German and French banks call the shots
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in title, tags, annotations or urlRio Tinto Coal Mozambique hit by lower reserves, transport problems - 0 views
German and French banks call the shots - European, Business - Independent.ie - 0 views
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d, for reasons best
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known to itself, the ECB -- in clear contravention of both previous market precedent and financial logic -- has insisted that the senior bondholders be repaid in full and has lent the Irish banks, institutions which it must have known were hopelessly insolvent, €70bn to do so.
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Euro zone could lose 4.5 million more jobs, UN agency warns - latimes.com - 0 views
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The euro zone nations already have 3.5 million fewer jobs than they did before the financial crisis hit in late 2008, bringing the total number of unemployed to 17.4 million as of April, the organization said in a report issued Tuesday.
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The unemployment rate hit an all-time high of 11.1% in May.
A Driving School in France Hits a Wall of Regulations - NYTimes.com - 0 views
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The other driving schools have sued them, saying their innovations break the rules.
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partly because getting a driver’s license here is so difficult and expensive that it has inspired books on the subject,
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their struggle highlights how the myriad rules governing driving schools — and 36 other highly regulated professions — stifle competition and inflate prices in France.
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Russia puts squeeze on Ukraine, jacks up natural gas prices 40 percent - CSMonitor.com - 0 views
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Russia puts squeeze on Ukraine, jacks up natural gas prices 40 percent
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On Thursday, the International Monetary Fund threw a financial lifeline, agreeing to stump up $14-18 billion as part of a two-year bailout package in exchange for tough economic reforms.
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Russia's milk union has asked for a ban on Ukrainian dairy products
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Some thoughts on German politics and the saver's tax in Cyprus | Credit Writedowns - 0 views
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Now, the large 82.8% German government debt to GDP ratio is a source of shame for many because Germany was a driving force in enshrining the 60% government debt to GDP hurdle into the Maastricht Treaty that set out terms for the euro zone.
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Moreover, the interest rate policy of the ECB, geared as it was to the slow growth core, produced negative real interest rates and credit bubbles in Spain and Ireland during the last decade. German banks piled in to those countries as prospects domestically stagnated.
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“The average German worker feels like a cash cow being sucked dry by a quick succession of reforms and bailouts that take money out of her pocket. First it was for reunification, then for European integration, then to right the economy, then to bail out German banks, and finally to bail out the European periphery. Fatigue has set in.”
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Op-Ed Columnist - Bubbles and the Banks - NYTimes.com - 0 views
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Bear in mind that the implosion of the 1990s stock bubble, while nasty — households took a $5 trillion hit — didn’t provoke a financial crisis. So what was different about the housing bubble that followed?
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The short answer is that while the stock bubble created a lot of risk, that risk was fairly widely diffused across the economy. By contrast, the risks created by the housing bubble were strongly concentrated in the financial sector. As a result, the collapse of the housing bubble threatened to bring down the nation’s banks. And banks play a special role in the economy. If they can’t function, the wheels of commerce as a whole grind to a halt.
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Why did the bankers take on so much risk? Because it was in their self-interest to do so.
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Solutions Remain Elusive After Financial Crisis - NYTimes.com - 0 views
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In this world, financial bubbles matter, capital flows are of dubious merit, low interest rates fail to stimulate growth and government spending becomes the only tool with real traction to spur economic activity.
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With total government debt in the rich world stuck at around 100 percent of its combined economic output, there is a legitimate fear that a rise in interest rates could tip off a financial death spiral. Moreover, if countries with debt levels well under 50 percent of G.D.P. were so devastated by the crisis, it is hard to imagine what might happen to them if another were to hit them.
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If so, the urgent task is what kind of limits should be imposed on banking and the rest of finance to temper its propensity to careen toward disaster.
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Why the Baltic states are no model - FT.com - 0 views
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Olivier Blanchard, the IMF’s economic counsellor, stated last June that “many, including me, believed that keeping the peg was likely to be a recipe for disaster, for a long and painful adjustment at best, or more likely, the eventual abandonment of the peg when failure became obvious.” He has been proved wrong.
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According to the IMF, Latvia tightened its cyclically adjusted general government deficit by 5.3 per cent of potential GDP between 2008 and 2012,
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But Greece’s tightening was 15 per cent of potential GDP between 2009 and 2012.
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Kenen on the euro | vox - 0 views
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Early work on optimum currency areas by Robert Mundell had emphasised the symmetry or asymmetry of disturbances hitting different regional economies as a key criterion on which to gauge their suitability for sharing a common currency.
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Peter took this insight further by arguing that disturbances were often sector specific and that the diversification of regional economies was therefore a key consideration in gauging their suitability for monetary union (the better diversified an economy was, the less likely it was to be badly destabilised by a sector-specific shock). (Kenen 1969).
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We now know that Kenen flagged a problem for which the Eurozone could have been better prepared. With an outsized capital-goods producing sector, Germany benefitted from a strong positive shock as a result of China’s emergence onto the global stage, given the Chinese economy’s voracious appetite for capital goods.
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The Morning Ledger: Europe Prepares for Nightmare Scenario - The CFO Report - WSJ - 0 views
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But euro-zone members would probably have to take a big hit on loans to the country and banks could face heavy losses on their exposure to the Greek economy.
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Contingency planning is ramping up on the corporate side, too. One European supermarket group has been looking closely at its suppliers’ financing requirements. “The key thing for them is how their working capital cycle is funded and whether they can get access to the banks that they normally would use, which may themselves be in a liquidity squeeze,” a treasury official at the company tells CFO European Briefing. “Our job is to ensure the channels of liquidity are open. If we can keep that going, a lot of the disruption can be minimized relatively quickly.”
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Meanwhile, some portfolio managers are dumping debt of southern European countries, while others are piling into U.S. and German issues,
Analysis: Euro zone fragmenting faster than EU can act - 0 views
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Deposit flight from Spanish banks has been gaining pace and it is not clear a euro zone agreement to lend Madrid up to 100 billion euros in rescue funds will reverse the flows if investors fear Spain may face a full sovereign bailout.
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Many banks are reorganising, or being forced to reorganise, along national lines, accentuating a deepening north-south divide within the currency bloc.
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Since government credit ratings and bond yields effectively set a floor for the borrowing costs of banks and businesses in their jurisdiction, the best-managed Spanish or Italian banks or companies have to pay far more for loans, if they can get them, than their worst-managed German or Dutch peers.
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Euro crisis deepens as time starts to run out for Spain's banks and regions | Business | The Guardian - 0 views
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But the shortcomings of the agreement have once again undermined renewed confidence in the eurozone and sent the bond yields of several countries higher, including Spain and Italy.
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The Spanish government said a predicted rise in GDP next year of 0.4% had proved optimistic, and the economy would suffer another year of recession.
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Regional governments deliver the key parts of the welfare state, including health, education and social services.
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One more summit: The crisis rolls on | vox - 0 views
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Reading the official documents from the June 28 summit requires linguistic and divination skills.
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The clearest result is that EFSF/ESM funds can be used directly to support banks.
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The summit attendees seem to have successfully drawn the conclusion that this was necessary from the disastrous impact of their mid-June decision on new lending to Spanish authorities to shore up their banks. Within hours, the main conclusion drawn by the markets was that the Spanish public debt had grown by €100 billion, bringing Spain closer to the fate of Ireland (bad bank debt dragging down a government with an otherwise healthy fiscal position).
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The delicate balance of fixing the eurozone | Martin Wolf's Exchange - 0 views
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The euro itself was a leading cause of this crisis by ushering in a remarkably swift convergence in interest rates, which had the effect of directing too much capital into countries that formerly had had to pay high interest rates. This undermined the competitiveness of these countries through inflation and gave rise to huge deficits in their current accounts.
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The euro is not suffering from a mere confidence crisis that can be resolved by assuaging the markets; it is experiencing a profound balance‐of‐payment crisis that is being prolonged by the expansion of public financial aid.
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Since autumn 2007, long before the official bail‐out initiatives began, some of the crisis‐hit countries have replaced dwindling private capital imports and capital flight with their money‐printing presses (Target credits).
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Worried Banks Pose Obstacle to Forming Financial Union - NYTimes.com - 0 views
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French loans to Spanish banks plunged 34 percent in the fourth quarter of 2011 compared with the previous quarter, according to the latest data from the Bank for International Settlements.
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For Italian banks, French bankers cut their exposure by 16 percent. German banks have also been increasingly wary of their Italian and Spanish peers, reducing lending to them by about 19 percent last year
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In the last six months, as fears about Spain and Greece have intensified, Spanish and Italian banks have been by far the biggest users of the European Central Bank’s program of cut-rate, three-year loans to banks that cannot find money elsewhere.
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Utilities Switch Off Investment in Fossil Fuel Plants - NYTimes.com - 0 views
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workers at the large power station known as Keadby 1 are preparing to shut it down at the end of the summer, with the loss of about 40 jobs.
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fluctuations in global energy markets have made the natural gas power plant unprofitable
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