Rosia Montana - the criminal government of Romania or an opportunity to make a profit...????

Italian GDP revised down - The Italian recession is deeper than thought. New data released this morning shows that the economy shrank by 0.3% in the second quarter of 2013, worse than the 0.2% first estimated. That means that Italian GDP is 2.1% less than a year ago, not the 2% as initially thought.

As if prime minister Enrico Letta didn't have enough to worry about with Silvio Berlusconi's fate still in the balance.

 ISTAT, Italy's statistics body, reported that household spending continued to shrink in the face of Italy's economic woes, falling by 0.4% during the April-June quarter.

Capital spending and imports also dropped, by 0.3% quarter-on-quarter in both cases.

The year-on-year data underlined how Italy's economy has suffered over the last 12 months. Consumption is down by 2.4%, capital expenditure is 5.9% lower, while imports are down 4.6%. Exports are 0.2% higher than a year ago.

Here are the details:

Over in the bond markets, Italian government borrowing costs have risen above Spain's for the first time in 18 months. It means Italy is being priced as a (slightly) bigger risk than Spain, in a sign that the Berlusconi Conundrum is dragging Italy towards a new crisis. Italian 10-year bond yields are trading at 4.485% this morning compared to 4.481% for Spain. That's must be a minor relief for Madrid, whose borrowing costs have been pushed up by allegations of government corruption and fears over bad bank debts.

I have a feeling that this whole economic situation is going to end up with a "boy who cried wolf" scenario....there have been so many "crisis" stories since 2007 that no one cares any more, then one day we will wake up and the Euro will be on its knees ....then the media will be happy because there will be an actual crisis to report on !

In the mean time...A "French expansionary policy' would have to be paid for with German, Dutch, Finnish money. These payees may agree if as part of the package deal there was real external control at a federal level over spending in France (and Spain, Portugal, Italy, Greece) and as a result of this control see a roll back of many aspects of the huge government spending in France where 65% of GDP is direct government spending. What the payees want is a reform of rigid labor markets and money to be spent on supporting projects that will employ people and not on cradle to grave government largesse beloved of French socialists. On the other hand, the French ideal is an agreement where they get pots of other peoples money to allow them to carry on exactly as they where doing and even expand the dirigiste state more. Mr Hollande made lots of election promises (eg hiring 65000 more teachers that he now he is President he knows France cannot afford. He would love Germany to pay. France (and others) will never give up an iota of sovereignty over their economy, so don't expect the Germans and others to agree to mutualize debts....Well...It is really all a big scam. Governments borrowing money that they know they wont pay back, banks doing the same, senior politicians and banksters all know that they will be retired soon, into the sunset with their golden pensions and pots of cash. They wont be around to live in the hell they have created. Meanwhile, the workers, the poor, the unemployed, the pensioners will all pay the price of rising unemployment, failed social systems and rising crime. Eventually there will be an overthrow of the current system, but the crooks will all be gone to Dubai, USA or some other capitalist entity that doesnt ask questions about how they got their money. I live in the UK, the poverty is visibly worse every day and our politicians do nothing. Same everwhere I guess. Pity. Within weeks of taking office at the start of the year he was flooding Europe's banks with €1tn in cheap, short-term credit. Was that the same cheap loan scheme that was known as LTRO? Long Term Refinancing Operation? Either way Angela seems to have it well under control. She will play it her way, loosen the purse strings as and when necessary. The Germans really couldn't give a damn but if, in their desperation, the EU wishes to place the future of Europe in her lap, who is she, a mere frau, to refuse? Interesting times. Time for us to think about where's the EXIT maybe?

A summit of leaders on Feb. 4 produced no breakthrough, with Germany and France introducing new proposals for boosting competitiveness across the zone, prompting renewed disagreement among states. Another summit is due to be held after March 9 to sustain momentum towards a deal, with the complete package expected to be finalised at another summit on March 24-25 in Brussels. Below are ideas that have been discussed formally or informally and could be included. Some measures face strong opposition from Germany and appear unlikely to make it.

INCREASING THE EFFECTIVE LENDING CAPACITY OF THE EFSF

There is a strong chance of this step being adopted. The nominal lending capacity of the European Financial Stability Facility, the euro zone bailout fund, is 440 billion euros, but because of a system of guarantees to secure a triple-A credit rating, the special purpose vehicle has an effective lending capacity of only around 250 billion euros. The European Commission, France, Germany and others agree that the effective lending capacity should be boosted to the full 440 billion and talks are focusing on how to do that. The idea of raising the EFSF's overall size above 440 billion euros was rejected by euro zone ministers on Jan. 17.

HOW COULD THE EFSF'S CAPACITY BE INCREASED?

Lifting the EFSF's effective capacity could require euro zone states to increase their guarantees, forcing some governments to seek fresh approval from their parliaments. This could be politically tricky in countries such as Germany where public opinion is against bailouts of countries that have been overspending or not kept budgets in check. Berlin has indicated that instead, euro zone countries with a rating below the top notch could inject cash into the EFSF, making up for their lack of a triple-A grade. If the 11 non-AAA countries in the euro zone injected cash, the fund would no longer need cash buffers to secure its rating and could therefore lower its interest rate. But non-AAA countries are not keen to spend cash, so the end-result could be a mix of both options, euro zone sources have indicated.

Five cajas failed Europe-wide stress tests on banks last year. The Bank of Spain has forced them into a round of mergers, reducing their number from 45 to 17 last year. High levels of bad property loans at the cajas are seen as a major risk for Spain as it slashes its budget deficit to stave off fears it will need an Irish or Greek-style rescue from the European Union and International Monetary Fund. Estimates of the cost of recapitalising the savings banks range from €17bn (£14.4bn) to €120bn, with consensus falling in the €25bn to €50bn range, according to Reuters. Economists say Spain could afford that level of rescue without seeking outside aid.The banking sector has so far set aside €88bn to cover losses on total loans of €439bn to real estate and construction. Spain's borrowing costs have soared amid worries that the sovereign debt crisis that forced Greece and Ireland to seek bailouts will spread to Portugal and then Spain. A budget deficit of 9.3% of GDP in 2010 and stagnant growth have added to the worries, though the government is hitting deficit reduction targets and pledges pension and labour reform shortly. Analysts welcomed the promise of caja recapitalisation. "This underpins hopes that Spain is now on the right track," Commerzbank strategist David Schnautz told Reuters.