The biggest Italian banks, insurers and asset managers in the country, have accepted, on Monday night, to create a five billion Euros fund meant to help troubed banks, to allay investor fears over the stability of the local banking sector. The fund, called "Atlas", will benefit from major capital injections from "UniCredit" and "Intesa Sanpaolo", the top two largest banks. According to sources quoted by Reuters, "UniCredit" and "Intesa Sanpaolo" will each contribute one billion Euros to that fund. The sources are also saying that state owned bank CDP will contribute 500 million Euros, smaller banks will allocate between 500 and 700 million Euros, banking foundations will contribute approximately 520 million Euros, and insurers - another 500 - 700 million Euros.  In exchange for the financing offered by private banks, the Italian government has accepted to revise its bankruptcy legislation, in order to facilitate the sale of non-performing loans. Italian PM Matteo Renzi said: "In the coming days we will make the bankruptcy procedure simpler and quicker, so that all the parties involved recoup their money within a reasonable delay".  Currently, in Italy it takes about eight years on average to recoup non-performing loans, compared to approximately two years in the EU. The Italian banking system is facing non-performing loans of approximately 360 billion Euros, one third of the total volume in the Eurozone. The "Atlas" fund will allow supporting "Banca Popolare di Vicenza" and "Veneto Banca", financial institutions that have to raise almost 3 billion Euros in the coming weeks, to consolidate their capital. The fund may invest two billion Euros in the future stock issues of "Banca Popolare di Vicenza" and "Veneto Banca", and may even acquire one of these banks.  The European Commission has informed that it is keeping in touch with the government in Rome on the creation of the fund intended to support banks.

In October 2013, the provisions of articles 12 and 13 of the Law no. 193/2000 concerning abusive clauses in contracts concluded between professionals and consumers, with the modifications that were made to them by the Law no. 76/2012 for the implementation of the Law no. 134/2010 concerning the Civil Procedure Code. Article 12 stipulates: "If the use of adhesion contracts which include abusive clauses are found, the control entities stipulated in Art. 8 (ed. note: the authorized agents of the National Consumer Protection Agency and authorized specialists of other entities of the public administration, depending on their competences) will notify the court from the domicile, or the headquarters of the professional, and demanding that the professional be required to amend the ongoing contracts, by removing the abusive clauses they may contain. (...) The consumer protection associations (...) can sue professionals that use adhesion contracts that contain abusive clauses, with the courts stipulated in paragraph (1), and ask the latter to decide the cessation of their use, by eliminating the abusive clauses".  Article 13 states: "The court, if it finds the existence of abusive terms in the contract, requires the professionals to change all ongoing adhesion contracts, as well as to eliminate all abusive clauses from boilerplate contracts, meant to be used as part of the professional activity". There are several ongoing "class action" lawsuits filed by the ANPC, especially against banks. The Parakletos Association has intervened in seven of the ANPC cases against the banks, as a third party. The leaders of Parakletos state that, through the ruling in the ANPC/OTP Bank case, lays the groundwork for the straightening of all the contracts between professionals and consumers, when they contain abusive clauses, without the consumers in question having to resort to individual lawsuits.

 

  Unemployment rate in Greece increased slightly in January this year, to 24.4%, from 24.3% in the previous month, and down from 25.7% in January 2015, according to the Athens Statistics Bureau - ELSTAT. Thus, unemployment in Greece remains almost double than in the Eurozone and almost three times higher than in the European Union. According to seasonally adjusted data, the January level is the lowest since May 2012, when the unemployment rate was at 24.1%. The highest level, of 27.9%, was seen in September 2013.  According to ELSTAT, 1,169,119 people did not have a job in January, down 62,999 over the previous month. Also, the number of employees in Greece was 3,613,483, up 59,789 over the previous month, ELSTAT announced.  The highest unemployment rate, of 51.9%, was seen among young people aged 15 to 24. In January 2015, the unemployment rate on this segment was 50.5%.  Greece's economy fell 0.3% last year, according to revised data recently published by ELSTAT. In 2014, the Greek economy exited a recession which lasted almost six years, posting an advance of 0.7%.

The International Monetary Fund has tried to attenuate the pessimism reflected in its World Economic Outlook through the Global Financial Stability Report, titled "Potent policies for a successful normalization". Without going too much into the psychological subtext of the title, a cursory read shows that the optimism of the Fund has no real basis, especially if we focus on the description of the financial situation of the financial system in Europe.  "The systemic risk is limited, but can grow all over Europe", the IMF document states, because there is "a confluence between the issue of non-performing loans and that of borrowing conditions", when the possibility of bail-in has been fully internalized by the holders of banking liabilities". The euphemisms of the Fund are touching, especially if we look at the report on the global economic outlook.  Bloomberg writes that "the report is very pessimistic", amid "far too low growth that has lasted too long", according to the chief-economist of the institution, professor Maurice Obstfeld.  One of the risks mentioned in the introductory chapter of the report, is the return of the financial crisis, with negative effects on demand and confidence, about which it is stated that "they could enter a self-perpetuating negative feedback loop".  The choice of the term "self-perpetuating negative feedback loop" is extremely unfortunate for the specialists of an institution who should know something about dynamic economic systems. A negative feedback loop is by definition, stabilizing, whereas a positive feedback loop can lead to explosive growth or catastrophic growth.

Has Mario Draghi not announced a fresh stimulus package from the European Central Bank designed to remove the threat of deflation? Are hundreds of thousands of jobs not being created in the US each month?  In each case, the answer is yes. China’s economy appears to have bottomed out. Fears of a $20 oil price have receded. Prices have stopped falling in the eurozone. Employment growth has continued in the US. The International Monetary Fund is forecasting growth in the global economy of just over 3% this year – nothing spectacular, but not a disaster either.  Don’t be fooled. China’s growth is the result of a surge in investment and the strongest credit growth in almost two years. There has been a return to a model that burdened the country with excess manufacturing capacity, a property bubble and a rising number of non-performing loans. The economy has been stabilised, but at a cost. The upward trend in oil prices also looks brittle. The fundamentals of the market - supply continues to exceed demand - have not changed. Then there’s the US. Here there are two problems – one glaringly apparent, the other lurking in the shadows. The overt weakness is that real incomes continue to be squeezed, despite the fall in unemployment. Americans are finding that wages are barely keeping pace with prices, and that the amount left over for discretionary spending is being eaten into by higher rents and medical bills. For a while, consumer spending was kept going because rock-bottom interest rates allowed auto dealers to offer tempting terms to those of limited means wanting to buy a new car or truck. In an echo of the subprime real estate crisis, vehicle sales are now falling.

Hopes the Opec exporters' club and other major producers including Russia would agree to freeze output at Sunday's talks in Doha helped scrape oil prices off the 13-year lows they touched in February.  But the commodity tanked this morning after kingpin Saudi Arabia walked away from the talks, which many hoped would ease a huge surplus in world supplies, because of a boycott by its rival Iran.  US benchmark West Texas Intermediate for May delivery was down 4.9pc at $38.37. Brent crude, the global benchmark, lost 4.6pc to $41.13.  Energy firms were the biggest losers, with Sydney-listed mining giant BHP Billiton down 3pc, Rio Tinto off 1.6pc and Woodside Petroleum down 1.4pc.  "Expectations for the talks to end with an agreement were high, and the lack of one damaged the credibility of future meetings to support the oil market," said Bernard Aw, market strategist at IG Markets Singapore.  Sanjeev Gupta, an oil and gas analyst at EY, told AFP that failure in Doha "revived price collapse fears especially after Saudi Arabia hardened its stance and threatened to raise production quickly if no freeze deals were reached".  Peter Lee, an oil and gas analyst BMI Research, warned oil price losses could reach 15pc.  "What is clear coming out of this is that Opec would no longer be the main driver of oil prices," Mr Lee told AFP.  Angus Nicholson, also of IG Markets, said geopolitics was behind the failure of the talks.  "With Saudi Arabia fighting proxy wars with Iran in Yemen and Syria/Iraq, it is understandable that they had little inclination to freeze their own production and make way for newly sanctions-free Iran to increase their market share," he said.  Major exporters from Nigeria to Venezuela, and even Saudi Arabia, have suffered billions of dollars in lost revenue as prices have slumped from levels above $100 touched in mid-2014.

But Iran, which only recently returned to world oil markets after the lifting of nuclear-linked Western sanctions in January, has ruled out capping its own production as it seeks to regain market share.

"The market share battle is expected to rage on as the failure of the oil-freeze pact could set off another price drop," Mr Gupta said.  Opinion had been split over whether a deal on Sunday would be enough to tackle the global oversupply, which is also due to slowing demand in major consumer China and burgeoning US shale production.

Lagarde said more global cooperation is needed to stop tax avoidance and to ensure “the net does not have little loopholes here and there”. “A lot of things have gone global but there is one thing that has not gone global and that is tax. It is still very much a local affair,” she said. “International cooperation really has to be significantly improved and we are happy to play our part.”

“When we issue a report that is flabbergasting, indicating that work needs to be done by the country there has to be follow-up.”

Kim said he and Lagarde are “working as aggressively as we can” to track down tax evaders, and warned anyone thinking about avoiding tax to be “very careful”.

“When former government officials leave a country and take stolen funds with them we have to track them down,” he said.

Kim said he had been to many countries where the only ones who pay tax are those “too weak to refuse”. “You see systems where the rich don’t pay and the poor do. There is a comprehensive problem that we have to tackle.”

“Transparency is not going to move backward,” he said. “The world is only going to become more and more transparent as we move forward.

“Be very careful and also understand that leaders in developing countries all over the world are telling us that they want to work with us very strongly to track down these illicit flows to make sure the fair share of taxes are being paid. To make sure much of these assets that are taken literally out of the hands of governments and the poor can be reutilised for tackling poverty and inequality.”