Comments on EURO-JOBLESS rise: I believe that the politicians have let us down, are continuing to do so and will carry on doing it. Where I digress is that I believe they do not tell us the whole truth. And here i am thinking about Balls and Milliband junior who try to seduce us with easy solutions when there are none. This is a long haul and we have to cut Govt spending. to say otherwise is either cloud cuckoo land or lies.Although the unemployment figures are still dreadful I am assuming that the slight reduction in Portugal’s rates would have to do with seasonal work related to tourism which always influences partial figures for Q2 and Q3. Probably not really a trend, unfortunately.

And I wonder, as with Greece, if reality isn’t a bit worse in Portugal as I read a lot of reports of companies that don’t pay their employees. So, they are neither unemployed nor in meaningful employment. A bookshop chain where I regularly buy most of my literature apparently only pays their employees one wage every 3 months. Portuguese law only allows for a contract to be cancelled by an employee with a justifiable reason for non-payments if these are not paid for 3 months.  In this case this means that the employees cannot have access to the Portuguese equivalent of JSA or ESA but can’t also cancel their contract with justifiable reason, which would allow them to eventually claim those benefits. If they were to cancel their contracts at this stage they would actually need to pay probably pay some money back to the company as severance but would also lose all rights to claim for their missed wages for previous months....There is an alternative. A very good one. Watch. A bank charges interest to a firm which means it earns interest and can pay its staff. The staff then spend their money at the firm and get stuff the firm produces for them. The firm now has the income which it can use to pay the bank interest. Monetary result is zero (the bank interest charged paid for itself), but real goods and services were produced and transferred to bank staff. Money and goods are not the same thing. They operate in different circuits and respond in different ways. Why have a bank issuing money out of thin air?, that is still a Monetary based system. Why not have a Resource based system?. An economy based upon meeting peoples needs (and desires) while accepting there are finite resources in the world to be shared amongst the population. Any system based upon interest is fundamentally flawed and damages us and the environment in the long run.

Germany's main opposition, the Social Democrats, have upped the ante, saying that Chancellor Angela Merkel must assume greater risks to avert a breakup of the single currency.

Bloomberg has a report on an interview the SPD floor leader, Frank-Walter Steinmeier, gave to the Rheinische Post newspaper.

He raised the pressure on Mrs Merkel to agree to more burden-sharing to stem the euro crisis, claiming that Mrs Merkel, while rejecting euro-region bond sales, fails to say that Germany is already exposed to losses from the debt crisis through the European Central Bank’s bond purchases:

The government should finally be honest about it to the people. If we want to prevent the breakup of the euro zone, it won’t be without risks for Germany.....I have been following the EU. crisis for the last three years and the Muppets in Brussels still have no idea what to do. It gives me no confidence at all in our leaders in Brussels. The numpties in Westminster are not too bright but they beat the nutters in Brussels and Strasbourg hands down.

From debt crisis to food crisis. The UN's food agency has warned today that the world could face a food crisis like that of 2007/08 if countries restruct exports on concerns about a drought-fuelled grain price rally. In its latest update, the Food and Agriculture Organisation said its food price index climbed 6pc last month, after three months of decline, driven by a surge in grain and sugar prices.

Anxieties over extreme hot and dry weather in the US Midwest sent corn and soybean prices to record highs last month, driving overall food prices higher.  Grain markets have also been boosted recently by speculation that Black Sea grain producers, particularly Russia, might impose export restrictions after a drought there hit crops.

The FAO's senior economist and grain analyst Abdolreza Abbassian told Reuters:  There is an expectation that this time around we will not pursue bad policies and intervene in the market by restrictions, and if that doesn't happen we will not see such a serious situation as 2007/08. But if those policies get repeated, anything is possible.

Austerity is politically unsustainable across Europe...

Economists at Deutsche Bank said that a 'yes' vote was not guaranteed. "The polls should not be taken for granted. Irish voters have some history of tactical 'No' voting in European referenda. The Nice and Lisbon Treaties were rejected before certain issues were clarified." The Deutsche economists added that Ireland's vote would have wider significance during the current crisis. "This will be an occasion to judge voter appetite for austerity. Rejection could reinforce a general fear that austerity is politically unsustainable across Europe," they said.

Ireland is the only member state that will ratify the compact with a full public vote, because the Irish Constitution dictates that any transfer of national sovereignty can only be granted via a referendum. "The latest polls suggested Ireland would back the pact"
should read: "The latest polls suggested Ireland would back the suicide pact"Any country which rejects the fiscal pact will not be eligible to access the European Stability Mechanism, the eurozone's permanent bail-out fund. here are the main points of the ESM.......god help us Article 8 The authorized capital stock shall be EUR 700 Billion
Article 9 3) ESM Members hereby irrevocably and unconditionally undertake to pay on demand any capital call made on them within seven (7) days on receipt of such demand.
Article 10: Changes in authorized capitol stock.
The board of governors may decide to change the authorized capital and amend article 8 (...) accordingly Article 27; Legal status, privileges and immunities.
2) The ESM (...) shall have full legal capacity (..) to institute legal proceedings.
3) The ESM, its property, funding and assets (..) shall enjoy immunity from every form of judicial process (...)
4) The property, funding and assets of the ESM (...) be immune from search, requisition, confiscation, expropriation or any other form of seizure, taking or foreclosure by executive, judicial, administrative or legislative action.
Article 30: immunities of persons
Governors, alternate governors, Directors, alternate directors, The managing director and staff members shall be immune from legal process with respect to acts performed by them (...) and shall enjoy inviolability in respect of their official papers and documents...

The latest draft of a new pact on the financial crisis, focusing on how the European Commission can sanction debt-sinners and how to merge the new treaty with EU law despite a UK veto. According to this draft version of the new pact sent to national governments on Thursday, the commission "may, on behalf of contracting parties" bring a legal case before the European Court of Justice if the countries subscribing to the pact break the so-called golden rule of keeping balanced budgets which are to be enshrined in national constitutions. In a first version of the text drafted last month, only member states could take fellow countries to court for breaching the debt-brake rule. But getting the commission - which represents all 27 member states and is bound by the EU treaties - involved in an intergovernmental arrangement at 26-level poses legal challenges which could be attacked in the EU court. The problem arises after the UK in December vetoed writing the new measures into the EU Treaty directly because it was unhappy over upcoming legislation which might affect the City of London. The legal trick to get around the issue could be mandating the commission to act "on behalf" of member states, one EU diplomat said. LET'S NOT FORGET : The Commission is not an elected body and the Parliament has no legislative power ! British Prime Minister David Cameron pledged to do "everything possible" to stop signatories of a new fiscal treaty from using the European Commission and the European Court of Justice. "You can't have a treaty outside the EU that starts doing what should be done within the EU," he told BBC.

The perfect ‘storm scenario’ for the euro in 2012:

• Widespread downgrades, including of the eurozone’s remaining Triple A countries, by credit rating agencies. Serious questions would be raised over the viability of the eurozone’s bailout funds as they rely on an ever thinner list of Triple A eurozone states, leaving the euro with little more than a paper tiger as a backstop.

• Spanish banks could hit the iceberg as households fail to pay their mortgages and the level of non-performing loans pile up. If it gets bad enough, the Spanish government wouldn't afford to recapitalise these banks on its own and must seek a potentially huge bailout from the EU/IMF.

• In addition to those in Spain, one or more banks in Italy or France could sink due to large exposure to weaker euro states - following a hard Greek default for example. As in Spain, there are doubts as to whether these governments could afford to bail out their banks without outside help.

Draft of new euro measures a 'confidence trick'

The EU summit in Brussels agreed to provide up to €200 billion more to the International Monetary Fund, which could use some of that money to support debt-laden countries. The 17 eurozone countries will provide €150 billion of that, with the remaining €50 billion due to come from EU members who do not use the single currency. Several non-euro nations including Denmark and Sweden have said they are prepared to provide loans from their central banks. EU officials said it remained possible that Romanian Central Bank could be asked to contribute to the €50 billion. Final decisions on the IMF package are due in 10 days. Leaders are hoping that economies outside Europe will contribute. Even The Central Bank of England may be asked to contribute. Christine Lagarde, the head of the IMF, welcomed the deal as the beginning of an answer to the eurozone crisis. “I appreciate this demonstration of leadership from Europe, and I am hopeful that others will also do their part,” she said.

If anyone thinks things are getting better then they simply don't understand how severe the problems are.

Everyone talks about the amount of CDS's that have been issued and how they could all be paid without a collapse of the entire banking system. I would expect that every financial institution that has issued CDS insurance has themselves hedged the risk with another institution that has itself hedged the risk they took and so and so on. The NET liabilities of each financial institution would therefore be far less than the CDS's they have issued. The way to do with this is by setting up of clearing house for CDS claims in the event of a default. Any thoughts on this idea, how it would work and how effective it would be? The European Central Bank admitted it had held meetings about providing emergency funding to the region's struggling banks, however City figures said a "collateral crunch" was looming. "If anyone thinks things are getting better then they simply don't understand how severe the problems are. I think a major bank could fail within weeks," said one London-based executive at a major global bank. Many banks, including some French, Italian and Spanish lenders, have already run out of many of the acceptable forms of collateral such as US Treasuries and other liquid securities used to finance short-term loans and have been forced to resort to lending out their gold reserves to maintain access to dollar funding. "The system is creaking. There is a large amount of stress," said Anthony Peters, a strategist at Swissinvest, pointing to soaring inter bank lending rates. MY COMMENT IS : Since The ECB has already acted this week to help the bank liquidity crisis in Europe, bu it did not get the prominence in the media I felt it deserved but it provided 50.7 billion US dollars of 84 day liquidity, I'm publishing this on this blog of mine. Perhaps in these days of numerical inflation 50 billion isn’t what it was! This was from the central bank liquidity swaps I have been discussing for a couple of months and as the funds are in effect borrowed from the US Federal Reserve if the crisis was a western film this stage would see the arrival of the US Cavalry! Whether this will turn out to be Little Big Horn or a triumph remains to be seen."

The eurozone's EFSF bailout fund may have its AAA rating cut if S&P downgrades the sovereign debt of the nations backing it

Dwight D. Eisenhower warned "we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex" . Well the financial crisis was the military-industrial complex making their move for total power - Create an EU ; Create an EU common currency. When the time is right launch an economic attack on the EU - chosen method, use international credit rating agencies and international financiers to defraud European banks and then get puppet politicians to transfer banking debt to taxpayers and call it sovereign debt. Then, use this so called sovereign debt as an excuse for "technocrats" (the military industrial complex) put their people in place. Yes the military industrial complex is taking over and overthrowing democracy. It follows that any country that does not have a stock market should be attacked and their leaders replaced. WELL finally : Tell us EU-enthusiasts : at what point do the ends cease to justify the means?

"A confidential paper from council president Herman Van Rompuy proposes empowering the commission to impose austerity" - Herman Van Rompuy is circulating the euro zone plan ahead of a crucial EU summit on Thursday and Friday - What seems ridiculous about this whole approach is that even if these proposals had already been in existence, they would NOT have prevented this crisis. Spain had a surplus right up to the crisis, Ireland was well within the GDP/Deficit and debt limits imposed by the growth and stability pact (unlike France and Germany ironically enough). The Germans seem unwilling to recognize or accept that this crisis is a banking crisis and only ever became a sovereign crisis when States had to shore up their failed banking systems. That being the case, are the Germans being wilfully blind to the fact their banks lent just as recklessly as anyone's to banks in the Southern States (and in Ireland, as an example, the debt mountain is largely the result of the State bailing out one bank in particular which was funded by German banks, who will be paid 100 cents on the euro for their stupid investing, all on the backs of the Irish tax payer!). I actually think integration with rules which everyone (including the new dictators) must abide by could be good for a sustainable euro economy but all this nonsense about countries losing voting rights and the likes is pretty dumb if you ask me. They do know this would have to go to a referendum in Ireland and if they continue to treat the Irish people with disdain whilst the Irish people pick up the tab for a failed banking system which the self righteous Germans are key villains in, do they really believe it would pass? Or is that the plan? A no vote thus allowing the northern states to walk away from this mess and form their own block?

Oh dear, yet more huffing and puffing from Frau Merkel and her toy pig Psycho-Sarko... They talk and try oh so hard to sound as if they know what is going on but fail to face reality each and every time. To say no more "haircuts" is a bit "rich", given how they mugged bond holders only a few weeks ago - can these two be trusted ever again?? ... They miss the point, in my humble opinion - they must have full fiscal union to make the You - Owe work... however, a small problem is that the people (oh no not them again!!!) do not wish to have full fiscal union depriving them of sovereignty...
Alternatively they can accept the grim reality, that Delors little idea born with flaws can never get better and is occupying a vital bed in Intensive Care...Here are the main points of the new treaty include:

1 - Automatic sanctions for breaching deficit ceilings of 3pc of GDP and a requirement for balanced budgets.
2 - Speeding up implementation of the permanent bailout funds, the European Stability Mechanism, to 2012, with the introduction of qualified majority - 85pc - for decisions, instead of unanimity.
3 - No more haircuts for bondholders.
4 - A monthly meeting of euro zone leaders until crisis ends, focusing on growth in Europe.
5 - ECB's role to remain unchanged - will not be lender of last resort - and there will be no eurobonds.

As the two spoke yields on 10-year Italian bonds, which last week were trading at "unsustainable" level above 7pc, slipped below 6pc.

Confidence that European leaders will come up with a credible plan to end the debt crisis at a crucial summit this week also buoyed stock markets. PRESS REACTION : -- Bruno Waterfield, the Telegraph's Brussels Correspondent, tweeted, citing a diplomat: "Looks like Sarko caved on most points, EU 27, automatic sanctions, ECB." -- While Simon Nixon, European editor of the Wall Street Journal's Heard on the Street column, suggested that France was a big winner. -- "Amid all the bluster from Merkozy presser, big winner seems to be Sarkozy (and de Gaulle), losers are Germany and UK."

The costs of insuring European Bank Debt against default fell Friday amid hopes that policymakers are nearing a solution to the debt crisis. In early trading Friday, the five-year CDS spreads on core European financial companies mostly fell, with senior and subordinated banking indexes both tightening, according to Markit. The CDS spreads on major lenders in Germany and France narrowed, with Deutsche Bank AG (DB) and Credit Agricole SA (ACA.FR) tightening the most. Deutsche Bank tightened 10 basis points to 229 basis points, while Credit Agricole tightened nine basis points to 265 basis points. Commerzbank AG (CBK.XE) saw its five-year CDS spread tighten four basis points to 306 basis points, with both BNP Paribas SA (BNP.FR) and Societe Generale SA (GLE.FR) also tightening four basis points. BNP Paribas was back on par with Credit Agricole at 265 basis points, while Societe Generale tightened to 331 basis points. Italian bank UniCredit SpA (UCG.MI) was the only major bank in the core euro-zone economies to see its CDS spread widen, advancing one basis point to 590 basis points. Spanish banks all pushed lower with Banco Popular Espanol SA (POP.MC) narrowing the most, tightening 21 basis points to 840 basis points. At around 0925 GMT, the iTraxx Europe Senior Financials index was six basis points tighter at 284/289 basis points, while the Subordinated Financials index tightened 12 basis points to 503/514 basis points, according to Markit. Credit default swaps are derivatives that function like a default insurance contract for debt. If a borrower defaults, sellers compensate buyers.

Announcing more talks with German Chancellor Angela Merkel in Paris on Monday to "guarantee Europe's future", Mr Sarkozy said: "France and Germany, after so many tragedies, have decided to unite their destiny and to look to the future together." Admitting that France had "spent too much and often badly", Mr Sarkozy pledged an "immense revolution" to install a "new model of growth". But he insisted the eurozone would have to reform together. "We will not re-take control of our destiny alone. We will not domesticate finances alone. We will not change the rules of globalisation alone." Eurozone governments would need to forfeit their rights of veto in policy-making, he said, under a new system of eurogroup qualified majority voting. Sarkozy failed to flesh out his ideas but his initiative appeared to run counter to Berlin's plans for a much more rigorous monetary union in which participating governments would surrender ultimate control of tax and spending policies to a centralised EU body armed with intrusive powers of scrutiny and dealing out automatic penalties to fiscal sinners. "The reform of Europe is not a march towards supra-nationality," Sarkozy said in a swipe at handing powers to Brussels. "The integration of Europe will go the inter-governmental way because Europe needs to make strategic political choices." The German chancellor, Angela Merkel, is to go to Paris on Monday to try to hammer out the new eurozone blueprint with Sarkozy. She is to unveil her proposals and priorities in a speech to the Bundestag in Berlin on Friday, while David Cameron is also to go to Paris for discussions on the crisis with the French leader. All of that precedes an EU summit next week that pundits and politicians are billing as Europe's last chance to secure a future for the euro. All the signs were that Paris and Berlin were determined to coin a common plan but remained far apart on the essentials. "Together we will make proposals to guarantee Europe's future," said Sarkozy.

The Euro should be put out of its misery-The EU deceived us that the Euro would work

The EU deceived us that the Euro would work when plainly it would not, and now millions are going to suffer due to their vanity, stupidity, and enlarged egos. We need to know not only who they are, but who were their supporters - further more all those that are on retainers, (sorry Pensions) need to come clean and repent.The EU politicians created this monster by saying join us and we will advance you money to develop your country to a level beyond your wildest dreams. And at a speed that you would never be able to attain through organic growth. So the scheme is built on a huge gamble that economists would always tell you was bound to fail one day. It was totally dependent on perpetual and rapid economic growth. That was and is the only key to repaying those debts. As soon as the growth slowed, the game was up. I like to keep it simple. A private individual can have a good life on a credit card, providing the income keeps going up to pay the interest. But the day of reckoning comes when the income slows or stops. Europe kept on spending and kept on asking for an increased limit and the banks and politicians kept giving it. Then the inevitable happened. And now there is no one left to lend the money for Europe's next months credit card bill. EU leaders simply won't admit that their pet project was unsustainable from the start and now they will stop at nothing to prevent the first domino falling. The Euro should be put out of its misery in the most orderly manner possible, before it collapses completely. There will be pain for all, but the longer they drag this out the worse it will be.

How incompetent can a E.U. Commissioner be ?...there he goes : Olli Rehn, the European Commissioner for Economic and Monetary Affairs, is calling for quick decisions for the solution of the financial crisis affecting the eurozone. Speaking in Helsinki on Thursday, Rehn said that slow movement will not work. “Ahead of us we have either the slow disintegration of the entire eurozone, or the strengthening of the economic and monetary union.” According to Rehn, plans to increase the lending capacity of the European Financial Stability Facility (EFSF) is in its final stages, and decisions could be forthcoming already next week at a meeting of the economic ministers of the eurozone. - The EU treaties that created the euro and set its membership rules contain no provision for members to leave, meaning any break-up would be disorderly and potentially chaotic. If eurozone governments defaulted on their debts, the European banks that hold many of their bonds would risk collapse. Some analysts say the shock waves of such an event would risk the collapse of the entire financial system, leaving banks unable to return money to retail depositors and destroying companies dependent on bank credit. The Financial Services Authority this week issued a public warning to British banks to bolster their contingency plans for the break-up of the single currency. Some economists believe that at worst, the outright collapse of the euro could reduce GDP in its member-states by up to half and trigger mass unemployment. Analysts at UBS, an investment bank earlier this year warned that the most extreme consequences of a break-up include risks to basic property rights and the threat of civil disorder. “When the unemployment consequences are factored in, it is virtually impossible to consider a break-up scenario without some serious social consequences.”

Amazing. The EU politicians now promise to enforce the rules a decade too late and they actually think that's an advance. It’s like a bad SciFi novel where everyone does everything in exactly the reverse order and in slow motion to boot. Merkel used the three-way summit with France and Italy in Strasbourg to insist that new treaty powers to intervene and punish sinner states remained the key focus of Europe's rescue efforts. She said: "The countries who don't keep to the stability pact have to be punished – those who contravene it need to be penalized. We need to make sure this doesn't happen again." Even suggestions that the ECB could extend longer loans to countries over a period of up to three years appeared to be ruled out. Ms Merkel said: "The ECB is independent, the modification of the treaty does not concern the ECB, which is dealing with monetary policy and financial stability. We are worried about a fiscal policy. It's a very different chapter. It has nothing to do with the European bank." At the beginning of the day, Jean Leonetti, French minister for European affairs, said: "France wants the ECB to have the same role as the Federal Reserve... Why is the euro under attack? It's simple. In the US there's a Federal Reserve. Europe has the ECB, but the ECB does not buy up sovereign debt if needed."

Credit markets are “too pessimistic” given Europe and the U.S. aren’t likely to suffer deep recessions

Franklin Templeton Investments favors corporate bonds on prospects global growth will be driven by sustained expansion in China, and is betting yields on German bonds and U.S. Treasuries that have fallen too low. Credit markets are “too pessimistic” given Europe and the U.S. aren’t likely to suffer deep recessions, helping sustain growth in export-driven emerging economies, said David Zahn, who helps oversee $694.1 billion in assets at Franklin Templeton as a London-based portfolio manager in the fixed- income group. Debt sold by industrial companies in Europe and the U.S. is attractive, while some government bond yields have reached levels too low to be sustainable, Zahn said. “A lot of what’s been going on recently, we see more as noise, as opposed to fundamental changes,” he said. “We are positioned relatively bullishly.” China is heading for growth in excess of 8 percent next year, and along with most Asian nations has fiscal scope to cushion its economy from an escalation in Europe’s debt crisis, the World Bank said Nov. 22. The report signals that Asia, which led the world out of the 2008-2009 recession, is poised to withstand the blows from any slump in demand for its exports or pull-back in credit by European banks. U.S. gross domestic product climbed at a 2 percent annual rate from July through September, the Commerce Department said yesterday. It is expected to expand 2.2 percent next year while the euro area grows 0.5 percent, according to economist forecasts compiled by Bloomberg. “If you look at the macroeconomic fundamentals, they’re still doing what you would have expected,” Zahn said.

Germany, backed by France - (Vichy ?!...nobody learns anything from their own history)...Speaking after talks with David Cameron in Berlin, Mrs Merkel also pointedly rejected the Prime Minister’s call for the European Central Bank to play the main role in bailing out troubled eurozone countries. The disagreements undermined the claims of the two leaders to be working closely on responses to the European debt crisis. Germany, backed by France, wants the European Union to impose a new tax on every financial transaction banks make, with the revenues used to help debt-ridden countries. Britain has suggested that such a tax would have have to be applied by every country in the world to be workable. A European tax would simply drive banks to other countries, ministers believe. Mr Cameron said: “The danger is driving transactions to a jurisdiction where it wouldn't be applied. Mrs Merkel made clear she had not changed her position either. “We are at one in saying a global financial tax would be introduced immediately,” she said. “But on a European one, we did not make any progress on that one. We have to both work on where we both feel change is needed.” The Prime Minister is among international leaders has been pushing hard for Germany to agree to the ECB acting as a bank of last resort for failing eurozone states.

ECB policymakers continue to reject international calls to intervene decisively as Europe's lender of last resort, stressing it is up to governments to resolve the debt crisis through austerity measures and reforms. The bond market contagion continues to spread across Europe. Italian 10-year bond yields have risen above 7pc, unaffordable in the long term, while yields on bonds issued by France, the Netherlands and Austria - which along with Germany form the core of the euro zone - have also climbed. With its prized 'AAA' credit rating under threat from soaring borrowing costs, France appeared to plead for stronger ECB action. German Chancellor Angela Merkel made clear Berlin would resist pressure for the central bank to take a bigger role in resolving the debt crisis, saying European Union rules prohibited such action. I believe that the euro zone having so many diverse economies and no fiscal transfers that the ECB needs to act as a lender of last resort and start printing money like any other normal central bank would do - if it does not, then the euro zone could well collapse... and it will ! On the reverse : France is truly pathetic. No balanced budget for decades; Chirac did nothing to restructure France, which has the highest costs for govt. employees in the EU. They surely need a reality check; this pathetic begging for the ECB to print money is ridiculous. They have only now, started a programe of "austerity", but we're not allowed to call it that. I fear far worse is to come when the socialists win the Presidency; than, we may well see a real collapse.

The prospect of a euro zone breakup intensified

The prospect of a euro zone breakup intensified on Tuesday night as borrowing costs around the region soared and the Dutch prime minister said it should be possible to expel some members from the currency union. Investors are rapidly losing hope that a solution to the sovereign debt crisis will be found, and their fear was demonstrated by rising bond yields – the rate of interest governments have to pay to borrow – across almost all single-currency countries. The Dutch premier, Mark Rutte, stoked fears that a collapse could become a reality as he aired the prospect of countries being ejected, albeit as a last resort. "We would like countries to be able to be pushed out of the euro zone," Rutte said on a visit to London, adding member countries must "put out the fire" of the debt crisis. As analysts warned of "terror taking hold", even some of those countries until now regarded as safe havens, such as the Netherlands, came under pressure as fears about countries' creditworthiness spread from peripheral countries such as Greece into Europe's core. One bond expert described this as the most worrying day yet in the crisis - he said - France was now suffering a "full-blown run" on its debt, with investors dumping French bonds to move their money to safer havens. The source added that the credit default swap (CDS) market – where investors in effect bet on the prospects of countries going bust – now indicates that the chance of France losing its coveted top AAA rating is a near certainty. Italy's growth figures for the third quarter have yet to be released, but the latest update for the euro zone does not bode well. The 17-nation group grew by just 0.2% during the quarter, and many forecasts expect the euro zone economy to contract in the final months of this year. In Spain, there was more evidence of investors' frayed nerves as the government was forced to pay out its highest borrowing costs in 14 years on new debt. Investors did come forward with enough money, but Spain's borrowing costs shot up to more than 5%, compared with less than 4% at similar recent sales. Belgium was victim to the same flight from eurozone bonds, and yields on a sale of 12-month debt by Brussels were at a three-month high. Investors were looking outside the currency union, and Switzerland fared rather differently at its latest debt auction. Its sale of six-month bills had an average interest rate of -0.3%. In other words, investors are paying the Swiss government for the privilege of lending their money to the country.

Growth - statistics ...

German gross domestic product (GDP) expanded by 0.5pc between July and September compared with the preceding three months, driven by strong domestic demand. Growth in Europe's biggest economy in the second quarter had stood at 0.3pc, revised upwards from an original estimate of 0.1pc. "Positive impulses came primarily from domestic demand, with rising consumer spending in particular contributing to growth," the federal statistics office Destatis said in a statement. "In addition, investment in equipment also increased, while construction investment declined somewhat after a strong start to the year." Foreign trade was also robust, with both exports and imports growing by around the same amount. Economists also expect fourth-quarter growth in France to be flat at best as the euro zone debt crisis discourages investment and employment. The French government has slashed its growth forecasts twice in the past four months and pledged budget cuts to prevent the deficit from ballooning. Xavier Bertrand, the French Labour minister, said: "Positive growth means tax revenue, but there isn't enough growth so we have to manage our budget like you do at home, or like a company chief. If there's not enough money coming in then there must be less money coming out." Romania 3Q GDP + 1.9% On Quarter, +4.5% On Year. Romanian economy expanded by 1.9% in the third quarter, after a modest recovery of 0.2% three months earlier, a flash estimate of the country’s statistics institute showed Tuesday.

BERLIN—German Chancellor Angela Merkel on Monday responded to growing criticism of euro-zone bailouts from within her Christian Democratic Union party with a passionate call for Germany to shoulder the burden of saving Europe's most ambitious project and to step up to the challenges of these uncertain times. During a party convention in the eastern German city of Leipzig, where in 2003 Ms. Merkel made a pledge to return Germany to its role as Europe's undisputed economic leader within a decade, the chancellor rebuffed accusations she had abandoned the conservative party's long-standing positions on core issues—from social policies to nuclear energy and now minimum wages and euro-zone bailouts. German Chancellor Angela Merkel at the CDU party congress Monday in Leipzig, Germany. "We live in times of epic change," Ms. Merkel said. "Our political compass has not changed. But the context is constantly changing." Some party members called for Ms. Merkel to make it possible to boot profligate euro-zone nations out of the 17-member club. Ms. Merkel told her party that 30-year-old policies couldn't supply the appropriate answer to Europe's "most difficult hours since World War Two." She insisted that the party must go with the times. In a one-hour speech at the two-day convention that is being held under the motto "For Europe, For Germany," Ms. Merkel pounded the themes that have become a steady drumbeat in her daily messages back in Berlin about resolving the euro-zone debt crisis: that the euro crisis will take years of hard work to fix and that the crisis offers the opportunity to recreate the European project. "We need to send a clear signal," Ms. Merkel told the delegates. "We don't whine; we don't complain. We know instead that we have a job to do." ...I ask : What job ? : THE JOB IS TO FULFILL THE RIBBENTROP - MOLOTOV PACT PROVISIONS and TAKE OVER EUROPE !!!!!!! The Russians already met their task of taking over the European Energy resources !!!

Europe is in trouble because you, THE UNION MEMBERS ( amusing thought - union- what union?) borrowed too much money. If your politicians had not spent so much of your money, and borrow more to boot, to buy the votes of various constituencies, you would not have these problems now. You continue to blame everyone but yourselves. The EU will collapse because European society is a welfare state that could never be sustained. There is no way to fix it without pain (i.e., spending cuts). The reason every plan your "leaders" dream up fails is because they try to fix debt by more borrowing. You're finished. Your society is a failure. I hope the US does not follow you, but our current leadership seem bent on doing just that. You're spoiled just like Americans are spoiled. Don't take my word for it. Rather, listen to the head of the Chinese Sovereign Wealth Fund, to whom your leader went begging last week? “I think if you look at the troubles which happened in European countries, this is purely because of the accumulated troubles of their worn out welfare societies,” Jin Liqun said in an interview with Al Jazeera television. “I think the labour laws are outdated – the labour laws induce sloth, indolence rather than hard working. The incentive system is totally out of whack.”

I'm quite impressed with Mr. Pappandreou's performance. As I thought earlier, this pantomime seems to be designed entirely to allow him a somewhat dignified exit.
He 'negotiated' (i.e., 'had imposed on him') the EU debt relief package and then, when the conservatives railed against him for the terms of that package, floated the idea of a referendum (although I doubt he ever intended there to be one). That caused sufficient panic among his opponents that he proposed a 'government of national unity' (i.e. 'a government not led by him') to do the dirty work of actually implementing the requirements of the EU package. Now he can place the leader of the conservatives squarely in the gunsights for the duration of the worst of the cuts that must hit Greece, walk away and say, "But I wanted the people to choose!"
They shouldn't clean out his office as he or his successor will be back within two years.