Lucas Papademos requests document on “consequences” of a Greek default as France and Germany insist there will be no €130bn bailout unless the country agrees harsh [...]]]>

Lucas Papademos requests document on “consequences” of a Greek default as France and Germany insist there will be no €130bn bailout unless the country agrees harsh new austerity terms.

• Greek PM asks finmin to prepare eurozone exit report • Merkel, Sarkozy insist no Greek reforms, no €130bn bailout • EU commissioner: plans being made for Greece’s euro exit • Ernst & Young: Tobin tax to cost UK €22bn even with opt-out • Greece falters in debt talks with creditors • Bank of England to launch further £50bn of QE

= Latest =

21.13 That’s it from our live coverage this evening. Log (Xetra: A0B9YJ – news) on to our financial crisis page for more. We’ll be back tomorrow.

Goodnight!

21.10 Here’s a quick round-up of today’s events:

• German Chancellor Angela Merkel and French President Nicolas Sarkozy have insisted that Greece will not receive any more bail-out money unless it pushes through further austerity measures. In a later TV interview, Mr Sarkozy insisted that Greek bankruptcy “isn’t an option”.

• Meanwhile, talks continue in Athens. Greek PM Lucas Papademos has also asked his finance ministry to prepare a report on the “consequences” of a Greek default and eurozone exit.

• Expect lots of photos of angry people holding up banners tomorrow. Greece’s main unions have planned a 24 hour general strike.

• Portugal has denied that it is mulling options to restructure its debt.

We will not allow what happened in Greece to happen here.

PM Pedro Passos Coelho told reporters today.

• Oil prices rose on worries about Greece , Iran and tensions in Syria . Brent crude for March delivery rose nearly $2 to $116.52.

• And finally…The Ernst & Young ITEM Club has calculated that UK firms could be forced to stump up more than half the revenue from any financial transactions tax (FTT), even if David Cameron opts out ( see 16.50 ).

21.06 US stock markets have closed. Prices are still settling, with the Dow (NYSE: DPD – news) Jones industrial average currently down 0.13pc at 12,845.20, while the broader S&P 500 (SNP: ^GSPC – news) looks like it will close flat at 1,344.33.

20.16 Ahead of tomorrow’s planned 24 hour general strike, protesters in Athens have braved severe downpours to demonstrate against the upcoming austerity measures, including the 15,000 public sector job cuts announced today ( see 17.19 ).

Protesters hold a banner which reads ”Bread, Education, Freedom. Junta didn’t end in 1973” under a heavy rainfall outside the Greek Parliament in Athens (Photo: AP).

19.56 The cuts in Greece have hit all aspects of life, as this Olympic tale by Reuters’ Karolos Grohmann demonstrates:

The Greeks will march into the [London] Olympic stadium first, as tradition dictates, with a team numbering around 75, or half the size of the team it sent to the Beijing Games in 2008 — athletes’ dreams another victim of boom-time profligacy.

Apart from massive budget cuts for all Greek sports federations, gone are all the state incentives for athletes to succeed on the world stage.

“The debt crisis now has affected both sport and the National Olympic Committee. In the previous quadrennium (2005-2008) the Greek state paid around 30 million in total towards the country’s Olympic preparation,” said Kapralos, a former water polo player.

“We had agreed the same amount from the state (for 2009-2012). In 2010 and 2011 the amount we got from the Greek state was zero,” he said. “So our preparation has suffered.”

A general view of the Olympic Beach Volleyball Stadium in Athens. The rate of decay and dilapidation of Athens’ Olympic venues in just eight years provides a visual clue of maintenance costs too high for near-bankrupt Greece to operate (Photo: Reuters).

19.30 Meanwhile, Greece is still assessing €1.3bn of spending cuts for 2012 to satisfy the troika’s bail-out demands.

The cuts are part of total spending reductions of €3.3bn requested by the EU and IMF (Berlin: MXG1.BE – news) , state-run Athens News Agency (ANA (SNP: ^ANAY – news) ) reported.

The government has so far decided to cut health spending by €1.1bn, defence spending by €400m and local government subsidies by €440m, ANA said.

19.17 Following today’s meeting, German Chancellor Angela Merkel and French President Nicolas Sarkozy have been speaking in a joint interview on German and French television. Mrs Merkel said:

We want a rational solution, meaning we need a second program, but that can only happen when, in the opinion of the troika, the long-term sustainability of Greece’s finances is secured [...] we need the cooperation of private creditors.

Mr Sarkozy added that Greek bankruptcy “isn’t an option” but there could be no bail-out without reform.

The G reek government must do their homework and carry out their responsibilities.

he added.

Angela Merkel and Nicolas Sarkozy attend a TV interview at the Elysee Palace in Paris on Monday (Photo: AP).

18.45 However, in a Q&A session held after the speech, Mr Van Rompuy added:

I don’t say I am sure that we will overcome this problem [on Greece], because that would be considered by you a pep talk [...] It takes longer than we thought.

18.36 Mr Van Rompuy continues:

I am not one to underestimate the obstacles on our way. Getting to grips with the crisis takes time because there is real social and political resistance that needs to be overcome, in all member states. Deep-seated resistance both in countries with weaker economies who have to reform and reduce their public debt and deficit, and an understandable reluctance in stronger countries to step in with loans for the others, when these loans by themselves do not solve the underlying problems. Moreover, both sides worry that the end is not yet in sight.

[...] Today we face such a moment of co-responsibility. Each country — and I am in particular thinking of Greece — is not only responsible for itself but also for the monetary union as a whole. We carry a common project, even if the choices are made nationally. Forgetting this in our actions undermines the common good.

18.28 European Council president Herman Van Rompuy has just finished delivering a speech on the European debt crisis at the University of Humboldt in Berlin. On the face of it, a Greek exit is not on the cards:

I am convinced that this experience will have an impact on the way the Union operates beyond the crisis, on the way we shape the Europe (Chicago Options: ^REURUSD – news) of tomorrow. Sixty years of integration has taught us that Europe is not built by dissolving Member States, but by infusing them ever more deeply.

European Council president Herman Van Rompuy

18.17 Ratings agency Fitch has downgraded the credit rating of several Italian banks following the country’s sovereign rating cut last month.

Intesa Sanpaolo (Dusseldorf: 575913.DU – news) , Italy’s biggest retail bank, has been downgraded to ‘A-’ from ‘A’, while Banca Monte dei Paschi (Milan: BMPS.MI – news) di Siena and Banco Popolare (Frankfurt: A0MWJR – news) are now rated ‘BBB’ from ‘BBB+’,

Italy’s largest bank by assets, UniCredit SpA , together with Banca (Santiago: BANCA.SN – news) Popolare di Sondrio (Milan: BPSO.MI – news) and Banco di Desio e della Brianza (Milan: BDB.MI – news) had their ratings affirmed.

In a statement, Fitch said:

Fitch expects a marked deterioration in Italy’s near-term economic outlook, forecasting a 1.7% GDP contraction in 2012 and only modest growth of 0.2% in 2013. This deterioration is likely to result in further asset quality deterioration and higher loan impairment charges, placing banks’ mostly weak profitability under further pressure.

The pressure on funding and liquidity for Italian banks, which had intensified during Q411, has eased somewhat as the result of access to three-year funding from the European Central Bank (ECB). . Nonetheless, Fitch believes Italian banks now face less predictable wholesale market access and structurally higher funding costs both on wholesale and retail sources.

Unicredit (MDD: UCG.MDD – news) , Italy’s largest bank by assets, had its credit rating affirmed by Fitch (Photo: AP)

18.01 While the IMF’s chief economist Olivier Blanchard has said that Greece probably won’t be able to return to the markets for funding “for a long time”.

Mr Blanchard also said that the haircut taken by creditors on Greek debt is likely to “be very large,” Reuters reported.

17.29 Our man in Brussels Bruno Waterfield doesn’t sound too optimistic:

Twitter: Bruno Waterfield – #eurozone : never heard the officials so downbeat on Greece, a real sense time might have run out, “it’s not looking good,” says one

17.19 Meanwhile, Greece has reportedly accepted demands to cut 15,000 public sector jobs this year.

Dimitris Reppas , Greece’s minister for administrative reform, made the announcement Monday, according to AP. Public sector jobs have so far been protected by the government during the crisis.

17.15 Bloomberg reports that Greek PM Lucas Papademos has requested the country’s finance ministry to prepare a document on the implications of a Greek default.

Mr Papademos asked the ministry:

to record accurately and realistically all the consequences of the country’s exit from the eurozone.

according to Panos Beglitis , spokesman for the socialist Pasok Party , who told Radio 9 :

It’s an important initiative because the Greek people should know exactly what consequences a bankruptcy and eurozone exit would have and thereby take their responsibility.

17.09 Chris Beauchamp , at IG Index, said:

After Friday’s tumultuous close to the week, today’s session has been very quiet indeed, with the FTSE down just 15 points.

Markets have been torn between two conflicting situations. On the one hand, we have a US economy that is seemingly recovering in an impressive fashion. Friday’s jobs number, the second remarkably positive figure in a row, is the basis for this narrative. On the other hand, we have Greece, an ulcer that has remained immune to every treatment the eurozone can throw at it. As a result, markets have refused to go lower today, but are also seemingly unable to make any upward progress, as investors can’t decide which of the two forces is the stronger. Do they opt to believe in the US decoupling story, with the world’s largest economy freeing itself from the shackles of recession at last, or do they keep worrying about Greece, as that country lurches ever closer towards the abyss of default?

17.05 Europe’s stock markets have closed.

The FTSE 100 in London finished down 0.15pc at 5,892.20, while the CAC (Frankfurt: 924169 – news) 40 in Paris closed down 0.66pc at 3,405.27, and the DAX 30 (Xetra: ^GDAXI – news) in Frankfurt finished flat at 6,764.83.

16.54 If the UK opts in, E&Y estimates that Britain would account for 77pc (€41bn) of potential FTT revenues. But even if we opt out, a “back door” tax could mean Britain is on the hook for 64pc (€22bn) of all FTT revenues.

And just to rub salt in the wound, E&Y says:

Moreover, these revenues would flow directly to governments in the Eurozone rather than to the UK Exchequer.

16.50 Analysis today by the Ernst & Young ITEM Club (hat tip to jouro Fabrizio Goria for highlighting) shows that UK firms could be forced to stump up more than half the revenue from any financial transactions tax (FTT)

…even if we opt out.

Why? E&Y explains :

the impact on the UK would depend very much on the design of the tax.

For example, there has been some discussion of the application of a reverse charge mechanism for the FTT, such that all trades denominated in euros would be subject to the tax, irrespective of where the trade takes place. As many eurodenominated trades take place in London, this could effectively impose an FTT on the UK through the ‘back door’.

The impact of a FTT on the UK would depend very much on the design of the tax. (Photo: PA)

16.01 Back to Portugal , where Reuters are quoting PM Pedro Passos Coelho as saying that the country is not in a “situation similar to Greece”. Mr Passos Coelho also insisted that the country’s debt load was sustainable.

We will not allow what happened in Greece to happen here [...] We hope that there will be the will to reach a new aid programme for Greece.

He said, adding that Portugal’s debt profile was closer to Ireland (Xetra: A0Q8L3 – news) than Greece .

Portugal’s debt to GDP ratio currently stands at 105pc, compared with Greece’s 160pc and Ireland’s 109pc.

15.48 Much has been made of the potential effect of the eurozone debt crisis on America. Just last week, Fed chairman Ben Bernanke warned that :

… developments in Europe or elsewhere may unfold unfavorably and could worsen economic prospects here at home .

However, Nobel Prize-winning economist Paul Krugman offers a different opinion :

It’s now conventional wisdom that the fate of the U.S. economy over the next three quarters — and hence, also, Obama’s reelection chances — depend on events in Europe. So maybe this is a good time to express some skepticism.

The map [ courtesy of Wells Fargo (Dusseldorf: NWT.DU - news) ] tells us that overall, exports to Europe are just 2 percent of GDP. Some states, notably South Carolina, are more exposed (presumably because of those European-owned auto plants). But Obama isn’t going to win South Carolina in any case. And more broadly, even a sharp fall in exports to Europe would be only a small direct hit to demand.

Click on the link above to see a larger version (Photo: Wells Fargo)

15.30 Meanwhile, Portugal has denied that it is mulling options to restructure its debt.

Such information is completely groundless.

its finance ministry said in a statement.

An earlier story by Reuters had suggested that Portugal had ” discreetly sounded out advisers on options to restructure its debt .”

The Portuguese government has repeatedly denied it has any plans to seek more bailout funds or to restructure debts. The €78bn EU/IMF bail-out Portugal received last year will fund the country through the rest of 2012.

15.15 About an hour ago, France sold a range of short term at largely similar interest rates compared with its last auction.

The French Treasury sold €4.2bn of 13-week bills at a yield of 0.145pc, down from 0.156pc at the previous auction a week ago. It also sold €2.0bn of 26-week bills at a yield of 0.249pc, up from 0.235pc, and €2.05bn of one-year bills at a rate of 0.436pc, up from 0.435pc at the last auction.

Demand outstripped supply by a ratio of three to one.

15.06 However, banks are still choosing to park hundreds of billions of cash with the ECB at a lower interest rate than the 1pc they will pay through last December’s LTRO. Last night, banks parked a total of €511.4bn with the ECB.

14.58 The ECB bought just €124m (£102.58m) of eurozone bonds last week through its Securities Markets Programme (SMP) . This compares with €63m the previous week, and a total of €219bn.

Borrowing costs across eurozone countries, especially in troubled states such as Italy and Spain have fallen significantly in recent weeks. Borrowing costs on 10-year Italian debt have fallen from 7.1pc in mid-January to 5.588pc today, while Spanish 10-year yields have fallen from above 6pc to 4.967pc. As analysts at Societe Generale (Paris: FR0000130809 – news) put it:

Italian government bonds have staged a remarkable recovery in recent weeks. This is widely perceived to be – at least in part – a consequence of the ECB’s successful three year LTRO in late December, which has encouraged domestic institutions to arbitrage the difference between the cost of ECB funding and the yield provided by government bonds of similar duration. In addition, some resilient surveys from the euro area and better than expected US business.

14.43 US markets are open. The Dow Jones industrial average is currently down 0.4pc at 12,809.59, while the broader S&P 500 is down 0.44pc at 1,339.45.

Elsewhere in Europe, the FTSE 100 (Euronext: VFTSE.NX – news) in London is down 0.26pc, while the CAC 40 in Paris and the DAX 30 in Frankfurt have fallen 0.8pc and 0.17pc respectively.

14.35 However, delaying adjustments and having control of your currency aren’t the only ingredients to a successful return to the markets, as Ireland , which has become the eurozone’s poster child for austerity, has demonstrated.

Mr Nolan continues:

So are the austerity policies favoured by Angela Merkel and her acolytes mistaken? Possibly, but the experience of Ireland provides evidence in the other direction. The Irish people have been stoic in accepting public spending cuts and tax rises, and their efforts appear to have made Ireland more competitive. Its (Euronext: ALITS.NX – news) external position has improved and growth is expected to pick up this year.

All of the peripheral countries had become uncompetitive compared to Germany and other core countries; hence a painful adjustment is necessary if it they are to stay in the eurozone. Ireland’s policies have been rewarded by the financial markets; its spreads have rallied to less than 600bp for the first time since April 2011. The contrast with Portugal is stark, as shown in figure 2. So the jury is still out on austerity but its effects on growth will be the key question in the credit markets over 2012.

14.25 But does austerity work?

Data provider Markit highlights two recent examples in its latest Sovereign Report, which looks at credit default swaps, measuring the likelihood that a country will default on its debts.

First (OTC BB: FSTC.OB – news) up, Iceland . Markit’s Gavan Nolan writes:

It is interesting to look at Iceland, a country that took a somewhat different approach. In a recent blog post Poul Thomsen, the IMF official in charge of the IMF programmes in Greece and Portugal formerly in charge of the Iceland programme, noted that a delay in fiscal adjustment was a crucial ingredient in returning Iceland to growth. Controlling the exchange rate through capital controls was also cited as one of the reasons for Iceland’s success. Neither of these policies is synonymous with the IMF, as many developing countries could attest to. Figure 1 shows that Iceland’s CDS (SNP: ^CDSY – news) spreads have outperformed the peripheral countries by some margin over the last two years, and the country recently returned to the capital markets.

14.11 As Open Europe explains, the main sticking point is the desire for eurozone countries to see greater wage and spending cuts versus the refusal by Greece’s three party coalition to back further austerity measures because “they simply believe their parties and the public won’t support it.”

Greece’s unions have said members will hold a 24 hour general strike on Tuesday in protest against the new austerity measures.

Members of the Communist Party of Greece (KKE) hold a banner reading: ‘Troika get out of Greece’ outside the Hilton in Athens last month where the delegation was staying (Photo: EPA)

14.07 Here’s Open Europe’s view on the latest developments . The think tank says:

Despite rumours of an agreement being reached, it looks as if the negotiations are far from over. Greek Prime Minister Lucas Papademos is set to hold talks with the troika later this evening to update them on his progress. Papademos will then hold another meeting with Greek political leaders tomorrow, presumably to communicate any messages which the troika wish to send. We assume the message will be for greater austerity. So don’t expect a Euro-group meeting until at least Wednesday.

14.00 Both Reuters and Greek state-run channel NET TV are reporting that the country’s PM Lucas Papademos will hold talks with the other political leaders supporting his government on Tuesday.

Mr Papademos will also hold talks with the “troika” of the ECB , IMF and European Commission later today.

13.30 Dow futures are pointing the blue chip US index opening down 0.25pc. With the technology-rich Nasdaq (Nasdaq: ^NDX – news) and broader S&P 500 also coming off six-month highs.

13.05 Those EU stats – see 11.05 – also reveal why the EC is working actively on plans for Greece’s exit from the euro. Today’s figures show Greek debt spiked to 159pc of GDP in the third quarter of 2011. This is by far the highest in the eurozone and compares with 138.8pc a year earlier and 154.7pc in the second quarter.

A glimmer of hope – depending if you are a “glass half full” personality – is Italy . Although it has the second highest debt, the county has managed to bring its borrowings down to 119.6pc of GDP from 121.2pc in the second quarter. Due in part, one suspects, to bond buying by the European Central Bank.

12.50 Bruno Waterfield , our Brussels Correspondent, has fleshed out his tweet about plans for Greece to quit the euro.

Maria Damanaki, the Greek European Commissioner, has revealed that scenarios for Greece’s exit from euro have turned to plans.

She (SNP: ^SHEY – news) told the To Vima tis Kyriakis newspaper that discussion over a Greek default had moved over the last year from contingencies to “preparations”.

“Now they’re not simply scenarios. They are alternative plans that are being openly studied. They are not preferable at the moment. What is promoted is Greece’s internal devaluation within the eurozone. But there is preparation for other solutions, if Greece doesn’t make it despite its efforts, to continue on the eurozone path,” she said.

A European Commission spokesman said: “I have no comment on the fishery commissioner’s comments on the financial situation in Greece.”

12.33 The euro remains under pressure after its recent bounce, as this graph from Bloomberg shows.

12.24 A worrying tweet from Bruno Waterfield , our Brussels Correspondent:

Twitter: Bruno Waterfield – #eurozone : ‘scenarios for Greece’s exit from euro have turned to plans,’ Greek commission tells To Vima tis Kyriakis

So, while Merkel and Sarkozy say they want Greece to remain in the eurozone, plans for its exit seem well underway.

12.20 Bruno also says the European Commission’s patience with Greece is wearing thin. Especially after an unnamed Greek government official said there was no deadline on a agreement today. He tweets:

Twitter: Bruno Waterfield – RT beyond not way beyond – says official @BrunoBrussels : #eurozone : European Commission on Greece, ‘the truth is we are beyond deadlines’

12.15 Brent crude prices are hovering around $114 a barrel in London, on worries about Greece, Iran and tensions in Syria.

12.10 The French President and German Chancellor are taking the opportunity to attack Russia’s decision on Syria . However, China seems to be spared – perhaps because the eurozone doesn’t want upset a potential donor to its rescue funds.

Ms Merkel said:

We were not only disappointed but appalled that we were not able to get approval of a U.N. resolution. And I have to say here, Russia must ask itself if we are really in a historical situation where policy should be made separately from the Arab League. I can’t imagine that this will prove to be a big success.

Syrian forces are said to have killed 50 people in artillery attacks on Homs , Richard Spencer , the Daily Telegraph’s Middle East Correspondent reports.

A united front – Sarkozy and Merkel on Monday

12.08 German Chancellor Angela Merkel is equally strident. There can be no new Greek funds unless there is an agreement with the so-called “Troika” inspectors from the EU, ECB and the IMF. She reiterates Sarkozy’s refrain that time is limited for a solution in the debt-laden euro nation.

We want Greece to stay in the euro. To say it clearly, this is the opinion of both of us. But I also say — there can be no new Greece programme if agreement is not reached with the Troika … All those who bear responsibility in Greece must know – we will not deviate from this position.

I want to make clear once again that there can be no deal if the troika proposals are not implemented. They are on the table, time is of the essence. Something needs to happen quickly. I support, as the French president has, the idea that the necessary interest payments for the debt be paid into a separate account …

I believe it is important in the next days to see some progress. I honestly can’t understand how additional days will help. Time is of the essence. A lot is at stake for the entire eurozone.

12.06 Now where have we heard this before? Sarkozy insists: Time is running out on Greece.

We want this accord. The Greek leaders have made commitments and they must respect them scrupulously … Europe is a place where everyone has their rights and duties. Time is running out, it needs to be concluded, it needs to be signed.

12.04 On the new treaty – between the 25 – Chris Adams tweets:

Twitter: Christopher Adams – Merkel and Sarkozy affirm European fiscal treary will be adopted in early March by 25 countries

12.01 Nicolas Sarkozy says Greek situation has to be solved once and for all. He insists there will be no release of funds to country unless it accepts the eurozone austerity measures and reforms.

12.00 The Merkozy press conference has started – but BBC is covering the all important “weather story”.

11.53 Cash-strapped British borrowers are turning away from credit cards. PwC says in its new Credit Confidence Survey that the credit card is suffering a mid-life crisis. The report says:

PwC’s Credit Confidence Survey reveals a clear preference among younger consumers for other payment types, underlining the industry’s struggle to reinvent itself for the digital age.

11.45 The country’s construction sectors suffered again in October, the Greek statistics office said. Gloomy news but hardly surprising for a country in its fifth year of recession. A total of 2,628 building permits were issued during the month – a drop of 34pc on October 2010.

One suspects it will make coalition politicians, who themselves are facing elections, even more nervous of backing more austerity measures as demanded by eurozone nations. In 2009 and 2010 the construction sectors dropped 14pc and 11pc respectively.

11.30 Lucas Papademos , the technocrat Greek Prime Minister, will continue talks today with the so-called “Troika”- EU, European Central Bank (Other OTC: CBSU.PK – news) (ECB) and International Monetary Fund – and then meet heads of the Greek socialist, conservative, and far-right parties, his office said.

Markets remain unsettled. David Jones (Xetra: 898370 – news) , chief market strategist at IG Index, said:

With a relatively quiet news week until the EU and UK interest rate announcements on Thursday, progress or otherwise in Greece is likely to dictate market direction

11.10 Gas prices are now at their highest level since early 2006, when Russia cut off all gas supplies to the Ukraine.

11.05 Public sector debt across the eurozone edged down to 87.4pc of gross domestic product (GDP) in the third quarter of 2011, according to the European Union . It’s still a big figure:

11.00 German Chancellor Angela Merkel and Nicolas Sarkozy , the French President are to hold a joint press conference after a joint cabinet meeting in Paris at 11.45am GMT, Bloomberg reports.

10.40 Italian 10-year government bond yields reversed an earlier rise on Monday with traders reporting strong buying after a denial that there was a looming deadline in the Greek debt talks, Reuters reports.

10.30 The European Banking Authority says it will provide an update on bank recapitalisation plans after its board meeting on February 8-9, Reuters reports.

10.00 UK gas prices on the same-day and day-ahead markets are at a 5 year high as the cold snap and exports to other countries (like France – see 09.35) depletes our storage. This graph from Bloomberg shows the past year:

Reuters reports:

Traders said the main reason for the price spike was concern that a glitch in Norwegian flows would cause serious disruptions in the UK. Unlike Russia, which last week had to cut exports to Europe in order to cover its own rocketing domestic gas demand, Norwegian gas flows have held up since the beginning of the cold snap.

The ongoing cold weather means the UK gas system was short of supply on Monday, despite healthy Norwegian flows. Daily demand was forecast at 396.6 million cubic metres (mcm), 68 mcm above the seasonal norm, according to National Grid (LSE: NG.L – news) data. With expected supplies of 383.2 mcm, the system was 13.4 mcm short, implying the need of further gas storage withdrawals.

The joy of snow over the weekend has fast faded for commuters as many have faced big delays – and the prospect of higher fuel prices.

09.50 Ian Scott, analyst at Nomura, writes:

The provision of liquidity to the banking system via the European Central Bank’s longerterm refinancing operations (LTROs) has had a considerable impact on the market’s assessment of the creditworthiness of euro area banks and some key sovereign governments.

Euro area banks were very large buyers of sovereign debt in December, but they also cut lending to the private sector by an unprecedented amount.

High (Euronext: HCO.NX – news) profile improvements in sovereign and bank debt markets have understandably dominated sentiment, while incoming economic data have surprised on the upside, leading stocks higher. Given the extreme risk aversion of investors before this rally, we think it will continue.

09.35 Debt crisis might pale into insignificance soon if the emerging gas crisis keeps on its current trajectory…

Key (NYSE: KEY – news) developments from the last few days:

• Russian state-controlled gas giant Gazprom (MCX: GAZP.ME – news) admitted it had reduced supplies to Europe amid extreme cold in Russia. It claimed only by about 10pc, but some European countries have reported bigger shortfalls.

• Italy’s industry minister has said the gas situation in the country is “certainly critical” and that consumption hit a record high on Sunday, raising alert levels. This followed from Paolo Scaroni, chief executive of Italian energy company ENI (EUREX: E1NT.EX – news) , saying that in a worst case scenario they could temporarily suspend supplies to some companies.

• France has apparently said it is heading to break its power demand record and is importing power from the UK:

Twitter: Linda Yueh – #France importing power from UK: French industry minister says after saying that record power demand will be broken today

Gazprom cut gas supply to Europe over the weekend as Russia experiences Arctic weather

09.30 Music to the Treasury’s ears… some solidarity in opposition to a European financial transactions tax, from the Dutch central bank:

Twitter: Linda Yueh – Dutch central bank opposes EU financial transaction tax, says costs for Dutch firms would be EUR4bn per year

09.11 Deadline? What deadline? Reuters reports a Greek government official saying there is no deadline on Monday for political leaders to respond to the bailout terms. So that’s alright then…

The only deadline is for the Greek government, the EU/IMF inspectors and political leaders to reach a deal before Eurogroup meeting, they say.

That Eurogroup meeting was originally tentatively scheduled for today but was postponed. It might now happen later this week. Possibly Wednesday, according to some reports. Or, it might just be postponed again.

As the FT’s markets editor Christopher Adams points out..

Twitter: Christopher Adams – Which all means, as we knew, that EZ ministers will meet if/when a deal is reached, which will be the moment when a deadline is reached. QED

09.05 Still, it’s not all doom and gloom out there. Somewhere (in the “one per cent”?) there are – Diageo (Other OTC: DGEAF.PK – news) reckons – 60 people willing to splash out £100,000 for a bottle of whisky to celebrate the Queen’s Golden Jubilee.

Amy Wilson reports:

David Gates, the head of Diageo’s whisky business, said the company originally planned to offer the Diamond Jubilee whisky to wealthy afficionados in Asia Pacific (Chicago Options: ^RASPUSD – news) and Latin America, but has now had requests from the US and Europe as well.

Cheers!

09.00 The continued uncertainty over Greece has had a knock-on effect on the cost of Italian debt against default. Reuters reports:

Five-year credit default swaps (CDS) on Italian government debt rose to 394 basis points, according to data monitor Markit. This means it costs 394,000 euros to protect 10 million euros of exposure to Italian bonds.

08.55 Reuters this morning reminds us how a mere eight years ago things seemed so very different in Greece, as the country hosted the 2004 Summer Olympic Games. Now, they say:

The rate of decay and dilapidation of Athens’ Olympic venues in just eight years provides a visual clue to maintenance costs too high for near-bankrupt Greece to operate. Back in 2004 when the Greeks staged the Olympics, the country was crackling with optimism, pride and activity, as it rushed to deliver the multi-billion dollar Games organisers hoped would boost the country’s growth and its modern image abroad.

These days, however, Greek athletes must be satisfied with a trickle of money as they prepare for the 2012 London Olympics, the debt crisis having dried up almost every revenue stream for sports, public or private.

The Olympic Taekwondo stadium is seen behind a fence at Faliro complex in Athens.

08.50 Analysts at Investec (Frankfurt: A0J32R – news) have a helpful summary of the situation this morning:

We remain in a state of limbo over the direction that negotiations on the second Greek bailout are heading. Over the weekend Greece’s coalition parties appear to have made little progress in deciding if they can accept the Troika’s latest list of demands in exchange for the second bailout. Greece is due to respond to a working group of senior eurozone finance ministry officials in just a few hours’ time; this may be something of a challenge given this lack of progress.

Discussions are also now increasingly complicated, with the focus having shifted to the official sector now potentially taking a haircut too, in an attempt to fill the funding shortfall. The coming week has been cited as the deadline for finalising the private investor debt swap deal, to allow the swap to be completed in time to avoid Greece defaulting at the time of its € 14.5bn March bond redemption.

With PSI negotiations now tied into wider talks over the second bailout and OSI (Official Sector Involvement), the task at hand is more challenging, leaving wide open the question of whether even a private sector debt swap deal can be agreed quickly enough to avert a default.

08.40 Linda Yueh, Bloomberg TV’s Economics Editor, tweets on the effect the Greek uncertainty is having on the money markets.

Twitter: Linda Yueh – #euro down agaqinst almost all of its 16 major counterparts slid versus dollar as much as 0.8% to $1.3053 now at $1.3094 over #Greece deal

08.30 Here in Britain it’s another week, another bonus row, as the debate over the Network Rail chief executive’s proposed £336,000 bonus rumbles on with Transport Secretary Justine Greening saying she will vote against it at a meeting this week .

08.25 Slightly conflicting reports coming out of Greece over this morning’s timings for a deadline on a deal.

Bloomberg reports that last night a spokesman for the Socialist Pasok party, Panos Beglitis, said first responses from the party leaders would be due by 11am in Athens (9am GMT). However a spokeswoman for the office of Lucas Papademos, the Greek interim prime minister, has said this morning that there is no such deadline.

The 12pm (10am GMT) timing still stands for the three party leaders to meet to discuss a detailed agreement for meeting conditions of an international rescue.

08.20 European shares slipped on Monday, with investors worried about whether Greece can avoid a messy default as its politicians struggled to agree austerity measures needed to secure a bailout package.

FTSE 100 -0.2pc DAX (EUREX: FDAX.EX – news) -0.2pc CAC -0.8pc Spain’s Ibex -0.5pc Italy’s MIB +0.03pc

The Halifax says prospects for house prices depend on events in the eurozone

08.02 The Halifax reports that house prices in rose 0.6pc in January, “despite the slight downward movement in the underlying trend”. Over the three months to January prices were 0.9pc lower that in the previous three months and the average house price during the month was £161,000.

Martin Ellis , housing economist at the Halifax, said:

The continuing very low level of interest rates has helped to support housing demand, resulting in little overall movement in house prices since last spring. Low rates have contributed to mortgage payments falling to their lowest level as a proportion of disposable earnings for a new borrower for 14 years. A recent improvement in employment trends may also have supported demand.

Prospects for house prices over the coming months will, to a large extent, depend on events in the eurozone and the repercussions of developments there for the UK economy. If the UK can avoid a prolonged recession, we expect broad stability in house prices in 2012.

08.00 The FTSE 100 has opened down 14.5 points – or 0.2pc – to 5884 .

07.45 It looks like nerves over Greece are continuing to help German bunds . The yield on the 10-year German government bonds have dipped 1 basis point to 3.11pc. But on the whole markets appears sanguine. One trader told Reuters:

The clock is ticking away every day but markets seem to think that something will get done, there’s a blinkered risk-on kind of mood but the rhetoric we’re getting doesn’t seem that good.

07.40 Boris Johnson is attacking the lastest “anti-business” hysteria that has swept Britain. In a column titles, Britain won’t create a Facebook until we learn to praise success , he writes:

It is one thing to object to bonuses that are explicitly funded by the taxpayer. It is another thing to start attacking “Mammon” of any kind because as my old schoolmate Ed Miliband has found, it is very hard to make a distinction between “good” enterprises and “bad” enterprises, between good money and bad money, between profit that is socially useful and profit that is not socially useful. In the general confusion, there is a danger that banker-bashing will metastasise into an all-round scorn for all varieties of money-making instinct and I can’t believe that is in the economic interests of the country.

07.35 Here’s how @npanayotopoulos views the current situations:

Twitter: npanayotopoulos – The politcos unwilling, the agorocrats lack in EQ, the neocons too dogmatic, the technocrats lack empathy: Time for the geeks to gov Europe

07.20 It is not just Greece where the electorate is unhappy with their leaders. Ambrose Evans-Pritchard says the French are increasingly unhappy with the country’s close ties with Germany:

“The single currency is condemned to an uncontrollable explosion sooner or later,” wrote 12 economists in a recent letter to Le Monde, calling for an orderly return to national currencies. “The obstinate determination of governments to take us by forced march deeper into the euro impasse can only lead to the general aggravation of the economic situation in Europe,” they said.

President Nicolas Sarkozy has no answer to this. He has clung to the fig leaf of Franco-German parity, staking all on ties to Chancellor Angela Merkel, rather than seizing leadership of the Latin bloc to force a radical change of policy.

His gamble on the status quo has failed. Mrs Merkel has not yielded an inch, and has now forced him to swallow a fiscal treaty that erodes French sovereignty without offering any remedy to the crisis at hand.

07.15 The euro has slipped in early trading, as this graph from Bloomberg shows:

07.00 Despite Mr Papademos’s assurances that they will meet the noon deadline, fears of a Greek default are expected to weigh on European markets.

Financial spreadbetters predict Britain’s FTSE 100 will open flat, Germany’s DAX to fall 0.2pc, and France’s CAC-40 to slide 0.5pc.

Earlier, Asian stock markets climbed as the took heart after US unemployment fell to its lowest in three years, suggesting a stronger recovery in the world’s biggest economy that could benefit the region’s exporters.

Japan (EUREX: FMJP.EX – news) ‘s Nikkei 225 (Osaka: ^N225 – news) index rose 1.1pc to 8,929.20, South Korea’s Kospi dipped 0.04pc, Hong Kong’s Hang Seng (HKSE: ^HSI – news) slipped 0.2pc and Australia’s S&P ASX (Other OTC: ATKEF.PK – news) /200 added 1.1pc.

Greek Prime Minister Lucas Papademos is hopeful his coalition’s partners will agree further spending cuts

06.55 Not only have the Greek debt talks hit another impasse but the coalition parties face a noon deadline to agree harsh new austerity measures in order to receive a €130bn second bailout from the EU.

The eurozone is playing hardball – no agreement, no money. This is angering Greek politicians. George Karatzaferis , leader of far-right party LAOS and Antonis Samaras , head of the conservative New Democracy party, both attacked pressure to impose even harsher cuts on the Greek people.

Karatzaferis told reporters as he exited a five-hour meeting with his socialist, conservative and far-right allies on Sunday:

I will not contribute to the explosion of a revolution from destitution that will burn all of Europe.

Prime Minister Prime Minister Lucas Papademos said the urgent talks would continue on Monday, and that agreement had been reached on many issues.

06.50 The Glencore merger dominates the Daily Telegraph and The Financial Times this morning – European Commission may probe ‘Glenstrata’ merger and Glencore pays a prices for Xstrata (Dusseldorf: XTR.DU – news) deal.

Other financial headlines:

Times (£) : Tesco (LSE: TSCO.L – news) defiant after delaying strike against big banks Guardian: Transport (Euronext: IXSTP.NX – news) secretary to vote against Network Rail £20m bonus Daily Mail (LSE: DMGT.L – news) : Barclays (LSE: BARC.L – news) profits hit £685,000 per hour Wall St Journal (£): Greeks struggle to resolve their differences

06.45 Good morning and welcome back to our debt crisis live blog.

Debt crisis live: archive

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LONDON (Reuters) – Near-record catastrophe claims, the euro zone debt crisis and low interest rates are likely to result in mostly weaker 2011 profits [...]]]> By Myles Neligan | Reuters – 

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Current law requires projects worth Bt1 billion and up to [...]]]> The Finance Ministry wants to make it much easier for private firms to invest in infrastructure projects.

Current law requires projects worth Bt1 billion and up to be approved by the Cabinet. The procedure is time-consuming and inconvenient for private companies, Deputy Finance Minister Viroon Tejapaibul said yesterday.

“I would like to raise the threshold to between Bt3 billion and Bt5 billion to make it easier for private firms to invest in public infrastructure projects,” he said.

He made the remark on the sidelines of the International Conference on Asean Regional Cooperation: Mega-Infrastructure Investment in Asia amid Global Uncertainties, jointly hosted by the Fiscal Policy Research Institute and its partners.

The Finance Ministry is in the process of making changes to laws related to public-private partnerships. To promote private participation in infrastructure investment in small projects, the threshold for Cabinet scrutiny should be raised, maybe as high as Bt5 billion, he said.

The previous government set the threshold at Bt1 billion as part of the effort to minimise corruption.

Naoyuki Yoshino, professor of economics at Keio University in Tokyo, suggested at the conference that Thailand and other Asean members needed to develop more financial products that could draw investment from Japan. His country has well-developed long-term funds such as pension and insurance funds, but there are few financial products available in Asean for them to invest in, he said.

He also suggested that Asean should learn from the mistakes of the Japanese government such as wasteful investment in highways or bridges that are little utilised. The solution is to encourage the private sector to participate in infrastructure projects, as such firms are keen on seeing returns on their investment.

Porametee Vimolsiri, deputy secretary-general of the National Economic and Social Development Board, said the government had several roads, railways and ports linking with other Asean countries in the pipeline for development.

He said Thailand needed to invest about Bt2.3 trillion in infrastructure projects in the next five years plus Bt350 billion for flood prevention.

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Greece’s coalition government on Monday caved in to demands to cut civil service jobs, announcing 15,000 positions would go this year, amid [...]]]> (02-06) 11:15 PST ATHENS, Greece (AP) –

Greece’s coalition government on Monday caved in to demands to cut civil service jobs, announcing 15,000 positions would go this year, amid mounting international pressure to agree on austerity measures needed to secure major new debt agreements.

The announcement signals a shift in Greece’s policy, as state jobs have so far been protected during the country’s acute financial crisis, which started about two years ago. Public Sector Reform Minister Dimitris Reppas said the job cuts would be carried out under a new law that allows such firings.

Unions have called a 24-hour general strike for Tuesday, in response to the new austerity measures, while about 4,000 protesters braved torrential rain late Monday to join protest rallies organized in central Athens by left-wing opposition parties.

Greece is racing to push through the painful reforms — which have yet to be agreed by Greece’s coalition partners — to clinch a euro130 billion ($170 billion) bailout deal from its European partners and the International Monetary Fund and avoid a March default on its bond repayments.

Debt-ridden Greece has been kept solvent since May 2010 by payments from a euro110 billion ($145 billion) international rescue loan package. When it became clear the money would not be enough, a second bailout was decided last October.

As well as the austerity measures, the bailout also depends on separate talks with banks and other private bondholders to forgive euro100 billion ($131.6 billion) in Greek debt. The private investors have been locked in negotiations over swapping their current debt for a cash payment and new bonds worth 50 per cent less than the original face value, longer repayment terms and a cut in the interest rate to be paid on the bonds. Greek government officials say they expect private investors to take an overall cut of up to 70 percent on the value of their bonds.

However, the EU/IMF bailout has to be secured for the deal with private investors to go ahead as about euro30 billion from the bailout will be used as the cash payment in the bond swap deal.

Greece’s coalition party leaders pushed back a key meeting on the austerity measures by a day till Tuesday, due to the ongoing negotiations with EU-IMF debt inspectors who were to hold a new round of talks later Monday.

The leaders have already agreed to cut 2012 spending by 1.5 percent of gross domestic product — about euro3.3 billion ($4.3 billion) — improve competitiveness by slashing wages and non-wage costs, and re-capitalize banks without nationalizing them.

Creditors are also demanding spending cuts in defense, health and social security, a cut in the minimum wage, as well as the civil service layoffs, as European pressure increased on Greece to make more concessions. The government has promised to reduce the 750,000-strong broader public sector by 150,000 by the end of 2015, but has so far insisted it could reach that target through staff attrition.

“We are opposed to indiscriminate firings,” Reppas said. “The work force reduction is strictly connected with the restructuring of services and organizations at each ministry.”

Officials at the Public Sector Reform Ministry gave no details of the new plan, or say how many of the job cuts would be compulsory.

European Commission spokesman Amadeu Altafaj Tardio said Greece is already “beyond the deadline” to end the talks.

After talks in Paris with French President Nicolas Sarkozy, German Chancellor Angela Merkel said there can be no bailout deal unless Athens implements creditors’ proposals.

“(The proposals) are on the table,” she said. “And time is pressing. Therefore something has to happen quickly.”

“Time is pressing and for the entire eurozone is much at stake,” Merkel added.

Greece is in its fifth year of recession, while unemployment has hit record highs of about 19 percent — following a spate of austerity measures in return for the rescue loans, that included significant cuts in pensions and salaries coupled with repeated tax hikes and an increase in retirement ages.

“The current policy of austerity … is turning workers into pariahs, jobless people and pensioners into paupers and deprives our youth of any hope,” a statement from the servants’ union ADEDY said. “This policy has already pushed Greeks beyond their limits and must be stopped at any cost.”

Yiannis Panagopoulos, leader of Greece’s largest union, the GSEE, said the creditors’ demands were certain to lead to more hardship.

“What is going on is not a negotiation,” he said. “It’s blunt, cynical blackmail targeting an entire people.”

___

Sylvie Corbet in Paris and Raf Casert in Brussels contributed

Article source: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2012/02/05/financial/f105508S21.DTL&type=politics

Ingham County Circuit Court Judge William Collette today [...]]]> A Michigan judge ordered a review
team appointed by the governor to study Detroit’s finances to
stop meeting in private.

Ingham County Circuit Court Judge William Collette today
issued a temporary restraining order after a union official
claimed the closed-door sessions violated Michigan’s open-
meetings law. The financial review team is considering whether
Michigan’s largest city needs an emergency manager.

The review team “flies in the face of the Open-Meetings
Act,” Collette said today in issuing the order.

The panel is “more than an advisory committee,” Collette
said at a hearing in state court in Mason, Michigan. It has “a
right to review records. They have the right to issue subpoenas,
and they have the right to require people” to talk, he said.
This “goes far beyond public advisory power,” he said.

Michigan Governor Rick Snyder appointed the 10-member group
in December after a preliminary study by the state treasurer
found the city was in “probable financial stress.”

If the panel declares a financial emergency, the governor
may appoint an emergency manager with sweeping powers to fire
employees, sell assets, void union contracts and assume
authority over the mayor and city council.

Robert Davis, an official of a union that represents city
employees, sued Snyder, the state treasurer and the review team,
contending the team is required under Michigan law to hold
meetings open to the public.

Open-Meetings Law

Davis said the review team also violated the open-meetings
law by failing to keep minutes of a Jan. 10 closed session.

The “review team is not a public body as defined under the
Open-Meetings Act,” the defendants said in a court filing Feb.
3. “A review team essentially performs background work.”

Terry Stanton, a spokesman for the Michigan Treasury
Department, didn’t immediately respond to a call for comment on
the ruling.

“This is a victory for open government and democracy,”
Andrew Paterson, a lawyer for Davis, staff representative of the
American Federation of State, County Municipal Employees, said
today.

Paterson said he will file for a declaratory judgment,
asking the judge to find that the actions of the review team
before today violated the open-meetings law. This would void
anything the panel has already done, Paterson said in an
interview.

Union Concessions

Detroit Mayor Dave Bing and unions representing a majority
of city employees last week reached a tentative accord on
concessions aimed at avoiding a state takeover. Bing and Snyder
have said they want to avoid an emergency manager for Michigan’s
largest city.

The mayor and Detroit’s police and fire fighters unions
continue to negotiate over concessions. Bing has called for a 10
percent wage cut.

The case is Davis v. City of Detroit Financial Review Team,
12-112-CZ, Circuit Court, Ingham County, Michigan (Mason).

To contact the reporters on this story:
Steven Raphael in Detroit
at sraphael5@bloomberg.net;
Margaret Cronin Fisk in Detroit
at mcfisk@bloomberg.net.

To contact the editor responsible for this story:
Michael Hytha at mhytha@bloomberg.net

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Article source: http://www.bloomberg.com/news/2012-02-06/michigan-judge-orders-detroit-finance-study-team-to-stop-closed-meetings.html

By Saurabh Chaturvedi of Dow Jones Newswires

NEW DELHI – Power Finance Corp. plans to invest $42 billion by the end of March 2017 in India’s power sector, [...]]]>

By Saurabh Chaturvedi of Dow Jones Newswires

NEW DELHI – Power Finance Corp. plans to invest $42 billion by the end of March 2017 in India’s power sector, in an effort to profit from increasing demand for electricity.

According to government estimates, India’s power sector will need $300 billion-o $400 billion between 2012-2017 to expand its generation capacity of 186.6 gigawatts.

The government has set up institutions such as Power Finance Corp. andRural Electrification Corp. Ltd. to provide dedicated funding to power projects.

“Whatever the problems in the conventional power business, it will continue to drive [Power Finance's] growth,” Chairman Satnam Singh told reporters.

“The government is taking up the problem of coal shortage at the highest level. I am hopeful of a solution that would boost the power sector.”

India is facing a coal shortage of at least 114 million tons for the fiscal year through March. This has pushed consumers such as power companies to import expensive coal, hurting their finances and increasing the risk of loan defaults.

But Power Finance is optimistic about the sector’s growth, and plans to raise 400 billion rupees in India and overseas in the financial year which will start on April 1.

Power Finance has raised 280 billion rupees of its 300 billion rupees target for this fiscal year through March, Mr. Singh said.

The company, which aims to raise up to $500 million overseas by the end of March, has sought the central bank’s approval to raise cheaper funds of tenure less than the mandatory five years.

The finance company disbursed 254 billion rupees as at Dec. 31. It aims to release 350 billion rupees to power projects this year and 400 billion rupees next year.

The state-run company plans to increase its loan sanctions to renewable energy projects to 15 billion rupees in the year beginning April, from 4.8 billion rupees in the year through March 2011.

This is because renewables give faster returns as they can start generation within a year of the start of construction.

Mr. Singh said also that the company will invite bids next week for a partner to launch a fund of up to $1 billion to buy into power projects.

A previous round of bidding saw only one company–Edelweiss Financial Services Ltd.–meeting its criteria.

Power Finance aims to shortlist an overseas partner for expanding its consultancy business to other South Asian nations next year and list it on stock exchanges in the year through March 2014.

Article source: http://blogs.wsj.com/dealjournalindia/2012/02/06/power-finance-aims-to-invest-42-billion-in-indias-electricity-sector/

by Vijay Kumar

   February 06, 2012

Jammu, February 06 (Scoop News) –   Minister for Finance, Ladakh [...]]]>

Finance Minister concerned over burgeoning power losses

by Vijay Kumar

  
February 06, 2012

Jammu, February 06 (Scoop News) –   Minister for Finance, Ladakh Affairs  A. R. Rather has called for an effective energy accounting mechanism to bring down burgeoning losses in power sector, which he said, is a stumbling block in the way of states development planning. He urged for joint efforts to bridge the gap between energy consumption and revenue receipts.

Speaking at a review meeting of the power department convened here this after, the Minister said despite limited resources, state has to spend about Rs 3000 crore on import of power against a revenue of only Rs 700 crore which is a matter of great concern and needs immediate attention of the authorities at the helm of affairs.

The Minister of State for Power,  Shabir Ahmad Khan was also present.

The meeting among others was also attended by the Economic Advisor to Government  Jalil Ahmad Khan, Principal Secretary Finance,  M. Iqbal Khanday, Commissioner/Secretary Power  Sudhanshu Panday, Director General Budget  Ravi Kumar Mangotra, Secretary Power (Tech)  Asgar Ali, Superintending Engineers, and Executive Engineers of the Power Department, Jammu division.

 Rather urged for a multipronged strategy to bring a turnaround in the power sector with emphasis on vigorous inspections, 100 percent metering and effective implementation of relevant laws to plug pilferages at various levels as also to affect targeted recoveries accurately. “Jammu and Kashmir is the single state where highest about 65 percent energy is lost due to power pilferage and TD losses”,  Rather said adding that the state’s economy cannot afford this kind of huge deficit for along. The situation demands self introspection and the onus lies on the officer, engineers and the field staff of power department.

The Commissioner/Secretary Power informed the meeting that the department has conceived an energy accounting plan which envisages tallying of electricity units distributed from a particular feeder during a specified period with revenue collections made there to. If there is any mis-match in the energy supplied and revenue realized, the concern officers and field agencies shall be held responsible for the lapse. This mechanism shall make the staff manning the feeders and supplying electricity to a particular locality more accountable who in turn would ensure that power theft is curbed. He said Chairman State Electricity Regulatory Authority and IMPA have been asked to arrange orientation courses for the engineers and officers of the power department to educate them about various laws meant for streamlining the power sector. He said residences of all the VIPs shall be metered first and public support garnered to identify the elements indulging in power thefts in respective localities. He said APRs of the officers and engineers of PDD shall now be based on their performance in energy accounting.

The meeting was informed that against a total number of about 6 lakh consumers in Jammu division, the number of electronic metered consumers ending December 2011 has reached to 2.75 lakh. The department needs Rs 65.05 crore for purchasing 3.15 lakh electronic meters for 100 percent metering of the consumers. It was stated that against a revenue target of about 1103.67 crore for the current fiscal, a revenue of 441.74 crore has been realized up to ending December 2011 which is Rs 77.23 crore more than Rs 364.50 crore revenue realized during the corresponding period last year.

Meanwhile, the department has conducted about 25000 inspections up to ending December 2011, thereby imposing a fine of Rs 6.41 crore on the offenders. Besides, 100 percent consumer data stands digitalized for computerization of Billing in the division.

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Article source: http://www.groundreport.com/Business/Finance-Minister-concerned-over-burgeoning-power-l/2944087

On the Hill

Inside Congressional [...]]]> It is one of the most convoluted arrangements in Washington for complying with campaign finance laws – and that is saying something.

On the Hill

Inside Congressional politics.

The four official party committees responsible for electing members to the House and Senate each raise tens of millions of dollars for advertising and other activities on behalf of candidates they have recruited and groomed. The heads of the Democratic Senatorial Campaign Committee, the National Republican Congressional Committee, the Democratic Congressional Campaign Committee and the National Republican Senatorial Committee map out budgets and determine generally where their money would best be spent.

Then, the committees turn over all the money they have worked so hard to raise to a second, separate entity responsible for researching, producing and placing campaign commercials over which the committee officials have no control, influence or say-so whatsoever.

But it is not like those in charge of the independent ad campaigns are unfamiliar with the thinking of the party committees. Typically they have worked for or are closely associated with them. They might even have offices in the same building or just across the street. Still, they can no longer talk to their friends and colleagues about the campaign ads they are running due to the virtual “wall” separating the campaign organizations from their independent arms.

Even top campaign finance watchdogs view this Rube Goldberg contraption as goofy and ripe for change.

“The hoops you have to go through to make the expenditures are silly,” said Michael J. Malbin, executive director of the Campaign Finance Institute. “Political parties ought not be independent of their candidates.”

At a time when huge amounts of money from anonymous donors fuels the activities of outside groups injecting themselves into the presidential and Congressional campaigns, the independent arms of the N.R.C.C., D.C.C.C., D.S.C.C. and N.R.S.C. will be playing by slightly different rules when they get in gear in the next few months.

In contrast to the nonparty groups, all the money donated to the Congressional committees is disclosed and subject to limits – just over $30,000 per person annually in this cycle as opposed to the millions that can go from one individual to a so-called super Political Action Committee. But in keeping with legal rulings that found that large donations have the potential to corrupt political figures, the party committees are required to spend this money without “coordinating” their activities with the candidates.

As a result, the committees must form independent arms to meet the technicalities of the court cases and Federal Election Commission rules.

The lines can get pretty blurry. Carl Forti, a Republican operative now in the middle of the explosion of third-party political advertising, was once a spokesman for the National Republican Congressional Committee and the chief of its independent advertising operation. Martha McKenna, who this year has been picked to run the independent arm of the Democratic senatorial committee, is that group’s former political director.

At the same time, party officials and critics say the arm’s-length distance that the party organizations are supposed to keep from their independent allies can lead to a lack of accountability for the campaign ads, which are often tough attacks on the opposition. The party itself and the candidate who is the beneficiary of the attack can deny any responsibility or even demand that it be pulled while gaining from it.

The situation can get confusing for both voters and candidates.

Senator Mitch McConnell of Kentucky, the Republican leader, remains unhappy with Senator Charles E. Schumer of New York for ads the Democratic Senatorial Campaign Committee, then led by Mr. Schumer, ran against Mr. McConnell in 2008 for his support of the bank bailout. But despite his chairman’s role, Mr. Schumer technically had no control over the content of the anti-McConnell ads since they were produced by the independent expenditure arm which he was barred from influencing.

The campaign contortions the parties must go through are stirring calls for change from party officials who believe the limits are helping spur the growth of more anonymous money in campaigns, and from watchdogs who want to encourage more accountability and citizen involvement.

“The current finance laws have done nothing but weaken the political parties and frankly have allowed third parties to prosper and virtually become more relevant than we are,” said Rob Jesmer, executive director of the National Republican Senatorial Committee.

In legislation developed in response to the Supreme Court ruling that led to the growth of third-party spending, Mr. Schumer proposed allowing the party organizations to engage in unfettered coordination with their candidates though the limits on contributions would be retained.

The Campaign Finance Institute, in a report done jointly with the Brookings Institution and the American Enterprise Institute, also recommended that party organizations not be constrained in working directly with candidates but only when using money from donors who give $200 or less.

Others advocate eliminating the restrictions on coordination with candidates and the donation limits as long the disclosure rules remain in place showing the source of the money.

In any event, both political operatives and those who follow campaign finance issues see the need to take another look at a jury-rigged system that is sowing confusion, bolstering spending from outside the parties and making it hard to determine just exactly who is behind that attack ad.

Article source: http://thecaucus.blogs.nytimes.com/2012/02/06/congressional-committees-face-campaign-finance-contortions/

Former Finnish Finance Minister Sauli Niinisto emerged victorious in the nation’s presidential election Sunday, according to preliminary results.

According to Finland’s Ministry of Justice, [...]]]>

(CNN) –

Former Finnish Finance Minister Sauli Niinisto emerged victorious in the nation’s presidential election Sunday, according to preliminary results.

According to Finland’s Ministry of Justice, with 100% of votes counted, Niinisto defeated the nation’s first openly gay presidential candidate, Pekka Haavisto, with 62.6% of the vote compared to Haavisto’s 37.4%.

Both were vying to succeed Tarja Halonen, Finland’s first female president, who cannot run for re-election.

In the first round of voting on January 28, the conservative Niinisto took just under 37% of the vote.

Haavisto, a pro-European Green League candidate, got 18.8%, claiming the No. 2 spot and narrowly edging out euro-skeptic Paavo Vayrynen, who had 17.5%.

The winner of Sunday’s vote between Niinisto and Haavisto will break a 30-year lock on the presidency by Halonen’s Social Democrats.

Halonen, who is completing her second term as president, defeated Niinisto, of the conservative National Coalition Party, in 2006.

Both candidates are pro-Europe at a time when the European Union is facing a debt crisis that could threaten the bloc’s common currency, the euro.

The most vocally anti-Europe candidate, Timo Soini of the True Finns party, came in fourth last week, though his party is the third largest in parliament.

Finland joined the euro when it was created, when Niinisto was finance minister. He insists Finland should stay in the eurozone despite the debt crisis that has taken some of the shine off the common currency.

His party won the top share of votes in last April’s parliamentary election, and leads a broad coalition government that includes the Social Democrats.

Finland is one of the few remaining AAA-rated countries in the eurozone. But 2012 is expected to deliver a growth of only 0.4%, with the possibility of a new recession, its finance ministry reports.

It has had to take part in the bailouts of other euro states that faced deep financial problems such as Greece and Ireland. Many Finns now see Niinisto — who also served as deputy chairman of the European Investment Bank — as someone who can stand up for Finland’s interests in the single currency.

Haavisto, meanwhile, has served as Finland’s environment and development minister and has international experience working for the European Union and the United Nations in Sudan and the Middle East.

Finland’s president is in charge of the country’s foreign policy, together with the government, and serves as commander-in-chief of its defense forces.

But recent changes have seen more power being given to the government and parliament, and former President Mauno Koivisto told YLE that there was a risk of an “imbalance” between the direct public election of the president and the office’s diminishing power.

Article source: http://www.news4jax.com/news/Finland-elects-new-president/-/475880/8597764/-/hprf8pz/-/index.html

MUMBAI (Reuters) – Manappuram Finance Ltd (MNFL.NS), which provides loans using gold as collateral, is not allowed to accept or renew deposits from the public, the [...]]]>

MUMBAI (Reuters) – Manappuram Finance Ltd (MNFL.NS), which provides loans using gold as collateral, is not allowed to accept or renew deposits from the public, the Reserve Bank of India said, noting the firm gave up its licence to take deposits in March 2011.

The RBI said on its website that Manappuram Finance had been accepting deposits from the public and had been issuing deposit receipts in the name of MAGRO, a sole proprietary concern of Shri V.P Nandakumar, who is Manappuram’s executive chairman.

Manappuram said the notice was the result of a technical error and that it had not accepted deposits since converting to a non-deposit-taking, non-banking financial company.

“There is some balance. While repaying that, they have found out some mistake, some technical error,” I. Unnikrishnan, the firm’s managing director, told Reuters.

The remaining balance of deposits is about 900,000 Indian rupees, Unnikrishnan said.

(Reporting by Shamik Paul and Aditya Phatak; Editing by Ted Kerr)

Article source: http://uk.finance.yahoo.com/news/manappuram-finance-cant-accept-deposits-131343536.html

[...]]]>

Members of the private equity industry paid tribute today to buyout veteran and philanthropist Nigel Doughty, who died on Saturday at his home in Lincolnshire.

Doughty Hanson, the U.K. mid-market buyout firm he co-founded with Richard Hanson, said in a statement: “On behalf of Dick Hanson, and all the management and staff of Doughty Hanson, we are tremendously sorry to learn of the death of Nigel Doughty at his home this afternoon. Our thoughts are very much with his family at this time.”

Doughty, who was 54, helped build Doughty Hanson to become one of the U.K.’s most well-respected private …

Article source: http://online.wsj.com/article/BT-CO-20120206-705796.html

By Radoslav Tomek

(Updates with budget, forecast in fourth, fifth paragraphs.)

Feb. 6 (Bloomberg) — Slovakia’s [...]]]> February 06, 2012, 8:39 AM EST

By Radoslav Tomek

(Updates with budget, forecast in fourth, fifth paragraphs.)

Feb. 6 (Bloomberg) — Slovakia’s Finance Ministry cut its 2012 economic growth forecast to 1.1 percent from 1.7 percent as Europe’s debt crisis damps demand.

The Bratislava, Slovakia-based ministry said today in a preliminary update of its economic outlook from November that it’s keeping its 2013 and 2014 gross domestic product forecast at 2.7 percent and 3.6 percent, respectively.

Exports, the main driver of the east European country’s growth, are set to slow in 2012 as the lingering debt crisis in the euro region depresses demand, the ministry forecasts. At the same time, domestic demand will be hurt by the government’s austerity measures.

Even as the economy will expand at a slower pace than predicted in the 2012 budget, the slowdown will not require adoption of any fiscal measures after last year’s budget gap was smaller than projected, the ministry said. The 2011 budget deficit probably reached 4.6 percent of GDP, compared with 4.9 percent of GDP targeted.

The ministry also revised its forecast for the average 2012 inflation rate to 2.8 percent from 2.6 percent. Price growth will slow to an average 2.3 percent in 2013 and 2014, according to the forecast.

For related news and information: Top Eastern Europe News: TOP EEU GO Economic Statistics: ECST GO Slovak Treasury Bonds: SLOVGB Corp GO

–Editor: James M. Gomez

To contact the reporter on this story: Radoslav Tomek in Bratislava at rtomek@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Article source: http://www.businessweek.com/news/2012-02-06/slovak-finance-ministry-cuts-2012-growth-forecast-to-1-1-.html

By Saurabh Chaturvedi of Dow Jones Newswires

NEW DELHI – Power Finance Corp. plans to invest $42 billion by the end of March 2017 in India’s power sector, [...]]]>

By Saurabh Chaturvedi of Dow Jones Newswires

NEW DELHI – Power Finance Corp. plans to invest $42 billion by the end of March 2017 in India’s power sector, in an effort to profit from increasing demand for electricity.

According to government estimates, India’s power sector will need $300 billion-o $400 billion between 2012-2017 to expand its generation capacity of 186.6 gigawatts.

The government has set up institutions such as Power Finance Corp. andRural Electrification Corp. Ltd. to provide dedicated funding to power projects.

“Whatever the problems in the conventional power business, it will continue to drive [Power Finance's] growth,” Chairman Satnam Singh told reporters.

“The government is taking up the problem of coal shortage at the highest level. I am hopeful of a solution that would boost the power sector.”

India is facing a coal shortage of at least 114 million tons for the fiscal year through March. This has pushed consumers such as power companies to import expensive coal, hurting their finances and increasing the risk of loan defaults.

But Power Finance is optimistic about the sector’s growth, and plans to raise 400 billion rupees in India and overseas in the financial year which will start on April 1.

Power Finance has raised 280 billion rupees of its 300 billion rupees target for this fiscal year through March, Mr. Singh said.

The company, which aims to raise up to $500 million overseas by the end of March, has sought the central bank’s approval to raise cheaper funds of tenure less than the mandatory five years.

The finance company disbursed 254 billion rupees as at Dec. 31. It aims to release 350 billion rupees to power projects this year and 400 billion rupees next year.

The state-run company plans to increase its loan sanctions to renewable energy projects to 15 billion rupees in the year beginning April, from 4.8 billion rupees in the year through March 2011.

This is because renewables give faster returns as they can start generation within a year of the start of construction.

Mr. Singh said also that the company will invite bids next week for a partner to launch a fund of up to $1 billion to buy into power projects.

A previous round of bidding saw only one company–Edelweiss Financial Services Ltd.–meeting its criteria.

Power Finance aims to shortlist an overseas partner for expanding its consultancy business to other South Asian nations next year and list it on stock exchanges in the year through March 2014.

Article source: http://blogs.wsj.com/dealjournalindia/2012/02/06/power-finance-aims-to-invest-42-billion-in-indias-electricity-sector/

BRUSSELS (AP) — Debt levels in bailed-out countries Greece, Portugal and Ireland continued to rise in the third quarter of last year, but they fell for Italy [...]]]> Associated Press – 

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PARIS — Greece’s debt rose to 159.1 percent of its gross domestic product in the third quarter of 2011 from 138.8 percent a year earlier, according [...]]]>

PARIS — Greece’s debt rose to 159.1 percent of its gross domestic product in the third quarter of 2011 from 138.8 percent a year earlier, according to data released Monday that illustrates the country’s worsening economic straits after two years of austerity budgets.

Interactive Feature

The data, reported by the European Union statistics agency Eurostat in Luxembourg as part of a new series, underscored the urgency of the talks continuing Monday in Athens, where Greek officials and international lenders were trying to reach agreements that would make possible the release of new financing to stave off a Greek default next month.

It was the realization in late 2009 that Greece had been hiding the true state of its public finances that set the European sovereign debt crisis in motion and left the future of the euro currency itself in jeopardy.

Two years of austerity measures have weighed on employment, with the jobless rate at 19 percent, and hurt government tax revenues. The economy is expected to show a contraction of 6 percent in 2011, the International Monetary Fund has estimated.

Shrinking the G.D.P. side of the equation makes it harder to bring down Greece’s debt ratio to a more manageable level, and adds pressure for additional taxes and spending cuts.

The E.U. has forecast Greece’s debt ratio for 2011 at 162.8 percent — far above the 60 percent that euro zone members are supposed to aim for. Negotiators are hoping to put the Greek economy on a footing that would bring it to 120 percent of G.D.P. by 2020, but even that figure is now in doubt.

Eurostat also said the debt ratios of the 17 euro zone nations as a whole rose to 87.4 percent of G.D.P. from 83.2 percent a year earlier. For all of the 27 European Union nations, the debt ratio rose to 82.2 percent from 78.5 percent.

Those averages remain below the roughly 100 percent for the United States and 200 percent for Japan.

Among the most indebted euro members, Italy’s debt ratio rose 0.5 point to 119.6 percent in the third quarter from a year earlier, though it did show progress in shaving down by 1.6 points from the second quarter of 2011. Portugal’s debt ratio rose 18.9 points from a year earlier, to 110.1 percent, while Ireland’s rose more than 16 points to 104.9 percent.

Eurostat, which had not issued such quarterly debt figures before, said the report was meant to complement annual data it already publishes.

A version of this article appeared in print on February 7, 2012, in The International Herald Tribune.

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]]> http://debtguider.com/data-show-greece%e2%80%99s-debt-ratio-growing-as-economy-shrinks.html/feed 0 http://debtguider.com/debt-level-spikes-in-greece-but-drops-in-italy-and-overall-eurozone-in-third-quarter.html http://debtguider.com/debt-level-spikes-in-greece-but-drops-in-italy-and-overall-eurozone-in-third-quarter.html#comments Mon, 06 Feb 2012 11:30:59 +0000 Admin http://debtguider.com/debt-level-spikes-in-greece-but-drops-in-italy-and-overall-eurozone-in-third-quarter.html By The Associated Press | The Canadian Press – 

BRUSSELS – Debt levels in bailed-out countries Greece, Portugal and Ireland continued to rise in the third quarter of last year, [...]]]> By The Associated Press | The Canadian Press – 

BRUSSELS – Debt levels in bailed-out countries Greece, Portugal and Ireland continued to rise in the third quarter of last year, but they fell for Italy and the 17-nation eurozone as a whole, official statistics showed Monday.

Greece’s debt level was highest, spiking to 159.1 per cent of gross domestic product and suggesting that repeated austerity cuts have yet to turn the country’s finances around.

Despite the deterioration in the weakest members, overall debt in the eurozone fell to 87.4 per cent of GDP from 87.7 per cent in the second quarter, thanks mainly to improvements in the biggest economies like Germany and France.

Investors will take heart from the Eurostat figures showing debt stabilized in both Italy and Spain, the two economies seen as the next shakiest members of the currency union.

Italy managed to bring its debt down to 119.6 per cent from 121.2 per cent the previous quarter. However, at €1.88 trillion, its debt in nominal terms is still massive.

Spain’s debt remained constant at 66 per cent of GDP between the second and third quarters, although it was up from just 58.7 per cent a year earlier.

The third-quarter figures give some hope that the eurozone may be able to contain the crisis to the three, relatively small countries it has already bailed out. During the third quarter, borrowing rates were rising sharply for countries like Italy, Spain and France — they started shooting higher in August amid growing investor concern about their ability to repay their debts and the future of the euro itself.

But the biggest threat to stabilizing debt loads is the currency union’s wobbly economy, which many economist believe has already fallen back into recession in recent months. If economic output falls, debt ratios rise even if the debt has declined in nominal terms.

Greece is by far the weakest economy in the eurozone and its debt levels continued to spiral out of control. The country’s debt rose to 159.1 per cent of GDP, or €347.2 billion ($457 billion) , from 138.8 per cent a year earlier and 154.7 per cent in the second quarter.

A similarly big increase was seen in Portugal, which had to be bailed out in April. Its debt rose to 110.1 per cent from 91.2 per cent a year earlier and 106.5 per cent in the previous quarter.

Ireland’s debt reached 104.9 per cent at the end of September, up from 88.4 per cent a year earlier and 102.3 per cent the previous quarter.

For the 27-country EU, which also includes non-euro countries like the U.K., debt rose to 82.2 per cent from 81.7 per cent in the second quarter.

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]]> http://debtguider.com/debt-level-spikes-in-greece-but-drops-in-italy-and-overall-eurozone-in-third-quarter.html/feed 0 http://debtguider.com/can-wages-be-garnished-for-old-debt.html http://debtguider.com/can-wages-be-garnished-for-old-debt.html#comments Mon, 06 Feb 2012 11:30:56 +0000 Admin http://debtguider.com/can-wages-be-garnished-for-old-debt.html

Editor’s note: This column is a continuation of the column that ran Feb. 2, “Young mother with old debt fears collectors.”

Dear Debt Adviser, Your article, [...]]]>

Editor’s note: This column is a continuation of the column that ran Feb. 2, “Young mother with old debt fears collectors.”

Dear Debt Adviser,
Your article, “Old debts won’t hurt new loan,” had a lot of valuable information I forwarded to my daughter. Twelve years ago, she was one of those 18-year-olds who was offered numerous credit cards, even though she was only a student. Her story is the familiar one of too much credit and no way to pay it all back. In regard to your article, we had a couple of questions and would very much appreciate your answer.

• She has at least one account that was delinquent and closed more than 10 years ago. She has started getting calls from a collection agency asking for payment. Your article indicated these debts should no longer be on the credit report. However, are collection agencies still allowed to pursue payment?
• She is a single mother of two boys who makes $12 an hour and gets $200 per month total for child support. After rent, utilities and food, she doesn’t have the money to pay on this old debt. Can her wages be garnished?

Thank you very much for your help and information.
– Marlene and Melissa

Dear Marlene and Melissa,
In my last column, “Young mother with old debt fears collectors,” I answered your first question and said old debts can be pursued, but the statute of limitations may limit a collector‘s options. Here is the answer to your second question concerning wage garnishment:

Although a collector may ask for payment on a very old debt, they may not be able to do much more. Without the ability to report damaging information to your credit report if the debt is more than seven years old and without the ability to sue you in court if the debt is past the statute of limitations in your state, most collectors are reduced to using either bluster or guilt to get a payment from you.

Before someone’s wages can be garnished, the collector has to go before a judge and get a court-ordered judgment that the money is owed and the debt is valid. If the debt is not past the statue of limitations, a collector may decide to sue in court and could be granted a judgment for the amount owed.

If you live in a state that allows wage garnishment, your daughter’s wages could be garnished using the court judgment at a maximum rate of 25 percent of disposable earnings (after federal and state taxes and retirement contributions) or the amount of disposable earnings greater than 30 times the federal minimum wage (currently $7.25), whichever is less. So if your daughter earns $408 net each week, her wages could be garnished by $102, leaving her with $306 per week. Her child support payments would not be eligible for garnishment.

However, if a collector knowingly takes an unenforceable case to court, they are breaking the law and are open to being sued for damages. Still, some may try, so I suggest that she pay attention to her mail for any correspondence from collectors and/or creditors and be sure to open and read them. Do not throw them away or ignore them.

Should she receive notification of a court date or request from the court to send documentation concerning a suit, she should appear or be sure to send in the requested information to the court. It’s always a good idea to have an attorney with you if you have to appear in court. Check with your local legal aid office for free or low-cost advice or have her look for an attorney who will represent her for a percentage of the suit she will file if they try to get a judgment on a debt they know is past the statute of limitations.

Good luck!

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