China’s central bank has rushed to pump money into the stalling banking system but markets across Asia still fell sharply amid fears that the world’s second-largest economy faces a credit crisis.

Cash rates on China’s money markets jumped after the move by the People’s Bank of China (PBOC) to ease a liquidity squeeze on banks. Both the Shanghai Composite Index and Hong Kong’s Hang Seng Index also fell amid concerns over structural problems in China’s financial system.

The Chinese seven-day bond repurchase rate, which essentially measures liquidity in the financial system, climbed to 7.6pc its highest since fears over a banking crisis in China first emerged over the summer.

State media in China had reported that the PBOC has unexpectedly pumped $33bn (£20bn) into the domestic money market through what it refers to as “short-term liquidity operation”.

“The focus is again on China where there is plenty of discussion on the squeeze in interbank funding markets,” said Deutsche Bank in a note to investors Friday. “The repo rate is now higher than yesterday amid market talk of a missed payment at a local Chinese bank. This is something to monitor over the next few days.”

Fears over a looming Chinese debt crisis spurred by a poorly regulated and opaque financial system stoked fears over the summer that the Asian powerhouse could finally be on the brink of a sharp slowdown in growth.

Much concern also surrounds what has become known as the “shadow banking” system that allows the Chinese to borrow money beyond their means.

Borrowers across the struggling eurozone economies received an unexpected fillip on Thursday when the European Central Bank cut interest rates to a fresh record low, in a bid to stave off a slide into deflation.

After its monthly policy meeting in Frankfurt, the ECB's governing council announced that it would reduce its key refinancing rate to 0.25%, from 0.5%.  While the economy of the 18-member single currency area clambered out of recession earlier this year, Mario Draghi, the ECB's president, warned that the outlook could deteriorate in the coming months.  "The risks surrounding the economic outlook for the euro area continue to be on the downside," he said. "Developments in global money and financial market conditions and related uncertainties may have the potential to negatively affect economic conditions. Other downside risks include higher commodity prices, weaker than expected domestic demand and export growth, and slow or insufficient implementation of structural reforms in euro area countries." As well as the rate cut, which took financial markets by surprise, Draghi said the ECB would continue making low-cost loans to eurozone banks until at least mid-2015, to try to prevent the financial sector from seizing up.

Howard Archer, of consultancy IHS Global Insight, said: "The fact that the ECB chose to act now rather than wait until December when the governing council will have the ECB staff's new eurozone GDP and consumer price inflation forecasts suggests that the bank felt there was a compelling case for prompt action."

With inflation running well below the ECB's 2% target, at just 0.7% in October, a growing number of analysts have started to warn that deflation – which can be disastrous for economies carrying a heavy debt burden, as prices and wages fall while debt-levels remain fixed – is a real threat. Draghi suggested at his press conference that, "we may experience a prolonged period of low inflation".

Lies and deceit ....

Besides the 26 trillion Dollars pumped by The FED in Budesbank, The ECB pumped more than €1 trillion (£840bn) of liquidity into the banks through two long-term refinancing operations (LTROs) to stabilize financial markets, in December 2011 and February 2012,  The move has come to be seen as the first step towards bringing Europe’s crisis under control and was reinforced by Mr Draghi’s promise in July last year to do “whatever it takes” to save the euro. Yesterday(MOn, addressing the European Parliament, he said: “We are ready to use any instrument, including another LTRO if needed, to maintain short-term money market rates at a level which is warranted by our assessment of inflation in the medium-term.”  His fresh commitment is likely to allay any lingering concerns about the state of Europe’s banks, which face another stress test in the coming months. His comments came amid signs of improvement in the eurozone economy. Business activity in the region picked up to a 27-month high in September, the closely-watched purchasing managers’ index (PMI) showed. Meanwhile, European markets edged lower as traders awaited news from Germany after Chancellor Angela Merkel’s election victory over the weekend. Traders urged her to strike a coalition deal swiftly to stop bail-out fears spreading among the eurozone’s troubled nations. Markets expect Ms Merkel’s Christian Democrats to go into partnership with the Social Democrats, the main opposition party, but observers noted that it took two months to negotiate an agreement last time the parties worked together. Given the fragile eurozone, traders called for Ms Merkel to move fast. Peter Schaffrik, head of European rates strategy at RBC Capital Markets, said: “If finding a new government takes too long, markets might get jumpy as regards the stability of the German government, particularly with key European issues – the Portuguese, Irish and Greek programmes – coming up for a negotiation." ... They will do whatever it takes to save the € up to and including - the theft of people's money in their bank accounts as per Cyprus - after all the sheep didn't protest - they just accepted their shearing without a murmur - and so will all the other sheep in the corrupt EU.

In September 1995, a secret agreement was signed inside the Romanian government giving convicted criminal Frank Timis the rights to mine Europe's largest gold deposit, located under the ancient mountain town of Rosia Montana. Soon after, the deposits were floated on the Canadian Stock Exchange, listed under Timis' firm, Gabriel Resources, a newly created mining company registered in the tax haven of Jersey, with no previous mining experience and a bank balance of close to zero.  Now, 18 years later, a near continuous rise in the price of gold has driven the value of the deposits under Rosia Montana up by 400 percent to over $20 billion, and the constant issuing of shares from Gabriel Resources has drawn in nearly a billion dollars to the project.   Restructured and rebranded as the Rosia Montana Gold Corporation (RMGC), the company has launched the biggest PR campaign Romania has ever seen. It also bought up most of the town of Rosia Montana and the four surrounding mountains, all of which would have to be flattened to make way for the open-cast mine, funded multiple NGO's, museums and a high-profile documentary to support their cause.  Yet the mine remains unopened. The company is unable to get past public opposition that has mobilized tens of thousands across the country, and a legal system that deems the project unlawful on three counts -- under environmental law, international mining laws and the Aarhus convention for transparency in decision-making.   But all of this is set to be overridden. At the end of August, Prime Minister Victor Ponta signed a proposed law that would annul all of the legal barriers standing in the way of the Rosia Montana project and get the mine underway by the beginning of next year. The law, currently waiting on a parliamentary vote, would give the company extraordinary powers. The hundred or so villagers who have refused to sell their homes in Rosia Montana would be forcefully expropriated, escorted by RMGC's private security firm and compensated at a rate set by the company. The government would then be mandated to issue all necessary permits for construction and exploitation on set terms drawn up by the company, allowing the project to begin well before the new law could be challenged in the European Court of Justice. Once passed, the law would also apply to all new mining projects in the country -- which sparks fears that, given the mineral richness of the Transylvania region, extend far beyond Rosia Montana. Three days after the law was proposed, thousands of people took to the streets in opposition. In the weeks since, the protests have grown and spread, with each successive Sunday bringing activists to the streets of cities increasingly far removed from the hills of Transylvania. The demonstrations are held in cities as far flung as Budapest, Berlin, London, Washington, Singapore. This weekend, protests are set to be larger still and, the organizers believe, they will keep growing "until something gives and our demands are recognized."  The scale of the protests reflects the size of the environmental risks involved. Using outdated techniques, 13,000 tons of cyanide are to be be pumped into the mine each year. This is over 130 times the amount used in the Romanian Baie Mare gold mine at the time of the catastrophic cyanide spill in 2000, Europe's worst environmental catastrophe since Chernobyl. Nevertheless, the extent of the opposition has surprised everyone, from the protest's organizers to government officials and, crucially, Gabriel Resources' shareholders, who have been selling off in droves, causing the company's stock price to crash.  But the significance of the case extends far beyond Rosia Montana. Ramona Duminicioiu, a constant figure in the Save Rosia Montana movement for over a decade, sees it as part of a process that links movements as diverse as the Occupy protests in America to this year's uprisings across Europe, from Bulgaria to Turkey, Greece and other countries. "This is a case of our elected government putting corporate interests over public priorities and then blocking any democratic process of opposition through legal measures," she says. "It resonates far beyond Romania as this is a crisis of global capitalism and impotent governments."   The actions of the Romanian government over the last fortnight certainly suggest a political powerlessness in the face of the proceedings. After the first protests, President Traian Basescu, always an avid supporter of the mine, came out condemning it on environmental grounds, stating that it should not go ahead given that the majority of Romanians are opposed to it. Soon after, Prime Minister Victor Ponta announced an emergency procedure that would, he claimed, stop the project once and for all.   Then, as Gabriel Resources' shares plummeted, the company threatened to sue. They claim that if members of parliament vote against the project they will "commence litigation for multiple breaches of international investment treaties for up to $4 billion." Ponta's emergency procedure was soon abandoned and a new committee was created that seems to allow the law to bypass both the Senate and Chamber of Deputies and be put directly to vote in parliament. However, with the new committee apparently unburdened by regular transparency regulations and the government unavailable to comment, the situation as it stands is unclear.   Whatever happens, the Romanian government is unlikely to survive the coming months in its present form. Calls for the removal of the Ponta-led Social Liberal Union (USL) coalition, brought into power largely on the back of promises that they would stop the Rosia Montana project, are increasingly dominating the protests in Bucharest. Meanwhile, the coalition is visibly shaky, one minute declaring unity in its approach to the mine and the next publicly threatening to split over the issue.   But the stuttering rhetoric of party politics has always felt more like a comic interlude than the main plot line in the story of Rosia Montana. For over a decade and a half, the Romanian government has swung back and forth on the issue but never been able to make any final decision.   "We still don't know the exact nature of the original contract signed between the government and Gabriel (Resources)," says Duminicioiu, "but as it is clear that the vast majority of Romanians oppose the mine. If the project goes ahead, it must be stronger than democracy."  What happens then? "We keep fighting, until we have a government that can represent its people," she says.

Apparently, there's now an idea for the smaller countries in SE Europe to come together to confront Germany as a group?

One old family friend was taken off to Mauthausen and his widow received nothing until the early 1970s, and even then it was a pittance - a few hundred deutschmarks.

It's a scandal that because the eastern half of Europe fell under communism, this meant Germany ended up paying nothing until the détente of the 1970s, by which time many claimants were dead.

And as I said, even in the 70s, the amounts paid out were pittances.

This issue affects so many countries. If proper compensation were to be paid now, the amount would be enormous.

 

I think the Eurozone has to admit this now looks more like a fire sale rather than a rescue....Face the facts Cyprus, Portugal, Spain, Slovenia, Greece, Italy are bankrupt and in the process the Eurozone has in effect done the same to France by spreading the unfunded debt across the rest of the eurozone. To pay for this they have forced the countries into an ever increasing depression of cuts, job losses, and poverty for the citizens of these countries.  This will flow back through the rest of the Eurozone as people just stop spending and companies find they have no one to sell to. 

The Germans are in effect now confiscating or asset stripping those countries of there last assets - individuals savings, gold etc.
The disaster that predicted by many is now happening - meanwhile the eurocrats keep saying everything is okay - I think everyone needs to remind them of TITANIC - there are not enough lifeboats left!

Draghi's expanding battery of weapons for combating the euro crisis is to be strengthened immensely on Wednesday when the European Commission unveils new draft legislation putting the ECB in charge of supervising the eurozone's 6,000 banks, with the power to grant and withdraw licences. Within a month of taking office last November, Draghi delivered a coup, launching a trillion-euro programme of cheap loans for Europe's banks. Last Thursday he went much further, announcing a new policy of limitless purchasing of eurozone government bonds known as OMT — outright monetary transactions. The markets went quiet, Spain, Italy, and Ireland rejoiced, as Draghi emphasised for the third time in six weeks that the euro is irreversible. He framed his bold intervention as solidly within his remit to defend the embattled currency. But German monetary purists erupted in howls of protest, although it was the German on the ECB's six-strong executive, Jörg Asmussen, who played a key role in drafting the new policy. "Only a currency whose existence is out of the question can be stable," Asmussen told the Guardian in an interview. "What for us is clearly within our mandate is to guarantee the stability of the euro." Extreme times generate extreme moves. There is no doubt that the eurozone's exhausted political leaders are quietly relieved that Draghi is taking some of the heat out of the crisis. While Merkel, the central actor in the euro drama, could never say so publicly, her aides have been known to concede that Draghi is the only person who can rescue the euro – so let him get on with it. And since the stakes could hardly be higher, for Asmussen the end would appear to justify the means.

Well....as far as Spain goes :

Option 1 :
a country like Spain asks for a bailout and has its budget (and therefore its entire legislative programme) subject to the oversight of the ECB. Death of democracy.
Option 2 :
a country like Spain asks for a bailout but refuses the oversight of the ECB on its legislature ; spurned by the ECB and the markets it crashes out of the Eurozone. Death of the Euro.

Same , same, no answers , just tricks, smoke and mirrors...

Same crisis, different summit. What is estimated to be the 18th emergency summit of the eurozone crisis gets under way today. Rather than agree any constructive plans to alleviate the currency region's problems, the meeting will give vent to the new political divisions that have arisen since elections in Greece and France. In the spotlight will be the latest supposed panacea for the eurozone's woes - so called eurobonds. The idea is that eurozone countries club together and issue debt collectively which will ultimately carry a credit rating underwritten by Germany. That would help insolvent countries such as Greece borrow on the international capital markets and allow extremely hard up nations, such as Spain, raise capital to bail out their banks. What it won't do is address the fundamental imbalances and policy differences within the eurozone. Angela Merkel is implacably opposed to euorbonds while other major nations such as France and Italy are in favor, as are the likes of the IMF. What is new this morning is the personnel at the summit where Merkel will find herself increasingly isolated now Nicholas Sarkozy is out of office. His successor, Francois Hollande, will meet his Spanish opposite number ahead of the summit to agree tactics and agenda items. We are now witnessing the start of political fracturing within the euro system with the anti and pro-austerity camps creating two broad groupings which will shape the immediate debate around the currency and could provide an obvious fault line along which the eurozone may ultimately split.
Christine Lagard , managing director of the IMF, has told BBC Radio this morning that Greece will have to do more if it wants to stay in the euro. We have to be prepared for all situations, she said, referring to a possible Greek exit.
Adding to the sense of economic unease, the World Bank has cut its Chinese growth forecasts over night to 8.2pc from 8.4pc. That still sounds robust but the World Bank said a slowing China will drag growth in emerging East Asia to two-year lows this year, warning Europe's seething debt crisis could inflict even bigger damage if it worsens.

Like they say, it not who votes that counts, it's who counts the votes.

Whoever becomes the next French president will have no state of grace, leading a country crippled by public debt and in economic crisis, with unemployment nudging a record 10%, a gaping trade-deficit, stuttering growth and declining industry. France's public debt is so high that interest repayments alone account for the second highest state expenditure after education. The rating agency Standard & Poor's this year downgraded France's triple-A credit rating, citing in part its over-high state spending for straining public finances. Both Hollande, a moderate from the centre ground of the Socialist party, and Sarkozy have promised to balance the books – France hasn't had a balanced budget for more than 30 years.

Hollande's manifesto is based on scrapping Sarkozy's tax-breaks for the rich and putting up taxes for high earners to finance what he deems essential spending, including the creation of 60,000 posts in France's under-performing school system. He has pledged to keep the public deficit capped but for his delicate balancing-act to work, he needs a swift return to growth in France, despite economists warning of over-optimistic official growth forecasts that need to be trimmed.

Hollande beat Sarkozy by about half a million votes in the first round of voting on 22 April.  The first round turnout of around 80% was higher than expected and is being closely watched again, with polls suggesting Sarkozy's best chance of an upset comes from an even greater voter turnout on Sunday.

European debt crisis --Barclays Capital caught the mood best – the result was "more than expected but not enough to make us sleep soundly". First, the definite good news. The yield on Greek two-year debt has plunged from 40% to 28%. Clearly, even the lower rate shows Greece is miles away from being able to fund itself in the market. But the danger of an imminent chaotic default has been removed by the eurozone's softer stance on lending. The country will get €109bn (£96bn) of loans at 3.5%, ranging from 15 years to 30 years in length. The banks will volunteer (ie have their arms twisted) to join the relief effort, but not by so much as to trigger worries about holes being ripped in their balance sheets. The precise sums are hard to determine given the complexity of the volunteering menu but the hit to the private sector could be €50bn for 2011-14, calculate analysts; banks will count that as a good result for themselves. But will the assistance be enough to shift Greece back on the road to financial solvency? And is the eurozone now equipped to cope with an outbreak of worry about Spanish and Italian debt? It is hard to answer "yes" to either question. The debt-relief programme simply doesn't look big enough to be a permanent solution. The country's debt-to-GDP ratio, previously set to hit 160%, could still emerge as high as 130% and its economy still looks too uncompetitive and too weak to allow higher tax rates to take a meaningful bite out of the debt pile Well, four years after the beginning of the 2007-8 financial collapse, this time it is different. After a recession, one normally expects a recovery in the major industrial economies. This time, recovery has had to be postponed – except, for a time, in Germany. Which is a disappointment, evidently, to our chancellor, George Osborne, who last week conducted a dramatic U-turn with regard to his party's view of the eurozone. Our very Conservative chancellor is now in favour of greater European integration, and has declared that "the remorseless logic" of monetary union is greater fiscal union. The "remorseless logic" is hardly news to those of us who, while being pro-European, were always concerned about the deficiencies of a monetary union without a full fiscal counterpart. But what is new is the chancellor's enthusiasm for it. The motive for this change in Treasury – as opposed to Foreign Office – policy towards the eurozone is not at all hard to find. Osborne was quite candid: if the eurozone crisis spirals out of control – 40% of our exports go to the eurozone – it will exacerbate what Osborne acknowledges is Britain's "tough" economic situation.

Germany and other euro-zone nations are pushing for some form of burden-sharing—for instance, delaying repayments to private-sector bondholders whose debt is about to mature. The European Central Bank is opposed. Mr. Van Rompuy's meeting will include ECB President Jean-Claude Trichet, Luxembourg Prime Minister Jean-Claude Juncker, European Commission President José Manuel Barroso and EU economy commissioner Olli Rehn. Many of the attendees are scheduled to be in Brussels on Monday for a regular meeting of the group of euro-zone finance ministers, of which Mr. Juncker is chairman. The wider finance ministers' meeting, too, is expected to include the Greek problem. A senior euro-zone official called Mr. Van Rompuy's meeting a precursor to the already scheduled Monday evening meeting of euro-zone finance ministers. "There are various concerns and worries about the progress of the second bailout package [for Greece], mostly because of little progress in the private-sector involvement," said the official. "It's not moving at the expected pace." Another EU official said there are several preparatory meetings that take place before finance-ministers' gatherings, adding this is "no emergency whatsoever." Mr. Barroso's spokeswoman said he will attend his regular coordination meeting with Mr. Van Rompuy, "enlarged to other actors, as has happened in the past." Meanwhile, Italy's stock-market regulator late on Sunday introduced temporary measures aimed at curbing speculative attacks on the Milan stock market, in a move that tries to respond to a wave of selling that hit Italian bank stocks on Friday. Stocks closed down 3.5% on Friday and the spread between 10-year Italian and German bond yields reached a record 2.47 percentage points on escalating concerns that debt-laden Italy might be dragged into the European debt crisis. A group of five Italian banks underwent a stress test, the results of which will be released July 15. The new measures in Italy require market operators to disclose short-selling moves above certain levels, according to a statement released by Consob, the regulator. The measures will be effective starting Monday and will remain in force until Sept. 9, the statement said. EU leaders have agreed that some form of private-sector involvement is necessary for another emergency loan to Greece so that the burden on euro-zone taxpayers is lightened. It has been so far impossible to nail down exactly how private creditors should be involved. Ratings companies have said that efforts that leave private creditors in worse financial shape will likely compel the companies to declare Greece in default. ECB officials have said a default is unacceptable. Talks with groups of creditors have yielded few results. Charles Dallara, the head of the Institute of International Finance, a banking-industry trade group, said last week that a "selective default" by Greece need not be as dire as widely thought, if it were temporary. A selective default occurs when an issuer defaults on some of obligations but continues to service others.

Dublin and IMF

DUBLIN—After a week of declining offers of a bailout, Irish Finance Minister Brian Lenihan said Sunday he will recommend his government formally apply for an aid package from the European Union and the International Monetary Fund to shore up its public finances. Mr. Lenihan said on state broadcaster RTE Radio he will make the recommendation at a cabinet meeting later in the day. The finance minister said Ireland's banks have become "too big a problem for the country."
The government must now ensure that it is able to fund itself, that the economy remains stable and that Ireland can still borrow money in the financial markets, he added.
"So for all these reasons I will be recommending to the government that we should apply to a program and open formal negotiations," he said.
The step paves the way for the 16-country euro zone's second government bailout this year, following the emergency €110 billion ($150 billion) bailout plan for Greece in May.
Ireland will have to knuckle down on public spending to meet EU guidelines, which many worry will trigger protests like the ones seen in Greece. The Irish Congress of Trade Unions already has planned a protest Nov. 27 against more government cuts.
Irish bond investors could become better protected against default risk. But market watchers worry whether the latest blow to the prestige of the euro will intensify scrutiny on the finances of other fiscally weak governments, such as in Portugal or Spain.traian basescu,emil boc.vadim.radu tudor,imobiliare,restaurante,auto.ro,ziare.ro