Romania’s prime minister is under pressure to resign after being indicted for forgery, tax evasion, and money laundering as part of a far-reaching anti-corruption drive by state prosecutors.

Victor Ponta, who has been prime minister since 2012, has refused to resign, saying only parliament could dismiss him, but the president, Klaus Iohannis, called for him to step down yesterday. Iohannis, who beat Ponta in presidential elections in November, said it was “an impossible situation for Romania”.  Parliament is due to vote next week on whether or not to lift Ponta’s immunity from prosecution. If it votes to shield him, political observers predict it will trigger a constitutional crisis, pitting prime minister and parliament against the president and the judiciary.

Ponta was called in to the National Anticorruption Directorate (DNA) in Bucharest yesterday, to be presented with an extensive charge sheet. He is accused of filing forged invoices for a total of $45,000 for work he did not do in 2007 and 2008, when he was a lawyer.

The DNA statement also said that an investigation would continue into alleged conflict of interest during Ponta’s term as prime minister, for making his closest business associate a minister. The DNA said there was “reasonable suspicion” of wrongdoing and said it would ask parliament to approve a criminal investigation into Ponti on those charges.

Greece missed its €305m (£218m) payment to the International Monetary Fund (IMF) on Friday in a show of defiance as a deal between Athens and its creditors remains out of reach.  The country invoked a rule created by the IMF in the 1970s that allows it to bundle all of its €1.6bn payments due this month into one.  In a statement, Gerry Rice, the IMF's chief spokesman, said: “The Greek authorities have informed the Fund today that they plan to bundle the country’s four June payments into one, which is now due on June 30.  “Under an Executive Board decision adopted in the late 1970s, country members can ask to bundle together multiple principal payments falling due in a calendar month (payments of interest cannot be included in the bundle). The decision was intended to address the administrative difficulty of making multiple payments in a short period." The last request made to the IMF to bundle payments was Zambia in the mid 1980s.  The Greek finance ministry, which is led by Yanis Varoufakis, said in a statement: "After four months of negotiations, creditor institutions submitted proposals which can’t solve the riddle of the economic crisis caused by the policies implemented in the last five years." The move to delay repayment is likely to have come as a surprise to the Fund. Hours before the announcement, Christine Lagarde, managing director of the IMF, described payment bundling by Greece as not on the cards.

The penal Romanian PM ( Victor Ponta)

Greece’s public debt is 180pc of GDP. The loans are in a currency that the country does not control. It is therefore foreign currency debt. The IMF knows that Greece cannot possibly pay this down by draconian austerity – the policy already implemented for five years with such self-defeating effects – and the longer it pretends otherwise, the more its authority drains away. It is has pushed for debt relief behind closed doors but only half-heartedly, unwilling to confront the EMU creditor powers head on. Objectively, it is acting as an imperialist lackey – as Greek Marxists might say.  Indeed, it has brought about the worst possible outcome. The Fund’s man on the ground in Athens – Poul Thomsen – has pushed the austerity agenda with a curious passion that shocks even officials in the European Commission, pussy cats by comparison. This would be justifiable (sort of) if the other side of the usual IMF bargain were available: debt relief and devaluation. This how IMF programmes normally work: impose tough reforms but also wipe the slate clean on debt and restore crippled countries to external viability.  It is a very successful formula. On the rare occasion when the IMF goes wrong it is usually because it tries to prop up a fixed-exchange rate long past its sell-by date.  All of this went out of the window in Greece. The IMF enforced brute liquidation without compensating stimulus or relief. It claimed that its policies would lead to a 2.6pc contraction of GDP in 2010 followed by brisk recovery.  What in fact happened was six years of depression, a deflationary spiral, a 26pc fall in GDP, 60pc youth unemployment, mass exodus of the young and the brightest, chronic hysteresis that will blight Greece’s prospects for a decade to come, and to cap it all the debt ratio exploded because of the mathematical – and predictable – denominator effect of shrinking nominal GDP.

make the world go away....goooooood

Common sense says bond investors might want to lighten up on their holdings of long-term government bonds and other fixed-income investments after the Federal Reserve warned of coming bond market turbulence in Wednesday’s release of the Fed’s April meeting minutes.  But, on the other hand, why exit the bond market when U.S. economic data for April and May keeps coming in below expectations, despite the consensus investment thesis that the economy would — and will — bounce back? Well, the hoped-for rebound Wall Street keeps betting on was a no-show again Thursday. The so-called Philly Fed manufacturing index came in weak. Existing home sales for April came in light, too. Even the latest weekly reading on first-time jobless claims was a miss, rising 10,000 to 274,000, above the 270,000 Wall Street had forecast.   The result: bond investors keep buying U.S. government bonds....So, once again investors reacted more to soft economic data than they did warnings of market volatility and potential losses in the future when the inevitable Fed interest rate increases begin.  Need proof? The yield on the 10-year Treasury note fell Thursday, which means bond prices rose, a day after the Fed warned of potential pain once rates rise in response to rate increases. “Yields on the U.S. 10-year Treasury dipped following the release of weaker-than-expected housing data and in increase in jobless claims,” Tradeweb told clients. The 10-year was at 2.19%, down from Wednesday’s intraday high of 2.29%.  Investors will again be listening closely to any hints of when the Fed might hike rates when Yellen delivers a speech on the outlook for the economy this afternoon. In early trading Friday the yield on the 10-year Treasury has dropped once again, and is now trading at 2.167%.

European leaders should "not discuss" treaty change, the European Parliament president has warned in a clear block on David Cameron's renegotiation aims.

Martin Schultz, a leading social democrat, said there were "a lot of obstacles" to making changes to the laws binding the Union together in the short space of time before a referendum on Britain's EU membership.  It marks the biggest warning today as Europe's big players have been filling into the summit in Riga. The Prime Minister has repeatedly said he wants treaty change.

Mr Schultz's full remarks...   I don't know what he is asking for. I had a phone call with him two days ago, he spoke about migration, he spoke about the ever closer union. He won the election, he wants to anticipate the referendum. We know in which direction the UK wants to go that's better for both sides.  Both sides are stronger together. David Cameron and the government should take into account that we are stronger together. If this is to make the EU more efficient, democratic and transparent I support that.  Not everything has to be done in Brussels. I agree entirely. This is feasible without a treaty change. I think the overwhelming majority of the member states of the EU know there will be a lot of obstacles for treaty change.  Therefore we should not discuss about treaty change. Treaty change lasts a long time. You need a ratification in 28 countries. It will take a lot of time. I prefer to discuss about reform steps now. The EU has the four freedoms - of movement, persons, goods capital and services. We will not change that basis of the European Union.