The crises of mass migration and Greek debt have hit the European Union like an “an out-of-control bulldozer”, forcing its leaders to rethink David Cameron’s call for fundamental reform, the cabinet’s leading Eurosceptic has said.  Iain Duncan Smith, speaking to the Guardian before a Conservative party conference that will see disputes over Cameron’s EU referendum tactics, said the twin crises had changed the debate.  The work and pensions secretary said: “We are getting a better hearing because people are waking up to these things. It is suddenly becoming clear that actually you cannot paper over the cracks and say ‘it’s alright, it’s only the British.’ We still have the crisis over the euro and Greece, and then the rows over Schengen border controls are like nothing I have ever seen. It is massive.”   The two crises had sent “shock waves everywhere”, he said. “Nothing is the same after this thing. The European Union has just been hit by an out-of-control bulldozer that has just gone straight through the middle of them.”

The British pound  saw the biggest decline against the dollar since March 2009, after London mayor Boris Johnson, one of the most popular politicians in the country, said he would start a campaign in favor of the United Kingdom leaving the European Union (Brexit) in the referendum scheduled in June. The pound lost 1.7% at 12:01, on the New York market, to 1.4156 dollars. The pound had earlier lost 1.9% - its biggest decline since March 9th, 2009. All throughout yesterday, the pound fell to 1.4058 dollars - the weakest exchange rate since March 18th, 2009. The British currency weakened against all major currencies yesterday, after having gained significantly at the end of last week. Valentin Marinov, a strategist with "Credit Agricole" SA, states, according to Bloomberg: "The pound is dropping because the agreement achieved by British PM David Cameron in the EU summit (ed. note: - Friday) has not removed the fears concerning a Brexit. The fact that prominent members of the Conservative Party have announced that they are going to be campaigning for Britain's exit from the EU has increased investors' worries over such a possibility". Since the beginning of the year, the pound has lost 4.1%. On Friday night, David Cameron has achieved a special agreement that grants the United Kingdom "a special status in the European Union", but has announced that he has not abandoned the idea of a referendum concerning the United Kingdom's exit from the EU, and set the date of the poll to June 23rd. 

 Following the capital deficit of almost 8 billion Euros, the regulator of the Austrian financial market (FMA) has imposed a moratorium on the payment of the debts of Heta on March 1st, 2015, which will expire on May 31st, 2016.  "The Finance Ministry has said that Heta is not insolvent, and the guarantees offered by Carinthia and the federal government for Heta's debts will not be affected by the decision", Reuters wrote at the time. The suspension of the payments of Heta has been justified by the need to draw up a resolution plan, which would ensure equal treatment of all creditors, according to the press release of the FMA.  Back in 2015, the Austrian Finance Minister said that the bail-in procedure will also be applied to creditors, as the Bank Recovery and Resolution Directive (BRRD) was transposed into the country's national legislation and came into effect on January 1st, 2015.  Now, honoring the government's debt doesn't seem to matter in Vienna anymore, and judging by his own statements, the minister of finance is convinced that the financial situation of the country and its borrowing costs will not be affected.  Unfortunately, reality, in particular the one that is giving the European authorities nightmares since the beginning of the crisis, does not "bend" to political will. Frances Coppola further writes that "Carinthia's insolvency will lead to a heavy fiscal adjustment for Austria, amid an increase in borrowing costs", and the "value of no risk investments will see a massive drop, because government can no longer be considered safe". "The implications, not only for the financial stability of Austria but for that of Europe as well, are terrible", the Forbes journalist concludes. If we also add in the uncertainties concerning the application of the bail-in framework, it is almost certain that Europe will need bigger crises than the Brexit and the refugees' "cover" the growing cracks in its financial foundation. 

The Austrian authorities have taken yet another step on the mined field of financial "stability" of the so-called hard core of the Eurozone. Amid the nearing of the deadline for the moratorium set on the payment of the debts of Heta Asset Resolution, the bad bank set up for the takeover of the non-performing land of Hypo Alpe-Adria, the creditors have been presented with the buyback terms for the bonds guaranteed by the land of Carinthia. Their total par value is 11 billion Euros, and the "offer" includes the payment of 75% of the par value for senior bonds and 30% of the value of subordinated bonds, which means a total loss of approximately 3.2 billion Euros for lenders. "Creditors that refuse the offer could wait for as long as ten years for a ruling of the judicial system in their favor", said Hans-Joerg Schelling, the Austrian finance minister, according to Bloomberg. Schelling further said that "the offer is excellent", according to Bloomberg, and creditors "should be rational and accept it". For the buyback of the Heta bonds, Austria has set up a special investment vehicle, Kaerntner Ausgleichszahlungs-Fonds (The Fund for the Payment of Compensations of Carinthia). Unfortunately for the authorities in Vienna, the notion of "rational" is understood differently by creditors. "What the Austrian authorities have done is unprecedented in the developed world: they have announced a figure that they consider acceptable and they have asked the creditors to accept the offer", the partner of Swiss company Gold Partners AG who owns 200 million Euros worth of Heta bonds, told Bloomberg. The list of creditors that oppose the offer includes far bigger names however, such as German banks Commerzbank AG and NordLB, as well as PIMCO, the American investment fund manager owned by Allianz AG.  Bloomberg estimates show that the exposure of those who have rejected the proposal of the Austrian authorities is about 5 billion Euros and represents approximately 45% of the total debt, as the terms of the offer are non-negotiable, and its acceptance by two thirds of the creditors involves its unconditional application and for the other creditors as well.

The European Parliament backs the monetary policy carried out by the European Central Bank to guarantee price stability but warns that its effect won't last without structural reforms, budgetary discipline and productive investments in the Member States. Moreover, the risks of the ECB's unconventional measures need to be monitored carefully, the European Parliament cautions in its Annual Report on the European Central Bank.  Tom Vandenkendelaere MEP, Shadow Rapporteur and Member of the European Parliament's Economic and Monetary Affairs Committee, calls for a multi-tiered approach to stimulate growth and job creation: "We support the ECB's efforts to increase inflation to under but close to 2%, and its policy to increase the supply of money is slowly yielding results. However, we should not be blind to the risks of this approach and carefully monitor for negative side effects. In addition, Member States should deliver on their part and carry through the necessary reforms and productive investments to boost economic growth and employment."

Tom Vandenkendelaere is appreciative of the ECB's efforts to increase transparency and maintain close ties with the European Parliament: "Thanks to the ECB's efforts on greater transparency, most central banks are now in the habit of explaining important monetary decisions to the wider public."

Shares in Deutsche Bank tumbled another 4.7pc on Tuesday. The bank’s shares fell to €13.26 and are now down 46pc since the start of the year and 58pc in the last six months. Last month the bank reported a €6.8bn (£5.3bn) loss for 2015.  Deutsche has led the wider banking market down as fears spread over the profitability and financial stability of Germany’s biggest bank. Yesterday Swiss institution Credit Suisse’s shares were down by almost as much, plunging 7.75pc. Spooked investors also sold off shares in other banks, leaving Barclays down 5.2pc, BNP Paribas down 4.8pc and Italy’s Intesa Sanpaolo down 4.9pc.  The turmoil in stock markets since the start of the year has been driven in part by worries over the strength of China’s economy as well as the crash in commodities prices, but investors are particularly concerned by the banking sector’s ability to cope with another downturn.  Investors have also been fleeing Deutsche’s bonds. Analysts have warned that if the bank has any large unexpected costs it may, from next year, be unable to pay the interest on its contingent convertible bonds (or “cocos”). The relatively risky class of securities - also known as AT1s - is designed to ensure that institutional investors pay the bill to help bail out any troubled bank, rather than the taxpayer...Dump Bank shares and any government paper. If you are old enough to cash out your pension... do it. Pension funds here in the UK have about a 650 billion hole in them and growing because of ZIRP and NIRP. Most of them will have sovereign bonds that have yet to blow up.

The ECB is to discuss whether to expand its stimulus measures at its next meeting March 10. Draghi said there were "a variety of instruments" the ECB could employ if it decided more is needed. It could increase its 60 billion euros in monthly bond purchases with newly printed money, a step aimed at driving down already low interest rates and raising inflation that remains too low at 0.4 percent.

He expressed some frustration with governments that have held back spending at a time of economic weakness. He urged governments that are in better shape financially to spend more on public investment that would increase grow and to avoid excessive taxation.

Monetary policy from the central bank "is the only truly stimulative policy over the past four years," he said. ECB officials have warned governments not to rely just on central bank stimulus to boost the modest eurozone recovery.