It’s Official: German Economy Minister Demands Surrender Of Greek Budget Policy, Says It Is First Of Many Such Sovereign

While over the past 2 days there may have been some confusion as to who, what, how or where is demanding that Greece abdicate fiscal sovereignty (with some of our German readers supposedly insulted by the suggestion that this idea originated in Berlin, and specifically with politicians elected by a majority of the German population), today’s quotefest from German Economy Minister Philipp Roesler appearing in Germany’s Bild should put any such questions to bed. And from this point on, Greece would be advised to not play dumb anymore vis-a-vis German annexation demands. So from Reuters,
“Greece must surrender control of its budget policy to outside institutions if it cannot implement reforms attached to euro zone rescue measures, the German economy minister was quoted as saying on Sunday. Philipp Roesler became the first German cabinet member to openly endorse a proposal for Greece to surrender budget control after Reuters quoted a European source on Friday as saying Berlin wants Athens to give up budget control.” And some bad news for our Portuguese (and then Spanish) readers: you are next.

More:

“We need more leadership and monitoring when it comes to implementing the reform course,” Roesler, also vice chancellor, told Bild newspaper, according to an advance of an interview to be published on Monday.

“If the Greeks aren’t able to succeed themselves with this, then there must be stronger leadership and monitoring from abroad, for example through the EU,” added Roesler, chairman of the Free Democrats (FDP) who share power with Chancellor Angela Merkel.

From: http://ping.fm/GwsEt

Viene una gran depresión para la zona euro: OCDE Excelsior

Image by Getty Images via @daylife

PARÍS, 28 de noviembre.- La OCDE consideró hoy que el riesgo de suspensión de pagos por el nivel de las deudas soberanas puede amenazar con una gran depresión en los países de la eurozona.

La Organización para la Cooperación y el Desarrollo Económico (OCDE) aludió a esa posibilidad en un informe en el que además revisa a la baja las perspectivas económicas para sus países miembros y los grandes emergentes.

La OCDE constató que la eurozona ha entrado ya en una recesión, por el momento suave, y también alertó en su informe semestral de Perspectivas Económicas que otro “serio riesgo a la baja” vendría de Estados Unidos si no se concretaran los planes de ajuste fiscal.

En ese caso, la mayor economía del mundo podría caer también en recesión y la política monetaria tendría un margen prácticamente nulo para evitarlo.

En caso de que esos malos augurios se cumplan, el PIB de la zona euro disminuiría en torno al 2% tanto en 2012 como en 2013, con una caída sólo un poco menos fuerte en Estados Unidos el año próximo, que no pasaría del estancamiento en 2013.

Para China, todo eso significaría quedarse con una progresión económica algo inferior al 8 % en cada uno de esos dos ejercicios.

Sin llegar a esos extremos, el escenario central de los autores del informe augura una ralentización el año próximo del crecimiento económico en la OCDE, con un 1,6% tras el 1,9% en 2011, lejos del 2,8% y del 2,3% que esperaban en su precedente estudio del mes de mayo. Para 2013, la progresión sería del 2,3%.

La principal razón de esa ralentización es la zona euro, que sufrirá un casi estancamiento en 2012, con un tímido ascenso de su Producto Interior Bruto del 0,2 % (comparado con el 2% que se preveía en mayo) tras el 1,6% de 2011 (también se anticipaba un 2%). En 2013 la progresión quedaría en el 1,4%.

Estados Unidos, que acabará creciendo este ejercicio un 1,7 % (y no un 2,6 % como se dijo hace seis meses) también se tendrá que conformar con un alza de su PIB mucho más modesto en 2012 (2 % en lugar del 3,1 %), antes de un incremento del 2,5 % en 2013.

Japón vive una situación especial, que según la OCDE se traducirá en una caída del PIB del 0,3 % en 2011 (menos del bajón del 0,9 % que se estimó en mayo, tres meses después del tsunami) y en una recuperación en 2012 con un aumento del 2 %, apenas dos décimas menos de lo anticipado hace seis meses.

El conocido como el “Club de los países desarrollados” igualmente espera consecuencias de la situación actual menos favorables en los países emergentes, pero de magnitud menos acusada que en sus 33 Estados miembros.

Así China pasará de un crecimiento de su PIB del 9,3 % este año al 8,5 % en 2012 y al 9,5 % en 2013, o India del 7,7 % al 7,2 % y al 8,2 %. Con cifras muy por debajo, Brasil subirá un 3,4 % este ejercicio y un 3,2 % el próximo antes de pasar al 3,9 % en 2013.

From: http://www.excelsior.com.mx/index.php?m=nota&seccion=especial-dinero-crisis-euro&cat=62&id_nota=788862

Debt Crisis – Euro Zone in Mild Recession, US May Follow: OECD – CNBC

The global economic recovery is running out of steam, leaving the euro zone stuck in a mild recession and the United States at risk of following suit, the OECD said on Monday, sharply cutting its forecasts.

The threat of even more devastating downturns looms if the euro zone does not get to grips with its debt crisis and U.S. lawmakers fail to agree a spending-reduction plan, the Organization for Economic Cooperation and Development warned.

In the absence of decisive action from euro zone leaders, the European Central Bank (ECB) alone has the power to contain the bloc’s crisis, the Paris-based OECD said. In the United States, however, the Federal Reserve had little ammunition left.

While solid growth in big emerging economies would provide a boost, slumping global trade would drag on Chinese output, the OECD said.

Its twice-yearly Economic Outlook forecast world growth would slow to 3.4 percent in 2012 from 3.8 percent this year.

That marks a sharp fall from its previous outlook in May, when the OECD estimated the world economy would grow 4.2 percent this year and 4.6 percent in 2012.

Struggling to contain an unprecedented debt crisis, the euro zone has already entered a recession and will eke out growth of only 0.2 percent in 2012, the OECD said, slashing its forecast from 2.0 percent in May.

Central Bankers To The Rescue?

The OECD said many key questions about the euro zone’s response to the debt crisis remain unresolved, raising doubts about even the bloc’s most solid economies, as demonstrated by Germany’s difficulties placing bonds with investors last week.

“What we see now is contagion rising and hitting probably Germany as well,” OECD chief economist Pier Carlo Padoan told Reuters in an interview.

From: http://ping.fm/dpoFA

Bank of France’s Noyer Speaks

In case anyone was wondering why the EURUSD is back to levels from several hours ago and well off the ramp highs (with ES continuing to pretend nothing matters), it is due to Bank of France Governor Christian Noyer who speak the following bullet points at a forum in Tokyo:

Crisis Has Worsened Significantly.

Market stress has intensified and Europe is in a “true financial crisis,”
In other words precisely what Zero Hedge readers have known all along, the same as this article from the FT which shows what we presented to readers last week. As for those who like listening to the French grovel here is you desert:

Markets and some governments think the ECB should buy more govt debt
Because €1 trillion is never enough…

From: http://ping.fm/GXFLi

Italy’s Berlusconi to Resign After Budget Is Approved – European Business News – CNBC

“I ask you, Mr. Prime Minister, with all my strength, to finally take account of the situation … and resign,” Bersani said immediately after the vote.

Italy, considered too big to bail out, has replaced Greece at the epicenter of the euro zone sovereign debt crisis, with yields on government bonds close to unsustainable.

Italian Prime Minister Silvio Berlusconi will resign following a humiliating vote in parliament on Tuesday, President Giorgio Napolitano said.

The president said Primer Minister Silvio Berlusconi has promised to resign after parliament passes economic reforms demanded by the European Union to save Italy from getting engulfed further in Europe’s debt crisis.

Following the news, the euro rose against the dollar while U.S. stocks jumped.

Napolitano said after meeting Berlusconi that the 75-year-old prime minister would step down as soon as parliament passed urgent reforms demanded by euro zone leaders to cut Italy’s huge debt and boost stagnant growth.

The votes in both houses of parliament are likely this month.

The head of state said in a statement that following Berlusconi’s resignation he would hold consultations on the formation of a new government.

Berlusconi had “demonstrated to the head of state his understanding of the implications of today’s vote in the chamber of deputies,” the statement said.

Berlusconi’s government won a key budget vote after the opposition abstained on Tuesday but obtained only 308 votes compared with an absolute majority in the lower house of 316 votes.

Pier Luigi Bersani, leader of the main opposition Democratic Party, said Italy ran a real risk of losing access to financial markets after political uncertainty pushed yields on government bonds toward a red line of 7 percent.

From: http://ping.fm/KXKcZ

Angela Merkel and Nicolas Sarkozy Have Lost Credibility – WSJ.com

By SIMON NIXON

“Six weeks to save the euro,” European leaders promised the world in September. That deadline passed at last week’s Cannes G-20 summit with the goal looking further away then ever. Nothing of substance was agreed on the French Riviera to aid the cause of euro survival, but one giant decision was taken that could hasten its demise. Angela Merkel and Nicolas Sarkozy’s announcement that Greece is free to leave the euro has transformed the nature of the euro.

The United States fought a bloody civil war in the nineteenth century to stop states seceding from the union. Yet the German and French leaders have decided the euro zone will be a voluntary union, not because of an attachment to the principle of national self-determination but to protect the principle that euro-zone countries should not become liable for each other’s debts.

The significance of Ms. Merkel and Mr. Sarkozy’s Cannes declaration is immense. At a stroke, they have introduced foreign-exchange risk into a sovereign-debt market still grappling with the realization that euro-zone government bonds contain unexpected credit risk. Worse, throughout the crisis, the two leaders said they will do whatever it takes to save the euro. Yet the assurances they’ve given haven’t been worth the paper they were written on: First, there were to be no sovereign defaults; then the first Greek haircut was a “unique situation;” the second Greek haircut followed 12 weeks later; now euro-zone exits are possible. No wonder the markets won’t lend and China won’t invest in Europe’s bailout funds. Nothing these leaders say any longer carries any credibility.

From: http://ping.fm/5WBrs

Italian Prime Minister Silvio Berlusconi agrees to IMF oversight of austerity measures – Telegraph

Image by London Summit via FlickrSilvio Berlusconi, the Italian Prime Minister, has agreed to allow International Monetary Fund oversight of the debt-ridden country’s progress implementing austerity measures.

Mr Berlusconi agreed to the humiliating step under fierce pressure from financial markets and other Eurozone countries during late-night talks with fellow G20 leaders in Cannes last night.

Jose Manuel Barrroso, the president of the European Commission (EC) confirmed the step today but insisted that Mr Berlusconi had taken the step voluntarily. He said: “Italy has decided on its own initiative to ask the IMF to monitor. I see this as evidence of how important Italy’s commitment to reform is.”
He said that the EC, who will also monitor Italy’s progress, would visit the country next week to underatake a detailed study. “Everything we can do to ensure the credibility of all our member states is important,” he said.
Italy has failed to produce concrete plans to overcome it’s deepening debt crisis, as Mr Berlusconi struggles to save his fragile coalition government from collapse. More of his loyalists defected yesterday.
Last week he presented a ‘letter of intent’ to EU leaders but an emergency meeting of the Italian cabinet in Rome on Wednesday failed to agree firm plans for reforming the pension systems and labour markets, or for privatization.

Without such measures to boost growth and slash public debt, Italy’s financial credibility is severely weakened and markets and fellow eurozone leaders fear the country could end up defaulting on some of its debt. Borrowing costs soared well above 6pc this week.
An EU source said: “We need to make sure there is credibility with Italy’s targets — that it is going to meet them. We decided to have the IMF involved on the monitoring, using their own methodology, and the Italians say they can live with that.”
The Italian economy is the third largest in the eurozone, making the kind of bailout offered to Greece impossible. The country has €1.9 trillion of debt, around 120pc of its GDP.

From: http://ping.fm/mk7o9

Related articles

• Italy: After Greece, Italy Could Be Next Focus For Markets – CNBC (livingstrongandhappy.blogspot.com)

Italy: After Greece, Italy Could Be Next Focus For Markets – CNBC

The eyes of the world have been trained on Greece for most of this week, but, as the Hellenic crisis approached breaking point, signs are that Italy will be the next focus.

“The whole stability of Europe depends on whether Italy gets its act together,” Commerzbank Chief Financial Officer Eric Strutz told analysts in a conference call on Friday.

Prime Minister Silvio Berlusconi’s élan was dented Thursday after he was forced to accept International Monetary Fund (IMF) oversight of Italy’s progress in implementing austerity measures at the G20 meeting in Cannes.

While the move calmed markets slightly, there are plenty of warnings that the Italian problem has not gone away.

Yields on Italian 10-year, fixed-rate bonds climbed to 6.25 percent on Friday morning.

Berlusconi has already survived more confidence votes than his Greek counterpart George Papandreou has had plates of moussaka.

Analysts at Unicredit, Italy’s largest bank, believe he may call another soon, and that a new interim government could be formed if he doesn’t win the support of parliament.

“Berlusconi seems inclined to call for a confidence vote,” the analysts wrote in a research note.

“We see chances that, besides the …dissidents, also a large part of the ruling coalition …might decide to support this interim government.”

From: http://ping.fm/cAPTi

Papandreou to offer his resignation – BBC News

Image via WikipediaGreek Prime Minister George Papandreou is expected to offer his resignation within the next half-hour, sources in Athens have told the BBC.

Mr Papandreou will meet Greek President Karolos Papoulias immediately after an emergency cabinet meeting has finished.

He is expected to offer a coalition government, with former Greek central banker Lucas Papademos at the helm.

Mr Papandreou himself would stand down, the BBC understands.

The Greek government was on the verge of collapse after several ministers said they did not support Mr Papandreou’s plan for a referendum on the EU bailout.

The bailout would give the heavily indebted Greek government 130bn euros (£111bn; $178bn) and a 50% write-off of its debts, in return for deeply unpopular austerity measures.

On Thursday, main opposition leader Antonis Samaras of the centre-right New Democracy party called for a caretaker government to safeguard the EU deal.

Shadow over G20
Mr Papandreou had called a vote of confidence for Friday. His Pasok party holds a slim majority, 152 out of 300 seats.

However, he was faced with a parliamentary revolt after several of his MPs withheld their backing. Some called for early elections or a government of national unity instead.

From: http://www.bbc.co.uk/news/world-15575198

WAFF | Greece & Turkey Defence Forum | World’s Armed Forces Forum: Hellenic Cheifs of Armed Forces ALL REPLACED!

WAFF | Greece & Turkey Defence Forum | World’s Armed Forces Forum: Hellenic Cheifs of Armed Forces ALL REPLACED!

Top brass replaced
November 1, 2011 | Filed under: Army,Featured News In a surprise move, the defence minister proposed on Tuesday evening the complete replacement of the countrys top brass.

At an extraordinary meeting of the Government Council of Foreign Affairs and Defence (Kysea), which comprises the prime minister and other key cabinet members, Defence Minister Panos Beglitis proposed the following changes to the army, navy and air force and the general staff:

General Ioannis Giagkos, chief of the Greek National Defence General Staff, to be replaced by Lieutenant General Michalis Kostarakos (until now commander of the 3rd army corps)

Lieutenant General Fragkos Fragkoulis, chief of the Greek Army General Staff, to be replaced by lieutenant general Konstantinos Zazias (until now commander of the 4th army corps)

Lieutenant General Vasilios Klokozas, chief of the Greek Air Force, to be replaced by air marshal Antonis Tsantirakis (until now commander of the Tactical Air Force)

Vice-Admiral Dimitrios Elefsiniotis, chief of the Greek Navy General Staff, to be replaced by Rear-Admiral Kosmas Christidis (untiTop brass replaced
November 1, 2011 | Filed under: Army,Featured News In a surprise move, the defence minister proposed on Tuesday evening the complete replacement of the countrys top brass.

At an extraordinary meeting of the Government Council of Foreign Affairs and Defence (Kysea), which comprises the prime minister and other key cabinet members, Defence Minister Panos Beglitis proposed the following changes to the army, navy and air force and the general staff:

General Ioannis Giagkos, chief of the Greek National Defence General Staff, to be replaced by Lieutenant General Michalis Kostarakos (until now commander of the 3rd army corps)

Lieutenant General Fragkos Fragkoulis, chief of the Greek Army General Staff, to be replaced by lieutenant general Konstantinos Zazias (until now commander of the 4th army corps)

Lieutenant General Vasilios Klokozas, chief of the Greek Air Force, to be replaced by air marshal Antonis Tsantirakis (until now commander of the Tactical Air Force)

Vice-Admiral Dimitrios Elefsiniotis, chief of the Greek Navy General Staff, to be replaced by Rear-Admiral Kosmas Christidis (until now chief of Staff of the Fleet Command of the Hellenic Navy)

It is understood that the personnel changes took many members of the government and of the armed forces by surprise.

http://defencegreece.com/