News & Financial Advice

European stock markets have all but closed down Friday, pushing the market to allow Germany to the European Central Bank to guarantee the debt of fragile countries in the euro area. But Berlin and the ECB still refuse it. A passerby looks at the course of the Tokyo Stock Exchange in March 2011.

Most European stock markets ended the week in the red, worried Berlin's refusal to use the European Central Bank (ECB) to reduce fears about fragile states. Paris has lost 0.4%, from under 3000 points, Frankfurt (-0.8%) and London (-1.11%) also won. Madrid and Milan have instead ended in the green (0.5% and 0.2% respectively). In the line of sight of the markets, the refusal to Berlin to call for the ECB to contain the crisis.Political pressures are becoming more numerous and demanding that the central bank relaxed its position to let him play the role of lender of last resort against Europe's most indebted. And put an end to soaring interest rates on debt. The spread between Germany and Spain has exceeded 500 basis points Friday. "As the savior of Italy but also in other countries precarious, there is that the ECB," said analyst Robert Halver Germany, Baader Bank, adding that "it is the only one who can fight against nuclear explosion in the euro area. "

Germany and the ECB opposed to an intervention

Germany, the only country ruled by the strong market is the focus of all eyes. Chancellor Angela Merkel refuses steadfastly calls to relax the policy of the ECB.

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Universal Music, a subsidiary of Vivendi, announced Friday the signing of a definitive agreement with Citigroup to buy back the recorded music industry of its British rival EMI for a total of 1.2 billion sterling (1.4 billion euros).

The operation, if it goes to completion, will allow the first record company to add to its global purse of music stars such as Coldplay and Katy Perry, but it may be a long review and detailed by the competition authorities.

"It is a historic acquisition for UMG (Universal Music Group) and an important step in preserving the heritage of EMI Music," said Lucian Grainge, CEO of Universal, in a statement.

The U.S. bank, the Financial Times on Friday, would end the deadlock by agreeing to make such commitments at his expense.

Also interested in the recorded music division of EMI, the billionaire Len Blavatnik, owner of Warner Music Group, was considered the favorite, but according to two people familiar with the discussions, he threw in the towel last week after the rejection by Citigroup's offer of a $ 1.5 billion.

Net inflows of life insurance products was negative in September, the first time since December 2008, said Monday the French Federation of Insurance Companies.

The collection amounted to 9.7 billion euros in September while the amount of benefits paid totaled 11.5 billion euros.

Net inflows, the difference between contributions and benefits remains positive throughout the year.

In the first nine months of 2011, benefits payments to customers were up 19% to 78.8 billion euros, while the premiums collected by insurance companies has decreased from 11% to 98 billion euros .

The life insurance industry is suffering from financial market volatility, higher the performance of the booklet A and competition from other savings accounts that banks promote to increase the deposits of their customers.

The EU summit Sunday will not lead to a global solution. But behind the technical question of strengthening the EFSF lies a conflict between France and Germany on the new role of the ECB. Explanations. Euro

Europe is in a fog for two days a summit critical to its future. A senior European official said the Thursday night, there will be no complete agreement at the EU summit in Brussels on Sunday. The elements of discord between states include the level of discount on Greek debt to private creditors to impose on the recapitalization of banks and especially the role of the ECB in the context of strengthening the European Financial Stability Fund (EFSF ). For in cettetempête that shakes the eurozone, the ECB can not imagine a savior.His "future ex-" chief economist Jürgen Stark has also referred to this Thursday, the ECB "can not solve the crisis" and does not want to get out of the mandate it has been set. However, it could have a role to play. Explanations.

She refuses to be involved in strengthening the EFSF

One of the bones of contention between France and Germany is the role of the ECB in the rescue of the euro. Paris wants the European Financial Stability Fund (EFSF) obtain a banking license to go with her to refinance. Leverage and the ability to fund intervention limited to 440 billion euros that can lift the markets. Option rejected by the institution headed by Jean-Claude Trichet and Germany do not want the ECB to lend to the Fund in exchange for government bonds as collateral in trouble. Because it would weaken its balance sheet and would require a recapitalization.But Berlin refused to give his hand to the pocket.

Germany therefore recommends allowing the EFSF to act as guarantor to facilitate the obtaining of loans by fragile states. The fund could then provide up to 20% to 30% of their credits would be granted. In other words, the fund would be used to support a loan volume of 3 to 5 times higher in the private sector. This scenario would not involve the ECB.

But according to Cyril Regnier, strategist at Natixis, the track of the transformation of the EFSF bank is not completely abandoned. "I wait for the official release of Trichet's refusal to confirm," he said beforehand. "The ECB reversed its decision several times. She was sure she would not buy debt of struggling countries.Since it did massively. "

She claims to have done his share of work

In fact, the Frankfurt institution has already made several decisions that were outside its remit. Since May 2010, it bought bonds of troubled countries for a total of 165 billion euros, 45 billion for Greece. In exchange, it has hundreds of billions of euros of liquidity available to banks that have struggled to find on the market conditions as favorable. In his last speech as president of the institution, Jean-Claude Trichet has even granted two new lines of credit volume limit of one year, an unusually long. They also pledged 40 billion euros through the repurchase of a portion of their assets, especially real estate.The aim is to allow banks sufficient liquidity to meet their financial deadlines near term. The ECB is already far out of its responsibilities in the crisis. "For now, this is the only institution in Europe to have done something concrete," said Jean-Louis Mourier same.

She wants to return to its basic objectives

For over the events we tend to forget them. "The Bank has a mission, is to ensure price stability. This is too often overshadowed at this point in public perception," said Juergen Stark. This is because he refused these missions outside the mandate of the ECB's chief economist has decided to resign. He also pressed the point home by stating that if the ECB went further, "we not only ruin our reputation, but the ECB would also be overwhelmed by the task, and its independence threatened."Today, the objective of the ECB is that the EFSF is promptly voted and she stops to buy the debt of fragile states. But without really knowing if it will happen quickly. "It takes a lot of precautions. It gave no date for example on the end of the buyback," said Cyril Regnier.

The ECB should it have a stronger role in the future?

Opinion is divided on its role in the institutions. "The ECB is currently the only entity capable of ending the crisis," said Cyril Regnier reminder that the ECB has the weapon of the printing press. And he said, if the institution refuses to EFSF banking license, it could ultimately end up losing. "The EFSF can not buy as many bonds that the ECB did, simply because it has limited resources.And if it's not effective, then the ECB will continue to buy the debt of the States, "says strategist at Natixis. But according to Jean-Louis Mourier, the ECB has no additional role as that is his. "It's not really within its jurisdiction to be the savior of Europe. She has already done much. "He said the key lies rather in a" greater federalism "across Europe.

Europe wants to impose further cuts in the salaries of the Greeks. Prime Minister refuses a new social massacre. In fact, the daily population is becoming increasingly untenable. Testimonials. One protester surrounded by police at a rally anti-austerity Thessaloniki.

Greece "will not become India." With these words the Greek Prime Minister George Papandreou, said the creditors of the country which call for new cuts in wages in the private sector and lower the minimum wage. The country will not meet its targets for deficit reduction this year, its lenders demanded additional sources of money before granting the payment of a further tranche of 8 billion euros. "We're on the side of workers and we ensure the protection of their collective rights," added the Prime Minister.I must say that since the outbreak of the crisis in Greece, in 2009, the austerity measures have led to a daily population increasingly untenable. Testimonials.

40% pay less

Fotini, 32, is married with two children. It is directly affected by the decline in wages imposed austerity plans. She said in testimony to the world. "40% of my salary in less than 1400 euros gross, 20% in less than the salary of my husband at 1300 euros gross. The increase in all products and services, gasoline, food, transport tickets …" His family is also affected by austerity. "My sister graduated from high school in Athens Polytechnic, is unemployed, my eldest daughter of two and a half years has no place in municipal day care, then you have to pay 500 euros a month to write it in a private nursery. Our rent is 600 euros, it has remained stable.But with all the fixed expenses, we are left with only 300 euros a month to live. "

Pensions reduced by 20%

Anastasia is a former professional dancer. It affects his retirement for six years but has planed for 20% to 1500 euros. It demonstrates the difficulty of daily in an interview with Radio Suisse Romande. "Towards the end I'm really broke. Life has become more expensive in the supermarket, food, energy. It's depressing, we see people losing their jobs. I live with my mother who also has a retirement. People help, otherwise I will not be alone. I have three children 22, 24 and 26 years old and not yet working. It is very unfair to lower the wages of people who have always been correct with the law. It hurts. I'm not allowed to work in conjunction with my retirement, not even a dance school.If I do that I was cutting a big part of my pension. I also very afraid of riots, the country goes bankrupt and can not even touch our retirement. I am very, very worried. "

Unemployment affects 4 out of 10

Greek youth is affected by austerity. Laurane Chytiris is a Greek-Swiss student in French literature at the University of Athens. She said: "I think to leave Greece for one year to get my master elsewhere. If the situation does not improve, I will not. I have a lot of knowledge on the internet looking to live in England or France. They see that it is unbearable here. There are young people of 30 who still live with their parents. They have a job but can not afford to pay rent with what they earn. " And unemployment is not just young people.The government announced an official figure to 16.3%, unions talk instead of 23%.

The hell of job search

Dimitri, 33. He is unemployed computer, converted into a teacher after the bankruptcy of his company at the beginning of the crisis. "I made some replacements as a teacher, but I did not post in September, I hope to have one a few months," he said still with hope. Meanwhile, it still affects 400 euros per month for unemployment benefits, which will stop in four months. For immediate needs, he relies on his savings and his family because his rent is 500 euros per month. Eventually, he too sees no alternative but to leave Greece. He participated in a recruitment drive to emigrate to Australia. "When I think of all that has to have degrees, to be ready.It's not my generation that created the debt, even if we rééchelonnons, it means that people who are not yet born today will still repay the thirty years. "

Small businesses are the key under the door

The "triangle trade" of Athens is not what it was. In this high place of business of central Athens, near Syntagma Square, fashion is the curtain fell. According to the National Confederation of Hellenic Commerce (ESEE), over 20% of small businesses have disappeared since 2010 in Athens. "Nobody gives us a hand," laments Themis Lizardos of Reuters, a jeweler in the neighborhood who has not dropped the curtain. But at this rate it should not delay. "There is only one hand, the one that we press our heads and keeps it on the ground," he adds.Tens of thousands of small businesses have closed across the country after the establishment of the first European aid plan of 110 billion euros, and the promise of stringent austerity measures by the government.

Real estate, next epicenter of the crisis?

Theodore Pelahaidis, is professor of economics at the University of Athens. He said the next crisis will be real estate in Greece. And you can not do much about. He said at Radio Suisse Romande. "When household savings have been spent in the coming months, what will people do? They will sell their home. But if you sell, the properties will lead to lower prices. So the next step that it will undergo a real estate crisis. And it will exacerbate the current crisis. "

The chairman of Deutsche Bank, Josef Ackermann, is opposed, in an interview broadcast Saturday, a review of the terms of private sector participation in the second bailout of Greece.

"If we reopen the voluntary agreement of July 21, we not only lose valuable time but also quite possibly the private sector support," said Josef Ackermann in the Sunday edition of Greek newspaper Kathimerini.

"The impact of such a decision will be incalculable.That's why I warn with great energy against any revision material, "the head of Deutsche Bank, who also chairs the Institute of International Finance (IIF).

At the European summit on 21 July, private creditors, represented by the IFIs, have agreed to reduce Greece's debt of some 37 billion euros through a redemption followed by an exchange.

The program anticipates a 21% discount on the underlying bonds, but in recent days, officials from the European Union have suggested that higher discount would be required to read the accounts of Greece by the inspectors of the EU and International Monetary Fund.

Josef Ackermann also finds that the exposure of German and French banks in Greece's debt is "absolutely manageable" and that it is "necessary and important for governments in the euro area to their promises and implement them on time and with determination. "

The Swiss bank plans to remove "thousands" of jobs in its investment bank. Restructuring decided before the discovery of a fraud of $ 2 billion a trader of its subsidiary in London. UBS, headquartered in Zurich, Switzerland, May 26, 2011.

Swiss bank UBS, which said Thursday he was the victim of fraud by one of its brokers who lost $ 2 billion, will "massively" reduce its investment banking and to make major layoffs, said the Helvetic Press Friday.

A reduction in size of the bank, often cited by analysts, should be announced Nov. 17 at the UBS Investor Day, said the daily Tages-Anzeiger, which is based on internal sources of bank.This will result in the reduction of "thousands" of jobs in the division, said the newspaper, which is also expected that the Chief Oswald Grübel and the head of the banking Carsten Kengeter have to resign soon .

The Swiss press has reacted strongly in the wake of revelations of the first bank Helvetic, who announced Thursday he was the victim of fraudulent activities of one of its traders, which caused him to lose $ 2 billion (1.4 billion euros) . While the bank had to release third quarter earnings of between 900 million and 1.1 billion Swiss francs, analysts said it could now suffer a loss of 500 million, the first since the third quarter of 2009.

"You have to ask, how is it possible, despite recommendations stricter domestic (…), to lose such sums out of control," questioned the daily Neue Zürcher Zeitung (NZZ). For the newspaper, the case threatens the reputation of the entire Swiss financial center, which represents more than 10% of gross domestic product Helvetic. A Swiss Exchange, the rebounded Friday morning as UBS. After closing Thursday down more than 10%, the action gained 2.67% to 10.01 Swiss francs in a market up 0.60%.

European shares ended on a note undecided, the ISM manufacturing index in the United States, down but still growing area, from offset concerns about the contraction in the eurozone.

In Paris the CAC 40 gained 0.28% or 9.07 points to 3265.83 points.

Other major European markets, London has gained 0.45% and Frankfurt lost 0.94%. Of the European indices, the Eurofirst 300 took 0.65%.

The defense was sought, Deutsche Telekom 2.19% returning after a decline of 7.6% after reports that the U.S. would oppose the sale of its subsidiary T-Mobile to AT & T.

The Swiss pharmaceutical company Roche took 1.5% and the French specialist Danone dairy products 1.3%.

The Spanish Socialist government announced Friday the signing of an agreement with the conservative opposition in the Constitution for the country the principle of limiting the public deficit and debt.

The Constitution will be amended through a law to be adopted before June 30, 2012, the government said in a statement released in the early hours of Friday.

Both sides agreed to secure 0.4% of GDP limit of the overall deficit of the country, that is to say state and regions included.

The law will also include criteria for a gradual reduction of debt pursuant to the Pact of Stability and Growth in the euro area.

The two sides signed the agreement will review the deficit ceiling in 2015 and 2018.

This follows a call to that effect made by France and Germany to countries threatened by the debt crisis in the euro area.

Spain has already announced Tuesday that it would enshrine in the Constitution a public debt ceiling before the legislative elections in November.

The Russian producer of nickel and palladium, Norilsk Nickel said it had prepared an offer to buy out 15% of its capital owned by the Rusal aluminum companies for about $ 8.75 billion.

The offer proposes to return the securities at a price of 306 dollars, or 20% above their average price over the last six months.

It is still subject to approval by the Board of Directors of Norilsk, which will meet Aug. 24.It will then be valid until September 5, the company said.

This proposed acquisition represents a further attempt to Norilsk to end the standoff delivered by the principal shareholder of Rusal, the oligarch Oleg Deripaska.

The aluminum companies said it would consider the offer.

"Rusal considers its investment in Norilsk Nickel is strategic, and as a public company we are discussing all offers submitted to us in accordance with our internal management procedures," he reacts in a statement.