The surge in public borrowing has several important effects, exposing governments to higher interest rates as well as constraining their options at a time when economists would like extra fiscal stimulus from some countries.

“Higher borrowing costs could raise concerns about debt sustainability,” warned the IIF. “With the focus in 2017 likely to be on prospects for fiscal stimulus, already-high levels of mature market debt may act as a constraint.”. Borrowers in Britain have been working hard to pay down their debts, slashing the total debt to GDP ratio by 65 percentage points between 2011 and 2015. That is now in reverse, as the government keeps borrowing and banks stop deleveraging – in the first nine months of the year, debts rose by 15 percentage points to more than 465pc of GDP. Governments in emerging markets have increased their debt more slowly – debt to GDP increased by only two percentage points. Those nations could be particularly hit by higher interest rates in the US, however, as investors looking for yield in riskier markets may be tempted back to the States, as they were in the so-called taper tantrum of 2012.  The biggest emerging market borrower in 2016 was China – it accounted for $710bn of the total $855bn of bond issuance from the governments.

The country’s households were also keen borrowers in the nine-month period. Individuals took on loans amounting to an additional 3pc of GDP, while overall emerging market household debt hit a new high of 35pc of GDP.
“This suggests that for some households, debt service capacity could be challenged in a rising interest rate environment,” the IIF warned.

Wages in the US grew at their fastest pace since 2009 last month, pointing to continued momentum in the labour market and putting the country on course for a string of interest rate rises this year. Average hourly earnings increased by 2.9pc compared with the year before, the largest annual increase in more than seven years, while 156,000 jobs were created in December. Although the employment figure fell short of the 178,000 widely expected by economists, it was enough to suggest that the economy is steaming ahead.  The unemployment rate ticked up to 4.7pc in December, from a nine-year low of 4.6pc in November, as more people entered the labour market, in a sign of confidence in the economic recovery. Over the course of 2016, more than two million jobs were created in the US.  This set of jobs data will be the last for President Obama, as he makes way for Donald Trump, who is set to take office later this month.  President elect Trump has pledged to increase spending on the country's infrastructure, cut taxes and reduce red tape, three measures widely expected to boost growth this year.  The US jobs market is expected to hit full employment this year, and the country's central bank, the Federal Reserve, is set to push through interest rate rises in response.  Last month, the Fed increased the benchmark rate by .25 percentage points to a range of 0.25pc to 0.50pc. A further three rate increases are forecast for this year.  Kully Samra, managing director of Charles Schwab in the UK, said that despite December’s numbers missing forecasts, the US economy still had a robust labour market.

The Bank of England’s chief economist has admitted his profession is in crisis having failed to foresee the 2008 financial crash and having misjudged the impact of the Brexit vote.  Andrew Haldane, said it was “a fair cop” referring to a series of forecasting errors before and after the financial crash which had brought the profession’s reputation into question.  Blaming the failure of economic models to cope with “irrational behaviour” in the modern era, the economist said the profession needed to adapt to regain the trust of the public and politicians.... Haldane described the collapse of Lehman Brothers as the economics profession’s “Michael Fish moment” (a reference to when the BBC weather forecaster predicted in 1987 that the UK would avoid a hurricane that went on to devastate large parts of southern England). Speaking at the Institute for Government in central London, Haldane said meteorological forecasting had improved markedly following that embarrassing mistake and that the economics profession could follow in its footsteps.  The bank has come under intense criticism for predicting a dramatic slowdown in the UK’s fortunes in the event of a vote for Brexit only for the economy to bounce back strongly and remain one of the best performing in the developed world.  Haldane is known to be concerned about mounting criticism of experts and the potential for Threadneedle Street’s forecasts to be dismissed by politicians if errors persist.  Former Tory ministers, including the former foreign secretary William Hague and the former justice secretary Michael Gove, last year attacked the Bank of England governor, Mark Carney, for predicting a dramatic slowdown in growth if the country voted to leave the EU.

Donald Trump's reflation rally will short-circuit. Rising borrowing costs will blow fuses across the world before fiscal stimulus arrives, if it in fact arrives.

By the end of 2017 it will be clear that nothing has changed for the better. Powerful deflationary forces retain an invisible grip over the global economy. Bond yields will ratchet up further and then come clattering down again – ultimately driving 10-year US yields below zero before the decade is over.  There are few ‘shovel ready’ projects for Trump’s infrastructure blitz. The headline figures are imaginary. His plan will be whittled down by Congress....The House will pass tax cuts for the rich but these are regressive, with a low fiscal multiplier. The choice of an anti-deficit Ayatollah to head the budget office implies swinging cuts to federal spending. These will hit the poor, with a high multiplier.  This Gatsby mix is mostly self-defeating...

   BMPS stock yesterday reached a new all-time low (see chart 1) and then recovered for no apparent reason, as if the current and potential shareholders were hoping for a miracle that would save them from the imminent bail-in.
The solution of nationalization, regardless of the way it will be promoted and called by the authorities, was somewhat predictable long before the application of the recapitalization program backed by the Italian state. Beyond the precarious lending standards, which are reflected in the quality of the portfolio of corporate loans and mortgages, most banking analysts claim that the beginning of the end for Monte dei Paschi was the fateful decision to the buy the Antonveneta bank, at the end of 2007, for 9 billion Euros. The merger process ended in 2013, precisely when the losses of BMPS, which had been hidden through various derivatives trades, were revealed and the bank "benefited" from an initial bail-out, of almost 4 billion Euros. It will be interesting to see if the nationalization process will also include a complete analysis of the way the bank was managed, as well as the naming of those who bear the blame. Between June 2006 and October 2011, it was Mario Draghi who was the Governor of the Bank of Italy.  What exactly did the Bank of Italy oversee during all this time? As a national oversight authority, the Bank of Italy oversees "the careful management of financial institutions and the stability of the financial system", according to its website. 

As the old year draws to a close, there is more encouraging news on the economic front which is again quite out of kilter with the largely gloomy predictions of mainstream forecasters. According to a survey of chief financial officers by the professional services company, Deloitte, optimism among Britain’s leading companies is at an 18-month high. Business leaders are notably more upbeat about prospects than they were three months ago.  This is obviously very welcome news, but it is small thanks to a Government which seems to be doing its level best to make the costs and complexity of doing business in Britain ever more burdensome. The latest example of such wrong-headedness is in changes to the business rates system, due to come into effect next April. For some businesses, they mean an immediate increase in the tax on their properties of 42 per cent, with still worse to come in future years. Particularly badly hit will be smaller traders in London and the South East. Many face an eventual doubling or worse in their rates bill.  A significant number will be broken by the increases, and in despair close up shop. Others will find ways of passing the extra costs on to their customers, or alternatively demand rent reductions from landlords. Still more will simply take the hit to profits and invest less. Yet however they choose to absorb the impact, it’s going to do lasting damage to some of the most prosperous parts of the UK economy.

At least nine people have been killed and many more injured, according to German police, after a truck ploughed into a Christmas market in Berlin in what is believed to have been a deliberate attack. A vehicle, a large black Scania articulated lorry, ran into the market outside the landmark Kaiser Wilhelm memorial church on Monday evening. German police said one person was found dead in the lorry, having died of injuries sustained in the crash, while a suspect was arrested about 100 metres away from the scene in the Tiergarten.  A witness told the Guardian that the truck ploughed into the market at speed. “It was not an accident. The truck was going 40mph. It was in the middle of a square, there are main roads either side, [where it could have come from]. But it showed no sign of slowing down,” said Emma Rushton.  She said it crashed into a stall only a few feet from where she and her friend were standing. “We heard a massive bang. About eight to 10 feet in front of us was where the lorry ploughed through. It ploughed through the stall where we bought our mulled wine.

“It ploughed through people and the wooden huts, it tore the lights down. Everything went dark, it was black and there was screaming. It was awful,” she said.

Reuters writes that the 2 billion Euros "investment" needs to be approved by the European Commission, which needs to check whether the transaction occurs at the market price or if it represents a state aid. Shortly after, a report appeared in Italian daily La Stampa, where it is state that the authorities in Rome have asked for a 15 billion Euros financial aid from the European Stability Mechanism (ESM) to prop up Italy's banking system. Shares of Italian banks rose significantly following the news, with Monte dei Paschi, being the best "performer", with a rise of about 10%. "No request for the ESM is being prepared", a spokesperson of the Italian treasury said, according to Financial Times.  With the resignation of the government led by Matteo Renzi, who has announced on his Twitter account that the budget law has been approved, Italy's "Aeneid" in the Eurozone enters a new stage and nobody knows when the country is going to turn that corner.  As for Greece's "Odyssey", Bloomberg asks whether the plan to cut the debt burden isn't too small and applied too late, reminding that the IMF sees the fiscal targets as unrealistic and the debt as far too big. Right now all we have to do is wait, even though we probably won't have to wait as many years as have passed since the aggravated phase of the sovereign debt in Europe, to find out whether Greece and Italy will "kick the bucket" once they "turn that corner". 

 Once upon a time, there were five international audit, tax and audit consulting firms. Arthur Andersen disappeared in 2002, after it was convicted for the involvement in the Enron fraud.  Since then, there have been four giants on this market, PricewaterhouseCoopers (PwC), Deloitte Touche Tohmatsu, Ernst & Young and KPMG, and some of their biggest clients are financial institutions. Bloomberg and Financial Times recently wrote that PricewaterhouseCoopers has been sued for "not having detected a case of fraud that led to the collapse of a bank during the global financial crisis". According to FT, the lawsuit in the United States "could bring more audit firms in the line of fire". The biggest lawsuit against an audit firm, according to Financial Times, has been brought following the complaint filed by the company that is in charge of the liquidation of Taylor, Bean & Whitaker (TBW), a mortgage originator in the US, which has been in a long-lasting relationship with Colonial Bank din Alabama. During the period of the real estate bubble in the United States, which has led to the subprime lending crisis, TBW used to grant mortgage loans, and they have already been financed by Colonial Bank.  According to the article in FT, the company that manages what is left of the TBW assets are accusing PwC of "failing to spot the conspiracy of several billion dollars between the founder of TBW and the executive management of Colonial Bank". The documents submitted to the court show that PwC signed "clean" audit opinions between 2002 and 2008, and in 2009 Colonial Bank collapsed and "rose" up to the 6th position in the chart of the biggest defaults in the US. The cost for the FDIC (author's note": Federal Deposit Insurance Corp., the institution for the guarantee of bank deposits in the US) was 4.2 billion dollars, according to Bloomberg estimates.

EU leaders will search for unity at a special summit without the UK on Friday, in the hope of setting a course for a union battered by the Brexit vote and riven by a simmering east-west row over migration.  Donald Tusk, the former Polish prime minister who chairs EU leaders’ summits, hopes to cool tempers after Luxembourg’s foreign minister called for Hungary to be thrown out of the EU for allegedly treating asylum seekers “worse than wild animals”. Hungary counterattacked with stinging criticism of the grand duchy’s record in helping big corporations avoid tax. On Thursday Tusk called on EU leaders to take a “brutally honest” look at the bloc’s problems, declaring: “We must not let this crisis go to waste.”  “We haven’t come to Bratislava to comfort each other or even worse to deny the real challenges we face in this particular moment in the history of our community after the vote in the UK,” said Tusk, who will chair the summit. “We can’t start our discussion ... with this kind of blissful conviction that nothing is wrong, that everything was and is OK,” he added. “We have to assure ... our citizens that we have learned the lesson from Brexit and we are able to bring back stability and a sense of security and effective protection.” Tusk hopes to focus on areas that the 27 leaders can agree on: border security, counter-terrorism and moves to “to bring back control of globalisation”. Officials are playing down expectations of results from the meeting at Bratislava castle, in the capital of Slovakia, one of the four Visegrád countries along with Poland, Hungary and the Czech Republic.  Officials close to Tusk hope for small but symbolic breakthroughs, most notably an agreement to send an extra 200 border guards and 50 vehicles to the EU’s external frontier in Bulgaria by next month. Agreeing on stronger border defences is the easy bit. The thorny issue of sharing the cost of protecting refugees is likely to continue to strain unity. The Visegrád group are fiercely opposed to the EU executive’s attempts to fine them for not accepting refugees in their countries. Hungary has flatly refused to take in refugees under an EU quota scheme, while many other countries are falling short. Hungary’s rightwing prime minister, Viktor Orbán, has called a referendum for 2 October on the EU relocation plan, which would see 1,294 asylum seekers sent to the country.  Ahead of the vote, the European commission president, Jean-Claude Juncker, appeared to offer an olive branch to his opponents. In his annual state of the union address, he said solidarity “must come from the heart” and could not be forced.

An authoritarian European Commission was to blame for Brexit and must give up on its federalist dreams or risk the disintegration of the European Union, eastern European states have warned as the continent’s divisions were laid bare.  “The EU has to change, we have to reform it," the Polish Prime Minister Beata Szydlo told the European Council president, Donald Tusk, at a meeting in Warsaw designed to ensure that post-Brexit Europe could present a united front at a summit in Bratislava on Friday.  The east-west split in Warsaw came on the eve of today’s keynote ‘State of the Union’ speech by Jean-Claude Juncker, the European Commission president, which aides had also hoped would provide a “big bang” moment to show that Europe could deliver for ordinary citizens.  Instead, European capitals descended into a round of bitter mutual recrimination over the future direction of the continent.

France’s opposition party will field eight candidates in primaries to decide who will lead it in next year’s presidential election. Polls suggest the winner of the November two-round party vote will become the country’s next leader.

After Les Républicains (LR) party nominations closed on Friday evening, the stage was set for a rightwing “duel” between former president Nicolas Sarkozy and former prime minister Alain Juppé, now mayor of Bordeaux.

Polls predict that whoever wins the primary will be in the second-round runoff next May against the Front National’s Marine Le Pen; the latest show Juppé, 71, still the favourite with LR voters, but Sarkozy, 61, snapping at his heels. According to market researchers TNS Sofres, if the election were held tomorrow Juppé would win the second round against Le Pen with 55% of votes, but pollsters agree that former Socialist finance minister Emmanuel Macron could seriously upset the contest if he decides to stand. Macron, an ex-banker, resigned from the Socialist government last month but has not said if he will join the presidential race. Le Figaro suggests he would knock out Sarkozy to take third place.

The only woman among the eight LR candidates, former minister Nathalie Kosciusko-Morizet, 43, is an outside bet.

Eurostat has issued a publication to inform regarding the unemployment rate in Euro area for July.The euro area (EA19) seasonally-adjusted unemployment rate was 10.1% in July 2016, stable compared to June 2016 and down from 10.8% in July 2015. This remains the lowest rate recorded in the euro area since July 2011. The EU28 unemployment rate was 8.6% in July 2016, stable compared to June 2016 and down from 9.4% in July 2015. This remains the lowest rate recorded in the EU28 since March 2009. These figures are published by Eurostat, the statistical office of the European Union.  Eurostat estimates that 21.063 million men and women in the EU28, of whom 16.307 million were in the euro area, were unemployed in July 2016. Compared with June 2016, the number of persons unemployed decreased by 29 000 in the EU28 and by 43 000 in the euro area. Compared with July 2015, unemployment fell by 1.688 million in the EU28 and by 1.034 million in the euro area.

Member States

Among the Member States, the lowest unemployment rates in July 2016 were recorded in Malta (3.9%) as well as in the Czech Republic and Germany (both 4.2%). The highest unemployment rates were observed in Greece (23.5% in May 2016) and Spain (19.6%).  Compared with a year ago, the unemployment rate in July 2016 fell in twenty-four Member States, remained stable in Denmark, while it increased in Estonia (from 6.1% to 7.0% between June 2015 and June 2016), Austria (from 5.7% to 6.0%) and Belgium (from 8.1% to 8.3%). The largest decreases were registered in Cyprus (from 15.0% to 11.6%), Croatia (from 16.5% to 13.2%) and Spain (from 21.9% to 19.6%). In July 2016, the unemployment rate in the United States was 4.9%, stable compared to June 2016 and down from 5.3% in July 2015.

Youth unemployment

In July 2016, 4.276 million young persons (under 25) were unemployed in the EU28, of whom 2.969 million were in the euro area. Compared with July 2015, youth unemployment decreased by 310 000 in the EU28 and by 136 000 in the euro area. In July 2016, the youth unemployment rate was 18.8% in the EU28 and 21.1% in the euro area, compared with 20.2% and 22.1% respectively in July 2015. In July 2016, the lowest rates were observed in Malta (7.1%) and Germany (7.2%), and the highest in Greece (50.3% in May 2016), Spain (43.9%) and Italy (39.2%).

Geographical information

The euro area (EA19) includes Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland. The European Union (EU28) includes Belgium, Bulgaria, the Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden and the United Kingdom.

Methods and definition

Eurostat produces harmonised unemployment rates for individual EU Member States, the euro area and the EU. These unemployment rates are based on the definition recommended by the International Labour Organisation (ILO). The measurement is based on a harmonised source, the European Union Labour Force Survey (LFS).

Based on the ILO definition, Eurostat defines unemployed persons as persons aged 15 to 74 who:
- are without work;
- are available to start work within the next two weeks;
- and have actively sought employment at some time during the previous four weeks.

The unemployment rate is the number of people unemployed as a percentage of the labour force. The labour force is the total number of people employed plus unemployed. In this news release unemployment rates are based on employment and unemployment data covering persons aged 15 to 74. The youth unemployment rate is the number of people aged 15 to 24 unemployed as a percentage of the labour force of the same age. Therefore, the youth unemployment rate should not be interpreted as the share of jobless people in the overall youth population.

Country notes

Germany, the Netherlands, Austria, Finland, Sweden and Iceland: the trend component is used instead of the more volatile seasonally adjusted data.  Denmark, Estonia, Hungary, Portugal, the United Kingdom and Norway: 3-month moving averages of LFS data are used instead of pure monthly indicators.

 French president, Francois Hollande, will inaugurate the Airbus plant in Ghimbav on September 13th, according to sources close to the investors. According to Serge Durand, the CEO of Airbus Helicopters Industries, the first helicopter made in Ghimbav will only be delivered at the end of 2017, but starting with September 2016, the plant will become functional and operational. The company intends to bring in other projects to Braşov if the H215 project proves to be successful.   Serge Durand said: "For now, we have concluded a protocol with Romanian airlines- IAR Ghimbav, Aerostar, Aerotech and Turbomecanica - to become suppliers for the helicopter that will be manufactured in Romania, which will be entirely made out of parts manufactured in Romania".   Serge Durand also stated that Ghimbav will first of all manufacture the civilian version of H215, with production of the military version to be transferred in a few years from the factory in France to the one in Braşov. Moreover, in 2019, Durand hopes that over 30 Romanian engineers will be working on the design of the helicopters that will be manufactured in Ghimbav, with the company intending to develop an R&D center in Romania. The amount of the total investment in the new Airbus Helicopters project in Ghimbav is 55.7 million Euros, of which the aid of the Romanian state is a maximum of 5.2 million Euros. "We will reach 350 employees at the plant of in 2019, when we are going to start manufacturing 15 H215 helicopters a year", Durand further said.   Guillaume Faury, CEO Airbus Helicopters, said that in Ghimbav will be assembled the H215 helicopter, the latest member of the H aircraft family of the German French group, the "smaller" brother of H225. H215 is an advanced variant of the former AS332 Cie/L1e helicopter, which would be sold at "accessible prices", because "the costs are low".  Airbus Helicopters, a division of Airbus Group, offers solutions for civilian and military helicopters all over the world. The company has an operational fleet of approximately 12,000 helicopters operated by over 3,000 customers in approximately 154 countries. Airbus Helicopters has over 22,000 employees all over the world and has generated a revenue of 6.8 billion Euros in 2015. 

The annual inflation rate in the Eurozone has remained stable in August compared to July, at 0.2%, according to a preliminary estimate published on Wednesday by the European Statistics Office (Eurostat).  According to Eurostat, in the month of August, the most significant price increases were seem in food, alcohol and cigarettes, which have posted an annual increase of 1.3%, compared to 1.4% in July, followed by services, which have seen an annual increase of 1.1%, compared to 1.2% seen in July. On the other hand, energy prices have seen an annual decrease of 5.7% in August, compared to a decline of 6.7% seen in July.  Eurostat had previously announced that in July, compared to June 2016, annual inflation dropped in nine EU member countries, has remained stable in seven countries and has increased in 12 states, including Romania, according to Agerpres.  Eurostat has also announced on Wednesday that in July 2016, compared to June 2016, the unemployment rate has remained stable at 10.1% in the Eurozone, while in the European Union the unemployment rate has remained stable at 8.6%. Among the member states, the highest unemployment rates were seen in Greece, (23.5% in May 2016) and Spain (19.6%). On the opposite is Malta, with an unemployment rate of 3.9%, Czech Republic and Germany, both with 4.2%. Romania is below the EU average, with an unemployment rate of 6.1%. Compared to the situation in July 2015, the unemployment rate decreased in 24 member states, including Romania, has remained stable in Denmark and has increased in Estonia, Austria and Belgium.  In Romania's case, according to data notified by the National Statistics Institute, (INS), the annual inflation has remained in negative territory in July as well, at -0.8%, down from -0.7% in June. Calculated based on the harmonized consumer price index, the drop has been -0.3%, the INS states. The seasonally adjusted unemployment rate also stood at 6.1%, at the end of July, up 0.1 percentage points over the previous month (6%), according to the standards of the International Labor Bureau. 

Wall Street drew two conclusions from the news that the US jobs engine shifted down into a lower gear last month. The first – that a September increase in interest rates is now a non-starter – was almost certainly right.  Putting up the cost of borrowing so close to the presidential election in early November always looked like an outside bet. It would have taken thunderously good figures for job creation to have persuaded the more dove-ish policymakers at the Federal Reserve to move, and the ones released on Friday were average at best.  To be sure, the August non-farm payrolls have come in worse than expected for the past decade, suggesting that there might be some problem with the way the raw data is seasonally adjusted. What’s more, the two previous months – June and July – saw strong increases in demand for labour, so the three-month average for non-farm payrolls is running at a healthy 200,000. That could persuade some of the hawks at the Fed to move, but they will not be able to muster a majority. The second conclusion drawn by Wall Street is more questionable. That is the assumption that the rate rise some analysts had pencilled in for September has now simply been put back to a later date. Some economists believe the Fed won’t waste any time once US voters have chosen who will be Barack Obama’s successor at the White House; some think the central bank will wait until March next year. There is, though, a different way of looking at the numbers. For most of this year, the strength of the US labour market has been at odds with data showing the economy growing only slowly. Sooner or later, the theory went, growth would accelerate and come into line with employment numbers, so justifying higher interest rates.

The annual inflation rate in the Eurozone has remained stable in August compared to July, at 0.2%, according to a preliminary estimate published on Wednesday by the European Statistics Office (Eurostat).  According to Eurostat, in the month of August, the most significant price increases were seem in food, alcohol and cigarettes, which have posted an annual increase of 1.3%, compared to 1.4% in July, followed by services, which have seen an annual increase of 1.1%, compared to 1.2% seen in July. On the other hand, energy prices have seen an annual decrease of 5.7% in August, compared to a decline of 6.7% seen in July.  Eurostat had previously announced that in July, compared to June 2016, annual inflation dropped in nine EU member countries, has remained stable in seven countries and has increased in 12 states, including Romania, according to Agerpres.   Eurostat has also announced on Wednesday that in July 2016, compared to June 2016, the unemployment rate has remained stable at 10.1% in the Eurozone, while in the European Union the unemployment rate has remained stable at 8.6%. Among the member states, the highest unemployment rates were seen in Greece, (23.5% in May 2016) and Spain (19.6%). On the opposite is Malta, with an unemployment rate of 3.9%, Czech Republic and Germany, both with 4.2%. Romania is below the EU average, with an unemployment rate of 6.1%. Compared to the situation in July 2015, the unemployment rate decreased in 24 member states, including Romania, has remained stable in Denmark and has increased in Estonia, Austria and Belgium.  In Romania's case, according to data notified by the National Statistics Institute, (INS), the annual inflation has remained in negative territory in July as well, at -0.8%, down from -0.7% in June. Calculated based on the harmonized consumer price index, the drop has been -0.3%, the INS states. The seasonally adjusted unemployment rate also stood at 6.1%, at the end of July, up 0.1 percentage points over the previous month (6%), according to the standards of the International Labor Bureau.

France wants the EU to stop its negotiations with the US for a free-trade agreement.

"That means the end" of the talks, not a suspension, he said, adding he would officially make the demand at an EU trade minister meeting at the end of September.

"There is no political backing by France to these negotiations anymore," Fekl told RMC radio and BFM TV, even though the Europeans can continue to negotiate "until the end of time [because] nobody can legally oppose it".

Fekl said that TTIP talks were "obscure" and that that the US "gives nothing or just crumbles".

"That is not how you negotiate between equals and allies," he said, adding that it was not the EU commission's fault.

The French minister's declaration comes two days after German vice-chancellor Sigmar Gabriel said that TTIP talks had "de facto failed, even though nobody is really admitting it."

The EU commission, for its part, said on Monday that the "ball keeps rolling". Their chief negotiator Ignacio Garcia Bercero had also said that news of TTIP's demise was "greatly exaggerated".

The drama of Brexit may soon be matched or eclipsed by crystallizing events in France, where the Long Slump is at last taking its political toll.  A democracy can endure deflation policies for only so long. The attrition has wasted the French centre-right and the centre-left by turns, and now threatens the Fifth Republic itself.  The maturing crisis has echoes of 1936, when the French people tired of 'deflation decrees' and turned to the once unthinkable Front Populaire, smashing what remained of the Gold Standard.  Former Gaulliste president Nicolas Sarkozy has caught the headlines this week, launching a come-back bid with a package of hard-Right policies unseen in a western European democracy in modern times.  But the uproar on the Left is just as revealing. Arnaud Montebourg, the enfant terrible of the Socialist movement, has launched his own bid for the Socialist Party with a critique of such ferocity that it bears examination.