Reuters writes that the 2 billion Euros "investment" needs to be approved by the European Commission, which needs to check whether the transaction occurs at the market price or if it represents a state aid. Shortly after, a report appeared in Italian daily La Stampa, where it is state that the authorities in Rome have asked for a 15 billion Euros financial aid from the European Stability Mechanism (ESM) to prop up Italy's banking system. Shares of Italian banks rose significantly following the news, with Monte dei Paschi, being the best "performer", with a rise of about 10%. "No request for the ESM is being prepared", a spokesperson of the Italian treasury said, according to Financial Times.  With the resignation of the government led by Matteo Renzi, who has announced on his Twitter account that the budget law has been approved, Italy's "Aeneid" in the Eurozone enters a new stage and nobody knows when the country is going to turn that corner.  As for Greece's "Odyssey", Bloomberg asks whether the plan to cut the debt burden isn't too small and applied too late, reminding that the IMF sees the fiscal targets as unrealistic and the debt as far too big. Right now all we have to do is wait, even though we probably won't have to wait as many years as have passed since the aggravated phase of the sovereign debt in Europe, to find out whether Greece and Italy will "kick the bucket" once they "turn that corner". 

The International Monetary Fund, the third pillar of the creditors' Troika, has not yet accepted that and continues to ask for the application of a new debt reduction, so that it becomes bearable, as well as the continuation of the austerity programs. Even though the authorities in Athens have accepted the measures adopted in the Eurogroup meeting, once they got home they also "discovered" their true meaning. The measures for relieving the burden of the public debt will be applicable until 2060 and are subject to achieving the creation of a budget surplus of approximately 3.5% of the GDP over a ten year period, which will begin after the completion of the current bail-out program, in 2018.  Apparently no one knows why the new proposals of the European creditors are realistic. What will be extremely realistic and painful will be the new taxes provided in the draft budget for 2017. According to an article from French newspaper Le Monde, new taxes will be introduced for personal vehicles, landline phones, TVs, fuel, tobacco, coffee and beer.  Unfortunately, those taxes are missing one item, because there haven't been dance taxes introduced, as is happening in Brussels, where the local authorities have "rediscovered" a tax that was approved in the "50s and they send people undercover in bars and restaurants to make sure it is paid.  Of course, the "optimism" displayed by the European and the Greek authorities is completely out of place. "The agreement of the Eurogroup represents a chance for Greece to turn a corner", said Euclid Tsakalotos, finance minister in the government led by Alexis Tsipras, except his statement was made in spring this year, according to daily Kathimerini. Nobody expected miracles right away back then, but there are no signals that Greece is ready to turn a corner, just like nobody expects the new tax hikes and the newly introduced taxes to generate a virtuous circle of growth. As strange as it may seem, the notion of "virtuous circle of economic growth" actually exists in the discourse of the authorities in Athens. As always their optimism runs smack dab into the attitude of German finance minister Wolfgang Schäuble. On the day of the referendum in Italy, Schäuble said, in an interview he gave Bild am Sonntag, that "Athens needs to finally apply the necessary reforms, or else it has no room in the Eurozone".

Russia’s Central Bank expects the crude glut on the global market to persist till 2017, according to the regulator’s report on monetary policy quoted by Tass. Oil price will decline to about $40 per barrel in 2016 and remain on this level in 2017-2019, the bank said. “The estimates of the supply and demand balance on the global crude market have not changed significantly, the surplus of oil supply is expected to persist till 2017. Taking this into account, the Bank of Russia has kept its base case forecast of Urals crude oil price by the end of 2016 at the level of $40 per barrel,” the report said.

A possible decision to freeze oil production by the exported countries will not have a significant effect on the demand/supply balance on the global oil market or oil price, the report said.  “The negotiations on freezing oil production among OPEC countries and some large exporters outside the organization are unlikely to have a lasting effect on market conditions. This would be possible only if the parties have agreed on direct reduction of production in comparison with current levels, but such an outcome is very unlikely. A more likely solution – setting production and exports at the levels close to the current ones – will not significantly affect the demand/supply balance on the global oil market,” the report said.  Earlier, Saudi Arabia and Russia’s energy ministers singed a joint statement aimed at stabilizing the crude market on the sidelines of the G20 Summit. The Ministers recognized the importance of maintaining the ongoing dialogue about current developments in oil and gas markets and indicated their mutual desire to further expand their bilateral relations in energy.  Russian Energy Minister Alexander Novak told reporters that Russia and Saudi Arabia are going to discuss freezing oil production for 3 or 6 months, maybe more.  The 15th International Energy Forum (IEF15) will be held in Algiers on September 26-28, 2016. According to the media, oil exporter countries might discuss freezing of oil production. Venezuela, Ecuador and Kuwait were the initiators of the discussion.

OMV Petrom proposes its shareholders a dividend worth a minimum 30% for this year, says a release sent to Bucharest Stock Exchange. “OMV Petrom currently targets, subject to adverse developments in the external market, a proposed dividend from the 2016 net earnings of a minimum of 30% in the case it is fully covered by the Company’s free cash flows before dividends,” reads the release. ”The above should not be considered an amendment of the Company’s existing Dividend Policy, which will remain unchanged, but only a further detailing of the general principles with respect to 2016 only.” Starting the 2017 financial year and beyond, unless otherwise approved, the general principles under the Company’s existing Dividend Policy will remain unchanged and applicable, as follows: “OMV Petrom S.A. (the Company) is committed to deliver a competitive shareholder return through the business cycle, including paying an attractive dividend, subject always to maintaining a strong balance sheet that will enable the Company to finance its investment needs and to the shareholders’ approval.” OMV Petrom recorded a consolidated net profit of EUR 26 million in the second quarter of this year, down by 83% compared to the same period of 2015. The group’s consolidated sales declined by 20% in the three months ended June 31, 2016, to EUR 807 million.

 Once upon a time, there were five international audit, tax and audit consulting firms. Arthur Andersen disappeared in 2002, after it was convicted for the involvement in the Enron fraud.  Since then, there have been four giants on this market, PricewaterhouseCoopers (PwC), Deloitte Touche Tohmatsu, Ernst & Young and KPMG, and some of their biggest clients are financial institutions. Bloomberg and Financial Times recently wrote that PricewaterhouseCoopers has been sued for "not having detected a case of fraud that led to the collapse of a bank during the global financial crisis". According to FT, the lawsuit in the United States "could bring more audit firms in the line of fire". The biggest lawsuit against an audit firm, according to Financial Times, has been brought following the complaint filed by the company that is in charge of the liquidation of Taylor, Bean & Whitaker (TBW), a mortgage originator in the US, which has been in a long-lasting relationship with Colonial Bank din Alabama. During the period of the real estate bubble in the United States, which has led to the subprime lending crisis, TBW used to grant mortgage loans, and they have already been financed by Colonial Bank.  According to the article in FT, the company that manages what is left of the TBW assets are accusing PwC of "failing to spot the conspiracy of several billion dollars between the founder of TBW and the executive management of Colonial Bank". The documents submitted to the court show that PwC signed "clean" audit opinions between 2002 and 2008, and in 2009 Colonial Bank collapsed and "rose" up to the 6th position in the chart of the biggest defaults in the US. The cost for the FDIC (author's note": Federal Deposit Insurance Corp., the institution for the guarantee of bank deposits in the US) was 4.2 billion dollars, according to Bloomberg estimates.

A key gauge of credit vulnerability is now three times over the danger threshold and has continued to deteriorate, despite pledges by Chinese premier Li Keqiang to wean the economy off debt-driven growth before it is too late.  The Bank for International Settlements warned in its quarterly report that China’s "credit to GDP gap" has reached 30.1, the highest to date and in a different league altogether from any other major country tracked by the institution. It is also significantly higher than the scores in East Asia's speculative boom on 1997 or in the US subprime bubble before the Lehman crisis. Studies of earlier banking crises around the world over the last sixty years suggest that any score above ten requires careful monitoring.  The credit to GDP gap measures deviations from normal patterns within any one country and therefore strips out cultural differences.  It is based on work the US economist Hyman Minsky and has proved to be the best single gauge of banking risk, although the final denouement can often take longer than assumed. Indicators for what would happen to debt service costs if interest rates rose 250 basis points are also well over the safety line.  China’s total credit reached 255pc of GDP at the end of last year, a jump of 107 percentage points over eight years. This is an extremely high level for a developing economy and is still rising fast .

EU leaders will search for unity at a special summit without the UK on Friday, in the hope of setting a course for a union battered by the Brexit vote and riven by a simmering east-west row over migration.  Donald Tusk, the former Polish prime minister who chairs EU leaders’ summits, hopes to cool tempers after Luxembourg’s foreign minister called for Hungary to be thrown out of the EU for allegedly treating asylum seekers “worse than wild animals”. Hungary counterattacked with stinging criticism of the grand duchy’s record in helping big corporations avoid tax. On Thursday Tusk called on EU leaders to take a “brutally honest” look at the bloc’s problems, declaring: “We must not let this crisis go to waste.”  “We haven’t come to Bratislava to comfort each other or even worse to deny the real challenges we face in this particular moment in the history of our community after the vote in the UK,” said Tusk, who will chair the summit. “We can’t start our discussion ... with this kind of blissful conviction that nothing is wrong, that everything was and is OK,” he added. “We have to assure ... our citizens that we have learned the lesson from Brexit and we are able to bring back stability and a sense of security and effective protection.” Tusk hopes to focus on areas that the 27 leaders can agree on: border security, counter-terrorism and moves to “to bring back control of globalisation”. Officials are playing down expectations of results from the meeting at Bratislava castle, in the capital of Slovakia, one of the four Visegrád countries along with Poland, Hungary and the Czech Republic.  Officials close to Tusk hope for small but symbolic breakthroughs, most notably an agreement to send an extra 200 border guards and 50 vehicles to the EU’s external frontier in Bulgaria by next month. Agreeing on stronger border defences is the easy bit. The thorny issue of sharing the cost of protecting refugees is likely to continue to strain unity. The Visegrád group are fiercely opposed to the EU executive’s attempts to fine them for not accepting refugees in their countries. Hungary has flatly refused to take in refugees under an EU quota scheme, while many other countries are falling short. Hungary’s rightwing prime minister, Viktor Orbán, has called a referendum for 2 October on the EU relocation plan, which would see 1,294 asylum seekers sent to the country.  Ahead of the vote, the European commission president, Jean-Claude Juncker, appeared to offer an olive branch to his opponents. In his annual state of the union address, he said solidarity “must come from the heart” and could not be forced.