Europe outlook for October 12 , 2012 - The Telegraph liveblog , Athens News items of interest.....

http://hat4uk.wordpress.com/2012/10/12/syriza-15-pts-clear-of-samaras/

OCTOBER 12, 2012 · 6:38 PM

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GREEK CRISIS: New poll puts Alexis Tsipras well out in front

Fresh opinion research has Syriza 15 pts clear

The European Union may have just won the Nobel Peace Prize, but peace is the last thing the Sprouts of Brussels are bringing to Greece. Forcing Prime Minister Antonis Samaras to knuckle under on the question of austerity has pulled the rug from under leading rightist Party New Democracy, while previously the Berlin-am-Brussels bullying of Papandreou neutered the appeal of leftist PASOK. Since then, new PASOK leader Evangelos Venizelos has destroyed the Party’s credibility by openly scheming against Samaras…..and then being revealed as the main villain in the Lagarde List scandal.

A new opinon poll yesterday suggested a clear lead for Syriza, the Left Party headed by the increasingly persuasive Alexis Tsipras (pictured above). In just four weeks, New Democracy’s popularity has fallen 10%, while net, Syriza has the biggest share of voting intentions by some 15%. Over the same period, PASOK fell back a further 9%, to the point where an election tomorrow would render it a minority Party on a level with the neo-fascist Golden Dawn.

My instinct is that this is bound to concentrate Nordeurop minds when it comes to Merkel’s inflexible austerity drive. One of two things will happen: either a drive to amputate Greece from the eurozone body will gather speed, or more calm minds will prevail….and realise that the Greek State needs to be cut some slack.

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Two months ago I reaffirmed my belief that the Merkeschäuble strategy was to frighten the Greeks via the German media, and then follow the stick with a disguised carrot. But like so many well-laid plans, this one has gone awry. A combination of other alternatives for Athens (plus the German tabloid frenzy getting out of hand) led to the situation we saw earlier this week, when Chancellor Merkel had to be practically smuggled in and out of Greece.

The Troika approach in Southern Europe is having one overriding effect: to produce desperation – and therefore act as a catalyst in the germination of that very Nazi v Communist confrontation the Germans themselves genuinely fear….and the EU was allegedly formed to banish forever from the European political landscape.

Instability in a social, political and economic sense has now reached frightening proportions in the Hellenic Republic. One very important clue from last night’s new poll was that 70% believe there will be early elections again.

Meanwhile – as The Slog suggested earlier today – well-sourced feedback from Greece indicates that PASOK is internally riven. A regular Party informant asserts:

“It’s a boiling cauldron as we say in Greece. There are many inside PASOK that want Venizelos out. And Venizelos predecessor George Papaconstantinou has gone AWOL despite the fact that he has been called by the special prosecutor to testify about the Lagarde List. He is probably in the US – but when officers from the prosecutor’s office tried to find him, he did not return their calls.”

I like the cut of Alexis Tsipras’s jib: he strikes me as a diplomatic and sensible young man. Ironically, this avowed enemy of austerity and EU neocon poppycock now seems to be the last Greek standing between his country’s self-esteem and eurozone disaster.

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http://hat4uk.wordpress.com/2012/10/12/lagarde-list-justice-closes-in-on-evangelos-venizelos/

OCTOBER 12, 2012 · 9:09 AM

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LAGARDE LIST: Justice closes in on Evangelos Venizelos

Special prosecutors say USB-stick Venizelos gave them ‘incomplete and probably tampered with’

Pasok leader faces Parliamentary enquiry

Tubbinas Lardolopous

In an act of sweet revenge for all the back-stabbing and instability meted out by his Coalition partner Evangelos Venizelos, Greek Prime Minister Antonis Samaras yesterday accepted the opinion of special SDOE investigator Stylianos Stasinopoulos that the USB stick handed over by Venizelos had been doctored. Stasinopoulos comes from the same region of Greece as Samaras, and was personally appointed by the Greek leader to head the financial crimes squad (SDOE).

At the behest of Antonis Samaras, Finance Minister Yiannis Stournaras is to ask French officials to deliver the original list of 1,991 Greeks with $1.95 billion in deposits in the Geneva branch of HSBC Bank. This could very seriously implicate Venizelos as a conspirator to pervert the course of justice. Given the motivation Samaras now has to bury The Fat One once and for all, we may at last see justice done….as opposed to the customarily liberal use of white paint.

The original disk is still missing, whereabouts unknown. Also missing entirely from the record is Christine Largarde’s explanation as to why TF she gave the list to Venizelos’s predecessor George Papaconstantinou at some time during 2010.

After Stournaras said the original CD had gone missing, Venizelos turned up with a memory stick but it was reported he handed it over without making a copy and that special financial prosecutors Grigoris Peponis and Spyros Mouzakitis doubt it is either complete or authentic and want the original along with all verifying documents.

At the time he failed to act upon the list’s contents, Evangelos Balloonolopolus was doubling the income and property
taxes levied upon ordinary Greeks.

Sources in Athens last night suggested to The Slog that PASOK will almost certainly now move to dump Venizelos before his guilt gets any more apparent. Champagne sales there doubled, and Amalgamated Ouzo was up 30% on the news.

Troika pushing for budget, tax reform bill to be tabled sooner

Greece will have to submit its 2013 budget to Parliament about two weeks earlier than usual, along with a bill overhauling the country’s tax system, as part of a commitment to the troika, which looks set to unlock the next installment of bailout funding.
Friday's meeting between Finance Minister Yannis Stournaras and the troika officials in Athens was postponed until Saturday to give the Greek side more time to prepare. However, sources said that beyond having to agree on what measures will be included in the 13.5-billion-euro austerity package the two sides are negotiating, Greece’s lenders also expect Athens to guarantee a set of so-called “prior actions.”
This includes having to submit next year’s budget to Parliament at the beginning of November. Usually, the budget is submitted toward the end of the month. The troika is also pressing for the tax bill, which will see income tax brackets changed, to be approved quickly.
The Greek side still has to take steps to liberalize closed professions, especially in the legal sector, and to deregulate the energy and fuel markets. The greater use of generic drugs in public healthcare and the merging of all funds into the National Organization for Healthcare Provision (EOPYY) are also on the government’s to-do list. The visiting inspectors also want the coalition to enshrine in law the minimum wage, which was slashed by 22 percent earlier this year.
The government is not expected to reach a final agreement with the troika this weekend but there are still hopes that Prime Minister Antonis Samaras will travel to Brussels for the European Union leaders’ summit on Thursday with some kind of deal in the bag.
“We think that an agreement could be close,” Simon O’ Connor, spokesman for EU Financial and Monetary Affairs Commissioner Olli Rehn, said on Friday.
International Monetary Fund Managing Director Christine Lagarde on Friday stood by her comments that Greece should be given more time to meet its fiscal targets. “Given the... lack of growth, given the market pressure, given the efforts that have been undertaken, a bit more time is necessary,” she said in Tokyo.

At the same meeting, German Finance Minister Wolfgang Schaeuble appeared to challenge Lagarde’s views. “There’s no alternative to reduce in the medium term too high sovereign debts, especially, and of course for... the eurozone as a whole,” he said. ekathimerini.com , Friday October 12, 2012 (21:22)   Crisis-hit Europeans see cruel joke in EU Nobel ”Is this a joke?” said Chrisoula Panagiotidi, 36, an Athens beautician, laughing derisively upon hearing that the European Union had won the Nobel Peace Prize. Three days ago she lost her job, becoming one of the one-in-four Greeks who is unemployed in the fifth year of a biting recession. Told it was no joke at all, her incredulity quickly turned to disgust. ”It mocks us and what we are going through right now,” she said. ”All it will do is infuriate people here.” Across a continent where the EU’s policies are blamed for deepening the worst economic crisis in living memory, many Europeans said they were simply baffled by the prize. Others were outraged. ”I can’t get my head around it. They’d be last on my list. It’s such a bland and inert organisation,” said Philip Deane, 48, an IT consultant walking along the River Liffey in Dublin. ”Given the state of the economy, the timing is really, really bad.” Ireland, like Greece, has been forced to turn to the European Union and IMF for a financial bailout, delivered in the framework of a strict austerity programme. Mariana Fotiou, 69, an Athens lottery ticket vendor was furious. ”It makes me so angry. We have a financial war on, don’t they realise that? The only morale it will boost is Merkel’s,” she said, referring to the German chancellor, whose insistence on austerity measures as the price for aid has made her a hate figure in Greece. Earlier this week Merkel visited Athens. Protesters burned Nazi flags and clashed with police in fury at her presence. The irony of awarding the prize at a time when the EU is being pilloried in several European capitals, occasionally by crowds of rioters, was not lost on the Nobel Committee itself. ”The EU is currently undergoing grave economic difficulties and considerable social unrest. The Norwegian Nobel Committee wishes to focus on what it sees as the EU’s most important result: the successful struggle for peace and reconciliation and for democracy and human rights,” said Nobel Committee chairman Thorbjoern Jagland in announcing the award in Oslo. Ed Balls, a politician from the opposition British Labour Party, joked at a panel discussion in Dublin: ”They’ll be cheering in Athens tonight, won’t they.” Yet even in countries hard hit by the tough economic times, there were still many people who said they understood the logic of awarding a prize to an organisation credited with helping maintain peace for more than half a century on a continent that was ripped apart in two world wars. ”It’s a good thing,” said 48-year-old Howard Spilane in Ireland, where unemployment has tripled since the crisis hit. ”Europe’s in a crisis, but compared to the wars - even compared to the Cold War - Europe is in a better place. People are suffering, but they are not dying. On balance they have achieved a lot.” Such warm responses were also common in parts of Eastern Europe, where many prize membership in the EU as a badge of hard-won European identity and a bulwark against a return of Communist-era totalitarianism. ”I am glad of it, although I do find it strange,” said Andras Kocsis, an 18-year-old student in Budapest, the Hungarian capital. ”I think it’s right, because indeed the EU does a lot for the rights of the people.” But even in the ex-Communist countries, praise was far from universal for an organisation that many have come to resent. Petr Hajek, deputy head of the office of Czech President Vaclav Klaus, who once supported the EU but has since turned against it, said the EU lacked ”democratic legitimacy” and was contributing to ”animosity among nations”. ”Freedom and democracy are shivering in the corner similar to the way it was in the regimes we experienced in the 20th century in Europe,” he said. In Bosnia, which hopes to join the bloc but still remembers how a hesitant and divided EU stood by during its 1992-95 war, Kada Hotic called the award ”shameful”. Her son, husband and two brothers were among 8,000 Muslim men and boys massacred by Bosnian Serb forces in 1995. ”The EU had an obligation to protect minorities in Europe but was incapable or unwilling to protect Muslims in Bosnia and even today it is doing so little to prevent conflicts across the world,” she said. [Reuters] ekathimerini.com , Friday October 12, 2012 (16:35)

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http://www.athensnews.gr/portal/1/58656

News bites @ 10

by Damian Mac Con Uladh 12 Oct 2012

A snapshop of a street shoe cleaner's base in central Athens, 12 October 2012 1. TROIKA Finance Minister Yannis Stournaras held another meeting with troika inspectors on Thursday evening, with sources indicating that the two sides were close to agreement on austerity measures for 2013 and 2014. The total cost of the measures would amount to 13.9bn euros, 7.8bn euros of that from cuts to salaries, pensions and allowances. Sources also said agreement had been reached on a taxation system reform, which is expected to bring in 2bn to state revenues. 2. BANK DEBT One of the issues being discussed by the government and troika is whether Greek banks should repay to the state 555m euros owed as part of state’s 5bn euro bank recapitalisation scheme in 2008. The troika had proposed that the amount should be raised through further cuts in pensions and incomes, but eventually the two sides agreed that further talks be held with the banks. 3. GOLDEN DAWN A theatre critic with Lifo newspaper has described how he was beaten to the ground by a gang of Golden Dawn members, including an MP, while police looked on indifferently. The incident took place outside the Chytirio theatre in Athens which is staging the play Corpus Christi. Arguing that the play is “blasphemous” – it depicts Jesus and the apostles as gay men as a metaphor for the acceptance of the gay community in society – Golden Dawn members, priests and religious extremists picketed the venue, at one stage trying to storm the building. YouTube videos show one Golden Dawn MP hurl crude racist and homophobic abuse at theatre goers, and another MP removing a man previously detained by riot police from a police truck – all while the police look on. 4. ISLANDS The government has categorically denied that the troika ever suggested that islands with less than 150 residents be "evacuated". After the story went viral on the internet, the finance ministry issued a statement saying the rumours had "nothing to do with reality". Earlier, the Aegean ministry said: "No one ever raised such an issue with the shipping and Aegean minister. Anyone faced with such a prospect would only consider it a joke, one in bad taste," the ministry added. 5. LAGARDE LIST Pasok leader Evangelos Venizelos told MPs on Thursday that he could not be sure whether the flash drive containing the names of 2,000 Greeks with large bank deposits in a Swiss bank had been tampered with before it was given to him. "The material was given to me unofficially, without accompanying materials. I don't know if the original material or a copy was given. Nor could Ioannis Diotis [then head of financial crimes unit SDOE) know if the original had been given to him," Venizelos said, testifying to the parliamentary transparency committee. He also accepted that the huge delay in investigating the information contained on the memory stick drive might have given the interested parties sufficient time to cover their tracks. 6. BUREAUCRACY Anyone wishing to register a birth, marriage or death, or make any changes to vital records, will now have to go to a private-sector notary, and not the state registration offices, under new proposals announced by the government. The noraties, who would be paid up to 40 to 50 euros for each document, would then forward the information to the relevant pension fund electronically. Labour Minister Yannis Vroutsis said the plan would help stamp out pension fraud. 7. SYRIAN REFUGEES The government is anticipating that it may have to provide accommodation for up to 20,000 Syrian refugees if necessary, in refugee centres on the Aegean islands of Rhodes and Crete. The public order ministry said on Thursday that it was working on a scenario in cooperation with the UN and EU. The same scenario envisages Cyprus and Turkey hosting up to 48,000 and 130,000 refugees, respectively. 8. COCA-COLA The country’s largest company, Coca Cola Hellenic, on Thursday announced that it was moving its headquarters to Switzerland and listing its shares on the London Stock Exchange. The company’s manufacturing and distribution units will remain in Greece. The announcement came A day after diary giant FAGE announced it was moving its headquarters to Luxembourg. 9. ATHENS NEWS The paper edition of the Athens News will not circulate on Friday 12 October due to the participation of its employees in the strike called by the journalists' unions. The strike will also affect our internet coverage. We regret any inconvenience to our loyal readers.

and...

http://globaleconomicanalysis.blogspot.com/2012/10/greece-still-word-time-is-still-money.html

Friday, October 12, 2012 2:32 AM

Greece Still the Word; Time is Still Money; Battle of Bailouts; Coca Cola, Greece's Biggest Company, Leaves

Germany and the IMF, which in recent past seemed ambivalent at best to keeping Greece in the eurozone, are suddenly acting as if Greece is a life-or-death matter.

First Merkel flew to Greece pledging solidarity, now the IMF chief Christine Lagarde seeks Two More Years For Greece.

 IMF chief Christine Lagarde’s declaration this morning that Greece should be given two more years to hit tough budget targets embedded in its €174bn bailout programme – coming fast on the heels of German chancellor Angela Merkel’s highly symbolic trip to Athens – are the clearest public signs yet of what EU officials have been acknowledging privately for weeks: Greece is going to get the extra time it wants.

But what is equally clear after this week’s pre-Tokyo meeting of EU finance ministers in Luxembourg is there is no agreement on how to pay for those two additional years, and eurozone leaders are beginning to worry that the politics of the Greek bailout are once again about to get very ugly.

The mantra from eurozone ministers has been that Greece will get more time but not more money.

Time is Still Money

Quite frankly it is impossible to give Greece more time but not more money. The time value of interest payments is proof enough.

Ever late to the party, the IMF recently changed its 2013 Greek GDP projection from flat to negative 4%.

In my estimation, more downward revisions are coming, including Germany and France.

Battle of Bailouts

With every down-tick in GDP assume lower tax revenues. Will Greece ever get to a sustainable debt to GDP numbers?
Once again the answer is no, and this was perfectly obvious years ago.

Yet the IMF and ECB have stated they will not take write-downs. Peter Tchir discussed this in detail in his T-Report on Greece.

Here are some details from the report, with my additions in braces [] ...

 Official Greek Debt is €288 billion. I don’t think this includes every bilateral loan made by the EU and certainly doesn’t deal with any national central bank loans.

It does include the entire Public Sector debt. The PSI bonds total just over €62 billion. There is about €4 billion of Greek legacy bonds documented under non-domestic law. So of the €288 billion, at most, €66 billion is held outside of the official sector.

[If Greece wiped out €66 billion] it would reduce debt from €288 billion to about €222 billion. From a practical standpoint it accomplishes next to nothing. It will save Greece about €1.25 billion annually in interest for the next 10 years. The annual savings for 10 years would be €1.25 billion for a total of €12.5 billion over the period. Who really believes Greece will make it 10 more years if all they get is a measly €1.25 billion [per year] in current savings. 

While crushing the PSI bonds would do next to nothing for Greece’s ability to survive in the near term, it would send shockwaves through the bond markets [especially Spain and Italy].

But what happens if the EU or the ECB or the EFSF actually have to take losses?

The ECB is highly levered. It cannot afford real losses without making capital calls. I cannot imagine the ECB making capital calls at the same time it embarks on OMT for Spain.

Hollande is passing implementing some bizarre budget of his own, but last thing he needs to do is cover a few billion of losses on existing loans to Greece. It is the only way to help Greece, but it will make the anti-bailout crowd more vocal.

Across Europe, the reluctance to participate in the bailouts has been increasing. Leaders may finally be realizing they have done too little, but their population (i.e., voters) has been growing more disillusioned and taking actual losses will add to that resistance.

So I see Greece as once again being a focal point for the crisis and think that just like their eventual default last year, there is no good path.

The Good Path

What Peter really means is there is no acceptable path to the Troika. An excellent path (for Greece) would be for Greece to default, tell the Troika to go to hell, wipe out all of the debt, return to the Drachma (backed by silver or gold), and institute badly-deeded work-rule reforms.

Since the Greek leaders are shills for the Troika while simultaneously attempting to appease public unions, what's needed is downright impossible as long as this set of politicians is in office.

In the meantime, debt escalates, unemployment soars, and Greece rots away.

Coca Cola, Greece's Biggest Company, Leaves

The idiots in Brussels and the IMF, hell-bent on "saving Greece" have helped destroy the country. On Thursday we learned Greece's Biggest Company Quits Country.

 Greece's biggest company is leaving the country, drinks bottler Coca Cola Hellenic (CCH) said on Thursday in announcing it will move to Switzerland and list its shares in London, dealing a blow to the debt-crippled Greek economy.

"This transaction makes clear business sense," chief executive Dimitris Lois told analysts in a conference call. An overwhelming majority of shareholders have already accepted moving a company which has long complained about Greek taxes.

One of the Troika demands was higher taxes. Did it work?

Unemployment Tops 25%

On Thursday, we also learned Greek unemployment rate hits 25.1 percent in July as recession heads for sixth year.

Youth unemployment is 54% and jobs are vanishing at a rate of 1,000 per day for the last year. So now the IMF wants to give Greece more time, but not more money.

As explained above, that is impossible. More importantly, how could it possibly matter even if it was possible?

The bankers and the IMF helped destroy Greece. There is nothing left but ruins. And in the end, Greece is going to default on all the debt and exit the eurozone anyway.

Expect European taxpayers to foot the bill.

This is what happens when countries take money under onerous terms from the IMF. Spain should be paying attention, but it isn't.

Mike "Mish" Shedlock


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http://www.telegraph.co.uk/finance/debt-crisis-live/9603072/Debt-crisis-Germany-and-IMF-spar-over-crisis-live.html

13.02 Celebrations are somewhat muted on Spain's National Day, which marks the day Christopher Columbus discovered America in the name of the Spanish Crown.

AFP reports that the mood was sombre as the traditional military pageant was scaled back to cut costs:

King Juan Carlos presided over a much reduced parade that featured none of the usual fighter jets or tanks. Instead, all that was on offer were 2,600 marching soldiers, 50 armored cars and seven trainer aircraft normally used for displays.

And 12 schools in the populous Catalonia region ignored the vacation as they refused to acknowledge a holiday that highlights Spanish unity over regional identities.

12.22 Ian Traynor, European editor of The Guardian, has written this analysis of how the IMF and Europe are in a "dangerous game of brinkmanship over failing Greek bailout".

He writes that it is now "clear that Athens is highly unlikely to achieve the key IMF benchmark on the rescue of getting its national debt down to a "sustainable" 120pc of gross domestic product by 2020."

The showdown between the eurozone and the IMF is being described as eyeball-to-eyeball, a shouting match, and a contest to see who will blink first. It is expected to come to a crunch next month. The IMF is insisting that the eurozone and the ECB resort to a new policy of OSI, Official Sector Involvement, meaning a writedown or writeoff of Greek debt to its official creditors, a move that the ECB and the German government are resisting fiercely.

He adds that EU leaders meeting in Brussels for a summit next week are likely to shelve the problem, arguing that they need to wait until next month for the troika report on Greece before deciding their next moves.

Greece needs a bailout disbursement of over €30bn (£24bn) next month, without which it will go bankrupt. It is certain to get the money, it is said in Brussels, since, following chancellor Angela Merkel's fraught visit to Athens this week, no one in the eurozone or in Washington wants to let Greece go bust or exit the common currency.

The disbursement decision will be left to eurozone finance ministers rather than the EU summit which next week will shower Antonis Samaras, the Greek prime minister, with praise for the efforts he's making to tackle the crisis.

11.50 Reuters has got its mitts on a blueprint of Portugal's budget for next year. According to the newswire, it shows that the country plans to impose a financial transactions tax of up to 0.3pc and to cut pensions next year as it aims to reassure its international lenders.

As the government battles to meet the fiscal terms of its bailout, Portugal's government will present the draft budget to Parliament on Monday.

Portugal needs to cut its budget deficit to below 3pc of gross domestic product in 2014, one year later than previously planned.

10.55 Amid all the excitement over the Nobel peace prize, the bloc's statistics office - Eurostat - pushed out data on industrial production. Those figures show that output at eurozone factories grew much more than expected in August, helped by demand for food and French car production.

Industrial production in the currency bloc rose 0.6pc in August from July, beating expectations for a 0.4pc fall forecast by economists in a Reuterspoll.

09.38 Over in Cyprus, the president is calling on trade union leaders to back the austerity measures the government wants to secure a multi-billion euro bailout to prop up the island's banks and economy.

Cyprus asked the European Commission, the European Central Bank and the International Monetary Fund for aid in June. The so-called 'troika' wants the government to slash spending by roughly €1bn before signing off on a bailout deal.

But, trade union leaders have reacted angrily to proposed public sector pay cuts and tax rises.

09.12 Nick Malkoutzis, deputy editor of Ekathimerini, tweets:

09.10 Ekathimerini is running a story this morning that following talks with the troika, Greece is likely to adopt austerity measures worth €9bn next year, rather than the €7.8bn it had planned for the 2013 budget.

Ekathimerini writes:

Following talks between Finance Ministry officials and the troika on Thursday, it emerged that the Greek side was prepared to agree to its lenders demands for more cuts to be made next year.

The total package for 2013 and 2014 is worth €13.5bn euros in spending reductions and tax hikes. The mix of the measures in the package is likely to be €11.5bn in spending cuts and €2bn in tax increases.

Almost €5bn of the cuts next year will come from pensions, which is likely to mean larger reductions for pensioners who earn more than 1,000 euros a month than had originally been planned.

About €1.7bn will be cut from civil servants salaries, rather than the planed €1.4bn. Welfare payments will be slashed by €1.2bn.

09.05 Benoit Coeure, a member of the European Central Bank's executive board, has been speaking to German newspaper, Die Welt. He told them that the ECB will not cave in to market pressure and buy bonds of eurozone governments, whose borrowing costs have reached unsustainable levels, if the country does not comply with the ECB's rules.

He also told the paper that the eurozone was flirting with recession (translation courtesy of Reuters):

The economies of several eurozone countries are contracting at the moment, and the eurozone as a whole is currently not far from a recession. Consequently, the risk of deflation is greater than the risk of inflation.

08.56 Olli Rehn, vice president of the European Commission, has also weighed into the debate between the IMF and Germany (see 08.07).

He has been speaking to CNN on the sidelines of the IMF summit and he told them: "Even the IMF can be open to criticism. It is not the final word."

Reacting to Wolfgang Schaeuble's rebuke of Christine Lagarde's suggestion that the likes of Greece and Spain should be given a bit of breathing space, he said: "[Schaeuble] has a point. The EU cannot be making swift turns, rather it is a convoy and you have to carefully consider which policy turns are best."

08.29 After S&P cut Spain's credit rating by two notches late on Tuesday night, there was yet more speculation that the country could seek a bailout.

Spain's economy minister, Luis de Guindos, has said today that there is no political resistance within the eurozone to a rescue request from Spain.

Asked whether Spain wanted more political clarity rather than technical details before taking a decision on an aid request, he said "absolutely not".

"There was no pressure, in one sense or the other," he added.

08.17 As well as calling for more time for crisis-hit countries, Christine Lagarde also warned that public debt in developed countries standing at "wartime levels" is the biggest threat to the global economy. She told the IMF's annual meeting:

Without growth, the future of the global economy is in jeopardy, and perhaps the greatest roadblock will be the huge legacy of public debt, which now averages 110 percent in advanced economies, pretty much wartime levels.

And this leaves governments highly exposed to subtle shifts in confidence.

We have seen it. We are seeing it in the eurozone for instance. It also ties the governments' hands, especially as they seek to build the infrastructure of the 21st century while keeping the policies, particularly the social promises of the 20th century.

08.07 The IMF's annual meeting in Tokyo is in full swing and it seems that all is not rosy between the organisation and Germany, with the pair clashing over the next step in the fight against the debt crisis.

Christine Lagarde, the IMF's chief, proposed allowing countries such as Greece and Spain more time to reduce their budget deficits.

But, the proposals were pushed back by Wolfgang Schaeuble, the German finance minister. He said:

When there is a certain medium-term goal, it doesn’t build confidence when one starts by going in a different direction. When you want to climb a big mountain and you start climbing down the mountain, then the mountain will get even higher.

In a debate on the sidelines of the summit, he said:

I think it's even more important for sustainable growth that investors and consumers have some confidence. We have to stick to what we announced and we have to implement it step by step.

The Financial Times has more details on Wolfgang Schaeuble's comments here (£).