These debts -- across the Eurozone and the world -- are too big to ever be repaid.

Klaus Regling, head of the European Financial Stability Facility (EFSF), warned that the eurozone must reinforce its fire walls to avoid more market volatility. "More money would reassure markets. Wrongly or rightly the fact is that big numbers in the shop window create calm," he said over the weekend. Mario Monti, the Italian prime minister, told a conference that the rise in Spain's borrowing costs was a warning that "it doesn't take much to recreate risks of contagion". Last night, officials claimed Angela Merkel was prepared to yield to the pressure and agree to combine the firepower of the €440bn (£368bn) EFSF and its permanent replacement, the €500bn European Stability Mechanism (ESM). However, the German Chancellor is desperate not to anger her electorate by giving more support to the eurozone, especially after her coalition partners struggled in state elections yesterday. Eurozone finance ministers are due to meet in Copenhagan on Friday and Saturday to agree to combine the bail-out funds – or significantly increase their capabilities.....Perhaps Mr Regling is too clever for me, I see now, the bailouts will not cost German tax payers a "penny...Euros, now that's another story....I say: These debts -- across the Eurozone and the world -- are toobig to ever be repaid.The only solution to this mess is for nations to simply refuse to pay sovereign debts, and to move on like nothing happened.

Sunday posting - "the German fist"

European leaders will discuss whether to weld the funds together at a summit in Brussels this week. But, Germany has so far refused to say whether it would support such a move.... Germany also raised doubts that finance ministers would come up with a deal on IMF funding this weekend. “I expect no decision at the G20 summit on boosting the IMF’s resources,” said Jens Weidmann, head of Germany’s central bank. ...Other major contributors to the IMF are insisting that Europe must combine its two existing bail-out funds as a pre-condition of any extra money from the IMF. The European Financial Stability Facility, which is worth about €250bn, will be joined this summer by the €500bn European Stability Mechanism. “We have to take a hard look at the firewall,” said Angel Gurria, head of the Organisation for Economic Co-operation and Development. “The bigger, the thicker, the deeper and the taller it is, the more credible it will be and the less likely it will have to be used.” Becoming the first member of Germany’s cabinet to openly call for a Greek exit, Hans-Peter Friedrich told Der Spiegel magazine that Greece’s chances of restoring its financial health would be greater outside the euro. “I’m not saying that Greece should be thrown out but rather to create incentives that it can’t say ‘no’ to,” he added.

Kicking the "can" down the road...amuzing if it wasn't sad !

In the wake of this week's deal to prevent a Greek default, Olli Rehn ( the definition of "incompetent"), the EU's economic and monetary affairs commissioner, insisted that a plan to merge two eurozone bailout funds was vital over the next 10 days. Mr Rehn is seeking to fuse the existing European Financial Stability Facility (EFSF) fund, worth €250bn, with a new European Stability Mechanism (ESM), to be created this summer and worth €500bn. "This is very important to show that we have credible instruments to ensure we have financial stability in Europe," he said. "It is also very important to encourage our international partners in the G20 and IMF to move in order to increase the resources of the IMF, which form a global financial firewall but also contribute significantly to the European financial firewall." The issue will dominate an EU summit in Brussels on March 1 and is expected to spark a major political battle when Germany's parliament debates the Greek bailout in Berlin in next week. The body representing Greece's private-sector creditors said Tuesday it recommends they "carefully consider" the new deal. But the Institute of International Finance stopped short of any clearer endorsement of the deal, which will force bondholders to trade their existing bonds for new bonds offering a coupon of 2% until 2014, 3% between 2015 and 2020, and 4.3% thereafter. "This is an unprecedented level of voluntary debt reduction," said Charles Dallara, the IIF's managing director, who headed the talks on behalf of private creditors. Though Mr. Dallara emphasized it is up to individual investors to decide whether or not to accept the deal, he expects a big take-up. "Despite a huge loss of value for investors, it holds a number of positive dimensions," Mr. Dallara said. "Losses will be substantial but they are contained."

BRUSSELS (AP) — The countries that use the euro pulled Greece back from an imminent and potentially catastrophic default on Tuesday, when they finally stitched together a 130-billion-euro ($170 billion) rescue they hope also will provide a lifeline to their common currency. But the patchwork of measures — including the implementation of austerity measures in Greece and approval by skeptical German and Dutch parliaments — required to give the rescue even a chance of success means it’s unlikely to be the end of the Continent’s debt crisis.

I don't...I wouldn't...I do...but...

I don't have a problem with the Greeks borrowing money at a rate and amount that two hundred years of their grandchildren would never be able to repay....I don't have a problem with the Greeks not collecting taxes to fund their nation. I wouldn't have a problem with the retirement age for Greeks being 24 years of age with a pension double the UK average wage (so long as it is Greece alone which is funding it). I don't have a problem with the EU for intentionally stripping each and every vestige of legitimate democracy from any nation idiotic enough to take its lies and deceit. I don't have a problem with the undeniable fact that the EU is - de facto - creating extremism across the continent by means of its own misplaced and malign grandiloquence. I don't have a problem with the possibility that those nations in such severe debt have recently been nations under dictatorship and military rule, and that such a status might once again shortly become incumbent within those borders. I do have a problem with the Government of my own nation being complicit in the practice, and that Government withholding any facet of input into the phenomenon from the electorate. I do have a problem with the Government of my own country pretending that everything is rosy in the garden, and that stripping just a wee bit more wealth from its electorate to throw into the bottomless Euro pit will improve its image among self-satisfied EU leaders at the next well-victualled continental jamboree. I do have a problem with the prostrate supplicants who worship at the altar of the EU, and the ignoramuses who justify the ambivalence of the UK political party tribes insulting those who rail against these practices as being racist xenophobes. I do have a problem in being compelled to fund, by compulsorily extracted taxation, the levers by which the entire disaster will be choreographed. I don't understand why the gutless drones who staff the major parties in Parliament have no problem dropping undefined future generations into limitless penury - at the whim of effete party leaders incapable of rational thought. Maybe in two hundred years time, someone might be able to piece it all together.....But it will be too bloody late then.

Sarkozy - no credibility

France is at risk of losing its AAA status not because of politics, but because of credibility, or lack of it. Noyer attacked the UK’s financial position as being worse than that of France which is true, up to a point. Both countries’s public sector debts are running at about 85pc of GDP but when Britain’s private sector debts are added we’ve got one of the worst debt positions in the world. UK's annual deficit is 8.4pc of GDP this year, falling to 7.6pc next year while the French deficit is 5.7pc and 4.5pc respectively. But France has the biggest debt burden of the top six eurozone nations, while its banks have the biggest exposure to the toxic government debts of the single currency’s worst offenders. France, Italy and Germany need to repay, or refinance, about €519bn (£436bn) of debts by June, according to Bloomberg data. So not only does France have enormous debts to refinance, its banks face huge potential losses from their own holdings of toxic debt which are likely to require bailouts from Paris - rather like the ones we completed in 2008 with RBS and Lloyds. Add to this the fast-descending economic gloom across Europe and no wonder the rating agencies are nervous. However the UK, outside the euro, has a floating currency which in recent years has depreciated by about a quarter versus the dollar to help our exporters cope (although the euro has been weaker in recent weeks). And the UK has control over it's own interest rates, not to mention the austerity measures already implemented while much of Europe is still talking about. Noyer also moaned that Britain had higher inflation than France, highlighting it as another reason to downgrade the UK. England has higher prices, but arguably the one "good" thing about inflation is it helps reduce a nation's debts in real terms. For a central banker, he showing a remarkable degree of economic illiteracy.

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?

Breaking news out of Italy tonight : Mario Monti has announced that he will present the results of his lengthy negotiations over the make-up of his government to the country's president tomorrow morning. The meeting with president Giorgio Napolitano is scheduled for 10am GMT. Italian media are reporting that this means Monti has reached an agreement and will officially succeed Silvio Berlusconi as prime minister. But it probably pays to be cautious....This development follows another day of meetings with Italy's various political parties At a press briefing, Monti also said he was confident about the country's reaction to the crisis. European bond markets are now closed for the day, so I've been looking at how bond yields have risen compared with mid-October, and mid-August.

Italian 10-year yields closed at 7.134%, up from 5.8% on 14 October and 5.03% on 15 August.
Spanish 10-year yields closed at 6.36%, up from 5.25% on 14 October and 5.014% on 15 August
Belgian 10-year yields closed at 4.91%, up from 4.41% on 14 October and 4.05% on 15 August
French 10-year yields closed at 3.69%, up from 3.14% on 14 October and 2.96% on 15 August
Austrian 10-year yields closed at 3.62%, up from 3.09% on 14 October and 2.833% on 15 August
Netherland 10-year yields closed at 2.41%, down from 2.62% on 14 October and 2.67% on 15 August

Whatever the outcome of this weekend's on - off, on again summit, it seems unlikely the 17 euro countries will get what's needed, given Germany's entrenched reluctance. As we predicted after the July 21 summit, Europe's leaders continue to fall behind the problem they're trying to solve. That's a constantly evolving debt crisis that gets bigger by the day. It doesn't stop and wait, its morbid momentum reflected in markets since early summer. What we'll see revealed in Brussels this weekend is that the euro zone is not just a flawed currency system, but it is also a flawed political system incapable of being led and incapable of making the difficult, often painful decisions required. Could it, for instance, ever impose the sort of fiscal discipline being attempted in the UK or the bank overcapitalization already complete here? I doubt it. That's not to be complacent about our own parlous position. We may be implementing fiscal and monetary policy decisions, but are they working? This crisis, whether elsewhere or in the euro zone, is like a virus mutating against a vaccine. Europe isn't using enough medicine while rest may have already administered what they can without any meaningful effect. The patient remains ill and the drugs aren't working.Markets slide on reports of deadlock between France and Germany in talks over how to expand the eurozone bailout fund, making a resolution by this weekend's crucial summit increasingly unlikely. Silvio Berlusconi has named Ignazio Visco as the new head of the Bank of Italy. He wasn't one of the favourites in the running for the job, which won't be an easy one at the moment. He's the existing deputy director general of the bank. Visco will take over from Mario Draghi, who is taking over from Jean-Claude Trichet as head of the European Central Bank.