Exporters demand professionalism from the future government, said Mihai Ionescu, the president of the National Association of Romanian Exporters and Importers (ANEIR). "Our first request is for the future government to be professional. Secondly, we would want for it not to overdo it with social policies. If they do that, meaning if they overdo it with social policies without helping the economy, then I don't see a solid future for this country. The third thing that we are asking for is: «Show some love to Romanian capital!»".  Mihai Ionescu warned that this year, the export growth rate is slower than the growth rate of the GDP. Also, this is the first time when Romanian exports outside the EU are dropping, he added. Another great discontent of the exporters is the elimination of the Foreign Trade Department of the Ministry of the Economy, according to the president of the ANEIR, who stated: "We are disappointed in the fact that the team in the Ministry of the Economy has succeeded in destructuring the Foreign Trade Department. We had a structure that was exclusively in charge of foreign trade. Some people thought we didn't need a department for that. That is not true! The existence of that department is very important. But that is how the technocrats saw fit to help exporters - they have dismantled that structure and they have frozen all departures of those nominated for those positions in the respective embassies. We used to have that kind of representatives in our embassies. This year only a few people went abroad to take those positions and they did so temporarily. Half of Romania's foreign network no longer exists. I am not saying they were geniuses, but we could rely on them. Good or bad, they were there and many of them were useful". Mihai Ionescu also mentioned the fact that the Ministry of the Economy has blocked the promotion of exports, despite the fact that a lot of money has been allocated from the state budget this year. "We have not even achieved half of the program for the promotion of exports planned in the beginning of this year". In this context, businesspeople are going to sue the representatives of the government who are guilty of the things mentioned above, like Mr. Ionescu, who mentioned: "We have decided, together with the representatives of the business sector: this government isn't going to go away just by handing over papers. We are going to take them to court, because they have to pay for what they have done and for what they haven't done. They are appointed and paid by us to help the economy. They are going to be taken to court, through criminal lawsuits, filed by the economic professional associations".

 According to Reuters, amid the disputes between the European and Italian authorities, concerning the initiation of a new bail-out program for Italian banks, but without the prior application of the bail-in procedure, Mario Draghi, the president of the ECB, has expressed his support for the governmental aid offered to Italian banks, because "such a program will allow them to sell some of their non-performing loans, which reduce their lending ability". But is such a "release" of Italian banks' lending capability rational and prudent, when the current volume of non-performing loans shows that they are incapable of correctly evaluating risks?  In the recent meeting of finance ministers of the G20 countries, Pier Carlo Padoan, Italy's finance minister said that "we are going in the right direction and there are no risks when it comes to systemic stability", according to an article in Financial Times. Padoan also rejected the possibility of a bail-in, as he said that such a measure would not be necessary. Shortly after Padoan's statements, shares of the Monte dei Paschi bank saw a new massive drop in Milan, according to Bloomberg, over "concerns over the need for a capital increase". Other information on the web indicates that the Italian authorities already know the results of the stress tests, and that has allowed the finance minister to express his faith in the stability of the banking system in the country.  A completely opposed opinion on the financial stability of the Italian financial system comes from the statements several Italian professors gave Financial Times.   Marcello Messori, a professor at the LUISS University of Rome said that "banks have allocated funds in a distorted and not at all selective manner", while Lorenzo Gai, a finance professor at the University of Florence, estimates that the loan portfolio of the Monte dei Paschi bank represents a "a paradigmatic history of value destruction", as "the management of the loan granting process did not work, and that is an euphemism".  This explains the concerns of the Italian authorities rather well, but 50 billion Euros, the amount of the bail-out program "negotiated" with Brussels, will not be enough.

How does it work in this world of smoke and mirrirs...

The SDR was created by the IMF in 1969 to support the Bretton Woods fixed exchange rate system. A country participating in this system needed official reserves—government or central bank holdings of gold and widely accepted foreign currencies—that could be used to purchase the domestic currency in foreign exchange markets, as required to maintain its exchange rate. But the international supply of two key reserve assets—gold and the U.S. dollar—proved inadequate for supporting the expansion of world trade and financial development that was taking place. Therefore, the international community decided to create a new international reserve asset under the auspices of the IMF.  The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves. Its value is based on a basket of four key international currencies, and SDRs can be exchanged for freely usable currencies. As of March 17, 2015, 204 billion SDRs were created and allocated to members (equivalent to about $280 billion).  Only a few years after the creation of SDRs, the Bretton Woods system collapsed and the major currencies shifted to a floating exchange rate regime. In addition, the growth in international capital markets facilitated borrowing by creditworthy governments. Both of these developments lessened the need for SDRs. However, more recently, the 2009 SDR allocations totaling SDR 182.6 billion have played a critical role in providing liquidity to the global economic system and supplementing member countries’ official reserves amid the global financial crisis. The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members. Holders of SDRs can obtain these currencies in exchange for their SDRs in two ways: first, through the arrangement of voluntary exchanges between members; and second, by the IMF designating members with strong external positions to purchase SDRs from members with weak external positions. In addition to its role as a supplementary reserve asset, the SDR serves as the unit of account of the IMF and some other international organizations...

IMF members often need to buy SDRs to discharge obligations to the IMF, or they may wish to sell SDRs in order to adjust the composition of their reserves. The IMF may act as an intermediary between members and prescribed holders to ensure that SDRs can be exchanged for freely usable currencies. For more than two decades, the SDR market has functioned through voluntary trading arrangements. Under these arrangements a number of members and one prescribed holder have volunteered to buy or sell SDRs within limits defined by their respective arrangements. Following the 2009 SDR allocations, the number and size of the voluntary arrangements has been expanded to ensure continued liquidity of the voluntary SDR market. The number of voluntary SDR trading arrangements now stands at 32, including 19 new arrangements since the 2009 SDR allocations.

In the event that there is insufficient capacity under the voluntary trading arrangements, the IMF can activate the designation mechanism. Under this mechanism, members with sufficiently strong external positions are designated by the IMF to buy SDRs with freely usable currencies up to certain amounts from members with weak external positions. This arrangement serves as a backstop to guarantee the liquidity and the reserve asset character of the SDR...

The value of the SDR was initially defined as equivalent to 0.888671 grams of fine gold—which, at the time, was also equivalent to one U.S. dollar. After the collapse of the Bretton Woods system in 1973, the SDR was redefined as a basket of currencies. Today the SDR basket consists of the euro, Japanese yen, pound sterling, and U.S. dollar. The value of the SDR in terms of the U.S. dollar is determined daily and posted on the IMF’s website. It is calculated as the sum of specific amounts of the four basket currencies valued in U.S. dollars, on the basis of exchange rates quoted at noon each day in the London market.  The basket composition is reviewed every five years by the Executive Board, or earlier if the IMF finds changed circumstances warrant an earlier review, to ensure that it reflects the relative importance of currencies in the world’s trading and financial systems. In the most recent review (in November 2010), the weights of the currencies in the SDR basket were revised based on the value of the exports of goods and services, and the amount of reserves denominated in the respective currencies that were held by other members of the IMF. These changes became effective on January 1, 2011. In October 2011, the IMF Executive Board discussed possible options for broadening the SDR currency basket. Most directors held the view that the current criteria for SDR basket selection remained appropriate. The next review is currently scheduled to take place by the end of 2015.   Under its Articles of Agreement (Article XV, Section 1, and Article XVIII), the IMF may allocate SDRs to member countries in proportion to their IMF quotas. Such an allocation provides each member with a costless, unconditional international reserve asset. The SDR mechanism is self-financing and levies charges on allocations which are then used to pay interest on SDR holdings. If a member does not use any of its allocated SDR holdings, the charges are equal to the interest received. However, if a member's SDR holdings rise above its allocation, it effectively earns interest on the excess. Conversely, if it holds fewer SDRs than allocated, it pays interest on the shortfall. The Articles of Agreement also allow for cancellations of SDRs, but this provision has never been used. The IMF cannot allocate SDRs to itself or to other prescribed holders.  General allocations of SDRs have to be based on a long-term global need to supplement existing reserve assets. Decisions on general allocations are made for successive basic periods of up to five years, although general SDR allocations have been made only three times. The first allocation was for a total amount of SDR 9.3 billion, distributed in 1970-72, the second—for SDR 12.1 billion—distributed in 1979-81, and the third—for SDR 161.2 billion—was made on August 28, 2009. Separately, the Fourth Amendment to the Articles of Agreement became effective August 10, 2009 and provided for a special one-time allocation of SDR 21.5 billion. The purpose of the Fourth Amendment was to enable all members of the IMF to participate in the SDR system on an equitable basis and rectify the fact that countries that joined the IMF after 1981—more than one fifth of the current IMF membership—never received an SDR allocation until 2009.   The 2009 general and special SDR allocations together raised total cumulative SDR allocations to SDR 204 billion.  The SDR interest rate provides the basis for calculating the interest charged to borrowing members, and the interest paid to members for the use of their resources for regular (non-concessional) IMF loans. It is also the interest paid to members on their SDR holdings and charged on their SDR allocation. The SDR interest rate is determined weekly and is based on a weighted average of representative interest rates on short-term debt instruments in the money markets of the SDR basket currencies.

A possible Greek exit from the euro zone is not, obviously, a new concern. Three years ago, it looked like a realistic possibility until Berlin became convinced that the risks of contagion for other euro-zone countries was too great. But since then, the situation has changed dramatically. Both Greece and the euro zone are in better shape than they were in 2012 and would be better prepared to handle a Grexit.   Still, Greece's departure from the common currency union would almost certainly be more problematic than Schäuble has made it sound. Josef Ackermann, the former head of Deutsche Bank who led the debt haircut negotiations in 2012 on behalf of Greece's private creditors, continues to believe that a Greek exit "is still a very risky proposition. It would very probably lead to bank insolvencies and enormous social costs in Greece."

Euro-zone countries may have established a functioning bailout fund and made progress on a banking union scheme, but a Greek exit could attract speculators. "International investors would quickly begin asking which country might fall next," Ackermann believes. Markets could gain the impression that the currency union is a club that countries could join or leave as they liked.

Speculators could begin testing just how durable the rest of the euro zone really is and focus on countries like Portugal, Spain or Italy. "Their interest rates would increase drastically, which would thwart the policies of ECB head Mario Draghi, who would like to prevent exactly that," says Jochen Felsenheimer, CEO of the investment firm Xaia.

Greece's departure would also be just as expensive for the remaining euro-zone member states as a debt haircut because Athens would hardly be in a position to fulfill its financial obligations. Its currency would be drastically devalued and its economy would be threatened with collapse.

Crude dropped to its lowest since April 2009 in the wake of a glut of supply, triggering more swings in share prices after heavy falls on Monday.  At one point Brent crude fell 2 per cent to $51.23 a barrel and US crude dropped nearly 3 per cent to $48.47, adding to market worries about a possible Greek exit from the euro.  The UK's FTSE 100 index of leading shares plunged as much as 78 points, after a 130 point drop on the previous day, before staging an afternoon rally to close down 50.7 points to 6366.5 points.  Shares in Germany and France were also under pressure, as Wall Street fell 141 points in early trading following Monday's 331 point slump.  Oil prices have been driven lower by a combination of higher US shale gas and oil production and a refusal by Saudi Arabia to cut output.  Alastair McCaig, analyst at broker IG, said: "Commodity prices continue to play havoc with the FTSE."   Despite market volatility, chief European economist Jonathan Loynes at Capital Economics predicted UK economic prospects would be improved by lower energy costs which would hold down inflation. 

"SMEs are a vital driver of growth in the UK," said Vivienne Dews, the chief executive of the OFT. "They need access to banking services and loans which meet their needs.

"Our work suggests there may be competition concerns in this sector. Further action will follow if concerns in these areas are not addressed," she added.

John Longworth, director general of the British Chambers of Commerce, said of the watchdog's findings: "Greater competition in the business banking market is only part of the story of fixing Britain’s broken business finance system. More must be done to provide growth capital to young and fast-growing firms who are often perceived to be too high risk.

"That means broadening the role of equity and bond issues in business finance, but it also means delivering a British Business Bank that is sufficiently capitalized and has the capability to lend directly to promising high-growth businesses"

The OFT also announced that the Competition and Markets Authority will take over the study as part of a wider probe into retail banking. The Financial Conduct Authority will also contribute to the research.

The prospecy of an American takeover of Vodafone was put on hold on Monday after AT&T was forced to deny it is poised to make an offer.

The US telecoms giant said it had no plans to make an imminent move for Vodafone, sending shares in the British company falling by as much as 7pc.

The Takeover Panel, the UK’s deal watchdog, had requested that AT&T either confirm or deny that a bid was in the works, following reports that a recent meeting between AT&T chief executive Randall Stephenson and Neelie Kroes, Europe’s top telecoms regulator, was aimed at smoothing over a deal.

It has subsequently emerged that Mr Stephenson and Ms Kroes did not discuss Vodafone at the meeting.

“AT&T notes the recent speculation regarding a potential transaction involving Vodafone,” a statement from the company read. EE, the UK’s biggest mobile network, is another possible target for AT&T. Germany’s Deutsche Telekom and France’s Orange, EE’s owners, recently called off a planned flotation, saying that maintaining its current ownership structure is “the best option for value creation”.

Separately, it emerged yesterday that Vodafone is considering a takeover of Ono, the Spanish cable operator, as it uses the portion of its cash from the Verizon Wireless sale not given to shareholders to invest in diversifying its European business.

The company has sought to sell a bundle of internet and television services on top of its core mobile phone business, leading to speculation it could seek a deal with BSkyB in the UK.

Vodafone did not comment on a potential deal for Ono.

Concept design for new polymer £5 note featuring former British leader Winston Churchill. Photograph: AP

Mark Carney, the governor of the Bank of England, has formally announced that Britain will switch to using plastic banknotes in 2016, ending 320 years of paper money.

After a public consultation in which 87% of the 13,000 respondents backed the new-style currency, the Bank said it would introduce "polymer" notes, as it prefers to call them, in two years' time, starting with the new £5 note featuring Winston Churchill in 2016 and the Jane Austen £10 a year later.

Speaking at a press conference in the Bank's Threadneedle Street headquarters, Carney said: "Our polymer notes will combine the best of progress and tradition. They will be more secure from counterfeiting and more resistant to damage while celebrating the history and tradition that is important both to the Bank and the nation as a whole."

The move follows Carney's native Canada, where plastic notes are being rolled out, and Australia, where they have been in circulation for more than two decades.

Carney launched a public consultation on polymer banknotes, seen as cleaner and more durable, shortly after arriving at the Bank this summer. However, the Bank's notes division has been considering plastic money for several years.

Bank officials have been touring shopping centres and business groups around the country with prototype notes to canvas public opinion.  The Bank has promoted its polymer notes, featuring a see-through window and other new security features, as less threadbare and tougher to counterfeit. It has sought to quell concerns about the environmental impact of printing on plastic by suggesting they can last up to two-and-a-half times longer than the cotton-paper notes in circulation at the moment. The durability will also compensate for the higher production costs and save an estimated £100m, the Bank claims. Its laboratory tests showed polymer banknotes only begin to shrink and melt at 120C, so they would fare better in washing machines but could be damaged by a hot iron.

The German government has recently signaled willingness to compromise on the issue of which body would be responsible for deciding if a bank needs to be liquidated. Initially, a newly created committee with representatives of national authorities would assume this responsibility, but the formal decision could then be left to an EU body like the European Commission. In disputed cases, the European Council, the powerful body that includes the leaders of the 28 member states, would be brought in to arbitrate.

Berlin has also agreed in principle to calls for a liquidation fund for failing financial institutions that would have a capacity of €55 billion ($76 billion) within 10 years. But the EU member states are supposed to agree among themselves on how these funds can actually be used, with greater voting weight being given to more populous countries. This idea hasn't gone over well with some governments, because they fear that Berlin, working together with a few small countries, would be able to block decisions. In addition, the money in the fund would not be available for use until it is transformed into an official EU instrument in 10 years' time.

Under the "liability cascade" plan being promoted by Schäuble, however, bank shareholders will be required to pay part of the costs for liquidating a bank starting in January 2016. Owners and creditors would first be required to cover any liquidation costs before any taxpayer money could be brought in. Berlin has had success so far in negotiations on this point. The German government had wanted to introduce this rule as early as 2015. But other member states like Italy pleaded for it to start at the earliest in 2018. They fear the move to start in 2015 might frighten investors.

And there's one additional play to safety: Germany continues to oppose using the European Stability Mechanism, the permanent euro-zone rescue fund, as a backstop for fledgling banks. Other countries have suggested employing the fund's billions of euros as part of a future banking union resolution mechanism.

Yes, let's be honest, the de facto leadership of all things in Europe is exercised by Germany. The problem is that unless or until we all accept and formalize that a German politician (former STASI officer - merkel) captains the European Union and that Germany calls all of the shots, then it's the same as if there was nobody in charge.
Everybody was sure that somebody would do it. Anybody could have done it, but nobody did it. Somebody got angry about that because it was everybody’s job. Everybody thought that anybody could do it, but nobody realized that everybody wouldn’t do it. It ended up that everybody blamed somebody when nobody did what anybody could have done.My dual military related and commercial career to date has led me to hold a few golden rules dear to my heart.One of my golden rules is this. When one enters a situation where there is clearly a crisis playing out, the first question to be asked is, "Who is in charge here?" The answer can tell you a lot about why the crisis might have arisen in the first place, and can give some indication of the chances of the crisis being controlled and resolved.  If the person questioned can't answer straight away, confidently that "So-and-so is in charge", then you already have some understanding of why the organization is in a crisis. If the person questioned answers along the lines of "I think Blogs is in charge but, err, then again it could be Smith in charge. Err, or is it Jones in charge? Not sure really. One of them, is in charge anyway ... I think."...And there you have it. Nobody's quite sure who's really in charge at the ECB. Indeed, nobody's really sure who's in charge at the ECB; or in charge of the Euro Monetary Union; or in charge of the European Union. These are all just monstrous, dysfunctional European institutions which can neither jointly nor severally take 400 million European citizens to the economic and social paradise of a super state (which is what the European Union is supposed to be about). This is as much because the structures for governance of these organizations are a shambles, as it is because the underlying concept itself - of slamming sovereign nations together into a super state without democratic consent and without a single, clearly identified leader at the helm - is a monstrous deceit.  And now we have the particular situation explained by AEP above where the best the nascent European superstore's bank can do is to slam the continent into deflation. That's terrific, just terrific. A dysfunctional monetary union, tucked inside a dysfunctional economic and political union with, sitting behind it all, a dysfunctional central bank. An organization in crisis if ever there was one.

Investing in Federal Bonds a Losing Proposition - Some €900 billion of monetary assets consist of deposits, which can be withdrawn immediately and earn an average of about 0.42 percent in annual interest. At an estimated inflation rate of 1.6 percent this year, these assets will see a 1.18-percent decline in value, or about €11 billion. The situation is slightly more favorable for savings deposits or fixed deposits with terms of up to two years, but even here the real rate of interest is often negative. Investing in federal bonds is also a losing proposition for Germans. In the case of five-year bonds, for example, interest rates have also fallen below inflation. This also affects many insurance companies and pension plans, which together account for more than €1.8 trillion of German monetary assets. They, too, invest most of their money in government bonds, which means that the returns on life insurance policies are declining from one year to the next. Guaranteed interest rates, which were at 4 percent in 2000, had dropped to 1.75 percent by 2012. "Savers still benefit from the fact that their policies are backed by previously acquired bonds with higher fixed-interest coupons," Kater explains. "But the longer the low-interest-rate phase lasts, the more fixed interest rates will expire, and the bigger the losses will become from year to year." If the structure of monetary assets doesn't change and the low interest-rate policy continues for another 10 years, the total loss to savers could grow to €60 billion. "In Germany today, people can no longer provide for their retirement by saving," says Walter Krämer. A statistics professor in the western city of Dortmund, Krämer initiated a call for protest by 282 German economists against the euro bailout policy last year, and this summer he followed up with a letter of complaint titled "Cold Expropriation." Krämer assigns the blame to the ECB. "Savers pay the price for the fact that the ECB is determined to rescue comatose banks," he says. According to Krämer, banks are being charged too little to gain access to ECB funds, so that they have no incentive to offer more to savers.

There is probably no way to know whether conflicts in the brokerage business are more severe or common than they used to be.

But they aren’t hard to find. An adviser might earn undisclosed fees that could taint his objectivity or recommend mutual funds run by his firm over cheaper third-party choices; he could collect upfront commissions on funds right before moving the client’s assets to a fee-based account.

Often, the code of conduct meant to guide brokers’ behavior doesn’t require them to act in their clients’ best interest. The Finra report urges firms to adopt such a proviso. Some firms don’t give brokers specialized training to sell complex products like “structured notes,” debt securities whose returns depend on factors beyond interest payments alone.

However, other firms review such products after launching them to see whether they perform as promised and to learn whether they have been sold to investors—or by brokers—who don’t understand them.

“That’s a strong process,” Ms. Axelrod says, “and one that I would strongly suggest that firms consider adopting.”

Some brokerages, according to the Finra report, refuse to offer higher payouts for selling in-house mutual funds or other investments; that might help prevent brokers from pushing funds that benefit the firm more than the client.

The European Central Bank has launched a push to strengthen the eurozone's banking system and keep troubled financial institutions from holding back the region's economy.

The bank announced Wednesday that a year-long review of 130 of Europe's biggest banks will begin next month. The asset review is an effort to check for hidden bank losses such as loans that are unlikely to be repaid. That will be followed by a stress test conducted along with the European Banking Authority that would simulate bank losses in a crisis. At the end, banks could be pushed to repair their finances by raising more capital.

Troubled finances at some banks have held back the economy of the 17 EU countries that use the euro by making it harder for them to lend to businesses. Banks that have shaky assets - such as bad loans - may be unable to find cash to lend to businesses that need credit to expand their operations. The review is also aimed at restoring confidence in bank finances so they can borrow money more cheaply themselves - and rely less on the ECB's emergency credit offerings.

The asset review is a test of the ECB's credibility. Previous stress tests carried out by the European Banking Authority clcomplicated because Europe does not have a single resolution authority that could carry out the restructuring of troubled banks. European leaders are still debating how to set up such an authority. For now that job remains in the hands of national authorities who have been seen as too reluctant to take tough measures against their home banks ...German banks were "already intensively preparing for the comprehensive assessment"Haha, or in real words, walls of bluff and bluster are hurriedly being erected to hide the massive black holes of the overleveraged biggest german banks. Hopefully the proximity of the ECB in Frankfurt will provide assistance with the fraud.

At least they have money coming in from the Irish and Greek Taxpayer to pay for the credit scams they inflicted on those countries though.eared many banks - only to see some of them rescuing soon after.

Economists say Europe's delay in dealing with bank troubles has held back the eurozone economy. Officials in the United States, by contrast, moved far quicker in the wake of the 2008 collapse of investment bank Lehman Brothers.

The asset review and stress test are preliminary to the ECB taking over as the European Union's banking supervisor next year. The single supervisor is part of a broader effort to strengthen the banking system and prevent a repeat of the debt problems afflicting countries such as Greece and Portugal.

The head of Slovenia's central bank, Bostjan Jazbec, has said it will consider asking for outside help if the country's funding costs stay high. He also said Slovenia's GDP would shrink by 2.6% this year, more than April's 1.9% forecast.

Slovenia's banks are largely state-owned and saddled with bad loans worth 22.5% of its GDP.

Mr Jazbec's comments are likely to fuel speculation over whether Slovenia will be bailed out by the EU.

Still hope

Mr. Jazbec said he would consider asking for aid if yields on Slovenia's bonds remained high.

During a news conference, he said the country was doing everything it could to bring its funding costs down.

"If that is not successful, then there is a possibility to ask for help within various programmes," he added.

Meanwhile, Slovenia's Prime Minister, Alenka Bratusek, has admitted to parliament the amount needed to rescue the banks is "completely unknown".

But Ms Bratusek told STA, the state-owned news agency: "We are very intensely preparing measures that are needed, so as to avoid asking for help."

The results of the bank's stress-tests, out at the end of November, will indicate whether or not a bailout is needed.

Eurozone members can ask for help from the European Stability Mechanism, set up in 2012.

The only hope for Italy is to leave the EuroZone now - otherwise = bankruptcy!

Thousands of workers and unemployed people marched in Rome on Saturday to protest against record unemployment and call on Enrico Letta's two-month-old government to deliver more than empty rhetoric on the issue.

The rally, organized by the country's three largest unions was the first major protest since Letta's broad, left-right coalition took office following an inconclusive election in February.

Italian unemployment rose to 12% in April, the highest level on record, and joblessness among people under 24 is at an all-time high above 40%.

Union chiefs, speaking before a flag-waving crowd estimated at more than 100,000 by the organizers, criticized Letta for what they called a lack of action on an urgent problem.

"We can't accept these continuous promises that aren't translated into decisions that give a change of direction," said Susanna Camusso, leader of the country's largest union CGIL.

Luigi Angeletti, head of the UIL, said the country could not afford the piecemeal approach to policy adopted so far, especially when the ruling coalition is so fragile...The unionists called on the government to intervene to prevent plans by white-goods manufacturer Indesit to lay off 1,400 workers in one of the most recent labor disputes....
Big deficits in time of recession are nothing new. They are not desirable, but calling them "dangerous" is ridiculous. The only way to reduce them is through growth, which isn't going to happen with taking so much money out of the economy. Growth has got its own problems, I don't think a society can run for ever on people/states buying stuff they don't really need with money they have really got, but the present "solution" isn't going to work. It is indiscriminate cutting, with no thought for the cost this "cutting" is storing up for the future. The present crew hasn't got the skills, imagination, intelligence to think out of their narrow ideology. They still think putting state services to tender to private businesses is going to solve all. It isn't....

Mediobanca, Italy’s second biggest bank, said its “index of solvency risk” for Italy was already flashing warning signs as the worldwide bond rout continued into a second week, pushing up borrowing costs.

“Time is running out fast,” said Mediobanca’s top analyst, Antonio Guglielmi, in a confidential client note. “The Italian macro situation has not improved over the last quarter, rather the contrary. Some 160 large corporates in Italy are now in special crisis administration.” The report warned that Italy will “inevitably end up in an EU bail-out request” over the next six months, unless it can count on low borrowing costs and a broader recovery. Emphasizing the gravity of the situation, it compared the crisis with when the country was blown out of the Exchange Rate Mechanism in 1992 despite drastic austerity measures.
Italy’s €2.1 trillion (£1.8 trillion) debt is the world’s third largest after the US and Japan. Any serious stress in its debt markets threatens to reignite the eurozone crisis. This may already have begun after the US Federal Reserve signaled last week that it will begin to drain dollar liquidity from the global system.

Christine Lagarde, one of the most powerful women in the world as head of the International Monetary Fund, is facing acute embarrassment after a letter in which she urged former French President Nicolas Sarkozy to "use me" was found during a police raid on her Paris flat. An undated copy of the letter was found at Mrs Lagarde’s flat in Paris during a raid by police investigating a spiraling financial scandal surrounding payments to businessman Bernard Tapie.

"I'm on your side to serve you and serve your projects for France," she said in the letter.

"Use me during the time that suits you best and fits your action and your cast....If you decide to use me, I need you as guide and supporter: without guide, I might be ineffective, without support I might be implausible."

She signed off: “With my immense admiration, Christine L.”

She also claimed that she does not have "personal political ambitions" and remarked she does not want to become "an ambitious servant", referring to some members of Sarkozy's entourage.

The letter was leaked to French newspaper Le Monde, and its publication has caused acute embarrassment for the head of the IMF.

Ms Lagarde was finance minister during Mr Sarkozy's term as President, before stepping down to become managing director of the Washington-based IMF in 2011.

Her Paris flat was raided as part of an investigation into her handling of a 2008 compensation payment to a businessman supporter of ex-president Nicolas Sarkozy, her lawyer said.

Police are investigating claims that Lagarde, when French Finance Minister under Sarkozy, acted illegally in approving the €285m arbitration payout to Bernard Tapie. Ms Lagarde denies any wrongdoing.

BRUSSELS - An idea to create special arrangements within the European Parliament for deputies from eurozone countries is gaining traction but there is confusion over whether it can work in practice. The aim is for eurozone MEPs alone to be able to discuss issues affecting the single currency area - reflecting wider moves to strengthen the economic and political integration of the soon-to-be-18 member region. A Franco-German paper published last week was the latest to mention the concept. It spoke of "dedicated structures specific to the euro area to be set up within the European Parliament" after the 2014 elections. But the idea is highly complex both legally and politically. It is similar to the UK's so-called 'West Lothian' question - first raised 25 years ago and an increasingly hot topic today. That concerns the extent to which Scottish, Welsh and Northern Irish deputies should be able to vote on issues only affecting England.

The European Parliament's own West Lothian question was raised about two years ago about the time when EU leaders started to earnestly think about the institutional future of the single currency, including eurozone bailout funds and eventually a eurozone budget.

Political leaders in the parliament suggested setting up sub-committees to deal with eurozone issues. But since then discussions have stalled. "The problem is that when you look at the rules of the treaty, it is immensely difficult to put such a concept in place," said centre-right Polish MEP Rafal Trzaskowski.

"Because we have all equal rights. We represent citizens not member states. It would be quite difficult to organize it in a way that would not breach the treaty." According to Trzaskowski, who has been involved in discussions on the issue, one idea would be to have some sort of gentleman’s agreement under which the political parties concerned would agree amongst themselves to send only euro and would-be euro member deputies to a sub committee.   Another option, said Trzaskowski, could be to have the three biggest parties give key posts and reports only to euro member states.  There is also the broader question of what is purely a eurozone issue. "It's one union and one financial market. The problems of the banks are not just issues of the eurozone," said Jacek Saryusz-Wolski, also a Polish MEP. UK liberal MEP Andrew Duff points to the financial transaction tax (FTT), supported by 11 eurozone states but potentially affecting all 27 member states. "The discussion over the FTT is a very good example of this. All member states are seriously involved in that concept. They all have a stake." He also raises a purely organisational objection. "If you decide to divide the present responsibilities of the economic and monetary committee then you’re risking incoherence and inconsistency. And we’ve got quite enough of that already." In addition to blurred boundaries between euro and non-euro issues, Polish and other MEPs reject the idea on principle. Of the all the eurozone outs, only the UK and Denmark have an opt-out from joining the single currency. It was part of EU membership negotiations for the rest. So why, goes the argument, should they be excluded from discussions on issues that will eventually affect them. Saryusz-Wolski said he and other eventual eurozone member MEPs will oppose creating "two tiers of MEPs" within the parliament and, if necessary, before the European court of justice.

UK EUROPEAN MEMBERSHIP - We don't want to be part of a United Europe governed by a socialist unelected junta from Brussels. Put the business case to one side, this is about democracy, liberty and self governance.  I would rather be a little bit poorer now but in charge of my own destiny, than ruled by a socialist political elite which will in time become even more corrupt than now and make me much poorer in the long run. If the rest of Europe want to unite under a Brussels government then let them, but we don't want it. I suspect if other countries were ever given a vote, they would not want it either.  But surprise, surprise, the unelected elites don't like elections because they get the wrong answer to their ever closer union. The business leaders quoted should know better than to neglect democracy for the sake of profits....
Whilst the economic benefits of membership may, or may not be, overwhelming, (and Lord Lawson, Denis Healey and others have already questioned whether the economic benefits are as great as made out), that is not the issue.  The issue is that there are a number of fundamental problems with the eurozone and the EU itself which are precipitating the continent into potential conflict.  Firstly, as is apparent from Greece, Cyprus, Spain, Italy and Portugal, not a single person in those countries has a vote to change let alone influence policy being directed by Brussels. This democratic deficit in a time when the Euro-"elite" are pushing a solitary austerity agenda, without regard to the consequences of those policies not just on families and communities but half the continent, is fanning the flames of extreme nationalism in those countries. Until such time as the people of Europe get a vote to get rid of the idiots in charge in Brussels, we should have nothing to do with it.  Secondly, even if the policy of "internal devaluation" is successful, that will mean a worker in those countries will have to work harder and longer for a Euro than a worker, say, in Germany. So the exodus of the youth from those countries will accelerate and some will go within the Union to areas where there is work. This will drive down wages in the destination countries and will ignite talk of "jonny foreigner taking our jobs" that we've heard incessantly here. How well that will play in Germany is anyone's guess.  Thirdly, the accounts of the EU haven't been signed off by their auditors for, I believe, something like 10 years due to fraud and misappropriation of funds.  Finally, and most importantly, if the eurozone members are successful in driving through a Federal State (without obtaining specific consent for this from the individual national electorates), what impact is that going to have upon the operation of the EU? Currently, we have 27 nations, some with greater weight than others. With a Federal State of 17 nations, that bloc will outvote and outweigh all the other members. Policy (as the SNP seems to argue) will be set to the agenda of the bigger constituent. Ergo, the UK and all the other non-eurozone members will be outvoted on every measure, and what guarantees are there going to be to protect those countries from such policy focus? Given the EU's declaration of economic war against the City of London with the FTT (stealing money that would otherwise go to the UK Exchequer from the City), capping bonuses (bureaucracy gone mad and aimed directly at the City), with seemingly precious little the UK can do about it, it does not augur well for future protection.   I remain unconvinced about the economic benefits of membership. The EU will want access to our market. But is the EU necessarily the dynamic growth zone for the future? It doesn't look like it.   However, the risk of extreme nationalism arising from the current policies and the utter devastation being wrought across half a continent to "save" the Euro is not a price worth paying to secure economic benefits. We should be leading Europe away from the precipice towards which its bureaucrats appear determined to push it. Clearly this isn't happening at present, so its time to leave. Not, as some would suggest, to a Norwegian or Swiss style semi-detached model, but complete detachment.  And the sooner the better.

Germany, the 4th Reich, also suffered a contraction in business activity during the month, which could send a worrying signal for the rest of the bloc. Tim Moore, a senior economist at Markit, said prospects for Germany's service sector were increasingly gloomy. "A renewed slide in services output during April, alongside falling manufacturing production, raises the risk that the German economy will fail to expand over the second quarter," he said. Data gauging the level of activity across thousands of companies and regarded as a good indicator of general economic conditions came in below the crucial level of 50, which separates contraction from expansion. At 46.9 in April, Markit's  eurozone composite purchasing manager's index (PMI) was an improvement on initial readings of 46.5 and March's output of 46.5 but it has been below 50 for more than a year.  Germany's PMI, which measures growth in manufacturing and services and accounts for more than two-third's of Germany's GDP, fell to 49.2.  Germany's economy performed well during the first two years of the eurozone crisis, but growth slowed last year as it was knocked by the slowdown in China. The services sector fell to 49.6 last month from 50.9 in March – the first contraction since November. Germany's wobble is likely to drag the whole of the eurozone deeper into recession, Markit warned. "The eurozone's economic downturn is likely to have gathered momentum again in the second quarter," Chris Williamson, its chief economist, said: "The PMI is broadly consistent with GDP falling at a quarterly rate of 0.4%-0.5% in April."

Howard Archer, chief UK and European economist at IHS Global Insight, said: "The latest data and survey evidence fuel concern that the eurozone is headed for further GDP contraction in the second quarter after highly likely suffering a sixth successive quarter of contraction in the first quarter of 2013."

The European commission last week warned that it expects the eurozone's GDP to shrink by 0.4% in 2013, an increase on the 0.3% it had previously forecast. The recovery penciled in for 2014 will also be slower than expected and the unemployment crisis in the eurozone will persist, the commission said in its spring forecasts.

European Central Bank executive board member Benoît Cœuré said the ECB would ready to cut interest rates further if the economic outlook in the euro area worsens. The central bank cut its benchmark rate by a quarter point to a record low of 0.5% last week. "It's a historic low and we'll cut again if indicators confirm the situation is deteriorating," Cœuré said in an interview with France Inter radio station on Monday. Williamson said it was difficult to believe that a mere 25 basis point cut from an already low level will have "a material impact on an economy that is contracting so sharply". In further gloomy news, a separate EU report published on Monday showed retail sales across the eurozone dropped 0.1% in March following a 0.2% fall in February. There were also fears that the service sector is slashing prices to drum up business. Official figures released last week showed prices across the region rose 1.2% in April – well below the central bank's 2% target – while unemployment hit a new high of 12.1%. An index that measures sentiment in the eurozone improved, but illustrated concerns about Germany. "While investors' assessments of the economy for the eurozone are stabilizing, those for Germany are clouding a little, albeit at a significantly higher level," research group Sentix said.

Billionaire investor George Soros and French President François Hollande, a Socialist, are in agreement: The world is on the verge of a currency war, and it threatens to destroy Europe. The Europeans should finally enter the fray and do battle with all their might, says Soros, who made some of his fortune by betting against the British pound. "Europe is an outsider," the 82-year-old recently said at the Davos World Economic Forum. He blamed the European Central Bank (ECB), which he called the last representative of an outdated central bank policy. Hollande doesn't put it as clearly, but he means the same thing. "A currency zone must have an exchange rate policy, or it will end up with an exchange rate that doesn't correspond to the actual state of its economy," the Socialist told the European Parliament in Strasbourg last week. These remarks were intended for Mario Draghi, the president of the Frankfurt-based ECB. Hollande's message is that he should protect the euro's exchange rate. The central bank chief is coming under increasing pressure because he can't quite bring himself to embrace the concept of quantitative easing, the latest fashion in the world of finance. It involves central bankers engaging in the large-scale purchase of bonds issued by their governments and other securities, thereby injecting huge sums of money into the financial system. In this way, they hope to stimulate the domestic economy and keep their own currencies cheap, thereby strengthening exports. Soros believes that this is the only way countries can grow out of their large debts. But a country that artificially pushes down its exchange rate is obtaining competitive advantages at the expense of others. And if they manipulate their own currencies, all sides will end up losing out.