Overnight Markets- Leading News -Update 5

Greeks Push Back at German Financial Nazi Banksters

A leader of Greece’s governing coalition pushed back against German demands for deeper budget cuts to get the bailout needed to prevent a financial collapse.

In Athens, unions struck for the second time this week and police used tear gas to counter protesters. George Karatzaferis, who heads one of the three parties supporting interim Prime Minister Lucas Papademos, said he wouldn’t support austerity measures worked out for a rescue. He spoke hours after German Finance Minister Wolfgang Schaeubletold lawmakers in Berlin that Greece was missing deficit targets.

“What has particularly bothered me is the humiliation of the country,” Karatzaferis, whose Laos party has 16 members in the 300-seat parliament, said in televised comments. “Clearly Greece can’t and shouldn’t do without the European Union but it could do without the German boot.”

Schaeuble said that current plans would leave Greece’s debt as high as 136 percent of gross domestic product by 2020, according to two people in the meeting who spoke on condition of anonymity because it was private. That compares with the 120 percent foreseen in the 130 billion-euro ($172 billion) bailout being negotiated. Debt was about 160 percent of GDP last year.

“The Greek offer is not sufficient and they have to go away to come up with a revised plan,” Bertrand Benoit, a spokesman for the German Finance Ministry, said by telephone…

http://www.bloomberg.com/news/2012-02-10/asia-stocks-south-korean-won-decline.html

China Property Stocks Surge As Housing Price Supports Start

http://www.businessweek.com/news/2012-02-10/china-property-stocks-surge-as-wuhu-eases-curbs-shanghai-mover.html

Rajoy Tackles Spain 23 pc Joblessness 

http://www.bloomberg.com/news/2012-02-09/spanish-premier-rajoy-tackles-23-jobless-rate-in-litmus-test-of-resolve.html

 Beyond Chinese New Year data skew, a bear lurks

http://www.reuters.com/article/2012/02/10/us-china-data-idUSTRE8190CH20120210

Juncker- ECB Should Contribute to Greek Debt Deal 

http://www.bloomberg.com/news/2012-02-09/ecb-should-contribute-to-greek-debt-reduction-luxembourg-s-juncker-says.html

In Greek Bailout Deal Banksters First In Line 

Nothing new here but the sheer criminality of these banksters is really astounding. Even Al Capone and Meyer Lansky had nothing on this gang.

http://www.nytimes.com/2012/02/10/business/global/plan-for-a-greek-debt-bailout-puts-the-banks-first.html?ref=business

Monti  Say IMF Must Help Greeks to Prevent ‘Explosion” 

(Reuters) – Greece’s debt crisis on Thursday dominated the first day of Italian Prime Minister Mario Monti’s visit to the United States, as he urged the International Monetary Fund to be more lenient with Athens in bailout talks to prevent “a big potential explosion.”

Monti welcomed the IMF’s insistence that Europe erect a strong firewall to prevent debt contagion from spreading, but he also said the fund should not be too rigid in how it applies its lending requirements.

“If there is a minimum of compliance with the requirements set out, this is the moment to turn the page and extinguish this potential big explosion,” Monti told an economics think-tank before meeting with U.S. President Barack Obama at the White House.

Later in a news conference at the Italian Embassy, Monti said he had discussed Greece with Obama and that it was in everyone’s interest to ensure a “non-explosive solution of the Greek case.”

He also discussed the euro zone debt crisis with U.S. congressional leaders. On Friday, the Italian prime minister heads to New York where he will try to persuade Wall Street investors of his efforts to bring the budget of the euro zone’s third-largest economy under control…

http://www.reuters.com/article/2012/02/09/us-imf-italy-monti-idUSTRE8182ML20120209

In Europe -Stagflation the Way of Life 

http://www.nytimes.com/2012/02/10/business/global/after-accord-in-athens-uncertainties-loom-for-europe.html?_r=2&ref=business

Germans Say Greeks Deadbeats-Default or Not Vote Coming Up 

Greece is missing its debt-cutting targets, German Finance MinisterWolfgang Schaeuble told lawmakers today, intensifying pressure on Greek politicians to deliver on austerity promises.

Schaeuble said in Berlin that Greece’s plans would leave its debt as high as 136 percent of gross domestic product by 2020, according to two people who took part in the meeting and who spoke on condition of anonymity because it was private. That compares with the 120 percent foreseen in a 130 billion- euro ($172 billion) bailout being negotiated.

Signs that Greece is falling short underscored euro-area officials’ frustration with the country’s bickering leaders and the prospect that they may again backtrack on fiscal pledges not first passed into law. Greek lawmakers begin voting on austerity measures this weekend after European finance ministers last night held back the rescue package demanding further commitments from Athens.

“The Greek offer is not sufficient and they have to go away to come up with a revised plan,” Bertrand Benoit, a spokesman for the German Finance Ministry in Berlin, said by telephone today.

The emergency talks of finance chiefs broke up late last night with Luxembourg Prime Minister Jean-Claude Juncker saying Greece must turn its latest budget-cutting plan into law, flesh out 325 million euros in spending reductions and have its major party leaders sign up to the program so they don’t retreat after upcoming elections.

Juncker’s Condition

“In short: no disbursement without implementation,” Juncker said. He set another extraordinary meeting for Feb. 15. “We can’t live with this system while promises are repeated and repeated and repeated and implementation measures are sometimes too weak,” he said.

The impasse left European stocks falling for the fourth time in five days and the euro declining from yesterday’s two- month high against the dollar.

Facing general strikes and mounting opposition to cuts in wages, pensions and government spending, Greek Finance Minister Evangelos Venizelos said the parliamentary vote set to begin this weekend amounted to a ballot on euro membership.

“If we see the salvation and future of the country in the euro area, in Europe, we have to do whatever we have to do to get the program approved,” Venizelos said in Brussels.

Resolution of the aid talks, which have dragged on since July, would allow Greece to make a 14.5 billion-euro bond payment on March 20 and contain the threat that speculators will target debt-saddled nations including Italy and Portugal.

Default Risk

Fitch Ratings today reiterated its view that Greece will default even with the rescue package.

Greece “must get this deal agreed really within the next few days to enable them sufficient time and have the new bailout money disbursed before that bond is due,” Tony Stringer, Fitch’s managing director of global sovereigns, said in an interview in Singapore. “If they don’t manage to achieve that, then it could be in the realm of a disorderly default.”

Europe’s hardline stance follows more than two years in which Greece repeatedly failed to carry through promised reforms to tackle its uncompetitive economy and meet the terms for aid. Greece blamed its shortcomings on a deeper than first expected slump which is now set to worsen with reports yesterday showing unemployment jumping to 20.9 percent in November and industrial production declining.

Greek Talks

Negotiations over another bailout began seven months ago and Greece’s participation in the euro first came into question when then-Prime Minister George Papandreou threatened in October to hold a referendum on austerity.

In contrast to the approach to Greece, Germany may be willing to study revising the terms of Portugal’s bailout, Schaeuble told his Portuguese counterpart in Brussels in a conversation picked up by Portuguese television.

Germany will “be ready” for an adjustment of the Portuguese program if needed, Schaeuble told Finance Minister Vitor Gaspar at the meeting yesterday.

The gathering, attended by International Monetary Fund chief Christine Lagarde and European Central Bank President Mario Draghi, came hours after Greek Prime Minister Lucas Papademos and party chiefs ended a week of meetings with an agreement on a package of fresh budget cuts.

Greece is seeking to reduce its debt to 120 percent of gross domestic product by 2020 from 160 percent last year. The latest measures are aimed at delivering budget reductions totaling 1.5 percent of GDP this year and range from a 20 percent paring of the minimum wage to lower pension payments and immediate job cuts for as many as 15,000 state workers.

ECB Pressure

With European officials signaling investors will soon accept a debt swap that would impose losses of about 70 percent of their Greek bond holdings, the European Central Bank came under pressure to offer additional relief.

“The ECB must look, within the framework of its independence, what sort of contribution it can make,” Juncker said.

Draghi yesterday left open the possibility of passing up some the profits on the Greek bonds the central bank bought during the crisis. He nevertheless rejected selling them to Europe’s temporary bailout fund at a loss because doing so would amount to “monetary financing” of governments, which is banned by European treaties.

Bondholders Meet

Bondholders met in Paris yesterday to discuss accepting an average coupon of as low as 3.6 percent on new 30-year bonds in the proposed debt swap. An agreement would slice 100 billion euros off more than 200 billion euros of privately-held debt and a formal offer must be made by Feb. 13 to allow all procedures to be completed before the March 20 bond comes due.

European Union Economic and Monetary Affairs Commissioner Olli Rehn said the deal is “practically finalized.” The Institute of International Finance, which represents investors, said it welcomed progress made by Greece and look forward to the debt swap being completed next week.

“The Greeks understand that it’s not five minutes to midnight but 30 seconds to midnight,” Luxembourg Finance Minister Luc Frieden said.

 

http://www.bloomberg.com/news/2012-02-09/greece-rebuffed-on-aid-package-as-austerity-vote-raises-risk-of-euro-exit.html

 

China Exports Decline .5 pc in Jan, Imports Decline 13 pc

http://www.bloomberg.com/news/2012-02-10/china-s-january-exports-fall-0-5-trade-surplus-widens-to-27-28-billion.html

Germans Nix Greek Bailout Deal

European finance ministers held back a rescue package for Greece in a rebuff that left lawmakers in Athens under government pressure to endorse a newly minted austerity plan or exit the euro.

“In short: no disbursement without implementation,” Luxembourg Prime Minister Jean-Claude Juncker said in Brussels late yesterday after chairing emergency talks of euro-area policy makers. He set another extraordinary meeting for Feb. 15.

The refusal to deliver a 130 billion-euro ($173 billion) bailout for Greece reflected the euro area’s frustration with the country’s bickering politicians and the prospect that they may again backtrack on fiscal commitments not passed into law.

Facing general strikes and mounting opposition to cuts in wages, pensions and government spending, Greek Finance Minister Evangelos Venizelos said the parliamentary vote set to begin this weekend amounted to a ballot on euro membership.

“If we see the salvation and future of the country in the euro area, in Europe, we have to do whatever we have to do to get the program approved,” Venizelos said in Brussels.

Resolution of the aid talks, which have dragged on since July, would allow Greece to make a 14.5 billion-euro bond payment on March 20 and contain the threat that speculators will target debt-addled nations including Italy and Portugal.

Fitch Ratings today reiterated its view that Greece will default even with the rescue package….

 

http://www.bloomberg.com/news/2012-02-09/greece-rebuffed-on-aid-package-as-austerity-vote-raises-risk-of-euro-exit.html

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