http://www.telegraph.co.uk/finance/debt-crisis-live/9507012/Debt-crisis-live.html
When a good part of the claims [recent estimates by the group suggest Germany's gross claims from the eurozone stood at about €3.5 trillion] would go in default, there would be insolvencies in small and medium-sizes firms and the economy would be hit. This drop could amount to between 7pc and 10pc of [German] gross domestic product.
In both areas, the loss in confidence was particularly strong among consumers, retail trade and construction managers. In the services sector the loss in confidence was marked in the euro area but more contained in the EU as a whole. On the contrary, while confidence in industry decreased in the EU, it remained broadly stable in the euro area.
China is willing, on condition of fully evaluating the risks, to continue to invest in the euro zone sovereign debt market, and strengthen communication and discussion with the European Union, the European Central Bank the IMF and other key countries to support the indebted euro zone countries in overcoming hardships.
Philipp Roesler stands by his comment that a Greek exit from the eurozone has "lost its terror" (Photo: AFP).
The number of people out of a job in Germany rose for a fifth month in a row in August (Photo: ALAMY).
The main worries are two-fold: first is whether Greece will leave the eurozone. The second is whether Italy and Spain will take comprehensive rescue measures: resolving these two problems rests with whether Greece, Spain, Italy and other countries have the determination for reform.
At a summit in Berlin, Angela Merkel and Mario Monti publicly stated they disagreed over the role of Europe’s new big bazooka bail-out fund. The Italian prime minister said the European Stability Mechanism (ESM) should have a bank license to be able to properly bring down Club Med borrowing costs. The German Chancellor said the plan was “incompatible” with EU treaties - and that she was backed by Mario Draghi, president of the European Central Bank,
Submitted by Tyler Durden on 08/30/2012 06:00 -0400
Representatives of the three parties in the coalition government were on Thursday to continue talks aimed at nailing down an 11.5-billion-euro austerity package for 2013 and 2014 after sources revealed to Kathimerini that the cuts being proposed are even harsher than expected.
These include the abolition of the traditional holiday payments (at Easter, Christmas and summer) for all pensioners, not just former civil servants. It also emerged that the ax will likely fall on all pensions above 800 euros, with cuts starting at 2 percent and reaching 20 percent for the highest levels. The government hopes to raise 4.5 billion euros through pension cuts alone.
According to sources, objections were raised during a meeting between party officials on Wednesday night to proposed cuts to social welfare benefits and benefits for the disabled.
The proposed package also foresees fresh cuts to healthcare, to the tune of 1.3 billion euros, some 500 million euros of cutbacks in defense and 750 million euros in cutbacks to local authority subsidies.
Cuts to the so-called «special salaries» of certain categories of civil servants such as judicial and military staff as well as priests will reach the 12 percent level, according to the proposal which aims to raise 800 million euros in this area. It is likely that police officers and other members of security forces with dangerous jobs, will be excluded from this measure.
As for civil servants, the likely scenario involves between 35,000 and 40,000 employees leaving the public sector by 2014, either through early retirement or for failing to pass an evaluation. Another 110,000 are to leave the service by 2015 either through retirement or the termination of their contracts, Kathimerini understands.
Officials of of the Democratic Left, the smallest party in the coalition, have reportedly proposed that cuts to pensions' holiday payments be scaled according to income while calling for additional cuts to health sector procurement, defense and clerics' salaries.
Finance Minister Yannis Stournaras, who is spearheading efforts to draft the package, has said the measures will be ready by next week in time for a scheduled visit to Athens by representatives of Greece's foreign creditors, the European Commission, European Central Bank and International Monetary Fund, known as the troika. The troika officials are to arrive on September 5 and travel to Nicosia on September 13 ahead of a Eurogroup summit there on September 14.
11.41 The German economy would shrink by around 10pc if the euro collapsed, according to a key government adviser.
Lars Feld, one of the five "wise men" of Germany (one of them is a woman, by the way), told a meeting of journalists on Wednesday:
When a good part of the claims [recent estimates by the group suggest Germany's gross claims from the eurozone stood at about €3.5 trillion] would go in default, there would be insolvencies in small and medium-sizes firms and the economy would be hit. This drop could amount to between 7pc and 10pc of [German] gross domestic product.
A Greek exit on its own could also cause widespread damage, because of the risk of contagion, he said, adding that Europe had very few tricks up its sleeve when it came to resolving the crisis. "Many of them are not especially pretty," he said.
10.37 Italy has got a crucial debt auction away this morning, where it has managed to sell long-term debt at slightly lower rates.
The country sold €4bn (£3.1bn) of ten-year government bonds at average yields of 5.82pc. This compares with 5.96pc in July and is the lowest interest rate since the end of March. Demand was also stronger, with 1.42 bidders for every bond on offer, compared with 1.29 bidders at the last auction.
It also sold €2.5bn of five year debt at average yields of 4.73pc. This compares with 5.29pc in July.
10.35 European business confidence fell to its lowest level in three years in August, with retailers and construction managers feeling particularly downbeat.
The European Commission's Economic Sentiment Indicator (ESI) for the eurozone fell to 86.1 in August, from 87.9 in July. This is well below the long-run average of 100, and less than the 87.5 forecast by analysts in a Bloomberg poll.
The wider EU measure fell to 87 in August, from 89 in July.
In a statement, the EC said:
In both areas, the loss in confidence was particularly strong among consumers, retail trade and construction managers. In the services sector the loss in confidence was marked in the euro area but more contained in the EU as a whole. On the contrary, while confidence in industry decreased in the EU, it remained broadly stable in the euro area.
10.08 More comments are coming out of Beijing, where China has said that it may be willing to buy-up more European debt to support the struggling region. Mr Wen said:
China is willing, on condition of fully evaluating the risks, to continue to invest in the euro zone sovereign debt market, and strengthen communication and discussion with the European Union, the European Central Bank the IMF and other key countries to support the indebted euro zone countries in overcoming hardships.
09.58 Philipp Roesler, the German economy minister who claimed last month that a Greek exit from the eurozone had "lost its terror," has repeated his comments in an interview today, declaring that he had no reason to change or withdraw his remarks.
Mr Roesler told German daily Die Zeit: "I have no reason to change my statements or even withdraw them". Other MPs' comments had been even more "dangerous" than his, he added.
Mr Roesler, who has long voiced concerns over Greece's ability to meet its austerity targets, reiterated that if Greece did not deliver on its promises, it would receive any more bail-out cash.
"Anyone who breaks promises, can get no more money," he said.
Philipp Roesler stands by his comment that a Greek exit from the eurozone has "lost its terror" (Photo: AFP).
09.30 Back home in Germany, there's disappointing news for Merkel as the latest joblessness figures reveal the number of people out of a job rose for a fifth month in a row in August. The increase was slightly greater than expected, at 9,000, taking the total number out of work to 2.9m.
The figures are sobering reminder that even Europe's strongest economy is suffering as a result of the eurozone crisis.
The number of people out of a job in Germany rose for a fifth month in a row in August (Photo: ALAMY).
08.11 The global jaw-jaw continues. This morning, German ChancellorAngela Merkel met Chinese Premier Wen Jiabao for talks in Beijing.
This is Mrs Merkel's second visit to China this year, and she is accompanied by the biggest German delegation to visit the country.
In a press conference following the meeting, Mr Wen said that fears over a Greek eurozone exit remained his primary concern. He said:
The main worries are two-fold: first is whether Greece will leave the eurozone. The second is whether Italy and Spain will take comprehensive rescue measures: resolving these two problems rests with whether Greece, Spain, Italy and other countries have the determination for reform.
08.05 Europe's politicial and economic leaders clashed yesterday over debt crisis resolutions, underscoring the sense of chaos and disunity between Brussels and the key eurozone economies, writes Louise Armitstead:
At a summit in Berlin, Angela Merkel and Mario Monti publicly stated they disagreed over the role of Europe’s new big bazooka bail-out fund. The Italian prime minister said the European Stability Mechanism (ESM) should have a bank license to be able to properly bring down Club Med borrowing costs. The German Chancellor said the plan was “incompatible” with EU treaties - and that she was backed by Mario Draghi, president of the European Central Bank,
Meanwhile Mr Draghi launched an attack on Germany: in an article for Die Welt, he argued that the ECB would need "exceptional measures" to curb the crisis and that Berlin’s interpretation of the bank’s mandate was too narrow.
and......
http://www.zerohedge.com/news/china-bails-out-europe-rumor-back
The "China Bails Out Europe" Rumor Is Back
- Best Buy
- China
- European Central Bank
- European Union
- Greece
- International Monetary Fund
- Italy
- LBO
- Reuters
- Sovereign Debt
- Wen Jiabao
It's been a while since the ridiculous "China bails out Europe" rumor made the scene: in fact, the last time we can find with definitive confirmation was back in September of 2011, just before the bottom fell out of Europe, and when the FT, based on "anonymous sources" tripped over itself to report that "[insert European country] is in talks with China to buy bonds, assets." Sure enough, now that Merkel came, and saw, but hardly conquered Beijing, it is the turn of China's Wen Jiabao to add his 10 pips to the EURUSD rumormill: Reuters reports: "China is prepared to buy more EU government bonds amid a worsening European debt crisis that is dragging on the world economy, Premier Wen Jiabao said, in the strongest sign of support for its biggest trading partner in months." Naturally, considering how often this rumor (re)appeared in the past it will be excusable if nobody but the dumbest vacuum tubes fall for it this time, especially considering that the Chinese economy itself is going down in flames faster than the October Iron Ore contract. And lest there be any confusion, China's commitment is about as definitive as a Best Buy LBO "preunderwritten" with a Jefferies highly confident letter: "China is willing, on condition of fully evaluating the risks, to continue to invest in the euro zone sovereign debt market, and strengthen communication and discussion with the European Union, the European Central Bank the IMF and other key countries to support the indebted euro zone countries in overcoming hardships," [Wen] said after meeting Merkel." Ah, conditional aid. The kind that gets Mario Monti to break out the petulant ex-Goldman child act and refuse to leave the Belgian catered dining room until the beggeessuccumb to his technocratic platitudes. Needless to say, we'll believe China's "continued" investment in Europe when we see it.
As to what China's premier really thinks, here it is:
and from Greece ...... who is going to work when everyone's on strike ?Wen... said he remained worried about the crisis in the euro zone."Recently, the European debt crisis has continued to worsen giving rise to serious concerns in the international community. Frankly speaking, I am also worried," Wen told a news conference."The main worries are two-fold: first is whether Greece will leave the euro zone. The second is whether Italy and Spain will take comprehensive rescue measures. Resolving these two problems rests with whether Greece Spain, Italy and other countries have the determination for reform."He said a briefing by Merkel assuaged his concerns slightly, but warned that no quick resolution for the crisis is in sight, underscoring Beijing's worries about the debt problems in Europe, China's biggest trading partner."After I heard her views, it increased my confidence. But I must honestly say, the implementation of these measures won't be completely smooth," Wen said.China's latest promise to buy more European sovereign debt if certain conditions are met encapsulates Beijing's hitherto cool response to Europe's requests for financial aid.Attempts by the head of one of Europe's rescue funds to get funding from China last year floundered on Beijing's fear that it was not getting sufficient protection against losses.
Considering that nothing has changed since then except a lot more jaw, and recently, fingerboning by the Goldman head of the ECB, coupled with Europe down to its last snickers bar wrapper as money good ECB collateral, one can see why one would be skeptical to buy any of this. Except for the EURUSD algobots. If only for 5 minutes.
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Package foresees 4.5 bln euros in pension cuts
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These include the abolition of the traditional holiday payments (at Easter, Christmas and summer) for all pensioners, not just former civil servants. It also emerged that the ax will likely fall on all pensions above 800 euros, with cuts starting at 2 percent and reaching 20 percent for the highest levels. The government hopes to raise 4.5 billion euros through pension cuts alone.
According to sources, objections were raised during a meeting between party officials on Wednesday night to proposed cuts to social welfare benefits and benefits for the disabled.
The proposed package also foresees fresh cuts to healthcare, to the tune of 1.3 billion euros, some 500 million euros of cutbacks in defense and 750 million euros in cutbacks to local authority subsidies.
Cuts to the so-called «special salaries» of certain categories of civil servants such as judicial and military staff as well as priests will reach the 12 percent level, according to the proposal which aims to raise 800 million euros in this area. It is likely that police officers and other members of security forces with dangerous jobs, will be excluded from this measure.
As for civil servants, the likely scenario involves between 35,000 and 40,000 employees leaving the public sector by 2014, either through early retirement or for failing to pass an evaluation. Another 110,000 are to leave the service by 2015 either through retirement or the termination of their contracts, Kathimerini understands.
Officials of of the Democratic Left, the smallest party in the coalition, have reportedly proposed that cuts to pensions' holiday payments be scaled according to income while calling for additional cuts to health sector procurement, defense and clerics' salaries.
Finance Minister Yannis Stournaras, who is spearheading efforts to draft the package, has said the measures will be ready by next week in time for a scheduled visit to Athens by representatives of Greece's foreign creditors, the European Commission, European Central Bank and International Monetary Fund, known as the troika. The troika officials are to arrive on September 5 and travel to Nicosia on September 13 ahead of a Eurogroup summit there on September 14.
Stournaras is to meet with troika chiefs on September 9, Finance Ministry sources said on Thursday.
and....
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