http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_29/11/2012_472237
Race to tie up loose ends
Bond buyback, recapitalization and new tax bill still pending for coalition
 Prime Minister Antonis Samaras leaves the Presidental Palace after meeting with Karolos Papoulias on Thursday. |
The coalition suffered a blow late on Thursday when it emerged that banking representatives informed Finance Minister Yannis Stournaras that they did not want their institutions to take part in the bond buyback scheme that is crucial to implementing the debt reduction plan agreed in Brussels earlier this week.
There is also concern within the administration about a draft bill overhauling tax legislation. One of the main areas of contention between the coalition parties is the scrapping of tax breaks for families with children. Stournaras met with Prime Minister Antonis Samaras on Thursday to discuss this issue as well as the completion of the 48-billion-euro bank recapitalization.
Stournaras is due to meet with representatives of PASOK and Democratic Left on Friday in the hope of settling any differences over the tax bill so he can focus on setting up the buyback scheme.
A spokesman for the IMF, Gerry Rice, stressed that the successful completion of the bond buyback scheme was necessary before the release of a crucial 34.4-billion-euro rescue loan that Greece is depending on next month to avoid default. He noted that the scheme was an integral part of a “package” drafted by foreign creditors with the aim of making the country’s debt sustainable. “This is a significant and concrete package,” Rice told reporters in Washington yesterday. “But its success requires both Greece and the European partners to fully implement their commitments.”
| Meanwhile, the report compiled by troika inspectors and studied by eurozone finance ministers ahead of their decision to release more funding for Greece was leaked on Thursday. The officials from the European Commission, European Central Bank and International Monetary Fund highlighted several areas in which Greece had made substantial progress, such as fiscal consolidation, the lowering of unit labor costs, a reduction in healthcare expenditure, the use of an electronic prescription system, a reining in of losses at public enterprises and the lifting on restrictions in some closed professions. However, the inspectors stress that Greece’s performance this year on structural reforms has been “mixed.” They say that improvements to tax administration came to a “virtual standstill” and that a new tax bill has been “much delayed.” They also highlight the “disappointing” revenues from privatizations but note that the process has started to pick up momentum. The report also stresses the “fragile” state of Greece’s banking sector. |
and...
http://uk.finance.yahoo.com/news/greek-deal-frays-imf-threatens-181408381.html
Greek deal frays as IMF threatens walk-out on debt buy-back impasse
By Ambrose Evans-Pritchard | Telegraph – 5 hours ago
The eurozone's debt relief plan for Greece has hit serious trouble within days as banks and pension funds balk at fresh losses, raising fears that the package could unravel before a deadline in mid-December.
The International Monetary Fund said on Thursday that it would not disburse funds under its part of the EU-IMF (Other OTC: IMFAF.PK - news) package unless the eurozone delivers on a bond "buy-back" scheme, which is supposed to cut Greece’s burden by 10pc of GDP and is deemed crucial for restoring long-term viability.
If the IMF withdraws, Finland and Holland will also pull out of the programme. "This has become a really big problem," said Raoul Ruparel from Open Europe.
The dispute comes as Moody’s said the EU-IMF deal to unlock €44bn in bail-out payments to Athens merely papers over cracks and does little to alleviate Greece’s "extreme economic and social fragility".
"We believe that the country’s debt burden remains unsustainable," it said. Moody’s warned that there can be so lasting solution until EU states and official creditors agree to write down their holdings, now the lion’s share.
Private investors are furious at demands that they take a second "haircut" of 70pc on residual holdings, after already taking a 53.5pc loss earlier this year, while official creditors still refuse all loses.
Greek banks told finance minister Yannis Stournaras on Thursday that they cannot take part in the "buy-back" plan unless the Troika-imposed terms of Greece’s bank recapitalisation scheme are relaxed. They still hold €22bn of Greek bonds, mostly used as collateral for raising money under the European Central Bank’s emergency liquidity assistance (ELAs).
"It is our patriotic duty to make the scheme succeed. It must succeed," said Mr Stournaras, although he also alluded vaguely to a "Plan B".
Mr Ruparel said the burden will have to fall on foreign pension funds, insurers and banks with some €30bn of bonds, but it is unclear how they can be made to comply. The scheme is supposed to be voluntary. "Most want to hold the debt to maturity and have no interest in crystalising losses," he said.
Under the buy-back plan, investors sell their bonds back to Greece at a 70pc discount - last week’s market price. Greece in turn borrows the money from the eurozone bail-out funds.
The Institute of International Finance (IIF) said it would be an outraged if its members are forced to take further losses.
"Debt restructuring was clearly explained to investors as a one-off, as unique, not to be repeated. If they do restructure again, their own credibility is at risk," said the IIF's Hung Tran.
In theory, the plan could cut Greece’s €301bn debt by €20bn, but the IMF has been sceptical from the start. Without it, Greece cannot come close to meeting the agreed debt target of 124pc of GDP by 2020.
Leaked documents have already cast serious doubts on that target, much to the irritation of the IMF, which fears that its own credibility is being damaged by the continued fudge over figures that appear to be extracted out of thin air and have repeatedly proved wide of the mark over the past two years.
There is mounting irritation among the Asian and Latin American members of the IMF Board - as well as the US - at the failure of the Europeans to deploy their full wealth to clean up an internal EMU problem.
Gary Jenkins from Swordfish said there is a risk that the deal will "fall apart" over coming months. "It is a long way away from the permanent fix that the IMF had been insisting upon. It is just one more big kick of the can down the road."
Dario Perkins from Lombard Street Research said the convoluted deal aims to veil the fact - until after Germany’s elections next year - that German taxpayers are facing real losses for the first time since the crisis began. "In the meantime, Greece’s Greater Depression will just get greater," he said.
Mr Perkins said the package inflicts serious humiliations on Greece. The Troika will confiscate all privatisation revenues and the primary surplus at source for debt payments, yet offers no real change in strategy. "The plan to ‘save’ Greece shares the same fatal flaw as all the others. Rather than recognize that its policy prescriptions are fundamentally wrong - that austerity is no solution to a depression and Greek debt must eventually be written down completely - the Troika has stuck to its view that lack of success reflects poor Greek effort."
It is far from clear whether Greek society will accept yet more cuts as the economy contracts a further 4.5pc next year. Youth unemployment is already 58pc. The anti-Memorandum Syriza movement is running at 32pc in the polls.
While there is no doubt that the German Bundestag will back the deal for Greece in a vote on Friday, it is becoming hard for Chancellor Angela Merkel to disguise the mounting cost.
FT Deutschland said the process had become a charade. "Almost everybody knows Greece will need debt restructuring in the long run. It will remain cut off from capital markets and dependent on the international community for aid, and European citizens should be made aware of this. Political integrity from the eurozone-IMF talks are long overdue. Instead they are maintaining the illusion - especially in Germany - that the whole thing won’t cost taxpayers much."
Die Welt said the Chancellor’s office is still trying to "play down" the awful truth that the eurozone is turning into a "transfer union". The newspaper said it will soon be clear to everyone that the ultimate red line has been breached.
and the word " voluntary " takes on new meaning - at least in Greek .....
http://globaleconomicanalysis.blogspot.com/2012/11/new-meaning-of-word-voluntary-bond.html
Thursday, November 29, 2012 4:16 PM
New Meaning of the Word Voluntary; Bond Buyback Balancing Act
It is a deep stretch of the imagination to twist arms and appeal to "patriotic duty" in an effort to coerce someone to do something they really do not want to, then call the action "voluntary".
It is yet another thing to claim something is voluntary yet tell them it is "required". The latter has happened (again), when it comes to Greek debt.
The Financial Times reports Athens banks told of debt buyback ‘duty’
It is yet another thing to claim something is voluntary yet tell them it is "required". The latter has happened (again), when it comes to Greek debt.
The Financial Times reports Athens banks told of debt buyback ‘duty’
Yiannis Stournaras made clear the country’s four largest banks, which together hold about €17bn of government bonds, would be required to sell their entire holdings even though the buyback is billed as “voluntary”.
It was the “patriotic duty” of Greek bankers to ensure the success of the buyback, due to be launched next week by the country’s debt management agency with up to €14bn of additional European funding, Mr Stournaras said on Wednesday."Voluntarily Forced"
Yet Athens bankers appeared reluctant to be forced into a sale that would weaken their balance sheets and discourage local investors from participating in rights issues expected early next year as part of a €24bn recapitalisation of the sector.
“The banks stand to lose some €4bn by having to sell their bonds at around 33 cents on the euro,” said one Athens banker.
About half the €62bn of bonds issued in a partial restructuring of Greek debt last February are held Greek banks, pension funds, state entities and individual investors.
The debt management agency is set to announce details next week of the buyback scheme, which would be completed by December 12, the day before eurozone finance ministers are due to give the green light for disbursing the Greek aid payment.
Whereas Greek banks may be "voluntarily forced" (as if such a ludicrous idea even exists) into steep losses, anyone else holding such debt sure will not be.
Once again this whole notion of "voluntary" rests on arbitrary decisions as to what will trigger credit default swaps.
In that regard, please recall that in October 2011, the labeling of labeling 50% haircuts on Greek debt as "voluntary" proved many “Standard” Credit Default Swaps on Greece Are a Sham.
Thus, nothing really "new" is happening here. "Voluntary" means whatever the biggest players want it to mean (always to their advantage of course).
Bond Buyback Balancing Act
Bloomberg discusses this setup in Greek Bond Buyback Hostage to Below-Market Prices.
Greek efforts to ease indebtedness by repurchasing its own bonds at less than their face value depend on investors accepting below-market prices rather than holding out for an improved offer.Balancing Act
The new bonds have collective action clauses, which in a second restructuring would allow a preset majority -- typically at least 66 percent -- to force holdouts to take part, according to Gabriel Sterne, an economist at Exotix Ltd. in London. Still, enforcing the CACs risks triggering credit-default swaps and being put into default by the ratings firms to deal with a rump of bondholders, he said.
“Would it be worth the fight with the hedge funds?” he said. “I just don’t think they would want to go there yet again.”
“If the buyback price is forced up too high, it will be unpalatable to Greece and the European authorities, and the buyback will fail,” Sterne said. “The incentive not to participate is likely to be strong. The average value of the bonds for those that do not participate could rise sharply if there is very high participation.”
Sterne, a former IMF official, estimates that the strip might go as high as 50 cents on the euro assuming there is broad participation, compared with 24 cents if the buyback fails.
Bondholders probably will call the finance ministers’ bluff, said Peter Tchir, the founder of New York-based TF Market Advisors.
“Now that the Eurogroup has made a condition out of the bond repurchase, it is almost the obligation of the bondholders to hold their feet to the fire,” he said. “I can’t see bondholders accepting last week’s prices without trying for more.”CACs and the Balancing Act
Got that? No one wants to trigger Collective-Action-Clauses thereby "forcing participation" because it would trigger CDS contracts. Yet participation must be high enough so the Troika can pretend the results help Greece.
Given the incentive to not participate in the offer is huge, Greek banks were told their participation in the voluntary offer was required.
Thus, we see these preposterous games yet again as to what is "voluntary" and what isn't. Moreover, forcing Greek banks to take more losses means they will again need to raise capital (a perpetual state of affairs for Greek banks).
Of course any sensible person realizes none of this will actually help Greece. Instead, it will enable huge pretending games go on a bit longer, perhaps long enough to get German Chancellor Merkel reelected, which seems to be the real issue in play, not the well-being of Greece.
and....
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_29/11/2012_472141
( What will be the spin when the buyback plan goes " poof " in about two weeks ? )
Greek debt-buyback operation may address holdouts, troika says
 |
The buyback will “address” the holders of bonds governed by non-Greek law who refused to tender them in the 200 billion- euro debt swap in March, hoping to get paid in full, according to an updated draft of Greece’s debt-sustainability assessment from the troika comprising the European Commission, the European Central Bank and the International Monetary Fund.
The Greek buyback is part of a package of measures approved by euro-area finance ministers this week to cut the nation’s debt. While Greece has gotten pledges for 240 billion euros of aid, the funds have been frozen since June as the government tries to get its bailout program back on track after it was disrupted by two elections and a deepening recession.
The buyback, which Finance Minister Yannis Stournaras said will be unveiled next week, will target 62 billion euros of new bonds issued after the debt swap. Greek banks hold 15 billion euros of the new bonds, while the country’s pension funds hold 8 billion euros.
The deal aims to bring Greece’s debt down to 124 percent of gross domestic product in 2020 from the 190 percent it was projected to reach in 2014 without the measures.
Other steps mentioned in the report, which was posted on the Dutch government’s website and is dated Nov. 27, include forgoing a reduction in Greece’s Treasury bill stock, which pares Greece’s financing in the next two years by 9 billion euros, and postponing a build-up of the Treasury’s cash buffers.
Dutch Prime Minister Mark Rutte told Bloomberg News on Wednesday that Greece may need more financial help to stay in the euro.
“We now have a menu, an approach which brings the debt of Greece back into the realm of what we anticipated when the second package was installed in February,” Rutte said.
| The troika also said it foresees earnings from ECB holdings in Greek bonds through its Securities Markets Program being returned to Greece via euro-area members. The IMF has set the 2020 debt-reduction target as a condition for continuing to fund a third of Greece’s bailout program. IMF Managing Director Christine Lagarde said after the euro-area finance ministers’ meeting that the fund will examine the results of the buyback before deciding whether to approve disbursement of additional aid. Finance ministers plan to make a formal decision on Greece’s 34.4 billion-euro disbursement by Dec. 13. The ministers included no details in their statement of how the buyback would be implemented or funded, or specifics about the size and what would count as success. [Bloomberg] |
and....
http://www.zerohedge.com/news/2012-11-29/first-greek-bailout-snag-greek-bankers-refuse-voluntarily-participate-critical-bond-
First Greek Bailout Snag - Local Bankers Refuse To "Voluntarily" Participate In Critical Bond Buyback
- Bond
- Creditors
- default
- European Central Bank
- Germany
- Greece
- Gross Domestic Product
- None
- Secured Debt
Those who have been following the recent developments over the Greek distressed debt buyback, which in any normal universe would have been considered an event of default but certainly not in "special cases" such as Greece where the country's official default would start the Lehman-like domino collapse as apparently getting a 70 cent haircut in 8 months is a "voluntary" event, have been quite confused by the internal dynamics. On one hand the sole beneficiary of the transaction are those hedge funds who bought the GGB2 bonds when they tanked to lows just barely in the double digits as a % of par; on the other, there is absolutely no benefit to the Greek people as a result of this sub-par prepayment, as the only fund flow benefits hit the bondholders (and it is up to Greece to figure out how to grow its GDP by over 4% per year over the next 8 years). Then let's not forget that nobody has any clue yet where the funding for said buyback will come from. And finally, as Kathimerini just reported, we learn that one group that has just vocally declared against the buy back are the very people who are supposed to be benefiting from the Greek bailout: i.e., the country's bankers.
From Kathimerini:
Bank managers are planning to express their opposition to the credit sector’s likely participation in the bond buyback program at a meeting with Finance Minister Yannis Stournaras scheduled for Thursday.The administrations of all commercial banks are stressingthat they cannot possibly participate voluntarily in a program that leads to the financial exhaustion of shareholders.
Oops, looks like the local bankers are suddenly far less "voluntary" inclined, after realizing that their equity stakes will be largely impaired in the balance sheet waterfall, which sees bonds previously marked to myth at par, remarked to 35 cents, 20 cents, or whatever the final buyback price is agreed upon, largely a function of whatever cash the Greek government can find hidden underneath the rug.
Senior bank officials told Kathimerini that besides the legal consequences of a possible voluntary participation, such a serious decision, which would signify a change in the lenders’ portfolios, cannot be approved by their governing boards alone. They underlined that such a decision would require discussion and approval at general shareholders meetings, but that would compromise the buyback plan as it is a process that takes time.
In their meeting with Stournaras the bank managers will ask for their exemption from the buyback and propose alternative solutions to the problem.
They will also request changes to the terms of the recapitalization process. The main point is how to reduce the amount of capital requirements, which could take place via the bond swap or through the guarantee of bank bonds by the European Financial Stability Facility (EFSF), which would allow for their valuation at their nominal value. That would reduce capital needs by 11 billion euros at once and render recapitalization much more attractive for private shareholders. The more funds private investors contribute in the recapitalization process, the less money the state will have to pay through the Hellenic Financial Stability Fund (HFSF).
Bank officials argue that the scheme proposed for the buyback process is bereft of financial logic as it constitutes double borrowing and additional burdening for taxpayers. By contrast, they say, the guarantee of bonds would have a better result at no additional cost. However these alternative plans were rejected by the representatives of the country’s creditors a few weeks ago and there is no sign of them changing their attitude on the issue.Analysts say that banks are right to protest as in spring they were burdened by the 53.5 percent bond haircut and a few months later the state is asking to buy the bonds back at 30 percent of their value.
To summarize:
- Greek banks have suddenly become the fulcrum stakeholder class, and if their "involuntary" posture is maintained can scuttle the entire bailout as (mis)conceived over the past month.
- Hedge fund buyers of GGB2s in the secondary market are delighted by the Greek buyback as it means a 50%, 100% or maybe even higher return in months - a number which can, however, collapse if the discovered funds for the buyback are limited to single digit billions, resulting in a scramble to sell to the biggest fool and thus only bid left.
- Greek bankers are furious as there will actually be a repricing of the fair value of the GGB2s held on bank balance sheets, and coupled with no new capital infusion from the ECB. For the fatally insolvent Greek banking system this is yet another net capital outflow it simply can not afford.
- In effect, there is a new priming of General Unsecured obligations, as the new money will likely come at the expense of a new tranche of senior/secured debt.
- As pertains to the Greek economy, the outcome either way is irrelevant, as there is not one penny that actually enters Greek society or its economy.
- Also worth noting: Germany is set to vote on the Greek bailout even as it suddenly appears that the entire third Greek bailout as previously conceived is at risk of being sabotaged by none other than the very people it is supposed to be helping!
Or, in an even briefer summary: winners - hedge funds; losers - everyone else.
and once this sinks in Spain really go Mad Max.........
http://www.nakedcapitalism.com/2012/11/spain-about-to-whack-hapless-smaller-savers-conned-into-buying-bank-preference-shares-as-a-condition-of-its-bank-rescue.html
THURSDAY, NOVEMBER 29, 2012
Spain About to Whack Hapless Smaller Savers Conned into Buying Bank Preference Shares as a Condition of its Bank Rescue
Yves here. We’ve flagged in earlier posts how the Spanish banking
crisis had the potential to become destabilizing politically, as if Spain wasn’t already at considerable risk of upheaval. Spanish depositors were pushed to convert their deposits into preference shares, which they were told were just as safe. That of course was never true.
crisis had the potential to become destabilizing politically, as if Spain wasn’t already at considerable risk of upheaval. Spanish depositors were pushed to convert their deposits into preference shares, which they were told were just as safe. That of course was never true.
This was a simple desperation move by the banks to save their own skins, customers be damned, by raising equity from the most unsophisticated source to which they had access. And now that that gambit failed, these shareholders are due to have those investments wiped out unless the Spanish authorities can cut a deal to spare them. The conditions of a bank rescue, which Spain did try to resist, was to have equity holders wiped out, or at least haircut. And that plan is now about to be set in motion. Having losses imposed on small savers who were in many cases conned by their own bank to buy these preference shares is going to do serious harm as well as further delegitimate the government.
By Delusional Economics, who is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.
Back in July this year I mentioned that the new Memorandum of Understanding for the bailout of the Spanish banking system was going to include a special purpose vehicle (a “bad bank”) which would allow the banking system to offload non-performing assets. In October I posted on the structure of that bank, which would be called “Sareb”, and exactly how assets would be transferred.
As I mentioned in that July post, one of the critical points about the Spanish banking system is that Spanish banks had been successful in persuading ordinary citizens to switch their deposits into preferred shared and hybrid securities which, in the case of the enactment of the MoU, would force them to be “bailed-in”.
Overnight the European Commission approved the enactment of the MoU which have indeed triggered substantial bail-ins for Spain’s citizens. On top, Spanish banks will be forced to shrink, shed thousands of jobs and restructure their balance sheets over the coming years:
Four failed Spanish banks including the nationalised giant Bankia have been rescued by the eurozone’s bailout fund in exchange for brutal cuts to their workforces, branch networks and balance sheets as tens of thousands of small retail bondholders were also hammered.
Bankia, Catalunya Banc, Novagalicia and Banco de Valencia were set to shed more than 10,000 jobs in return for receiving €37bn (£29.9bn) to clean out toxic real estate assets that will be transferred to a Spanish “bad” bank.FT reports that holders of Bankia’s preferred shares will see a write-down of 39%, perpetual subordinated debt 46% and subordinated debt 14% and the total bail-in is expected to reach €10bn. As you can see from the article the banking system has been granted €37bn in order to support the restructure of Group 1 banks but there is more to come.
The news came on the heels of OECD forecasts that see unemployment rising above 6 million people next year as the recession-hit country continues to slash government spending, with a jobless rate set to reach 27%.
The harsh conditions imposed by Brussels will force the former savings
The banks must shrink their balance sheets by 60% over five years and immediately sell off €45bn of real estate assets to the Sareb bad bank at average discounts above 50%.
As of June 2012 there were already €170bn of bad and doubtful debts in the Spanish banking system and this figure has risen since as every month the percentage of bad debts sets a new record and the trend is accelerating. Bankia itself forecasts a €19bn loss this year.
Although ultimately the restructure of the banking system is a positive step, the political fallout from this event is definitely something to keep your eye on. Not only have Spanish citizens now lost billions in savings, but the shrinking of the banking system will lead to tens of thousands of well paid jobs going. In an economy already suffering 25% unemployment this is a potential political firecracker especially given the €37bn will be added to the Spanish national debt which is again something Spanish citizens will have to deal with. Something I noted back in July.
In other Eurozone banking news, the ECB released the October report on monetary developments overnight. The news wasn’t all bad with a possible bottoming of private sector credit growth, although it is difficult to see this as anything more than a brief up-tick given other data:
On a yearly basis the news is less positive with the divergent trend between government and private sector lending we have seen in previous reports continuing and private sector lending weakening further:
The annual growth rate of credit extended to general government increased to 8.8% in October, from 8.2% in September, while the annual growth rate of credit extended to the private sector was more negative at -1.4% in October, from -1.2% in the previous month. Among the components of credit to the private sector, the annual growth rate of loans was less negative at -0.7% in October, from -0.9% in the previous month (adjusted for loan sales and securitisation2, the rate stood at -0.4%, unchanged from the previous month). The annual growth rate of loans to households increased to 0.5% in October, from 0.1% in September (adjusted for loan sales and securitisation, the rate stood at 0.8%, unchanged from the previous month). The annual growth rate of lending for house purchase, the most important component of household loans, increased to 1.3% in October, from 0.7% in the previous month. The annual growth rate of loans to non-financial corporations was more negative at -1.8% in October, from -1.5% in the previous month (adjusted for loan sales and securitisation, the rate was more negative at -1.5% in October, from -1.2% in the previous month). Finally, the annual growth rate of loans to non-monetary financial intermediaries (excluding insurance corporations and pension funds) stood at -1.9% in October, compared with -2.0% in the previous month.This data is leading to an increased spread between M3 growth and private sector credit growth as seen in the chart below:
Full report below.
Monetary Developments in the Euro Area- October 2012
and.....
http://www.guardian.co.uk/business/blog/2012/nov/29/eurozone-crisis-live-fiscal-cliff-hopes-markets
Bond yields are going down all over Europe, as Lord Grey didn't say on the eve of an altogether more serious crisis in 1914.
But as a leading politician of his day I'm sure he was a keen student of the bond markets and would have been interested to know that not only are Italian and French borrowing costs falling, but also those of Spain, Belgium, Greece and Portugal.
Here are the numbers for 10-year bonds:
France - 2.048%
Belgium - 2.19%
Italy - 4.527%
Spain - 5.28%
Portugal - 7.527%
Greece - 16.428%
UK gilts by contrast are up slightly at 1.79%.
Italian borrowing costs at two-year low
Italian benchmark 10-year bond yields have hit a 2-year low today on the back of this week's deal on Greek debt.
At auction earlier this morning Italy sold €2.98bn of 10-year bonds, just shy of the maximum targeted amount, and paid a yield of 4.45% on Thursday, down almost 50 basis points from an end-October sale.
A year ago, Italy paid a record 7.56% to get 10-year bonds away.
A year ago, Italy paid a record 7.56% to get 10-year bonds away.
French borrowing costs have also fallen today. The yield on 10-year bonds is at 2.04%, which defies both Moody's downgrade of two weeks ago and predictions of the French economy imploding.
Eurozone economic confidence up
Confidence in the eurozone's economic prospects rose for the first time in a year in November according the European Commission's monthly business and consumer survey.
Economic sentiment in the euro zone rose a greater than expected 1.4 points to 85.7, ending an eight-month run of falls.
Less cheery news is that the Commission's survey of industry found expectations of a 1% fall in real investment in 2013 compared with this year, casting doubt on the prospects for growth next year.
Less cheery news is that the Commission's survey of industry found expectations of a 1% fall in real investment in 2013 compared with this year, casting doubt on the prospects for growth next year.
ECB allowed to keep Greece files secret
The EU's general court has blocked an attempt to force the ECB to release files showing how Greece used derivatives to hide its debt in the run-up to the crisis. The case was brought by Bloomberg under freedom of information in August 2010 but has been thrown out today by the court in Luxembourg. A bad day for those interested in finding out how Europe got into such a terrible fiscal mess. More on this shortly.
Protesters outside the ECB's headquarters in Frankfurt. Somewhere inside they've got secret documents showing how Greece cooked the books but they won't let anyone see them. Reuters/Lisi Niesner Photograph: LISI NIESNER/REUTERS
Updated
More mildly encouraging news from eurolandia where Italian business confidence rose to 88.5 in November compared with 87.8 in October. That's slightly better than expected. Data for the whole of eurozone coming at 10am.
Breaking news: German job figures
German unemployment stayed at 6.9% in November. Figures just out showed that the jobless total rose 5,000 - better than the 16,000 expected by forecasters.
Optimism over the US situation is quite tentative. Reuters citesRepublican House speaker John Boehner as saying that his party could broker a deal with the White house while President Barack Obama said that he thought it could be done by Christmas.
And there is also more signs of optimism in Europe where eurozone leaders hare clearly trying to be more conciliatory towards Greece than in the past few months.
My evidence for this is an interview given by Dutch prime minister Mark Rutte in which he concedes that Greece may need more financial aid to stay in the 17-nation pact. He tells Bloomberg:
Wolfgang Schauble, the German finance minister, is entirely right that you have to take a view on the situation of Greece every couple of years again, whether we are on track and whether extra steps have to be taken.'
Which contrasts with this sort of thing.
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