The EU’s executive body is to unveil radical new proposals on immigration, imposing migrant quotas on the 28 countries of the union under a distribution “key” system set by Brussels.

The plan, which is supported by Germany and will be fiercely resisted by the new Conservative government, will be launched by the European commission on Wednesday in response to migrant boats crisis in the Mediterranean.  The bold move by Brussels comes as the EU draws up plans for military attacks in Libya to try to curb the flow of people across the Mediterranean by targeting the trafficking networks. The EU’s top diplomat is to unveil an attempt on Monday to secure a UN mandate for armed action in Libya’s territorial waters.  Britain is drafting the UN security council resolution that would authorise the mission, senior officials in Brussels said. It would come under Italian command, have the participation of about 10 EU countries – including Britain, France, Spain and Italy – and could also drag in Nato, although there are no plans for the initial involvement of the alliance.  While there is broad support within the EU for the military plans, the proposals for sharing the immigration burden are highly controversial and divisive.

The policy document, obtained by the Guardian, demands new and binding rules establishing a quota system of sharing refugees among the member states.

The migration agenda declares: “The EU needs a permanent system for sharing the responsibility for large numbers of refugees and asylum seekers among member states.”

Greece avoided an unprecedented default to the International Monetary Fund after raiding an emergency cash account at the Fund, in a major sign the country is edging ever closer to stiffing its senior creditor.  Athens tapped €650m from an escrow account held by the Bank of Greece at the IMF, scraping together a further €100bn in cash reserves to avoid going into arrears.

The news came after reports in Spanish paper El Mundo said the IMF was ready to pull the plug on the debt-stricken country.  Fund officials reportedly told European finance ministers they had grave concerns about Athens willingness to slash spending, raise tax revenues, and implement a raft of structural reforms, ruling themselves out of a fresh rescue which could be worth €30bn-€50bn. Seems like they are going to have to do what I said almost 5 years ago at the start of this, and that is to start issuing a local currency that is put into circulation by government spending, as long as that local currency cant be traded outside the country then it wont have much impact on the rest of us, it does mean that almost every euro the country earns will go towards paying of debt, so Greece will become a country that will become euro hungry and should offer the rest of us great holiday deals... Speaking in Brussels, the president of the eurogroup Jeroen Dijsselbloem said there would be no discussions over another programme for Greece until an agreement on its current deal is reached.

The latest meeting of finance ministers gave way to little substantive agreement on unlocking vital bail-out funds for Athens, but was conducted in a more "constructive" environment, said eurozone economics chief Pierre Moscovici. Greece's finance minister Yanis Varoufakis warned his country now faced an "urgent" liquidity situation.  

“In their attempt to respect their duties, the ECB’s policymakers have made themselves political,” Greece’s finance minister Yanis Varoufakis told an audience of academics and economists in Paris last month.   The refrain strikes at the heart of his government’s complaints against the notionally independent ECB.   As one of Greece’s three main creditors - alongside the International Monetary Fund and the European Commission - the central bank is unique in wielding the power that can ultimately force the country out of the single currency.  Despite not officially being party to the political negotiations over extending Greece’s bail-out, the ECB has made a number of discretionary moves since the Syriza government was elected just over 100 days ago.  When he first swept into power, Prime Minister Alexis Tsipras appealed to Mr Draghi to provide some form of bridging finance to keep the country afloat as he sought to re-write the terms of Greece’s rescue programme.

It soon became clear the Italian would not be playing ball.  Not only has the ECB rebuffed requests for temporary financial relief, but its disciplinarian stance has led to accusations that it is acting ‘ultra vires’ - taking politically motivated action outside of its legal remit to ensure financial stability in the eurozone.  The ECB had no choice but to stop allowing Greece’s banks to post government debt as collateral for cheap cash. How could it do anything else? Otherwise, it was a blank cheque to Greece.  That said, there must be some justification complaining of ECB using its role in a political way - it's not many years ago that it was accused of deliberately bringing down the then Italian PM by refusing any further lending / financing.  The bottom line is that sovereign nationhood and one currency / central bank is a totally impossible combination. Either all the member nations of the Eurozone have to submit to one European government and have their countries treated as 'regions' controlled by Brussels, or they must return to independent currencies... Maybe one day we will wake up to the good news that the Greeks had defaulted to the IMF and as a consequence were kicked out of the Eurozone, since defaulting to the ECB won't do the trick with Germany too deeply involved with the ECB.  Will we be so lucky? Methinks not. This Greek farce will go on and on until the last reader of the DT will lose interest and resort to playing chess online, as I shall do right now. I am only here for the beer (i.e. AEP) but the beer is no longer on offer.

In a joint meeting of the Economic and Monetary Affairs and the Civil Liberties Committees of the European Parliament, MEPs endorsed the adoption of the final text of the Anti-Money Laundering Directive by the European Parliament.  These new rules are to safeguard the stability of the financial system from money laundering and terrorist financing. Moreover, they will provide authorities with new tools to prevent criminals from legalising illicit proceeds.  Krišjānis Kariņš MEP, Parliament's co-negotiator, said: “Authorities need new means to effectively deal with criminals legalising illicit proceeds by using the anonymity of offshore companies and accounts. The register of beneficial ownership is a powerful tool which will help in the fight against money laundering and blatant tax evasion.”  The register of the beneficial ownership of companies will be accessible to the wider public via an authorisation process. The register would make it possible for police and tax authorities to uncover who is actually the true beneficiary of any legal entity across the EU, making life much more difficult for criminals.

Estimates suggest that money laundering accounts for as much as 2.7% of the world’s economic activity (GDP) - or $1.6 trillion in 2009. This is a challenge for both the competitiveness of legal businesses as well as for government coffers.  Member States will be allowed to exempt certain gambling services and products (e.g. state lotteries) based on proven low risk. E-money products will also benefit from certain exemptions. The Directive introduces a 'blacklist' with high-risk third countries.  After the adoption in the committees, and the second reading agreement in the EU Council, the European Parliament will vote at second reading in plenary in May. The changes are set to come into force in the second half of 2017.

Greece could start using a "parallel currency" to pay its civil servants if it runs out of cash, one of the European Central Bank's board members has suggested.  Highlighting the desperate situation faced by the country, Yves Merch, a member of the ECB's executive board and governor of Luxembourg's central bank, told Spanish newspaper La Vanguardia that Greece could resort to using "exceptional tools" to pay its obligations.  "There are intermediate solutions circulating, such as the issuance of a parallel currency or IOUs," he told the newspaper. "All these measures are among the exceptional tools that any government can consider if it has no other options. But all of them have a high cost."   His comments come as the country scrambles to reach a deal with international creditors and avoid a default. The ECB has already analysed how such a scenario could play out. Officials told Reuters in April that creating a virtual second currency within the eurozone might not be enough to keep Greece in the 19-nation bloc.  Analysis showed around 30pc of Greeks would end up receiving such "IOUs" rather than cash, which would put further pressure on Greek banks as workers dipped into their their savings.  Mr Merch singled out Greece as the eurozone's black sheep. “Rarely have I seen Europe so united, except for one country, on the need to follow the rules. Those countries wouldn’t like everything achieved in the past, the effort made, frustrated now that it is starting to bear fruit."   He also suggested that a Greek exit may be relatively pain-free for the rest of the bloc. "There have been defaults in the US and other monetary unions without political consequences," he said. However, Mr Mersh added that policymakers remained ready to defend the single currency "by all means". "The markets have greatly underestimated the political will to save the euro," he added.   Meanwhile, Michel Sapin, France's finance minister, said that eurozone policymakers remained determined to keep Greece in the eurozone, but insisted that the country "must respect its commitments" to remain in the bloc.  Sarah Carlson, an analyst at Moody's said the risk of a Greek exit had grown, adding that any exit from the monetary union by a country would mark a significant change in how the euro area is viewed.  A poll by Paddy Power on Thursday indicated a 56% chance of a Grexit.

Rising Stock prices refelect the true inflation

Responding to a reporter asking about when interest rates might rise in March last year, Ms Yellen suggested that the Fed would start to increase these “probably something in the order of six months” after it ceased buying up bonds.  Financial markets reacted instantaneously. Ms Yellen’s offhand comment was interpreted as a clear sign that the bank would tighten policy much faster than expected, causing US stocks to tumble. In a now-infamous research note, James Lord, an analyst at Morgan Stanley, singled out five economies as particularly weak. Brazil, Indonesia, India, Turkey and South Africa became known as the “Fragile Five”, picked for their large current account deficits, high inflation, and weak growth potential – all factors that made them vulnerable to the Fed.  Morgan Stanley last week revisited the group, as the Fed’s most recent dovish tilt “allowed emerging markets some breathing space again”. Manoj Pradhan, an economist at the US bank, said vulnerable economies had failed to take advantage of the reprieve offered by the central bank. Rates are rising already in anticipation of the Fed, the bond markets are petrified of the fallout due to absence of liquidity...this tougher rates outlook makes it even more inconceivable that greece, hamstrung by the euro as its currency, can generate any kind of meaningful economic activity.  Greece needs to devalue, to gain economic momentum, to gain the massive boon in tourism that would surely be theirs; But. For this, it needs its own currency. Let grexit become a reality as soon as possible, to save the unproductive, lethargic greeks from themselves, and, to save the Eurocrats from squandering countless more billions trying to catch the falling knife.  EU and its leaders need to shore up credibility for themselves, and for the credibility of Europe in the eyes of investors and traders. UK must be given assurance that spendthrift nations will be fully confronted, and blocked, where necessary, so as to remove another possible excuse for another disastrous possibility: Brexit.

Earthquake............

Earthquake hits on Tuesday with shockwaves felt as far away as New Delhi. Follow the latest developments as aftershocks rock country