EXPORT-IMPORT BANK BOARD ADOPTS REVISED ENVIRONMENTAL GUIDELINES TO REDUCE GREENHOUSE GAS EMISSIONS  Washington, DC — The board of directors of the Export-Import Bank of the United States (Ex-Im Bank) today adopted revisions to its environmental procedures and guidelines governing high-carbon intensity projects, aligning the Bank with President Obama’s goal of reducing carbon pollution, while maintaining the Bank’s focus on continuing to help create and support American export-related jobs.

“No one has been more supportive of U.S. exports and the American jobs they produce and maintain than this Bank and this board. Since 2009, we have supported nearly 1.2 million jobs.” said Fred P. Hochberg, Ex-Im chairman and president. “We can’t do it, however, without considering the environmental costs associated with transactions.”

The revised guidelines adopted today require carbon capture and storage in most countries in order to secure Bank financing for coal-fired power plants, but would provide flexibility for the Bank with respect to the important energy needs of the poorest countries in the world.

The policy revisions were drafted by Ex-Im Bank staff and reviewed extensively by exporters, the public, leading environmental groups, the Administration and other federal agencies through an extensive and transparent vetting process.

“The Bank engages in an important balancing act — in supporting our exporters, we have to weigh the potential impacts on the environment associated with our financing,” Hochberg said. “This balancing act is a Congressional mandate, is a directive in our Charter, is part of our mission and it is something we at the Bank take seriously.”

Hochberg noted that: “Our proposed guidelines would balance the Bank’s obligations to its many different stakeholders and also its efforts to support the growth of export-related U.S. jobs.”

“Without guidelines or limits, ever-increasing numbers of new coal plants worldwide will just continue to emit more carbon pollution into the air we breathe,” said Hochberg. “But America cannot do this alone. I strongly support the Administration’s efforts to build an international consensus such that other nations follow our lead in restricting financing of new coal-fired power plants.”

Ex-Im has been a leader among the world’s export credit agencies (ECAs) in adopting measures to protect the environment while financing exports.

In 1995 the Bank was the first ECA to adopt environmental procedures and guidelines governing its export financing. In 1999 the Bank began tracking and publicly reporting projected carbon emissions produced by projects it financed. Even today Ex-Im is the only ECA that tracks and reports carbon emissions. In 2009 the Bank approved a formal carbon policy, and in 2010 it approved supplemental guidelines for high-carbon intensity projects.

The guideline revisions approved today are not designed to impact mining projects or coal exports produced by American coal miners. Ex-Im staff have worked with other agencies to ensure that the flexibility of these guidelines would be consistent with those of other federal agencies.

In addition to approving the revisions to its environmental guidelines, the board today approved seven transactions that together will support more than 11,200 U.S. export-related jobs.

ABOUT EX-IM BANK:

Ex-Im Bank is an independent federal agency that creates and maintains U.S. jobs by filling gaps in private export financing at no cost to American taxpayers. In the past five years (from Fiscal Year 2008), Ex-Im Bank has earned for U.S. taxpayers nearly $1.6 billion above the cost of operations. The Bank provides a variety of financing mechanisms, including working capital guarantees, export-credit insurance and financing to help foreign buyers purchase U.S. goods and services.

Ex-Im Bank approved $35.8 billion in total authorizations in FY 2012 – an all-time Ex-Im record. This total includes more than $6.1 billion directly supporting small-business export sales – also an Ex-Im record. Ex-Im Bank's total authorizations are supporting an estimated $50 billion in U.S. export sales and approximately 255,000 American jobs in communities across the country.

WASHINGTON—Senate leaders on Wednesday struck an 11th-hour agreement to avoid a U.S. debt crisis and fully reopen the federal government, putting lawmakers on track toward ending a stalemate that worried investors world-wide and provided striking evidence of congressional dysfunction.Negotiators rejected a Democratic proposal to delay for one year a fee of $63 per insured person levied on groups that offer health policies, including employers, labor unions and insurance carriers—a fee opposed by many large employers and unions. The agreement does includes backpay for all federal workers who were furloughed during the government shutdown.

The Senate deal doesn't include a provision granting federal agencies more flexibility to mitigate the effects of the across-the-board reductions known as the sequester. Congressional aides said the next round of cuts kick in when the stopgap spending measure ends in mid-January, motivating lawmakers to reach an agreement to ease the burden of the sequester's blunt cuts by then. The next round of reductions will bring annual spending levels down to $967 billion from $986 billion, largely through cuts to defense spending.

The setback in the House on Tuesday was the result of pressure from conservatives, who objected both to the Senate bill and Mr. Boehner's alternative because they gave Republicans too little of what they had been demanding. Conservatives have been pressing for major changes in the 2010 health-care law and additional measures to reduce the deficit.

GOP leaders had tried to build backing by including proposals sought by conservatives, including one that would have cut government health-insurance benefits for congressional and administration officials, including their staff, under the 2010 health-care law. But the bill met powerful headwinds when the conservative political group Heritage Action on Tuesday evening announced its opposition and said votes on the measure would be included in the group's influential ratings of lawmakers.

The White House Wednesday provided a little more clarity about when the Treasury will run out of its ability to borrow money. Mr. Carney said that moment will come "at the end of the day" Thursday. The Treasury had previously said the "extraordinary measures" it deployed to keep below the debt ceiling would run out on Oct. 17, without clarifying whether that meant midnight Wednesday or the subsequent day. Beyond Thursday, "the Treasury would have only cash on hand. It would not be able to borrow new money to meet obligations," Mr. Carney said. The Treasury has said that on Oct. 17 it would be left with only about $30 billion to pay the nation's bills.

There was palpable relief among Republicans who had been part of a bipartisan effort to break the deadlock. "We're ready to open the government and we are ready to make sure everyone around the world knows the U.S. pays its bills on time," said Sen. Lamar Alexander (R., Tenn.).

From New York's Liberty Island to Alaska's Denali national park, the US government closed its doors as a bitter budget fight left hundreds of thousands of federal workers idle and halted all but the most critical government services for the first time in nearly two decades.

A midnight deadline to avert a shutdown passed amid congressional bickering, casting doubt on Americans' ability to get government services ranging from federally-backed home loans to supplemental food assistance for children and pregnant women.

For many employees of the federal government, Tuesday's shutdown meant no more pay as they were forced onto unpaid furloughs. For those still working, it meant delays in getting paid.

Park ranger and father-to-be Darquez Smith said he already lived paycheck-to-paycheck while putting himself through college.

"I've got a lot on my plate right now — tuition, my daughter, bills," said Smith, 23, a ranger at Dayton aviation heritage national historical park in Ohio. "I'm just confused and waiting just like everyone else."

The impact of the shutdown was mixed — immediate and far-reaching for some, annoying but minimal for others.

In Colorado, where flooding killed eight people this month, emergency funds to help rebuild homes and businesses continued to flow — but federal worker furloughs were expected to slow it down.

National Guard soldiers rebuilding washed-out roads would apparently be paid on time — along with the rest of the country's active-duty personnel — under a bill passed hours before the shutdown. Existing social security and Medicare benefits, veterans' services and mail delivery were also unaffected.

Other agencies were harder hit — nearly 3,000 Federal Aviation Administration safety inspectors were laid off, along with most of the National Transportation Safety Board's employees, including accident investigators who respond to air crashes, train collisions, pipeline explosions and other accidents.

Almost all of NASA shut down, except for mission control in Houston, and national parks closed along with the Smithsonian museums and the National Zoo. Even the zoo's popular pandacam went dark.

As the shutdown loomed on Monday, visitors to popular parks made their frustration with elected officials clear.

The US government was forced to begin closing swathes of non-essential services on Tuesday morning after frantic rounds of late night political sparring failed to avert the first federal shutdown in nearly two decades.

As a midnight deadline to extend Congressional spending authority ticked ever closer, Republicans staged a series of last-ditch efforts to use a once-routine budget procedure to force Democrats to abandon their efforts to extend US health insurance.

Three separate attacks on the Affordable Care Act, known as Obamacare, were staged by the House of Representatives, only to be rejected in turn by the Democrat-controlled Senate, which accused Republicans of holding the country to ransom.

Shortly before midnight, Senate majority leader Harry Reid marked the end of the process by rejecting House calls for formal talks to reconcile their conflicting positions, arguing it was impossible to negotiate with a “gun to our heads”.

“This is a very serious time in the history of our country,” Reid said. “Millions of people are going to be affected tomorrow and the Republicans are still playing games”

An estimated 800,000 federal workers will be forced to stay at home from Tuesday under a stalemate that could drag on for days and disrupt services as varied as national parks and the US space programme.

The White House has drawn up a list of essential staff who are legally allowed to carry on working, but President Barack Obama warned that a shutdown would have an immediate affect on the fragile US economy.

“We do not have a clear indication that Congress will act in time for the president to sign a Continuing Resolution before the end of the day tomorrow, October 1,” said a White House statement issued shortly before midnight. 

“Therefore, agencies should now execute plans for an orderly shutdown due to the absence of appropriations. We urge Congress to act quickly to pass a Continuing Resolution to provide a short-term bridge that ensures sufficient time to pass a budget for the remainder of the fiscal year, and to restore the operation of critical public services and programs that will be impacted by a lapse in appropriations.”

Obama also issued a statement to military employees after signing a Republican-proposed law that exempts active-duty servicemen from the effects of the shutdown, but will not protect civilian workers.

“I know the days ahead could mean more uncertainty, including possible furloughs,” Obama said. “You and your families deserve better than the dysfunction we’re seeing in Congress.”

House speaker John Boehner denied that Republican tactics were responsible for the shutdown, insisting Democrats were to blame for refusing to negotiate over Obamacare.

“I didn't come here to shut down the government,” Boehner told one of several heated House debates. 

“I came here to fight for a smaller, less costly and more accountable federal government. But here we find ourselves in this moment dealing with a law that’s causing unknown consequences and unknown damage to the American people and to our economy. And that issue is Obamacare.”

But Democrats are confident that US public opinion will continue to hold Republicans to blame for what could be days of disruption until a deal can be struck.

They argue that Republicans are using underhand methods to overturn a law that was passed four years ago, ratified by the supreme court and endorsed by voters at the last presidential election.

Senator Bernie Sanders, of Vermont, said: “If we surrender to hostage-taking tonight, these guys would be back within a couple of weeks without a shadow of a doubt. What we are dealing with tonight is an extraordinary anti-democratic act.” 

Suggestions of a reduction to the US Fed's quantitative easing programme has pushed five-year yields to 1.53% today, from 0.65% in May. By comparison the yield on a five-year euro mid-swaps has gone to 1.19% from 0.61%. Some Asian bond issuers are now suggesting more euro-denominated bonds could be issued as a result.  One banker told Reuters: “There is no talk of tapering in Europe, so interest rate volatility should be smaller than in the [US] Treasury market.”  Cross currency basis swaps from euros to dollars has also improved, meaning that funding in euros is becoming cheaper for the many Asian issuers that routinely swap back to dollars.  China and Japan have emerged as the leaders of an exodus from US Treasuries in June following the first signals from the US central bank that it could end its stimulus packages, new data shows.  The two nations accounted for nearly all the record $40.8bn of net foreign selling. The sales were part of a $66.9bn of net sales by foreigners of long-term US securities in June – the fifth straight month of outflows. China, the largest foreign creditor reduced its holdings to $1.276tn and Japan reduced its holdings for the third month in a row to $1.08tn.....no doubt the Bank for International Settlements in Basel are behind this story. The central bankers bank has been forcing banks to increase their capital reserves for several years. This action has largely assisted the global recession. Banks unable to lend. The Basel 1,2 and 3 accords are now fully in action, the latest one coming into action earlier this year. The BIS operated outside government control. Meeting in Switzerland no Swiss officials are allowed to attend their meeting's. They are accountable to no one and control the global economy. The fed is just a private consortium of banking families pulling the chain of the US. Expect more bank mergers as they struggle to meet the higher and higher capital reserve targets set by the BIS.

Stock market jitters = lots of opportunities for traders to sell something, buy it back, sell it again a bit later, buy it back again, sell something they don't even own, place a bet on the volatility all this buying and selling causes, fire up the computers to buy and sell at the speed of light, and pocket millions in commissions for totally socially useless activity.... Commissions that come from our pension funds.
Happy days in the "City" - trebles all round.

World leaders meeting at the weekend’s G8 summit in the US are to focus heavily on the European crisis Saturday, after President Barack Obama aligned himself with the new French president’s drive for more economic stimulus. ...AFP - Leaders of the world's most powerful nations were to focus their attention on Europe's economic woes Saturday after President Barack Obama threw his weight behind French calls for more pro-growth policies. Obama set the stage for a fractious G8 summit here by forging an alliance with new French President Francois Hollande over the need to jolt Europe back to growth. Fearing Europe's economic crisis is poised to worsen -- with dangerous repercussions for the US economy and perhaps his chances of re-election -- Obama weighed in, risking the ire of German Chancellor Angela Merkel who has championed an austerity-first approach. Shortly before welcoming Merkel and other leaders to the famed presidential retreat outside Washington, Obama noted Friday that events in Europe held "extraordinary" importance for the United States. The G8 needs to discuss "a responsible approach to fiscal consolidation that is coupled with a strong growth agenda," he said. To kick-off the summit a tie-free Obama greeted leaders shortly after dusk Friday at the threshold of his wood cabin for an informal dinner that lasted more than two hours. But the dressed-down atmosphere did little to relieve tensions, which have been stoked by the belief that two years of painful cuts demanded by Germany and others have undercut Greek growth and made recovery more difficult. In what may have been a telling moment, Obama greeted Merkel at his Laurel Lodge with a cordial: "How've you been?" When her response came: a shrug and pursed lips, Obama conceded: "Well, you have a few things on your mind." Publicly European leaders have attempted to smooth over the splits within the G8, insisting austerity and stimulus need not be mutually exclusive. "We need to take action for growth while staying the course in terms of putting our public finances in order. Stability and growth go together, they are two sides of the same coin," European Commission chief Jose Manuel Barroso said ahead of the summit. But with Greece's fiscal crisis apparently approaching denouement, those good words may be sorely tested....
The euro zone crisis is set to dominate four days of intense diplomacy which began in Washington Friday morning and continued through a meeting of G8 leaders at the presidential retreat Camp David on Friday evening. Discussions will continue there on Saturday and on to a Nato meeting in Chicago.
In talks at the White House, only hours before the Camp David summit, Obama met the new French president, François Hollande, for a one-to-one conversation in which he explored the possibility of a new approach to the eurozone crisis based on a pro-growth, stimulus strategy. Obama has been pressing for such a strategy for the past three years and has a potential ally in Hollande.
The White House welcomed what it sees as a change in the debate since Hollande's election that tilts the balance slightly more in favour of a growth strategy. The French president is proposing an EU-wide financial transaction tax (FTT) that could raise up to €57bn a year that could be used to stimulate the 27-nation bloc. After meeting Obama, Hollande was scheduled to meet David Cameron in Washington before flying to Camp David.
However on arriving in the US, Cameron said: "On the financial transactions tax I'm very clear. We are not going to get growth in Europe or Britain by introducing a new tax that would actually hit people as well as financial institutions. I don't think it is a sensible measure. I will not support it."

With unemployment officially nudging 790,000 – although believed to be far bigger with the closure of some 150,000 small and medium-sized businesses over the past year – there are fears that Greece, the country at the centre of Europe's worst financial debacle in decades, is slipping inexorably into political and social crisis, too. Rising racist tensions and lawlessness on the streets this week spurred the soft-spoken mayor of Athens, Giorgos Kaminis, to describe the city as "beginning to resemble Beirut".With unemployment officially nudging 790,000 – although believed to be far bigger with the closure of some 150,000 small and medium-sized businesses over the past year – there are fears that Greece, the country at the centre of Europe's worst financial debacle in decades, is slipping inexorably into political and social crisis, too. Rising racist tensions and lawlessness on the streets this week spurred the soft-spoken mayor of Athens, Giorgos Kaminis, to describe the city as "beginning to resemble Beirut".

ATHENS—Greece was paralyzed by a nationwide general strike Wednesday as hundreds of thousands of workers, shopkeepers and civil servants walked off the job in a 24-hour protest over the government's austerity program. The strike affected public services, with government ministries, local government offices, courts and schools all closed, and hospitals and many state-owned enterprises running with reduced staff. Mass transit around the capital ground to a halt as bus, trolley, tram and subway operations were suspended, and Athens's electric rail operated on a reduced schedule. More than four dozen domestic flights were canceled ahead of a four-hour walkout by air traffic controllers, and ferry operations to Greece's islands were also suspended. "The austerity measures are beginning to affect all of society even more now. The economic situation is becoming very difficult for both Greek businesses and for workers," said Anthony Livanios, an independent political economist and commentator. "Even so, the government appears determined to continue with its policies." Recent public opinion polls showed seven out of ten Greeks expect the austerity program to continue even beyond 2013 when the current bailout deal with the EU and IMF ends. The ruling Socialists have seen their popularity drop sharply in the past year, although they still retain a 3.5 percentage-point lead over the center-right opposition.

BERLIN - The succession of European Central Bank President Jean-Claude Trichet will not be a topic at this week's Group of 20 meeting and will be dealt with after March, German Finance Minister Wolfgang Schaeuble said on Friday. "We will then see (if there will be a German candidate). The important thing is that we will have a good candidate," Schaeuble added in an interview with German radio channel Deutschlandfunk.BCE,EURO,Dollar,RON,Crisis Agerpres, Mediafax
FRANKFURT - Emergency borrowing from the European Central Bank remained exceptionally elevated for a second straight day on Friday, intensifying speculation that one or more euro zone bank might be facing new funding problems. ECB figures showed banks borrowed more than 16 billion euros in high-cost emergency overnight funding, the highest amount since June 2009 and well above the 1.2 billion euros which banks were taking before the figure first jumped on Thursday. The ECB gives no breakdown of the borrowing figures and declined to comment on Friday when asked for an explanation for the jump. Traders remained unsure whether the spike was due to a serious funding issue or whether a bank had simply made an error earlier in the week by not borrowing enough at the ECB's regular weekly funding handout. If a bank, or number of banks, did not get enough funding, and were unable to make up the difference in open markets, they would be forced to use the ECB's emergency facility until the next ECB tender came around. The next ECB offering is on Tuesday, banks get the money on Wednesday, meaning any change would evident in figures published early on Thursday. "As no bank or banking group from any euro zone country is aggressively seeking money in the interbank market at the moment, it is likely that something went wrong at the main refinancing operation," said one euro zone money market trader. "The bank or banking group needs to tap the ECB for the money whether they like it or not, or they are doing that so as not to appear active on the money market and to thereby be stigmatized," he added

European bank shares were down 1 percent by 1100 GMT while the euro fell against the dollar and other major currencies for much of the morning. Money markets showed little reaction, however. Key euro bank-to-bank lending prices remained on a downward trajectory, a direction traditionally at odds with rising tensions. The theory that the spike was due to human error appeared to be supported by data from the ECB's latest weekly funding operation. Banks borrowed the lowest amount since June at the tender, 19 billion euros less than the previous week and well below expected demand of around 160 billion euros.

However, a monetary source in Italy, speaking on condition of anonymity, told Reuters that the increase in borrowing was not a technical problem and was a sign that money markets were still not functioning correctly and geographically split in the wake of the global financial crisis. The source said the Italian banking system continued to have good access to money markets, while high-level Spanish financial source said the jump was not down to Spanish banks. The borrowing jump added extra complexity to the question of whether the ECB will scale back, or extend, its money market support measures at its next meeting on March 3.

ECB President Jean-Claude Trichet said in a recent interview that the health of money markets had improved, although Belgium's Guy Quaden said this week liquidity support remained necessary. "If the increased use of the marginal borrowing facility is due to new problems in the banking system this would call for an extension of the ECB's liquidity support," said UniCredit analyst Luca Cazzulani. "The ECB knows exactly who is borrowing the money and why they are doing it. If it is due to a mistake then it should not influence their thinking at all." The extra 0.75 percent which banks have to pay for overnight funding from the ECB normally means it is used only as a last resort. The last time before this week that overnight borrowing exceeded 10 billion euros was on June 24, 2009, when it was 28.7 billion euros, the highest ever. This year, emergency overnight borrowing has been above 1 billion euros only twice. Traders said while mistyping the required amount or missing the ECB's tender altogether would be an unlikely mistake, it could happen. "It would be a huge oversight and pretty unlikely but it is possible if a lot of things conspired against you," said one London-based money market trader. "If it is a mistake then someone's boss is not going to be very happy." A number of banks, mainly from the euro zone's most debt-strained countries but also troubled banks in core countries, remain barred from open money markets and almost completely dependent on the ECB for funding.

Financial-Banking Analysis

For the new democracies and market economies of the Eastern European region, 2009 has been a rude awakening, the biggest shock since they switched from Soviet communism to western capitalism 20 years ago. "There is no doubt the region is in deep crisis," said the European Bank for Reconstruction and Development last week. "The worst output collapse since the great recession that followed the end of communism."

Most analysts expect the National Bank of Romania to come with a less optimistic forecast as far as this year's price increase is concerned, after last autumn it expected inflation to slow down to 3.4% in December 2011, i.e. close to the official target of 3%. According to an internal survey conducted by the Association of Financial-Banking Analysts, the average analyst forecast for the 2011 inflation is 4.3%, i.e. also above the upper inflation target limit.
The main risks now have to do with the international trend of making food and fuels more expensive, which has already been felt on the Romanian market. Last year consumer prices climbed nearly 8%, although the official inflation target was 3.5%. The shock of the VAT hike from 19% to 24% in the summer, as well as the food price increases that occurred in autumn overturned the downward trend of inflation.

The complete destabilisation of the Arab world by the imminent fall of the Mubarak regime in Egypt will reset the strategies of world leaders. We could witness policies of stockpiling and rationing fuels and basic products, believes professor Daniel Dăianu. The imminent fall of the Mubarak regime under pressure from the hundreds of thousands of people taking to the streets for the sixth day in a row will change the balance of power in international politics. Economically speaking, the prices of oil and food, already under pressure, are the most affected by the Middle East instability.
The political change in Egypt, which has now reached a population of 80 million, is a "Lehman Brothers" of the Arab world, says professor Daniel Dăianu.
"This is a very difficult situation, a Lehman Brothers of the Arab world, it is a much too hot potato for everybody. It is an event with a major political impact, the most important one since the fall of the Berlin Wall, it could mark this decade," says economist Daniel Dăianu. The collapse of American bank Lehman Brothers is the biggest bankruptcy in the history of the United States and the trigger of the international economic crisis.
Daniel Dăianu believes the political unrest in Northern Africa and the Middle East comes at a time when all countries have had to make spending cuts as a result of the world economic crisis, with the very viability of the welfare state being questioned. (Z.F.)

Denmark's Vestas, the world's leader in the field of wind farm technology, with turnover worth above 6bn euros in 2009, decided to open an office in Romania this year considering the company has already sold turbines with a 450 MW capacity for investments in Dobrogea. After six years' research, Vestas now says it is time it started developing domestically.
"We have been eyeing Romania over the past five or six years, but it is now that we decided to open a local office. This is a decision that proves the domestic market has reached a certain maturity. We are in the right place at the right moment. Romania is the most promising country in Eastern Europe," says Hans Jorn Rieks, chairman for Central Europe with Vestas.
The best-known wind farms due to be equipped by Vestas are the ones being built by Energias de Portugal in two towns of Dobrogea, Pe[tera and Cernavod`.
According to Rieks, the big concern as regards the Romanian market is legislation. "The existence of clear legislation will open the market to several players as banks are always looking at something tangible and are not willing to take on risks," he says. (Z.F)

BRUSSELS, Jan. 27 - The European Financial Stability Facility (EFSF), the rescue fund set up by Eurozone countries last May, Tuesday saw strong demand for its debut bond issued to raise cash for Ireland. Demand for the five-year bond was reportedly nearly nine times of the 5 billion euros (6.8 billion U.S. dollars) on offer, which is seen as a sign of confidence in the facility. Klaus Regling, chief executive of the EFSF, said that the strong demand "confirms confidence in the strategy adopted to restore financial stability in the euro area." The 440-billion-euro (580-billion-U.S. dollar) EFSF is not offered directly by eurozone countries, but guaranteed by them to borrow money by issuing bonds on the market for debt-laden eurozone members. According to the aid package endorsed by European Union (EU) finance ministers last November to Ireland, the EFSF, will raise 17.7 billion euros in total for Dublin.

Earlier this month, the European Commission also raised 5 billion euros for Ireland through its first bond issuance under the European Financial Stabilization Mechanism (EFSM), which is guaranteed by the EU's budget. Markets snapped up the bond within one hour.

Recently, Grzegorz Konieczny, general manager of Franklin Templeton and portfolio manager of FP (Fondul Proprietatea), was quoted as saying by Reuters that the Government had to sell holdings in order to pay back the IMF programme. He said Fondul Proprietatea (Property Fund) expected the Government could raise nearly 1.5 euros selling shares in state-owned companies in the next couple of years. Agerpres,Mediafax,
So far, the authorities have only paid interest on the nearly 20 billion-euro record-high loan sealed with the IMF, the European Commission and the World Bank nearly two years ago.
The first principal payment will be made on August 6th 2012 and will amount to 546 million special drawing rights (SDR), i.e. over 600 million euros at the current SDR value.
"The repayment of the loan is done in instalments. There is no major pressure involved. Under no circumstances is the Government unable to repay the loan unless it sells holdings in state-held companies. The sale is a solution that can be considered. The Government's intention to sell stakes on the stock exchange has been previously announced. It is not unexpected. But I don't think the Government is forced to do this amid pressure to repay the loan," said analyst Aurelian Dochia.
On another note, as part of the new precautionary arrangement with the IMF, the state-run companies will be much better monitored, considering the high level of arrears, and the Fund believes the resources derived from privatising viable companies could provide cheaper financing of the budget deficit, sources close to the negotiations say.
On the other hand, while the arrangement with the IMF will continue in some form or another, the continuation of the agreement with foreign banks on maintaining exposure to Romania is not ironclad, and may be dropped, as parent banks maintain exposure voluntarily, sources close to the talks say. (Z.F.)

The outgoing head of the CBI today strongly criticised the government's lack of strategy for economic growth and warned that ministers would fail to reduce Britain's budget deficit without measures to boost demand. Sir Richard Lambert used his last big speech as director general of the employers' organisation to accuse the Conservative-Liberal Democrat coalition of taking policy initiatives for political reasons "apparently careless of the damage that they might do to business and to job creation". Speaking on the eve of the release of official growth figures expected to show a slowdown in the pace of economic expansion in the final three months of 2010, Lambert backed plans to cut the deficit but said they had to be accompanied by increased output and employment, which would increase tax receipts. "The sooner we can get output back up to the levels that were expected before the recession, the quicker government revenues will rise to narrow the fiscal gap. "It's not enough just to slam on the spending brakes. Measures that cut spending but killed demand would actually make matters worse." Lambert said the government had been single-minded, even ruthless, in the pursuit of spending cuts but had not been "nearly so consistent" when it came to policies that supported growth. "It's failed so far to articulate in big picture terms its vision of what the UK economy might become under its stewardship."

Lloyds Banking Group has begun a mass mailshot of 231,000 letters offering possible refunds to Halifax customers who may have been mis-sold payment protection insurance on their credit cards, under a costly and large-scale outreach programme codenamed Project Kestrel. Internal documents obtained by the Observer reveal that 8,300 letters went out last Monday. Almost a quarter of a million will be dispatched by mid-February, asking credit card customers to contact a special call centre operated by outsourcing firm Capita. The exercise by Lloyds, which is 70% owned by the government and is the parent of Halifax, Bank of Scotland and Lloyds TSB, comes amid an ongoing furore over the mis-marketing of so-called PPI policies which protect cardholders against debts if they lose their jobs, fall ill or have accidents. Analysts believe Lloyds could face a bill of more than £1bn for compensation if it were found to have mis-sold PPI.

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The euro edged higher against the dollar on Tuesday as the arrest of a slide in Chinese shares boosted risk appetite, but its gains were limited by uncertainty over whether officials will agree to beef up a euro zone safety fund this week. The euro dipped initially but later pared its losses against the dollar as Chinese shares showed signs of stabilising after the previous day's 3 percent slide, lending some support to risky assets.
The euro's rise against the dollar picked up some steam on stop-loss buying, helping push the single European currency 0.1 percent higher on the day to $1.3305, up from an intraday low of $1.3254. But doubts that euro zone policymakers would reach a quick decision on whether to enhance a rescue fund aimed at quelling a sovereign debt crisis, which has forced Greece and Ireland to take bailouts and put nations such as Portugal and Spain under heavy pressure, remained the euro's Achilles' heel.

When investors begin to lose confidence in a country’s ability to pay off its debt, they demand higher interest rates on the country’s bonds to cover the risk of loaning it money. When its borrowing costs rise, an ailing country has an even harder time raising money to pay off the debts it has. Borrowing costs are up this year in European countries considered more vulnerable as investors look to put their money somewhere they think is safer. Growing into its role as a global economic power, China is pledging to buy billions of dollars' worth of bonds in European governments to help restore confidence in the debt-ridden region. The move is the latest evidence that the giant Asian nation is developing ties with strategically important trading partners and expanding its influence in areas where it has long played a minor role. In what European media have dubbed a charm offensive, Chinese Vice Premier Li Keqiang was all smiles on a recent swing through the continent, assuring the Germans that their economy was complementary to China's and praising the Spanish as good friends. He also dispensed plenty of largess, promising to aid the souring economies of Spain and Portugal — pledges that were seen as more than just goodwill.

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The European sovereign debt crisis eased today after Spain and Italy attracted sufficient buyers for their bond sales, albeit at an increased price. The relatively successful multibillion-euro auctions pushed the currency 1.8% higher against the dollar to $1.336, and sent European bourses rallying. The Ibex index of Spain's most traded shares rose 2.7%, with Santander up 4.8%. Spain sold €3bn of five-year bonds but was forced to pay 4.5% – nearly a full percentage point more than at an auction in November, but still less than the level some had anticipated. The sale was twice oversubscribed.Italy auctioned €6bn of five- and 15-year bonds. The two countries, which along with Portugal have been fighting investors' scepticism over their finances, benefited from the stronger support given by EU officials this week. The EU has been widely criticised for doing too little too late in the year-long debt crisis, escalating the market panic that ultimately tipped Greece and Ireland into a bailout.

"Budgetary discipline can no longer be a theoretic figure in a political pact, but must be enforced in all budgets in the European Union. This is the only way forward, if we want to provide a long-term solution to the financial crisis", said Joseph Daul MEP, Chairman of the EPP Group, in a comment to the start of the "European Semester", a budgetary monitoring exercise decided by the EU. "Balanced national budgets are essential in order to guarantee economic and social stability and to provide better investment conditions for the creation of jobs and growth and allow Europe to increase competitiveness. European Economic Governance is therefore a prerequisite to maintaining the successful European model of social market economy", said the Chairman of the European Parliament's largest political group.

"I also wish to thank EU Council President Hermann van Rompuy for his courage and energy in heading the task force which led to the necessary strengthening of the budgetary control mechanisms in the European Union", said Daul.