist to pay up! Greece does not collect taxes so it wants them collected elsewhere and passed on to them otherwise they might have to pull out and it might be a systemic risk, Cyprus needs a bailout they too could be "systemic" and what about all that Russian money? Sure Russia might give a dig out? It is a tower of Babel ... I wonder whether most people in more stable Northern European countries realize just what exposure they are going to have to these bailouts via the ESM (for that is what the EU are now touting as the Spanish rescue vehicle)The ESM can make a capital call any time it likes on it's EZ members at 7 days notice and it's officers are immune from prosecution in any EU jurisdiction.. and it's records inviolable. So all those EZ member states that thought they were relatively safe are going to end up providing whatever funds a bunch of people with no accountability whatsoever demand of them. Budgetary independence and fiscal prudence gone in a flash and they never even noticed....Well, the next round of protests/riots ought to be interesting. Maybe Draghi, LaGarde, Merkel, Barroso, Van Rumpy and Rajoy could sit down with the hungry masses to explain how the worst is behind them.

Spain ...

The eurozone's fourth largest economy contracted for the seventh straight quarter in the final three months of 2012, shrinking by 0.8pc as the recession worsened by more than previously estimated

Output shrank by 4.7pc, due to a fall in domestic demand, while exports grew by 2.8pc over the quarter, Spain's National Statistics Institute said on Thursday. Economists had expected output to decline by 0.7pc in the three months to the end of December.

“The key numbers are consistent with very weak survey data,” Guillaume Menuet, senior economist at Citigroup, told Bloomberg. “It is about time the real economy numbers match the challenged picture which has become the mark of many countries across Europe including Spain in the last three to six months as across-the-board austerity damages growth.”

BERLIN - A third of Europeans have no savings at all, while in Spain and Italy half of the population is using up money put aside, a survey carried out by the German pollster TNS on behalf of ING Bank shows. The study was carried out on over 14,000 adults in Austria, Belgium, Czech Republic, France, Germany, Italy, Luxembourg, the Netherlands, Poland, Romania, Slovakia, Spain, Turkey and the UK. The country with the fewest savers was Romania, where almost half (48%) of respondents said they have no savings, while Luxembourg had the most (89%). The evolution of personal savings in the past year showed they decreased among 52 percent of Italians and 47 percent of Spaniards. In Turkey and Great Britain, however, almost half of their citizens were able to set aside more money in the past 12 months. Asked whether they were happy with the state of their savings, Dutch and German were the most happy (47% and 46%), while Czechs, Italians and Spaniards the most unhappy (38% and 36%). Most respondents - over two thirds - said they were not able to spend as much on hobbies, clothes and body care. Education and health were the least touched. On average, there are more Europeans who say they would be able to live from their savings for three months (49%) than those who say they could not (47%).

Almost 200,000 people lost jobs between October and December to send the jobless figure to nearly 6m, Spain's National Statistics Institute reported on Thursday.

Spain's youth unemployment - the number aged 16 to 24 without a job - hit a new quarterly high of 55pc, but showed tentative signs of retreating after falling from a peak of 56.5pc in November. Similarly, overall unemployment hit a high in November of 26.6pc and slid in December.

Meanwhile, the number of households in which every member is out of work climbed to 1.8m, more than one tenth of all Spanish families.

The report also suggests the long-term unemployed face a tougher struggle in returning to work, with the number of people remaining unemployed more than a year after losing their jobs rising by 213,800 during 2012.

The bleak figures - which make Spain home to a third of the eurozone's total unemployed - will cast a dark shadow over the one-year-old premiership of Mariano Rajoy, who has faced mounting criticism and a wave of general strikes over his administration's handling of the economy.

Well there is one comment that comes to mind.....

They think its all over..... It is now..

Now we know why last week we had all the talking heads out telling us how great everything is.

After 10 years living in Spain, I got to know hundreds of German people and I've felt for years that they should be our closest friends and allies in Europe.
We're remarkably similar. When you talk politics or the EU, they have just the same views and concerns as us. They're decent hardworking people. They do actually have a sense of humour! They(surprisingly) really respect us and I have massive respect for them.
Out of the ashes of the EU we should be looking to the future and a trading bloc with the Germans, Dutch Scandi's etc. The rest of Europe is broken.
Sod the "special relationship" with the US. It's Germany we should try and work with. As a country who would like to and need to improve our manufacturing base - we have a lot to learn from them.
All of this scaremongering from the US, Ford, Honda, the City etc about how bad it would be for us to leave the EU is just risible b*llocks. There's a big world out there and let's be honest, the majority of the EU periphery are f**ked. The Germans know this too.
We should, for once, lead the way and show the world how successful we can be without all the BS form the EUSSR!...

When Britain leaves the EU, as it will, we should invite Germany to leave too. They have much more in common with an Anglo-Saxon nation like England than they do with France, Italy, Poland or Spain. A new Northern league pact: an economic alliance of free nations that trade with each other and the world but do not have ambitions to create a superstate, has much appeal to even Eurosceptics. Germany, Britain, Holland, the Scandinavian countries and maybe even the Baltic States could form a new EFTA.

Meanwhile, France and the Mediterranean countries could proceed at a slower, socialistic pace that allowed the Euro to devalue to its lowest common denominator. We would once more find holidaying in Spain and Greece cheap, they would not need to be straining their economies to stay within touching distance of German efficiency. Happiness all round.

Be it the United States or the European Union, most Western countries are so highly indebted today that the markets have a greater say in their policies than the people. Why are democratic countries so pathetic when it comes to managing their money sustainably? In the midst of this confusing crisis, which has already lasted more than five years, former German Chancellor Helmut Schmidt addressed the question of who had "gotten almost the entire world into so much trouble." The longer the search for answers lasted, the more disconcerting the questions arising from the answers became. Is it possible that we are not experiencing a crisis, but rather a transformation of our economic system that feels like an unending crisis, and that waiting for it to end is hopeless? Is it possible that we are waiting for the world to conform to our worldview once again, but that it would be smarter to adjust our worldview to conform to the world? Is it possible that financial markets will never become servants of the markets for goods again? Is it possible that Western countries can no longer get rid of their debt, because democracies can't manage money? And is it possible that even Helmut Schmidt ought to be saying to himself: I too am responsible for getting the world into a fix ?

The reporting in germany on the government response to developments at the IMF conference:

-Merkel refused to comment on the suggestion of a two year extension, saying she'd await the troika report.
-Schäuble ruled out OSI, sounded extremely unconvinced about a two year extention for Greece, and basically said things were going better than the media presented it.
-Brüderle (FDP Floor-Leader) said that he didn't see a majority in the Bundestag for a 3rd Greek Bailout. Which is polite language for "we're not voting for it". The CSU would be against, but has made no public comment. Plenty in the CDU would be against too, but the majority will hold to Merkel's line. The SPD are for it, as I think are the Greens.

So it looks like another one of those wrapped-together-with-sticky-tape temporary coalitions, to get it through the Bundestag. And probably bundled together with other applications from Spain, Slowenia, Cyprus.

European Central Bank policymaker Jörg Asmussen has argued against Greece leaving the eurozone, at the IMF/World Bank shindig in Tokyo.   Asmussen argued that Athens was making good progress.  The Greek authorities have to demonstrate that they can continue to stick to their commitments... This is the best way out of its crisis: for Greece to reform within the euro area....CNN is also focusing on the growing divisions between the IMF and the eurozone over austerity....Its correspondent, Andrew Stevens, writes from Tokyo:The EU will produce its own conclusions about the impact of austerity measures next month. Whether that brings us any closer to a consensus is hard to judge.....Remember the old joke about economists: if you laid all the economists in the world end-to-end you still wouldn't reach a conclusion.  But this is no joking matter. Millions of Europeans have fallen into poverty or at least economic hardship as a result of the current austerity programs.

Up to 60bn euros (£48bn; $78bn) will be needed to bail out Spain's banks, according to the country's second biggest lender, BBVA. The results of independent stress tests of the Spanish banking sector will be published on 28 September. But previews are already being sent to the country's financial institutions. The BBC has been told that the Spanish government has already put in place economic reform plans that would allow it to apply for a bailout immediately. Spain's conservative Prime Minister Mariano Rajoy has in the past insisted Madrid would not become the fourth European capital in recent years to apply for such a bailout, but sources indicate such a programme is now likely. Spain's banking sector needs recapitalizing, and much of the money would come from 100bn euros in European Union funds already pledged by eurozone finance ministers in June. "We'll get a figure of around 70, 75 or 80 billion euros," BBVA's Chairman Francisco Gonzalez said. That figure includes around 20bn euros already allocated to troubled banks, which means 50-60bn euros is still required. The bigger question however for investors is how the Spanish government begins to balance its books. Many in Brussels and beyond now assume it is only a matter of time before Spain becomes the fourth eurozone country to take a bailout. A source in Brussels said the preference is that Madrid applies for the money sooner rather than later, before market conditions change. That is important because of the different manner in which this bailout is being put together. A European Commission spokesman said it would be wrong to see this as a "kind of proto-bailout" - but to many it does look like a bailout-by-stealth. Over the last few months Spanish officials have held numerous meetings with their European counterparts, working out what Madrid would have to do to fulfil the criteria of any bailout deal. Officials say Spain is already living up to any future bailout terms. Next Thursday Mr Rajoy will unveil the next Spanish budget. Rather than more cuts, more austerity, he is pushing for structural reforms to help him make savings. Such reforms will form the basis of a bailout agreement with the so-called troika - the European Commission, European Central Bank and International Monetary Fund. For a program to work, all that would need to be added would be firm dates for implementing such reforms and a team to monitor progress. Asked to comment, the Spanish finance ministry did not deny that negotiations to this effect had taken place. It could give Spain's prime minister enough wiggle room to present this to his country as a Spanish-led process. Many will not believe him, but it helps a leader who said he would never apply for a bailout to save some face. (source BBC)

NICOSIA, Cyprus—Euro-zone finance ministers indicated Friday they are open to giving Athens more time to meet budget targets and that they aim to decide by the end of October on whether to give Greece its next installment of a bailout money….In their first gathering after a long summer hiatus, finance ministers from the 17-member currency bloc spent the morning discussing the economic and financial crises of Greece, Spain, Portugal and Cyprus. They were joined later by the 10 ministers from the rest of the European Union to debate proposals, released this week, for a system of common banking supervision.  European Central Bank President Mario Draghi, center, with IMF chief Christine Lagarde, left, Eurogroup President Jean-Claude Juncker and German Finance Minister Wolfgang Schäuble talk at the start of a two-day informal meeting in Cyprus….The meeting comes days after the European Central Bank announced a revamped plan for purchases of government bonds in the open market in coordination with the euro zone's rescue funds, and follows a German constitutional court ruling clearing the way for the launch of the European Stability Mechanism, the permanent bailout fund.  Friday's gathering turned attention back to the governments of bailed-out countries and what they will do to implement tough reforms to qualify for support from the currency bloc.   Ministers sought to keep pressure on the Athens government, which hopes to win approval soon for the next disbursement in its €173 billion ($224.7 billion) second bailout package…. The Greeks "need to show very strongly decisive action" on structural reforms and spending cuts, said Luxembourg's Jean-Claude Juncker, head of the Eurogroup of finance ministers. Athens must agree to a "set of credible measures to close the fiscal gap between 2013 and 2014," he said.

Even the ECB's support is not obvious. Monetary hawks – the Bundesbank and several other core central banks – who were worried about a new open-ended ECB mandate pushed successfully for strict and effective conditionality for countries benefiting from the bond purchases. As a result, they can pull the plug on the programme if its stringent criteria are not met.  Moreover, Greece could exit the eurozone in 2013, before Spain and Italy are successfully ringfenced; Spain – like Greece – is spiralling into depression, and may need a full-scale bailout by the "troika" (the ECB, the European commission, and the International Monetary Fund). Meanwhile, austerity fatigue in the eurozone periphery is increasingly clashing with bailout fatigue in the core.  Small wonder, then, that Germany, politically unable to vote on more bailout resources, has outsourced that job to the ECB, the only institution that can bypass democratically elected parliaments. But, again, liquidity provision alone – without policies to restore growth soon – would merely delay, not prevent, the breakup of the monetary union, ultimately taking down the economic/trade union and leading to the destruction of the single market.  In the United States, the latest economic data – including a weak labour market – confirm that growth is anaemic, with output in the second half of 2012 unlikely to be significantly stronger than the 1.6% annual gain recorded in January-June. And, given America's political polarisation and policy gridlock, we can expect more fights on the budget and the debt ceiling, another rating downgrade, and no agreement on a path toward medium-term fiscal consolidation and sustainability – regardless of whether Barack Obama is re-elected as president in November. On the contrary, we should expect agreement only on the path of least political resistance: avoidance of tough fiscal choices until the bond vigilantes eventually wake up, spike long rates, and force fiscal adjustment on the political system.....

"Ineffective governments with weak leadership are at the root of the problem. In democracies, repeated elections lead to short-term policy choices. In autocracies like China and Russia, leaders resist the radical reforms that would reduce the power of entrenched lobbies and interests, thereby fuelling social unrest as resentment against corruption and rent-seeking boils over into protest."

There are indeed two problems which could be called "ineffective governments" and "power of entrenched lobbies and interests" but I disagree with the implication that the former belongs only to "democracies" and the latter only to "autocracies".
Britain's "democratic" government is ineffective, but it's ineffective because its leaders resist radical reforms that would reduce the power of entrenched interests -- there is zero attempt to seriously address the overweening power of corporate wealth and its corruption of the political balance, and far from attempting to rectify Britain's diseased inequalty, the government seeks to demonise the most vulnerable people.
Judging by actions and policies, Britain's government is every bit as craven before wealth, and subjugated to corporate corruption, as China's. The millionaires around the Cabinet table regard the poorest and weakest in their society with just as much contempt as those in the Politburo.

"Indignados" in Spain

"Que se vayan todos," or "Away with all of them," became one of the slogans chanted by the tens of thousands of "Indignados" in Spain at protests last year. In addition to their eponymous outrage, many had one thing in common: Most were young and viewed themselves as victims of the crisis.

They might have been more specific and instead chanted: "All the old people must go!" This phrase would apply because, in many ways, the euro crisis is also a conflict between generations -- the flush baby boomers in their fifties and sixties are today living prosperously at the expense of young people.

Intergenerational equity -- measured among other things by levels of direct and hidden debts and pension entitlements -- is particularly low in Southern Europe. In a 2011 study of intergenerational equity in 31 countries by the Bertelsmann Foundation, Greece came in last place. Italy, Portugal and Spain didn't do much better, landing in 28th, 24th and 22nd place respectively. Currently, the unequal distribution of income and opportunities is particularly distinct:

The employment market collapse has hit young Europeans much harder than older generations. In Greece and Spain more than half of those under age 25 are unemployed -- twice the rate of older workers. Things are even worse in parts of southern Italy, where youth unemployment has risen above 50 percent. One reason for this situation is unequal employment circumstances. Older Spaniards and Italians, for example, profit from worker protection laws preventing them from getting fired that are quite strong by international comparison. But almost half of young Italians and 60 percent of young Spaniards are on temporary employment contracts and can easily lose their jobs.  The burdens and risks of the euro bailouts are also mainly borne by young people. Ultimately, growing national debts and bailout funds worth billions will be financed through bonds that won't be due for many years to come.

More from the IMF: "The external position of the Euro area as a whole has been close to balance, and only slightly weaker than the estimated value consistent with fundamentals and desirable policies. However, this masked, and continues to mask, substantial divergences across the Euro area primarily financed from within the union, including by major banks with global links. Germany currently has the world’s second largest current account surplus, partly with the rest of the world, while Spain and (to a lesser extent) Italy have deficits. Major estimated external imbalances that are regionally-financed imply a need for substantial real and financial rebalancing within the Euro area as well as a much more modest rebalancing by the bloc with the rest of the world. Unsustainably large intra-Euro area imbalances were part of the global boom-bust cycle, and the failure to resolve the Euro area crisis is causing heightened stresses that are spilling over to other countries". -- Germany is doing OK though, and have done since the Eurozone was created. No wonder Merkel wants to preserve the status quo. The eurozone is on life-support, it won't be long before the apparatus is switched off, but by then millions of people in Spain, Portugal, Ireland, Italy, Greece et al will have had their lives ruined by arrogant, stubborn eurocrats. ..... What's the youth population of Europe? Say, around 100 million people (depending on how you define youth) of which roughly 20 million are unemployed. Now take the quantitative easing (QE: new money printed and issued, a taxpayer liability) amounts given to the banks, and the other forms of money given to them in bank bailouts. £375 billion and counting in the UK. Don't have close to hand, the QE, bank bailout, and other monetary relief sums for the bad debt of banks given to Spain, Italy, Greece, Ireland, and Portugal. Let's take a conservative estimate of a total of £600 billion: divide this by 20 million and you have £30,000 per unemployed youth. The new money printed and issued by European governments if given directly to the public instead of the banks would certainly wipe out unemployment for at least a year or two. That would be even truer for the Non-Euro Countries, forget about the rest of Europe. But we the public are such stupid, apathetic sheep, we play along with this massive misdirection of financial resources by the states, done for the banks, at your cost.

The Euro and the EU itself have never been about what the 'Germany' or 'Spain' or 'The UK' wants, it is only what the leaderships of those countries want, even in the face of popular votes against the EU.

"Germany" ( read Germans ) will not decide anything, the people will never be given a say, much like the rest of the peons across Europe.

Of course Germany wants to save the Euro, but will only do so if they are able to maintain their 'advantage' in the export markets to other Euro and EU states. One disadvantage for Germany would be if the Eurozone countries decided to allow the ECB to start buying the sovereign bonds of the indebted countries. Germany will never allow that to happen as it would mean that they would have to share a much bigger burden of the Eurozone "collaterized" debt than they do at present. It's called German self preservation....Unfortunately, it still appears as though Europe’s top policymakers – that is, the Germans – are trying to “muddle through”, as opposed to coming up with a good, powerful solution. To understand this situation, it is instructive to reflect on Spain’s “problems” in comparison with those of Greece and perhaps Ireland. While Spain’s widely cited problems of high unit labour costs and current account deficit are symptoms of it sitting inside a rigid currency zone, before 2007-08 these problems existed but were not highlighted. They were seen as an understandable consequence of a monetary union such as the euro area.

Germany gets to show its eurosceptic side

The preamble of the constitution makes Europe into a major premise of our constitution," says Alexander Graf Lambsdorff, the head of the pro-business Free Democratic Party (FDP) group in the European Parliament. "Today's judges treat it like an annoying postscript. That's alarming."

Yes, and the actual central clauses of the constitution state that that all power derives from the people.

The european parliamentarians are particularly noisy about the court daring to interfere, at this time. They're probably still sore about the fact that the Court ruled that the European Parliament didn't meet "international democratic standards", and so wasn't a suitable receptacle for future transfer of sovereignty.

From memory, the international democratic standard they saw the european parliament failing had to do with one MEP representing 300,000 germans, and 50,000 maltese....Ah well. Germany gets to show its eurosceptic side, for a change.

German economic think-tank suggests mandatory loans for the rich.

Spiegel Online's actual headline is, that a German economic think-tank suggests mandatory loans for the rich.

I think, I have a better, voluntary idea: We see crisis countries struggling to pay interest rates of around 7pc.  We also see, that the ordinary private saver is struggling to find secure investment opportunities that at least pay better interest rates than the inflation rate.  There are enormous amounts of wealth in the hands of the common people, ordinary savers, in all European countries, especially in Germany. And they actually get not more than 3pc from the banks even on 5 or 10 years time deposits, if the want to have the full German deposit protection. Without time deposit, the interest rates are even meandering around 0.5 - 1 pc.
And from that low interest rates, they even have to pay around 28pc flat rate withholding tax (Abgeltungsteuer) on capital gains.  This should be put together, the need for lower interest rates for the crisis countries, and the demand of ordinary people for save deposits at reasonable interest rates.  And this, if possible, while avoiding the costs private Banks would add for their services.  So, if European Countries are guaranteeing States or Banks via ESM or other measures, why don't the just guarantee the deposits of common people on something like an European Savings Certificate, issued by the ECB or another new bank like European institution....If such an institution could offer guaranteed deposit with a net profit of around 3pc, ordinary European savers would pry this certificates out of their hands.  At German capital gains tax rate, that would mean an interest rate of around 4,05pc must be offered.  The institution would add their bureaucratic costs, and surely could offer the so collected money of the European people, at an interest rate of around 4.3pc or so, to the crisis countries.

That would help the crisis states to get some air, meaning time to reform, and the ordinary European people.  And it would even help Mr. Schaeuble's tax office, as Germany would collect more capital gains tax than today, because of the rising average interest rates. After the crisis, one could even think about keeping such a scheme, as a regular way to support private capital formation for ordinary people and financing European states.

Potential Defaults....

 Potential Defaults. The chairman of Deutsche Schiffsbank, a Commerzbank subsidiary based in Hamburg that is focused on the shipping industry, had been summoned to Frankfurt to present the bank's financial results. But the presentation was cancelled; Commerzbank had no need for the numbers, having previously decided it no longer wanted anything to do with German shipping.

The executive board of Deutsche Schiffsbank was not notified in advance of the parent company's reversal. The supervisory board was also taken by surprise. Only three months earlier, Commerzbank CEO Martin Blessing had declared the financing of ships and commercial real estate to be part of the bank's core business. And although it was expected to shrink, Germany's second-largest bank intended to create a separate segment for the business.  But the executives had underestimated the risks that the European sovereign debt crisis presents to Commerzbank, and how much capital the ship and commercial real estate business ties up. Now Blessing has slammed on the brakes. Deutsche Schiffsbank Chairman Otto characterized the parent company's about-face as the "decision of a cautious businessman and not of a skydiver."

Commerzbank has recently made a huge effort to satisfy and even exceed the capital requirements set by the European Banking Authority (EBA). But if the euro crisis worsens, new gaps could soon open up, say banking industry insiders.

In Spain alone, Commerzbank is exposed to the tune of €14.2 billion ($17.9 billion) via investments in banks, companies and the government. The lower the rating agencies assess the creditworthiness of these borrowers, the more capital the bank will have to place in reserve for these investments in the future -- to say nothing of potential defaults.
The Finnish finance minister, Jutta Urpilainen, said in a newspaper interview this morning that she'd consider crashing her AAA-rated country out of the eurozone rather than face paying the debts of another country: Finland is committed to being a member of the eurozone, and we think that the euro is useful for Finland. Finland will not hang itself to the euro at any cost and we are prepared for all scenarios. Collective responsibility for other countries' debt, economics and risks; this is not what we should be prepared for. We are constructive and want to solve the crisis, but not on any terms.

In theory, Friday’s deal means Spanish banks will receive €100bn (£81bn) in funding, first from the European Financial Stability Fund and then its replacement, the European Stability Mechanism (ESM). ESM bonds will also concede seniority over ordinary creditors, addressing another market concern. Italian banks, too, may be eligible for such support - but no one knows for certain. Even that massive issue, though, is dwarfed by other unknowns.

The Brussels proposals, even before they face approval by Germany’s constitutional court and any number of other national parliaments and judicial bodies, are still a long way from being agreed in and of themselves. Euro-area finance chiefs are due to hammer out the details between now and July 9...Bankers and politicians are entwined like poison ivy and a certain Karl Marx predicted all this pretty accurately. The vested interest of the political ruling class cannot be seperated from the "owners of the means of production" in this case the bankers. This is a world wide problem, the insider joke in the city is ´that Goldman Sachs runs the USA and the Bundesbank runs Europe...not actually a joke, it is true......it was the Democrat President Clinton who was persuaded by the banking mafia to relax rules on investment and retail banking being merged ( Glass Steagall ) and in the UK Brown and Blair were in awe of the city.
Cameron and Osborne are so establishment it isn't true...can you imagine the discreet conversations that they have with their banker chums in the Oxfordshire countryside ( not too hard on us old boy, dammed country can't function without us bankers etc ). Meanwhile the non owners of the means of production are getting stuffed right, left and centre. We have grown up offspring having to live with parents at 30 years of age and more....there are very few proper jobs available for this generation ( plenty of fabulous unpaid internships or work experience !! ), and unaffordable houses. Daily life is a breeze... 80 quid to fill up a family saloon with petrol, utility companies fixing pricing in a cartel so that we cannot do a thing about these costs, oil pricing out of our control..university education is now like the USA, leave with huge debts or have rich parents.Those still with jobs are fearful of redundancy and have to work goodness knows how many more hours for the same pay as last year.........so we all hope that this time the banks will be regulated but I would not bet more than a couple of quid on it.
The inter dependence of the political class and their banking chums is too great for radical action. Expect more corruption...

BERLIN—Barely 12 hours after a reluctant European Central Bank breathed new life into the euro project, German politics dashed hopes that Europe would soon receive a bigger bulwark against a spreading government-debt crisis. A spokesman for German Chancellor Angela Merkel, Christoph Steegmans, removed hopes of a more robust European Financial Stability Facility, saying the fund will stay as agreed at a July 21 European Union summit. "The EFSF will remain what it is, and keep the volume it had before July 21," Mr. Steegmans said at a regular government press conference. The ECB Sunday made a landmark decision to expand its bond-buying program to include Italian and Spanish government debt, a step aimed at stopping a market sell-off that threatened to send their borrowing costs to unsustainable peaks. The ECB hesitated last week to take such a step, which greatly expands its role as an underwriter of government finances. But it was deemed critical to buy time until an improved bailout fund, the EFSF, could be ratified and implemented before October. The changes to the EFSF mandate would allow the fund to buy government bonds in the secondary market. The European Commission has asked for a massive increase in the EFSF's current lending capacity of €440 billion ($628.23 billion) guaranteed by euro-zone governments. Market watchers said a new volume of up to €1.5 trillion or more might be needed to reassure investors that the fund can offset government solvency threats. The euro promptly lost much of the ground gained from the overnight ECB announcement as investors responded to German opposition to a massive build-up in the euro-zone's defenses against debt contagion.

With unemployment officially nudging 790,000 – although believed to be far bigger with the closure of some 150,000 small and medium-sized businesses over the past year – there are fears that Greece, the country at the centre of Europe's worst financial debacle in decades, is slipping inexorably into political and social crisis, too. Rising racist tensions and lawlessness on the streets this week spurred the soft-spoken mayor of Athens, Giorgos Kaminis, to describe the city as "beginning to resemble Beirut".With unemployment officially nudging 790,000 – although believed to be far bigger with the closure of some 150,000 small and medium-sized businesses over the past year – there are fears that Greece, the country at the centre of Europe's worst financial debacle in decades, is slipping inexorably into political and social crisis, too. Rising racist tensions and lawlessness on the streets this week spurred the soft-spoken mayor of Athens, Giorgos Kaminis, to describe the city as "beginning to resemble Beirut".

ATHENS—Greece was paralyzed by a nationwide general strike Wednesday as hundreds of thousands of workers, shopkeepers and civil servants walked off the job in a 24-hour protest over the government's austerity program. The strike affected public services, with government ministries, local government offices, courts and schools all closed, and hospitals and many state-owned enterprises running with reduced staff. Mass transit around the capital ground to a halt as bus, trolley, tram and subway operations were suspended, and Athens's electric rail operated on a reduced schedule. More than four dozen domestic flights were canceled ahead of a four-hour walkout by air traffic controllers, and ferry operations to Greece's islands were also suspended. "The austerity measures are beginning to affect all of society even more now. The economic situation is becoming very difficult for both Greek businesses and for workers," said Anthony Livanios, an independent political economist and commentator. "Even so, the government appears determined to continue with its policies." Recent public opinion polls showed seven out of ten Greeks expect the austerity program to continue even beyond 2013 when the current bailout deal with the EU and IMF ends. The ruling Socialists have seen their popularity drop sharply in the past year, although they still retain a 3.5 percentage-point lead over the center-right opposition.