Now the party is over.....

Even a default , bank bankruptcies and a return to original currencies would be only a temporary relief for the economies of the countries of Europe. The rot would continue because the monetary system that has been in place since 1971 is unworkable in the long run. By this I mean the issuance by central banks of irredeemable digital "money" as debt allied with fractional reserve banking and a macroeconomic theory that justifies the price fixing of the rental of this "money" which comprises one half of every transaction. For the most part, most countries got what they wanted from the Euro, initially at least. The PIIGS (and Belgium) gained a stronger currency, easy access to the capital markets and an ability to borrow - unchecked - France checked Germany and Germany both moved to the center of Europe and her exporters benefited from a currency devalued by 30-40%. Now the party is over, but there are still now there are no discernable, serious voices in Europe's major democracies that wish to leave the Euro...Indeed, it's difficult to see what the process would be that leads to a Euro unwind. I'm not sure that Frau Merkel has the political mandate to start writing checks to individual countries without further surrender of sovereignty by those countries to the EU/EC, so I don't think that there is much point in brow-beating her over it. .... In short, her hands are tied: the paradox here being that the [German] political system that produces weak coalition governments incapable of making decisions was part of the post WW2 settlement for Germany. What the world needs is to recognize that this "big picture" thinking is delusional. It is all a dream of perpetual prosperity that has turned into a nightmare. We must as soon as practicable introduce competing currencies with sound money, traditionally gold and silver, free banking, removal of legal tender laws and abolition of fractional reserve banking. This can be accompanied by the re-introduction of real bills trading with 91 day maturities into gold or silver on commodities in most urgent demand. This market was closed during WWI and not re-opened because it would have given Germany the opportunity to recover quickly through fluid multi-lateral trade. It provides the wage fund without which we descended into the Great Depression. It would also serve every nation to abandon the so-called free trade agreements and initiate true free trade. All of these measures would ultimately lead to the disintegration of artificial treaty unions like the EU and the return of truly sovereign nations. The present political class would also be swept away in the hurricane of real change.

I say Merkel is being "catastrophic"... Let's LEAVE THE EU NOW !!!!...

Concern over Spain’s ability to manage its debts has been mounting and is likely to be the focus of the eurozone finance meeting in Copenhagen on Friday. Finance ministers are under pressure to agree to boost the eurozone’s bail-out capabilities - particularly as a show of support for Spain. Angela Merkel, the German Chancellor, on Monday insisted the firepower of the European Stability Mechanism (ESM) should not be raised beyond its €500bn cap but agreed she “could imagine that it could run in parallel” with the €440bn European Financial Stability Facility. Inan interview on the BBC's Newsnight program on Monday night, Ms Merkel ruled out Greece or any other country leaving the eurozone. “We have taken the decision to be in a currency union,” she said. “This is not only a monetary decision it is a political one. It would be catastrophic if we were to say [to] one of those who have decided to be with us, 'We no longer want you’.” "We debate very harshly in our parliaments and we use tough words. That has characterized Europe-wide debates too." Merkel added: "Thankfully we have learnt to solve our conflicts peacefully, to talk about them and to turn this crisis into opportunity." In this interview, Ms. Merkel also reiterated her support for Britain's strong presence in the EU, despite Prime Minister David Cameron's move to block a new fiscal pact in December. "Britain needs to know that we in Germany want a strong Britain in the EU, we always have and we always will," she said. My point : German Chancellor Angela Merkel says it would be "catastrophic" to allow Greece to leave the eurozone because of its debt problems... I say Merkel is being"catastrophic"... Let's LEAVE THE EU NOW !!!!... Greece off the euro means Greece can devalue its way out of trouble. Compared to the euro, the lower-value drachma would make way for a tourism boom for Greece and potentially outward investment in other sectors of Greek industry (there are many of us in the UK who are not sports fans who would very much appreciate a very good value escape to Greece this summer). However, Greece off the euro means fewer euro for your dollar/yen/pound/magic beans of preference. Fewer euro for your currency means German exports cost you more. Higher selling prices means Germany sells less. For Germany, the choice is stark. Either, give Greece an austerity-busting amount of free cash with no strings attached or support a Greek exit from the euro. The issue is German, not Greek. So, what's a Merkel to do?

Germans don't want to be Greeks; Greeks don't want to be Germans.

The NEWS... Jean-Claude Juncker, President of the Euro Group, has released a statement following the EU finance ministers conference call.... He says substantial progress on Greece has been made and is confident decisions will be made at a Euro Group meeting on Monday. Greece's Finance Minister Evangelos Venizelos says his country has met all prior actions with the Euro Group and all the issues on 2012s €325m fiscal gap have been decided. He adds that those arguing for a Greek euro exit do a disservice, and hopes for a plan on Monday, including debt swap. However, he says some technical issues are still to be resolved. Venizelos says implementation of bail-out plan depends on the country's two main parties. The full statement for Jean-Claude Juncker reads: As announced yesterday, I convened the Eurogroup to a conference call today in order to discuss the outstanding issues regarding the second adjustment programme for Greece. Substantial further progress has been made since yesterday. "First, we received the strong assurances provided by the leaders of the two coalition parties in Greece's government. Second, the Troika finalized and presented its analysis on the sustainability of Greece's public debt. Third, further technical work between Greece and the Troika has led to the identification of the required additional consolidation measures of €325m and the establishment of a detailed list of prior actions together with a timeline for their implementation. "Further considerations are necessary regarding the specific mechanisms to strengthen the surveillance of programme implementation and to ensure that priority is given to debt servicing. This will strengthen debt sustainability further. "On the basis of the elements that are currently on the table and the above-mentioned additional input, I am confident that the Eurogroup will be able to take all the necessary decisions on Monday 20 February. "I am confident that the Euro Group will be able to take all the necessary decisions on Monday," he said. The troika has finalised and presented its Greek debt report and has received strong assurances from Greek political leaders. Juncker says "further considerations are needed on specifics", and European finance minsiters see a need for stronger surveillance of Greece.

Several comments ...:
- Greece agrees to all conditions
- 70% Haircut issue 'fudged' (IMF/ECB secretly bail them out)
- Bailout given to Greece
- Greece pays debts due 20 March 2012
- April Elections in Greece
- New Greek Gov breaks all promises and blames past Gov
- New Bailout required for next debt(s)
- EU issues new conditions for NEXT bailout
- Repeat ad nauseum until Greece finally goes Bankrupt in 2013

The Heart of problem: Germans don't want to be Greeks; Greeks don't want to be Germans. The Greek default is coming, the rest of the Eurozone is merely buying time to shore up their capital reserves so they can bail out the Greek debt being carried by their own financial institutions. In the long run, it'll probably be cheaper than continually topping up the Bail Out fund.

What did they do for the 2,500 years or so before they joined the EU?

When is Europe going to learn: austerity does NOT work ?--All the EU is doing is making things worse by forcing austerity on Greece....Greece needs an economy and destroying it's tax base won't help create one. It is not like a household budget no matter how many people without a grasp of national economics keep comparing it to one. Currency MUST circulate to make the economy of Greece recover, austerity takes currency out of circulation and makes the situation far worse than it would have been had nothing at all been done in the first place. Time to put an end to the mad conservative Austrian/German economic school experiments, they have been proven as failures time and time again. Without the US Fed, that pumped over 16 trillion Dollars into BCE, Germany and the like (France, Italy,Spain...), would have gone bankrupt long time ago. more so, the US maneuvered the exchange rate in order to help Germany report "banner exports" and a growing economy (even though Germany is on the brink as well). ENOUGH B.S.!!!...Help the Greek people back onto their feet and the government will have the income necessary to pay down its debt, keep forcing austerity on them and they will just starve while the government coffers remain empty. HORST REICHENBACH - THE "GOVERNOR" OF GREECE should ease the IV Reich imposition of rule !

Source : Ambrose Evans-Pritchard- 7:21PM GMT 12 Feb 2012 ****The US, Canada, Britain, France, Greece, and other signatories at the London Debt Agreement of 1953 granted Chancellor Konrad Adenauer a 50pc haircut on all German debt, worth 70pc in relief with stretched maturities. There was a five-year moratorium on interest payments. The express purpose was to give Germany enough oxygen to rebuild its economy, and to help hold the line against Soviet overreach. This sweeping debt forgiveness caused heartburn for the British - then in dire financial straits, themselves forced to go cap in hand to Washington for loans. The Greeks had to forgo some war reparations. Yet statesmanship prevailed. The finance ministers of the day agreed to overlook the moral origins of that debt, and the moral hazard of “rewarding” a country that had so disturbed the European order. The Wirtschaftswunder whittled down the burden of German debts to modest levels within a decade. Germany emerged as a vibrant democracy and a pillar of the western security system. Greece has less strategic relevance, and must comply with tougher terms.

A group of top European banks is disclosing that they didn't borrow money under the European Central Bank's bank-lending program, fearful of being perceived as bailout recipients. The ECB in late December doled out a total of €489 billion ($643 billion) in three-year loans at a 1% interest rate to 523 banks. The primary goal was to avert problems at banks that faced waves of maturing debt but didn't have access to borrow money via traditional funding markets. The broad participation in the program, known as the Long-Term Refinancing Operation, fueled a sense of euphoria among many bank executives.

The ECB, Brussels and Germany are corrupt and self interested and don't give a damn about Greece or the amount of austerity they pour over Greek heads. They just want their money back - and with interest. He also points out that the banks in general are incompetent - leaving themselves open to gargantuan losses and not a sign of an insurance policy, relying on depositors' money to cover any losses. The greedy west has stuffed itself, but at least the top boys have paid themselves so much they are now independently wealthy and can just walk away and let others pick up the pieces. The ECB is relunctant to forego of profits from the Greek bonds they purchased but prefer to throw Greece into turmoil and its people into dire poverty as the economy disintegrates in a fifth year of deep recession? ....What an odd position for a Central Bank to take! Even if an involuntary restructuring is averted at this point, a messy default may still take place in Greece a year or two down the road as the debt is still not manageable. Who can guarantee that the overall economy will be strong enough to contain it then? Postponing the crisis may end up costing dearly in the long run.

A DIFFERENT NOTE : --- Romania's prime minister quit on Monday after a series of at-times violent nationwide protests against budget cuts and declining living standards, as deepening political turmoil fueled by Europe's prolonged economic crisis spreads across the Continent. Thousand of Romanians have taken to the wintry streets of Bucharest and other cities in recent weeks to vent their anger at the center-right administration of Emil Boc, who has implemented tough austerity measures in an effort to shore up state finances. "In times of crisis, the government is not in a popularity contest, but is saving the country," Mr. Boc said on Monday. But he said he and his cabinet would step down to "defuse political and social tension" and urged Parliament to quickly choose a new government. The collapse of confidence in Mr. Boc and his team reflects waning popular support for belt-tightening after years of higher taxes and reductions in public-sector salaries and pensions that have so far not been accompanied by a return to robust economic growth.

Today's main headlines:

Time for recap of today's main headlines: UK GDP falls 0.2pc in Q4 2011, worse than 0.1pc expected • Some MPC members believe further expansion of QE is likely to be required • IMF chief Christine Lagarde has warned that if a haircut on private sector Greek debt is not enough, public holders of debt will have to participate in renogotiation • The ECB is said to remain opposed to losses on its Greek debt holdings despite pressure • Greek debt talks will resume tomorrow in Athens • Portugal needs €30bn in additional EU/IMF funds to solve credit crunch • World Bank says it will make $27bn available over the next two years for emerging Europe, Cental Asia nations hit by eurozone crisis • George Soros warns that the European debt crisis could destroy the EU.

The German chancellor insisted – against widespread resistance elsewhere in the eurozone and in the UK – that the European court of justice (ECJ) be empowered to police the public spending and budget policies of the 17 countries in the euro. She also called for the eventual creation of a European political union, with many more national powers ceded to a central government, a strengthened bicameral European parliament, and the ECJ assuming the role of Europe's supreme court. Days before the latest crucial EU summit, which – at Merkel's insistence and evoking scant enthusiasm elsewhere – is to finalise an international treaty between eurozone governments entrenching German-style fiscal and budgetary rigour in all single currency countries, the chancellor admitted to having doubts about the strategy she has pursued throughout the crisis. "We haven't overcome the crisis yet," Merkel said. "Of course, there's Greece, a special case where, despite all the efforts that have been made, neither the Greeks themselves nor the international community have yet managed to stabilise the situation." Asked about the European response over the past two years, during which Berlin has often dictated terms and encountered strong resistance in Brussels, Paris, and at the European Central Bank in Frankfurt, Merkel said: "Good politicians always have doubts, as a way of constantly reviewing whether they are on the right track." There were no doubts about her aim – to save the euro and preserve the EU. The reservations concerned the means to those ends.

Nicolas Sarkozy is warning that the risk of disintegration has never been greater.

What's on offer in Brussels is a fiscal union which represents different outcomes for different groups of countries. But both outcomes will be equally unpalatable for voters. In Germany, and its satellites, what's being discussed will mean vast transfers of wealth south, to support the insolvent banks and governments of the Club Med countries. For voters in these places, such as Greece, Portugal and Italy, what's on the agenda is the imposition of a new set of rules which are about to change their lives irrevocably. They will be forced to become like the north as they submit their national rights to tax and spend to outside supervision by the European Commission. Comply or be punished is the highly enticing prospect. Arriving in Brussels on Thursday, Jose Manuel Barroso, president of the European Council, said it was essential that national interests were set aside at the summit for the greater good of the single currency – a dig at David Cameron's threat to veto any EU-wide treaty rewrite that damages UK interests. But if Eurocrats such as Barroso think British national interests are proving an irritating diversion, he is fatally underestimating the power of national interests in countries from Spain to Slovakia which are about to be unleashed in the weeks and months to come as the detail of the new treaty starts to emerge. Until recently, contemplating the break-up of the single currency was thinking the unthinkable. Now those openly discussing it – just about everybody – are merely adopting a mainstream, orthodox view. Even Nicolas Sarkozy is warning that the risk of disintegration has never been greater.

The truth about Germany

Germany’s public debt is much higher than officially shown, Handelsblatt reported, citing calculations by Bernd Raffelhueschen, an economics professor at Freiburg University. Apart from 2 trillion euros ($2.7 trillion) of public debt, there are liabilities of another 5 trillion euros because of shortfalls in the social security and pension funds, according to Raffelhueschen, the newspaper said.

Gloomy economic data released on Thursday showed that the eurozone's manufacturing and services sectors both contracted this month. Analysts said this piles pressure on the European Central Bank to step in to stop the economy worsening, at a time when Europe's debt crisis is threatening the world economy. "The recovery has finished, we are now contracting," said Chris Williamson, chief economist at Markit, which published the data. Surveys of purchasing managers' indices show that eurozone service industries are shrinking for the first time in two years, while manufacturing output hit a two-year low. The Markit eurozone services survey, which gauges business activity at firms from banks to restaurants, slumped to 49.1 this month from August's 51.5. This is the first time since August 2009 that the services index has fallen below the 50 mark that separates growth from contraction. The composite PMI, which combines the services and manufacturing data, fell to 49.2, its first contraction since July 2009, from 50.7 last month. Factory output contracted for the second month running, with the manufacturing PMI dropping to 48.4. "Today's flash eurozone PMI figures make grim reading and raise the spectre a renewed economic downturn in the 17-country region. The current [composite] index level indicates that the eurozone recovery has ground to a complete halt," said Martin van Vliet, an ING economist. "The figures reinforce our suspicion that the eurozone economy as a whole might contract slightly in the second half of this year. At the same time, with ongoing fiscal austerity and political leaders still way behind the curve in terms of resolving the debt crisis, we cannot dismiss the risk of a full-blown recession. "This data will amplify pressure on the ECB to come to the rescue and use the remaining scope for monetary stimulus," he said. The ECB has been criticised for raising interest rates earlier this year, and some economists believe it may have to perform a U-turn. "Pressure is mounting on the ECB to quickly reverse its recent monetary policy tightening cycle rather than just halting it, with a near-term interest rate cut," said Archer.The eurozone's private-sector economy is shrinking for the first time since the depths of the last recession, sparking warnings that the region's economic recovery is over.

Investors have pulled more money from U.S. equity funds since the end of April than in the five months after the collapse of Lehman Brothers Holdings Inc., adding to the $2.1 trillion rout in American stocks. About $75 billion was withdrawn from funds that focus on shares during the past four months, according to data compiled by Bloomberg from the Investment Company Institute, a Washington-based trade group, and EPFR Global, a research firm in Cambridge, Massachusetts. Outflows totaled $72.8 billion from October 2008 through February 2009, following Lehman’s bankruptcy, the data show. $177.7 billion has been removed during the past 30 months from mutual and exchange-traded funds that invest in U.S. shares as the benchmark gauge for American equity rallied as much as 102 percent, before falling 17.9 percent through Aug. 8. Investors pumped in $18.7 billion during the first four months of 2011, before removing about four times that amount since, according to the average of data from EPFR and ICI, the money managers’ trade group. The August estimate doesn’t include ETF data from ICI. Bond funds added $42.3 billion from the end of April through July and started posting weekly outflows last month, according to ICI. Since the bull market began, fixed-income managers have received a net $666.4 billion.

European interest rate setters piled pressure on the continent's most indebted nations after the European Central Bank warned of a rate increase next month that could send Portugal and Ireland closer to bankruptcy. Jean-Claude Trichet, the ECB president, said it was possible base rates on the continent could be raised in April to calm inflation, which he said was causing concern and could move further above the central bank's target. Trichet said the ECB was prepared to act "in a firm and timely manner" to prevent inflation from racing out of control. "Strong vigilance is warranted with a view to containing upside risks to price stability," he said. His remarks stunned currency traders, who said his previously careful remarks had been ditched in favour of a harder line. The euro strengthened on Trichet's comments to just below $1.40. However, the prospect of a rise in rates and a stronger currency put the spotlight on countries already paying high interest rates on their debts and would face a jump in costs should base rates go up. Irish political leaders are trying to persuade the EU that the costs of its bailout are punishing and will prevent it from recovering.

Two of the leading Petrom top managers, who were in the company's management team ever since the privatisation of the oil and gas producer in 2004, have this year left to carry out the reorganisation of OMV's latest acquisition: Petrol Ofisi."I won't be talking about Petrom today because it is already going in the right direction, of integration. Let's talk about Turkey." This was one of the opening messages conveyed by Wolfgang Ruttenstorfer, CEO of OMV in London, at the latest media summit organised by the Austrian oil group, Petrom's majority shareholder.
In mid-October, OMV finalised the acquisition of Turkey's biggest petrol station chain, Petrol Ofisi, for which it paid one billion euros, securing a significant share of a market credited with the biggest chances of growth in the next period.Reinhard Pichler, 49, former CFO of Petrom, left his position last week, being replaced by Daniel Turnheim, a member of the OMV group since back in 2002. Pichler is not leaving the group, however, but will go to Turkey, where he will fill the same position he has occupied in Petrom since 2004.At the beginning of this year Tamas Mayer, who used to be in charge of Petrom's marketing operations, i.e. of the nearly 550 distribution stations, left the position to become Vice Chairman of the Board of Directors of Petrol Ofisi. According to some sources, Mayer will be running marketing operations within Petrol Ofisi, as well.Agerpres, Mediafax, Romanian Vancouver Sun,Global News, Financial Times,Tribune, ,Wall Street Journal,The Washington Times,Athens News,The New York Times,USA Today,Le Monde

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UniCredit Ţiriac Bank ended the third quarter with 67 million RON (almost 16 million euro) net profit, down 6% compared with the same time last year. Nine months into the year, net profit amounted to 215 million RON (52 million euros), a 15% decline compared with 18% in the first half.Operating revenues exceeded one billion RON (245 million euros) nine months into the year, up 15%, while the credit portfolio rose by 13%, to 13.3 billion RON (3.1 billion euros). Midyear, the lending increase stood at 11%, with the Italian group continuing to apply the strategy designed to boost the loan market share.

China - the new frontier for EU Investors

China's rapid growth is easing to a manageable pace and Beijing can do more to reconfigure its economy to promote domestic consumption and reduce reliance on trade, the World Bank said Wednesday. Inflation that has risen steadily this year should level off and is unlikely to be a serious problem, the bank said in a quarterly China outlook. The Washington-based bank raised its 2010 growth forecast from 9.5 percent to 10 percent and said the expansion should slow to 8.7 percent next year. Growth eased to 9.6 percent in the three months ending in September, down from 10.3 percent the previous quarter, as the government imposed lending and investment curbs.
"We think that coming from this very strong growth, China should be able to ease into a more sustainable growth rate in the long term," said the report's main author, Louis Kuijs, at a news conference.
The outlook reflects China's status as the first major economy to rebound from the global crisis on the strength of a flood of stimulus spending and bank lending. While Washington and others are trying to shore up growth, Beijing faces the challenge of cooling inflation and restoring normal conditions.
Beijing needs to boost wages and consumer spending and promote growth of private and service businesses to reduce reliance on exports and energy-intensive heavy industry, the World Bank said.
"The need to rebalance to more domestic demand-led, service sector-oriented growth seems stronger now than five years ago," said Kuijs. "Internationally the environment is less favorable than it was."
Communist leaders made raising domestic consumption a priority in their latest five-year economic plan crafted at a meeting last month. But it also was a goal in their previous plan and private sector analysts say Beijing has yet to take major steps to shift emphasis away from manufacturing and construction. The World Bank recommended opening up more industries to private business, changing the way energy prices are set to encourage efficiency and nurturing private-sector research and development. The bank cautioned against abrupt steps such as mandating sharp wage hikes, saying Beijing instead should look at gradual changes such as allowing more rural workers to move to cities and changing energy prices that favor heavy industry."We are looking for a market-oriented, market-friendly way of getting this consumption growth, consistent with continued strong growth," Kuijs said. Inflation that hit 3.6 percent in September, well above the 3 percent government target, should level off but might stay as high as 3.3 percent next year, the bank said. Kuijs said that in developing economies such as China, inflation of 3 to 5 percent might be acceptable as industries grow rapidly and demand for resources shifts."We still do not think China's inflation is at a very serious risk of escalating but we also do not think China will go back to the very low rate of inflation it saw in 2005," he said.
The bank also cautioned that China's politically contentious trade surplus is likely to rebound in 2011 after narrowing temporarily this year.
The multibillion-dollar trade gap has strained relations with Washington and other trading partners and prompted some U.S. lawmakers to demand sanctions over Chinese currency controls blamed for widening the surplus.

Recent Investments - Eastern Europe - Romania

Bancroft has acquired a significant stake in Dumagas Transport, a leading Romanian road transportation company. Dumagas Transport engages in general and specialised transportation of liquid, powder goods, and vehicles and holds a prominent position in controlled temperature warehousing and logistics.
It is the second investment in the third fund launched by Bancroft Private Equity, LLP, a Central and Eastern European, mid-market, private equity fund manager. This transaction was completed in July 2010. Bancroft will support the founding shareholders and managers as they continue developing the company’s activities across all its business lines, consolidate the group’s positions in key export markets, and speed up the development of the controlled temperature warehousing and logistics markets.

Fate of the Romanian Economy in 2011 depends on talks with IMF

Yesterday saw the start of two weeks of negotiations with the Fund, which are set to provide some answers to essential questions as far as next year is concerned.
Romania could find out in about two weeks' time if and how much economic growth it will see next year, what the main taxes will look like - flat rate, social contributions, VAT, what the new arrangement to be signed with the IMF in spring will look like and implicitly how big the RON/euro exchange rate volatility will be.
The first official talks between the IMF's review mission and the authorities began yesterday.Jeffrey Franks, the mission chief, says the Fund's forecasts regarding the Romanian economy could be adjusted, but not significantly.Forecast modifications have become a current practice over the course of the arrangement sealed in the spring of 2009, with the IMF so far only revising its calculations for the worse, after failing to anticipate the economic trends. Now the Fund expects a 1.5% GDP growth for 2011.The final forecasts will be an essential tool towards building next year's budget. The draft that recently featured in the press but has yet to be officially assumed is already suspected of overestimating the revenue potential. Things are made even more complicated by the chaos on the political scene, which was reflected yesterday in the Parliament in the decisions on introducing a 5% VAT rate on basic food items and on exempting from taxation pensions of less than 2,000 RON, after there had been talk of taxing all incomes of this type.If these decisions are politically assumed, by the head of state inclusively, attempts by the main ruling party PD-L to talk to the IMF about cutting the flat rate to 12%, cutting overall social contributions to 41% and increasing the minimum wage to 700 RON will fail.