The strike force the Fund to support countries in difficulty to the euro area (EFSF) reach "probably not" the amount of 1.000 billion euros initially planned, due to the deteriorating situation on the markets, acknowledged Tuesday night Jean-Claude Juncker. "We have not reviewed the goals down but conditions have changed, so probably it will not be 1000 billion but less, but still (one digit) substantial," said the leader of finance ministersMonetary Union on the sidelines of a meeting in Brussels. "It is not possible to give an exact figure because the circumstances have worsened in recent weeks since the last Summit (European). It is virtually impossible, if we want to keep a straight face, to give a figure," did he insisted to reporters.
Finance ministers from the euro area agreed Tuesday night to increase the firepower of their Relief Fund (EFSF) via a system of partial insurance of loans to investors fragile monetary union, but without giving a figure to assess its capacity. Yet the last summit of EU leaders on the subject in late October, had set a target amount up jsuqu'à 1000 billion euros, in the hope at the time to reassure financial markets about the ability of the areaeuro to build a firewall against the compelling contagion of the debt crisis in countries like Italy or Spain.
Meanwhile, the crisis has worsened, threatening to win including countries such as France or Germany. So the market investors are more wary of investing in the debt of the monetary union. "The exact amount of the strike force will depend on the Fund increased its use of the instruments used and the exact degree of protection it needs to evolve and provide between 20 and 30%", merely stated in the EFSF a document issued after a meeting of finance ministers from the euro area (Eurogroup). Clearly, the initial idea to multiply by four or five some 250 billion euros of own resources still available in the Fund, effective capacity of a loan from 440 billion euros has been abandoned.
Regarding the security system of the EFSF, the exact rate of protection for investors who lend money to troubled countries "depend on the situation and market conditions," said the boss of the EFSF, Klaus Regling at a press conference. It will be applied for emissions of new debt and will aim to increase demand for new bonds and lower borrowing rates, said the statement issued by the EFSF. Another option for the EFSF aims to attract outside investors in a structure built against the fund, then buy the debt of troubled countries on the primary market or secondary flows where the debt already outstanding. It may also be used to refinance the banks. These two options can be combined, said EFSF.by http://businesnew.blogspot.com/
The OECD is considering the formalThe latest OECD report, the organization of the richest countries in the world, is very pessimistic. His scenarios range from a sharp slowdown in global growth in the long recession in developed countries. But it comes with a variant of particular concern. "While there is little chance for it to materialize, she writes, this scenario could be significantly accelerated and amplified if one or more countries were to leave the euro area and to restore their own national currency." The OECD notes that "the contagion has entered a new phase and extends beyond the euro zone countries whose public finances are normally considered vulnerable." And to warn: "Given the uncertainty with which they are currently facing, policymakers must prepare for the worst."
Large companies are preparingThe message is clearly received 5 of 5 in the companies. Banks are the first to consider it.Merrill Lynch issued a report Nov. 25 entitled "Euro area: think the unthinkable" in which she goes to quantify the impact on the value of the euro a trip to Germany. Banks also arise for themselves the problem of risk "redenomination". Clearly, they seek to determine which assets are threatened by conversion to a new currency, to Isaiah to cover.
These reflections are underway in all sectors. Large companies were preparing for a possible breakup of the euro is putting their cash in safe investments, or by repatriating their cash of the most fragile. The contracts also would be examined carefully to see what money they could be honored in case of disappearance of the euro. According to the BBC, several large financial platforms (CLS Bank, ICMA, Thomson Reuters or FXall), who perform transactions on the foreign exchange market, have informed their customers that they were preparing for this scenario.
Market pressure is increasingThe debt crisis in the euro area leaves no respite for the most fragile countries. Tuesday, the interest rates paid by Italy to borrow on the markets and have reached a new record, well above the 7% threshold, considered unsustainable at a much-anticipated bond issue.The problem is that distrust of markets is now affecting everyone. France but also Austria and the Netherlands have seen the difference in their interest rates rise relative to Germany. Then it was the turn of Germany itself to be affected through a fundraising failed at 40%. Last ominous sign, the European Central Bank has raised 9 billion less than expected Tuesday in an operation to absorb liquidity to offset its purchases of government bonds. A very unusual result. At the same time, the rating agencies are threatening to degrade or break down with a vengeance. Moody's has warned that no European country was now safe.
The debt crisis extends to banksThe debt crisis weighs on banks, including the United States. The rating agency Standard and Poor's lowered the rating Tuesday of the largest financial institutions in the country.She points out the consequences of the economic downturn but also the financing difficulties caused by the crisis of European sovereign debt. On the old continent, facing the same difficulties, many banks, especially French, were forced to reduce the size of their balance sheets. The fear is that they also end up reducing their funding to the economy. For now, the experts refuse to discuss credit crunch, but the first signs of a deterioration of the offer are already observable. In France for example, the increase in outstanding loans to enterprises cooled to 8% in August to 4.8% in October.
Still, the worst is not certain. After much depressed markets also want to believe that a crisis is possible. On Monday, the first rumors about various interventional devices were able to make them euphoric. And Wednesday, is a determined central bank intervention that boosted optimism. Paris has closed up sharply (+4.2%), as Frankfurt (+4.9%) and London (3.1%). Wall Street was in the same state of mind in the late afternoon (3%).http://businesnew.blogspot.com/
Thousands of fashion shows are scheduled throughout the UK. Here in London.
Schools closed, hospitals and municipal services slowed: public employees are on strike on Wednesday in the UK. Unions intend to make this movement a real show of force against a government uncompromising on its pension reform. According to the organizers, up to two million people must join this action in a country unaccustomed to large social movements and always very punctilious about the negative consequences for users.
No accurate estimate of participation is available in mid-day. In Scotland, unions estimate the number of public sector strikers to about 300 000 While in Wales, 170,000 workers joined the movement. The administration felt that the NHS about 6000 common medical procedures were canceled in the UK, as well as tens of thousands of appointments. For example, in the capital, 42% of the NHS are on strike.
The first effects of the strike were felt quickly thousands of families have had to keep their children at home, three quarters of schools being affected. In England, more than half of schools are closed, and 13% are partially closed. Picket lines were set before the public buildings, including hospitals where often only emergency care were provided. Municipal services also turned in slow motion, as the courts.
The protest movement has gained throughout the United Kingdom. Thousands of demonstrators beating the pavement in London, but the British also took to the streets of Birmingham, Leeds, Exeter or Aberdeen. In Manchester, the procession was attended by about 15,000 protesters, police said, and Cardiff, they were to march 3000.
Transport undisturbed In Northern Ireland, no bus or train does. But the ports and airports where it was feared massive queues, lack of staff in sufficient numbers to control the borders, have however been spared. Departure and the arrival of Eurostar trains, no disturbance was visible. Nor in the two major airports, Heathrow and Gatwick where staff had however provided biscuits and water to feed passengers to dormant potential. According to a spokesman for British Airways, two-thirds of employees responsible for control at Heathrow were at their posts. The government had, indeed, sought to limit the mess by calling the ministry officials to replace the strikers. Some companies also anticipated by canceling flights. "It is very significant Heathrow, which is supposed to be the most vulnerable seems to work fine," did not fail to note Francis Maude, Secretary of State to the Prime Minister David Cameron.
A "damp squib", according to David Cameron The Prime Minister described the movement of "damp squib." He stresses the "absolutely essential" to the pension reform because of the increase in life expectancy and the necessary balance with the private sector. As part of its austerity plan, the government plans to push back the age of retirement in the public sector to 66 years in 2020 - against 60 years for most current - and to increase contributions. The pill is more difficult to move it just announced a wage freeze for civil servants until 2013, in addition to the 710,000 job cuts by 2017 in the public service.
"Pensions: Hands off!" "This government is full of money to the poor" but "it does not touch the bonus, or the banks," complained Russel Challinor, 49, who participated in a picket line in front of a town hall in the center of London. At University College Hospital, a hundred people were installed at the entrance with placards proclaiming: "Pensions: hands off". In the street, motorists operate their alarms to greet the strikers. "Rarely do we strike in the health sector," said Mark Milligan, 42, anesthesiologist assistant. "But I think we'll go further, there will be other changes next year," he said.
"We are angry because we made plans, and that they change all that. We had agreed last year on a pension reform, and now they still want to change everything , "joked Gill, a nurse of 47 years. But the movement is not popular with everyone, one launched from "greedy bastards" towards the picket line at the University of London UCL, said Matthew Beaumont, a professor of English literature 39. "It put me flat on morale," he agrees, hoping a massive participation in the strike. "I think it will be huge, especially after the declaration of war by George Osborne (Finance Minister) in his budget presentation yesterday," he considers. He went on calling it "punitive and vindictive" the announcement of a limitation of 1% of the increase in salaries of civil servants in 2013 and 2014, while inflation is currently 5%, and after a wage freeze in 2011 and 2012.by http://businesnew.blogspot.com/
The central banks of major economies worldwide have surprised the markets. The ECB, U.S. Federal Reserve (Fed), the Bank of Canada, the Bank of England, the Bank of Japan and Swiss National Bank announced Wednesday concerted action to prevent any lack of liquidity in the international financial system.
This announcement delighted the European financial centers. After a difficult start of the meeting, the CAC 40 soared in the afternoon to finish up 4.22% on Wednesday. The Milan Stock Exchange was closed on it jumped 4.38%, the Madrid Stock Exchange has sold for 3.96%, the Frankfurt 4.98% while the London Stock Exchange gained 3.16%. Even the Athens Stock Exchange finished up (3.13%).
The announcement central banks?They agreed to reduce by half a point, effective December 5, the cost of liquidity in dollar swaps in progress. In addition, agreements have been extended until February 1 2013.Concrètement: the supply of dollars by the ECB and other central banks to private banks will now at a reduced cost of 0.50% compared to today due to a recalculation of the interest rate.
These concerted operations in dollars between central banks had already been performed during the financial crisis in 2008 and 2009. They resumed in September last face the difficulties of European banks. But they have met with almost no success. The last operation conducted by the ECB attracted only two banks in the euro area at a rate of 1.08%, amounting to $ 352 million. For comparison, the last weekly refinancing operations in euros carried by the ECB for European banks has attracted nearly 200 institutions for a volume of 265 billion euros. "The dollar operations have not been successful because the cost of borrowing was too high, says Jean-Francois Robin, strategist at Natixis. Today, it becomes much more interesting."
Other ad: bilateral swap agreements (currency exchange) will now be possible so that a bank can refinance in its own currency if necessary. The ECB may, for example exchanging euro against the yen with the Bank of Japan, and provide the Japanese currency to European banks that need it.
What are these measures?The bilateral swap arrangements have not yet great interest: there is currently no need to provide liquidity in currencies other than the dollar. It is mainly a preventive measure to ensure that such operations can be implemented quickly if the need arose. The decrease in the cost at which banks can refinance themselves in dollars, however, offers a breath of fresh air to European banks. Recent victims of mistrust of U.S. banks vis-à-vis the crisis in the euro area, meet for several months very difficult to borrow dollars in the interbank market. Now they are very exposed to the dollar since much of their business is done in the currency of Uncle Sam (investment activities in the markets, business loans for the purchase of products such as oil, etc.. ). The measure announced by the central banks has significantly eased the pressure off the values of the sector at the Bourse de Paris, Credit Agricole has awarded 8.37% Wednesday, Societe Generale and BNP Paribas 4.63% 4 also , 63%. Appeasement also took to the interbank market: the three-month Euribor, the main rate in the euro zone, fell to 1.473% against 1.477% yesterday.
This action does it solve the crisis in the euro area?"The announcement of central banks is a relief, this should significantly ease the panic on European banks and prevent a credit crunch," said Jean-Francois Robin. In short: this solves the liquidity crisis faced by European banks and eliminates the risk of a credit crunch. But fears about their solvency remain. Because the roots of the crisis in the euro area, namely public debt and high growth prospects near-zero, they are still unresolved. It is therefore likely that the relief recorded in the bond market Wednesday is only temporary.In the absence of political progress in resolving the crisis and a more incisive of the ECB, the pressure on the rates of countries in the euro area should reappear.by http://businesnew.blogspot.com/
After the fall of the Berlin Wall, a severe economic crisis shook the Western world emerged victorious from its confrontation with the socialist camp. At the same time new emerging powers, China, Brazil, to Russia and India.Trying to decipher the major lines of evolution of the new century, that's what Le Monde Diplomatique has been working for decades. In particular, our monthly closely followed all the crises in the capitalist system: that of the Latin American debt in the 1970s, those experienced Russia and Asia in the mid-1990s, that of the "new economy" in 2000 ...Four articles published in recent decades, reflect these upheavals. We offer them on our website. They are from our new DVD-ROM, which contains 40 years of archives, 480 issues of the journal, and more than 400 cards. An indispensable tool for students, teachers and all those who can not settle for a Kleenex-information."Fortune and misfortune of the" new economy "," by Akram B. Ellyas Laime and Marc (May 2000);"The crisis threatens the dikes of the world economy", by François Chesnais (September 1998);"On the rubble of Reaganomics," by Bernard Cassen (November 1987);"An economic crisis aggravated by the rigidity of the political system", by Jorge G.Castaneda (October 1982).
Search by keywords can follow the history of international relations (relations between Moscow and Washington, changes in the European Union, the rise of China, etc..), The evolution of a country (the Algeria to Zimbabwe, through the United Kingdom), or explore a concept (liberalism, democracy, international law, environment, finance, inequality, migration, globalization, intellectual property, etc.)..In a world dominated by information in "real time" and the lack of decline, a topic which drives out another, it is rare to have such a tool to decipher the changes in the world, far from approaches and surface appearances can be deceiving. By browsing the archives, we find, month after month, the wealth of texts that make the singularity of Le Monde Diplomatique.The analysis, in the Thatcher and Reagan years, the rise of neoliberal ideas, studies on conflicts in Asia and the Middle East stories in Latin America and Africa; records of problems policy related to the end of the Cold War and the collapse of the Soviet Union, attempts to understand the bottom of the "war against terrorism" and tipping the balance of power world, but also the issues of ecology, agriculture, urban planning, health, technology and, of course, media and culture.Between 1970 and 2009, our journal has changed. It was enriched, in particular, many foreign editions. The DVD-ROM Monde diplomatique features items from five of them: German, English, Spanish, Italian and Portuguese.Hypertext links let you move from one section to the existing translations. A boon for multilingual or language teachers.by http://businesnew.blogspot.com/
