As far as the banks are concerned, S&P already has 85 of them on credit watch, and it hopes to clarify the situation within the next four weeks. Something else to watch out for, on top of any moves by rival agencies Moody's and Fitch to alter their ratings. Senior IMF sources in Washington noted that there were "unprecedented delays" in the proper implementation of fiscal and structural reforms linked to the first 110bn euro bailout programme. Instead, "horizontal austerity measures are constantly being adopted that are leading nowhere, whilst further wage and pension cuts are unjustified because the only way to improve competitiveness is through growth-creating market liberalisation, the opening of closed professions and productive investments". Rather than pushing through blanket wage cuts on underpaid groups of employees in the public and private sectors, the IMF sources stressed that selective reductions in exorbitant salaries and closure of wasteful work stations needed to be introduced in dozens of public utilities (DEKO) and other state agencies "in order to attract foreign investment". "We have spoken repeatedly about reforms in the labour market to the extent that certain elements in the structure of the Greek state constitute a hindrance to the creation of new jobs," the IMF sources were quoted as saying. "We have said that this leads to rising unemployment and something must therefore be done about it. None of those idiots 'has a plan', just posturing and positioning....they're still fighting the bloody greek civil war, and expecting everybody else to pay them for it. And assuming that we'll all do it. No, they - left, right, whatever - are simply still deluded enough to believe they've got everyone over the barrel of EU collapse. Unfortunately, much current analysis suggests they may be on to something.
Access Investments-Building Awareness - European Union-ROMANIA
Wednesday, January 18, 2012
As far as the banks are concerned, S&P already has 85 of them on credit watch, and it hopes to clarify the situation within the next four weeks. Something else to watch out for, on top of any moves by rival agencies Moody's and Fitch to alter their ratings. Senior IMF sources in Washington noted that there were "unprecedented delays" in the proper implementation of fiscal and structural reforms linked to the first 110bn euro bailout programme. Instead, "horizontal austerity measures are constantly being adopted that are leading nowhere, whilst further wage and pension cuts are unjustified because the only way to improve competitiveness is through growth-creating market liberalisation, the opening of closed professions and productive investments". Rather than pushing through blanket wage cuts on underpaid groups of employees in the public and private sectors, the IMF sources stressed that selective reductions in exorbitant salaries and closure of wasteful work stations needed to be introduced in dozens of public utilities (DEKO) and other state agencies "in order to attract foreign investment". "We have spoken repeatedly about reforms in the labour market to the extent that certain elements in the structure of the Greek state constitute a hindrance to the creation of new jobs," the IMF sources were quoted as saying. "We have said that this leads to rising unemployment and something must therefore be done about it. None of those idiots 'has a plan', just posturing and positioning....they're still fighting the bloody greek civil war, and expecting everybody else to pay them for it. And assuming that we'll all do it. No, they - left, right, whatever - are simply still deluded enough to believe they've got everyone over the barrel of EU collapse. Unfortunately, much current analysis suggests they may be on to something.
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Amid fresh warnings of Greek default, Charles Dallara, director of the Institute of International Finance (IIF), flew from Washington to Athens on Tuesday night to try to agree a deal before the European finance minister's summit on Monday.
Sources close to the bondholders told The Daily Telegraph there was "enough movement" from officials representing Greece, the International Monetary Fund (IMF), European Central Bank (ECB) and the European Union (EU) to persuade Mr Dallara to meet with them.
Bondholders are resisting pressure to take losses of more than 50pc on their bonds. They are also pushing for higher coupons on fresh Greek paper.
The IIF, which has been representing private sector bondholders during the tortuous talks, said it was committed to "seeking an agreement on a voluntary debt exchange for Greece" and appealed to officials to "work in good faith toward this end with a sense of urgency".
Greece must reach a deal with bondholders to secure the €130bn bail-out it needs before Athens runs out of money in March.
We are going to demand criminal responsibilities - criminal in the sense that a public manager, who could be a politician or a manager appointed by a politician, cannot spend more than the budget limit. [A government official overrunning the limit] is falsifying public accounts in the same way that a private manager has to face criminal responsibilities if he falsifies his company accounts, especially if it is listed.
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13.10 German Chancellor Angela Merkel and Italian Prime Minister Mario Monti agree “on the line that has to be taken in Europe against the debt crisis,” Steffen Seibert, Merkel’s spokesman, told reporters in Berlin today.
13.07 Ambrose Evans-Pritchard has blogged on Italy's problems with the euro:
Italy is being pushed into depression... Obviously, Italy and Germany can no longer share the same monetary policy. Ergo, Germany should leave EMU, pronto.
13.03 Belgium PM Elio Di Rupo says his Government will take more budget measures in February or March because economic growth is slowing.
12.41 BREAKING NEWS...
Goldman Sachs Q4 revenues $6.05bn versus expected $6.39bn. Earnings per share $1.84 versus expected $1.23. Fourth-quarter net income dropped to $1.01bn from $2.39bn.
Net revenues in investment banking down 43pc to $857m. Compensation margin falls from 44pc to 36.5pc quarter-on-quarter. Average compensation per employee: $367,057. Goldman paid employees $12.2bn in 2011, down 21pc.
Goldman cut 900 staff in Q4 and 2,400 during 2011.
Bank sees "encouraging signs" of improved economy and markets. Chief executive Lloyd Blankfein is cutting costs and focusing on international growth to help offset a slowdown in trading, which contributes most of the firm’s revenue
European Commission president Jose Manuel Barroso believe growth actions by member states are uneven and insufficient. He tells the European parliament:
There are 23m jobless and 23m SMEs in the EU. If every SME employs one more person, we solve the unemployment problem.
09.45 Reaction to those UK unemployment figures (see 09.30):
Ross Walker at RBS said:
Overall, there's a slightly softer feel to these figures. The labour market is struggling and forward-looking indicators such as vacancies and hiring intentions suggest it's going to be rocky in the first half of this year. The fall in full-time employment is the key figure and you've got a bit of an offset from part-time workers, but the underlying trend just looks a little bit weaker.
Nick O'Reilly, a business recovery specialist at chartered accountants HW Fisher & Company, said:
Inflation may be coming down, and the Bank of England breathing a little more easily, but on the high street it's as bleak as ever. The Christmas period saw several high profile retail names go to the wall, and now public sector redundancies are progressively kicking in. There's no escaping the uncomfortable truth - that the SME sector cannot, and will not, ride to the rescue of the newly jobless public sector workers. My fear is that the number of unemployed will only go one way - and that's up.
And here's another fact to consider - 988,000 working hours were lost due to the strike action in November, highest since 1989
Die Welt is reporting that Commerz - which until now faced raising €5.3bn "only" - is more exposed to any larger-than-planned "haircut" on Greek debt.
The bank is already 25% in state hands and is seeking desperate emergency measures to avoid outright nationalisation.
The story is also further proof that Germany is not and cannot remain aloof from the crisis elsewhere: it downgraded its growth forecast to a measly 0.7% this morning, with economy minister Philipp Roessler saying the economy now relies on domestic demand to keep going. German consumers to the rescue? Now there's a change...
Further evidence that the eurozone saga is as much a banking as a sovereign debt crisis: Commerzbank, Germany's second-largest bank, may need as much as €6bn fresh capital - and faces a downgrade from Moody's rating agency.
OK, the situation regarding the International Monetary Fund's call for extra resources is becoming clearer (based on the various sources leaking across Europe).
The plan appears to be that the IMF to raise an extra $500bn to $600bn in funding, which would take its resources up from $385bn to almost $1 trillion.
As we postulated earlier (10.49am) that includes the €150bn ($192bn) already committed by the eurozone (and would also include €50bn from the rest of the EU (despite Britain declining to make its £25bn contribution last month)
Incidentally, Bloomberg has tweaked its original story (which suggested a $1tn boost). Getting just $500bn will be hard enough.
Germany and Portugal both enjoyed some success in the bond markets today.
Portugal sold almost €2.5bn of short-term bonds at an average yield (interest rate) of 4.985%, which is a drop from 5.9% from the previous auction (all the way back in April 2011, before it applied for financial support).
The results should be a relief in Lisbon, after Portugal's credit rating was cut to junk last Friday.
Germany also saw its borrowing costs fall when it sold €3.44bn of two-year bonds. The yield dropped to just 0.17%, down from 0.29%.
However, the usual caution applies -- the European Central Bank's LTRO operation (almost €500bn of cheap loans), is meant to encourage banks to buy eurozone debt. Without that liquidity, yields would be somewhat higher.
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