National, World, Business News

A source close to the government, China is considering investing 50 to $ 100 billion in the European Financial Stability Fund (EFSF). Nicolas Sarkozy and Hu Jintao in Beijing, April 28, 2010.

China is considering investing 100 billion dollars to help the euro area to combat the crisis of public debt, reported the Financial Times on its Web site Thursday, citing a government source. "China might be willing to contribute between 50 and 100 billion in the EFSF (European Financial Stability Fund) or to fund a new mounted under his leadership in collaboration with the IMF, according to a person familiar with the intentions of the Chinese leadership" , said the British newspaper.

"If conditions are suitable then something a little over $ 100 billion is not inconceivable," said the person at the Financial Times.

Italy has had to make a record performance to place five-year bonds Tuesday, which illustrates again the difficulties faced by Rome to finance to sustainable levels.

The euro briefly fell below $ 1.36 and European stock markets have widened their losses after this operation, before these assets back into positive territory in mid-session.

The hope that China will come to the aid of Italy by investing in debt, a prospect that had supported the market on Monday night and Tuesday morning, gradually dissipated, which weighed on the bond issue.

In all, the Italian Treasury has raised 6.485 billion euros, 3.865 billion of new securities to five years, sold at a yield unprecedented 5.60%.

The coverage ratio of the award to five years rose to 1.279, well below that in the last similar operation, where he had established at 1.93.

The cost of financing which faces Italy took off despite the buybacks of sovereign debt in recent weeks made by the European Central Bank (ECB) to support Italy – a program that has led to the resignation sensational Jürgen Stark Friday.

"A disappointing auction, where the relatively low coverage rate is obtained at an exorbitant cost," said Richard McGuire, technical analyst at Rabobank.

The Italian Minister of Economy, Giulio Tremonti, met last week a Chinese delegation, said on Tuesday a spokesman for the Italian Treasury, which did not however want to comment on the content of the meeting.

These offers came a day after an article published in the Financial Times reported that Italy had asked China to support its debt by buying quantities "significant".

EMERGENCY ACTION

Chinese leaders have repeatedly publicly expressed their support for a Euro mired in difficulties.

But according to the Wall Street Journal citing a source familiar with the matter, it is not certain that the talks between China and Italy lead, pointing out that visits of Chinese delegations in Greece and other countries in the region Euro difficulties had raised hopes for investment from the second world economy that never materialized.

The renewed investor concerns about the difficulties Italy has led to a further widening of the yield spread between Italian and German bonds to 394 basis points.

This level is near the peak of 400 basis points reached in August, just before the European Central Bank does not fly to the rescue of Italy in redemption of government bonds issued by Rome.

On Monday, the CDS to five years in Italy has reached a new high of 505 basis points, up 38 basis points, according to Markit, which tracks the derivatives market.This means it costs EUR 505.0000 to guard against exposure to 10 million Italian sovereign bonds.

Italy has entered the center stage of the debt crisis because of its sluggish growth and its debt of 1,900 billion euros, representing about 120% of the GDP of the country.

Italian MPs are looking into the austerity plan introduced by the government of Silvio Berlusconi plans to reduce the budget to balance of Italy in 2013.

The Italian Senate approved on Wednesday through a vote of confidence in the austerity plan intended to bring 54 billion euros according to the Italian Treasury.

Italian MPs will be asked to vote on Wednesday by a vote on the austerity plan of the Italian government said on Tuesday the prime minister, Silvio Berlusconi.

Herman Van Rompuy, European Council President, said that the implementation of the austerity program was crucial not only for Italy but for the euro area as a whole.

According to economists, the cost of a bailout of the country at once would exhaust all resources in the European Financial Stability Fund (EFSF).

The creation of non-agricultural jobs in the United States were zero in August and the unemployment rate remained unchanged at 9.1%, according to official statistics released Friday.

Last month, the creation of non-agricultural jobs were zero, according to the Labor Department, while economists on average expected 75,000 creations.

Statistics better than expected in July (117,000 new jobs) was also revised down to 85,000.

That of June was also revised downward, to 20,000 against 46,000 initially.

Overall, the private sector created 17,000 jobs, against 105,000 expected and after 156,000 in July (revised from 154,000).

The unemployment rate however remained unchanged from one month to the other 9.1%, in line with analysts' expectations.

In August, the U.S. economy has eliminated 3,000 manufacturing jobs, while economists expected 4,000 new jobs after 36 000 (revised 24000) in July.

The public sector has in turn eliminated 17,000 jobs, after having destroyed 71,000 in July (revised from 37,000).

For two days, France is the heart of the market storm. The cost of insurance against default on debt lights blazing. The contagion of the crisis of debt in the euro area appears to have reached France … French President Nicolas Sarkozy (here on a council of the euro area July 21, 2011)

It was predictable. After Spain and Italy, France is now the new target markets. Wednesday, rumors of degradation of the French note have plunged the European stock exchanges. Fears of contagion from the debt crisis in France have led Thursday by a surge in contracts of insurance against default (CDS) on debt lights. The CDS of France have indeed reached a record 75 basis points, which means it must pay 175,000 dollars a year to provide $ 10 million in French state debt to 5 years.In comparison, Germany CDS are 85 basis points, those of the United States to 56 points. The reasons for the increased tension on France.

Fears of loss of triple A

The CAC 40 is unscrewed from 5.45% Wednesday, amid rumors of degradation of the French note. Bercy immediately issued a formal denial. The three main rating agencies, Standard and Poor's, Fitch and Moody's, they all reaffirmed that the prospect of the "AAA" of France was stable. This means that there is no risk of downgrade tricolor short to medium term. Still, for many analysts and investors, the degradation of the note of the United States sounds like a warning to other countries with a triple A.But France has the worst ratios of the club budget of twelve (composed of Germany, the United Kingdom, Sweden, Australia, Canada, the Netherlands, Austria, Luxembourg of Norway, Switzerland and Finland). The French public deficit (7% of GDP) exceeds the level of other "triple A" in the euro area. France, also displays a primary deficit (excluding debt service charges) twice (3% of GDP) than its neighbors (1.6% in the Netherlands, Austria 0.9%, 0.5% Luxembourg, while Germany and Finland this year should generate a primary surplus).If it were, then, that a rumor, the prospect of a deterioration in the French note in the longer term is not excluded.

A sudden return of Nicolas Sarkozy ruled suspicious

Wednesday morning, the Elysee Palace announced the holding of a crisis meeting on deficits, with Prime Minister François Fillon, Minister of Economy Baroin and budget minister Valérie Pécresse. To do this, Nicolas Sarkozy, had to cut short her holiday to Cape Negro. During the meeting, the Head of State has asked his ministers to hand over on 17 August, "proposals to ensure compliance with the goals of deficit reduction." The arbitration will be made Aug. 24. Why Nicolas Sarkozy he called this meeting? As we know, before officially degrade a country, the rating agencies warn its leaders 12 hours.The initiative of Nicolas Sarkozy called a crisis meeting has encouraged the emergence of rumors about a possible loss of the triple-A French. "This has poured oil on the fire," admits one member of the French Government, quoted by the Financial Times. The other explanation – because the degradation did not occur – the holding of this meeting is to anticipate the cold shower that could be the announcement of the growth in the second quarter. INSEE is to publish this number on Friday morning. But after starting the year with a bang, French growth has slowed markedly.According to all forecasts, GDP should grow by only 0.2% in the second quarter, after +0.9% in the first quarter.

Commitments to reduce the deficit unconvincing

If the forecast 2% growth this year is achievable given the good start to the year, that of 2.25% in 2012, however, seems less and less realistic given the economic slowdown. Growth lower than expected means less tax revenue, so a larger effort to predict savings for deficit reduction. So, to achieve the objective of a deficit to 4.6% of GDP in 2012 and 3% in 2013, France will have to tighten their belts. In a report published mid-June, the Court of Auditors estimated that "the necessary efforts go beyond the measures that have already been taken." Particularly in terms of reduction of tax loopholes.According to the institution, the government's effort to reduce represent ten billion euros in 2012. The sages of the rue Cambon advocate an effort twice as large. Valérie Pécresse golds already announced that the government was ready to remove more tax loopholes that what was previously expected. The government is also considering taxing very high incomes, and increase taxation on life insurance. These measures will result in tax increases, targeted in 2012. Unless this commitment does the cost of the presidential campaign. Nicolas Sarkozy had indeed done in 2007 that he was not elected to raise taxes …

G20 countries have made contact by telephone Sunday morning to discuss the consequences of the debt crisis on both sides of the Atlantic, shaking financial markets and fears of a relapse of Western countries into recession.

After heavy turbulence in global financial markets, which lost 2,500 billion during the past week, European and American leaders find themselves again forced to reassure investors about the ability and determination of countries to reduce their deficits and public debts.

According to South Korea, a conference call Sunday morning brought together financial officials of the G20, which groups the world's major economies, to discuss the situation caused by tension on the debt in the euro area and lower by Standard & Poor's sovereign rating of the United States.

The G7 finance ministers are also expected to contact during the day and it is possible that they broadcast a statement, said a Japanese government source. The most logical would be that the conference takes place before Asian markets open on Monday at 9:00 (0:00 GMT).

The European Central Bank (ECB) will hold a conference call for its Sunday afternoon.Markets expect the ECB to see begin on Monday the purchase of government bonds in Italy and Spain in order to stabilize prices, but the issue divides within the institution in Frankfurt.

French President Nicolas Sarkozy, whose country currently chairs the G7 and G20, spoke Saturday on the phone with British Prime Minister David Cameron.

ITALY

In Washington, an economic adviser to the White House deplored the decision by S & P to degrade the rating of U.S. debt from AAA to AA +, which could ultimately affect all markets by increasing the cost of borrowing and undermining the prospect of sustainable recovery.

Asian allies of the United States, Japan and South Korea have renewed their confidence in U.S. Treasury bills, may lose value.

"There will be no sudden change in our policy of reserve management," said Vice Minister of Finance of South Korea, Choi Jong-ku.Much of the country's foreign exchange reserves, valued at over $ 300 billion, are made up of U.S. bonds.

"No alternative does not provide such stability nor such liquidity," said the South Korean official.

But the immediate concern of financial markets for the debt crisis in the euro area, while interest rates in Italy or Spain jumped to their highest levels in 14 years in recent days.

The absence of repurchase obligations of both countries by the ECB to ease prices has been particularly punished by the markets that have seen the sign of internal divisions harmful.

German officials in the central bank to claim the benefits of the implementation of stringent austerity measures before giving the green light.

Pressed on all sides, the Council President Silvio Berlusconi said Friday evening the implementation of an austerity plan a year ahead of schedule, achieving a balanced budget in Italy in 2013.

WASHINGTON SERMON S & P

One of the dangers feared by economists is to see Italy, the third economy in the euro area and the eighth world economy, private market financing.

Italian public debt reached 1,800 billion euros, or 120% of gross domestic product.

July 21, the countries of the euro area agreed on strengthening the European Financial Stability Fund (EFSF) to assist its members in trouble, but decisions must still be translated into action.

In addition, an extension of the crisis in Italy or Spain, after the bailouts granted to Greece, Ireland and Portugal, in the eyes of observers would require a strong increase in lending capacity of EFSF, with time for the 440 billion euros.

Quoted by the weekly Der Spiegel, the German government experts doubt that Italy could be re-floated by the EFSF even if the fund saw its capacity threefold, because the needs of Rome are in their too great.

United States, the lowering of the sovereign rating has been denounced by the Treasury, which held that the rating agency "forgot" 2000 billion in budget savings in its calculations.

Gene Sperling, economic adviser to Barack Obama, quipped on an agency "that starts from a conclusion and then looks for arguments to prove it."

The U.S. president called on members of Congress, who have battled for weeks over the question of raising the debt ceiling, to unite to improve the fiscal situation and stimulate growth.

U.S. stocks finished higher Tuesday after quarterly results from big names considered encouraging and the rating on hopes of a political agreement in Washington to avoid a default.

The Dow Jones gained 1.63% or 202.26 points at 12,587.42 points, while the Standard & Poor's 500 took 1.63% or 21.29 points to 1326.73 points and the Nasdaq Composite advanced 2.22% or 61.41 points to 2826.52 points.

The increase accelerated after a speech by President Barack Obama suggesting that discussions were progressing toward an agreement to reduce the budget deficit and an increase in the ceiling of the debt of the United States as we approach the deadline of August 2.

In addition, accounts and prospects published by some major groups have enjoyed.IBM said Monday after closing a quarterly profit up 8% over the previous year and reported a sharp rise in new business in its services division. The action ended up 5.7% to 185.21 dollars.

The S & P value of IT has awarded 2.7%. Apple gained 0.8% before the publication of its results.

Coca-Cola took 3.3% to 69.32 dollars after publication of results slightly above expectations.

A jump in housing starts in the U.S., their largest increase since January, has also supported the trend.

This supported the builders like DR Horton (+5.7%).

Some banks have been neglected.Bank of America and Goldman Sachs dropped 1.5% and 0.6% after the publication of their results.

Wells Fargo, by contrast, soared 5.7%. The bank reported a 30% jump in net profit in the second quarter.

The establishment of a second aid plan for Greece and increasing market confidence in respect of the entire euro zone will dominate a series of crucial talks between EU officials in Brussels on Monday.

The European Council president, Herman Van Rompuy, will meet at noon (1000 GMT) with Jean-Claude Trichet and Jean-Claude Juncker, the presidents of the European Central Bank and the Eurogroup, in preparation for the monthly meeting of Finance ministers of the euro area.

The spokesman Herman Van Rompuy has insisted that the meeting, involving also the European Commission President José Manuel Barroso and European Commissioner for Economic and Monetary Affairs, Olli Rehn, was not a meeting crisis but the coordination and the situation in Italy was not on the agenda.

A spokesman for the German government has also said that Italy would not be discussed at the meeting and said the new plan of aid to Greece was the top priority of the German authorities.

Several senior European sources, however, indicated that it was impossible not to mention the Italian case after the black day on Friday in the stock market lived in Rome, where UniCredit, Italy's largest bank, plummeted 7.9% background fears of poor results in stress tests banks that will be released Friday.

"Kilometre Zero"

Monday morning, the risk premium demanded by investors to hold bonds to ten years Italian rather than German bunds, which refer, hit a record since the inception of the euro to 268 basis points.

This movement has affected the entire periphery of the eurozone.Spanish bond rates have also reached the highest since early 2000, to 5.84% and have increased the pressure on Portugal and Ireland.

The Eurogroup meeting, however, should focus on the new aid plan for Greece, which currently stumbles on the issue of private sector participation.

According to several sources, the main option considered is that offered by French banks of a "rollover" of the Greek debt maturing by 2014.

Germany, however, back on the table this week's proposals for an "exchange" of Greek bonds and, last Friday, the Institute of International Finance (IIF) has meanwhile proposed ten days ago that Greece proceeds to buy back bonds, again placing the Europeans to a blank page.

"We're not quite not return to zero kilometers, but it is not far," admitted Friday a senior source within the euro area.

The Bank of France added his voice to the chorus of warnings about the activity in France. If the official growth forecast of 2% for 2011 is not threatened, and the second half of 2012 ahead full of pitfalls. 8 reasons to worry.

After starting the year with a bang and win government news, bad news for economic activity accumulate France. The growth of the French economy would slow sharply to 0.2% in the second quarter, after 0.9% in the first, according to a new forecast of the Bank of France on Friday. Twice less than the 0.4% proposed so far. This prediction is consistent with that of the INSEE table but on a rebound in the second half that would achieve growth of 2% throughout the year.Is the goal set by the government or the estimate recently published by the IMF for the country. The fact remains that the multiplication of negative indicators in the space of just a few days lead to worry, if not the achievement of these targets, at least on the exact health the French economy. Overview.

The effect of restocking is complete

After destocking during the lean times, companies have begun to replenish their stocks at the time of recovery. This was a technical factors determining the good performance of industrial production in the first quarter. Inventory changes have indeed contributed 0.7 point to growth in the first three months of the year. But this dope is now closed. Stocks are "slightly above the desired level" according to the survey of the Bank of France to the business.

The business climate is deteriorating

The indicator of business climate of the Bank of France in June fell below its long-term average (100 points) in the industry, he moved to 99 points (against 103 in May) and the services it totaled 99 points (against 100). After collapsing with the crisis can be raised above its average, the indicator relapse so far. The outlook is simple to stability in the industry, and progression to moderate pace in services.

The activity and order books are progressing more

Sales in France fell sharply in the scheme in June, according to the firm that publishes a Markit PMI closely watched by economists. In manufacturing industry, manufacturers have never produced so little since July 2009. And services, providers reported the lowest increase in their course of business for the past six months.Not surprising if one looks closely at the level of order books. The rate of expansion of new business across all sectors, has a lowest in 22 months. As a result, sales increased slightly both in the domestic market and export.

The foreign trade deficit breaks all records

The negative balance of trade balance reached 7.4 billion euros in May from 7.2 billion in April, according to customs statistics released Thursday. Numbers never seen before. The first five months of the year, it settled at 33.4 billion: an amount up 60% year on year, which already represents nearly two-thirds of the annual deficit in 2010. It should beat the 2011 record high year over 55 billion reached in 2008, at the height of the crisis. "What is happening is very serious," has acknowledged the Secretary of State for Foreign Trade Pierre Lellouche.Structurally, this huge deficit arises because the issue of competitiveness of French companies because, in addition to the energy bill, it is linked to a very low growth of industrial exports. But this poor performance will lead short-term French growth. In the first quarter, foreign trade had already withdrawn 0.4 points to GDP growth.

The engine of consumption is down

Purchases of goods of French households fell 0.8% in May after having fallen back by 1.4% in April and 0.9% in March. Not since the summer of 2008, just before the outbreak of the financial crisis, to find three consecutive months of falling consumption in France. This further decline was a surprise to all analysts who had forecast the contrary, a strong rebound after falling in April.Apparently, rising prices, both energy and food prices begins to do damage. What to ask a possibly prolonged failure of traditional engine of French growth. Especially as the unemployment figures do not grow to be optimistic.

Stop to the decline in unemployment

After four consecutive months of improvement in the unemployment figures, the announcement of a net 0.7% increase in the number of unemployed in May was the effect of a cold shower. The total number of people seeking work, including those who have worked reduced jumped even more sharply from 1% to 4.078 million, its highest level since the 2008 crisis.Despite its growth forecast of 2% this year, INSEE also does not open embellished, and expects the unemployment rate down to 9% at end 2011, against 9.2% in the first quarter, while the government hoped to pass a rate below 9%.

Business bankruptcies remain high

Direct consequence of the weakness in consumption, business failures recorded in France in the second quarter remained stable at a high level, the company said Thursday Altares. Despite the economic recovery, the number has in fact declined by only 0.3% over the period, with 14,397 judgments backup, reorganization or liquidation. Three quarters of the failing firms employing fewer than three employees."Rather than present in the food trade, catering, services to the person or business, these structures are struggling to resist in the face of sluggish consumer spending."

The building is not going that well

When the building is all is, the saying goes. If he is right, the return to growth in new housing construction in 2011 after three years of decline must be hope. Indeed, professionals considering an increase of 2.2% this year which will result in hiring. But this improvement may be short-lived as the housing market is threatened with blocking. It is indeed faced with a double upward movement, the price of m2 and that of interest rates. A coincidence which had not been seen since 2000 and is likely to stopping sales, as well as new, as in the former, as indicated by recent Century 21.Or the real estate market feeds the secondary market for home furnishings. This may also weigh on household consumption.

The trade deficit Britain fell more than expected in April, due mainly to a sharp drop in imports of consumer goods.

The deficit was 7.389 billion pounds (8.3 billion) in April against 7.708 billion in March and 7.55 billion expected, according to data released Thursday by the Office for National Statistics.

The deficit with countries outside the European Union, however, is somewhat higher than expected at 4.339 billion against 4.495 billion pounds in March and 4.28 billion expected.

Pierre Vermeren, Maghreb specialist and professor at the Sorbonne, has published in May, "Maghreb, the origins of the Democratic Revolution (ed. Plural). On the occasion of the G8 summit in Deauville, which focuses on measures to aid the Arab revolution, he discusses the situation in Tunisia, the country which is part of the wave of protest in the Arab-Muslim Pierre Vermeren, Maghreb expert and professor at the Sorbonne, has published in May, "Maghreb, the origins of the Democratic Revolution (ed. Plural)

Where is Tunisia, four months after the leak of Ben Ali in January?

From a political perspective and social, we can say that things were not too badly. The political prospects are created with the elections for the Constituent Assembly that appear to be maintained for 24 July, after much hesitation.The population is actually quite pleased with the progress of the country, despite the persistent economic problems. There is now a prospect of freedom and sustainable policy change. As for the transitional government, although he is alleged to be a little too French, it is composed of competent people who manage the business effectively.

But there are still some dark clouds. On the one hand, the faithful of the old regime are still maneuvering to undermine the transition process. On the other hand, Colonel Gaddafi is trying to bring the war in Tunisia. The influx of tens of thousands of refugees in the country is a heavy burden for Tunisia. The record is mixed but the revolutionary process continues so encouraging.

Is the country ready for elections, scheduled July 24?

Obviously not, but we must not forget that Tunisia emerging from decades of authoritarian rule, the party virtually unique. The political class did not exist, there was no respite, no organized opposition and that was in exile had aged. Today there are intellectuals, activists of human rights, good people, young people also who have distinguished themselves during the revolution, but this is not a political class in the sense that we ' usually understand.

I think we should hold elections as quickly as possible to sit on the vote a legitimate regime. But there is still a tentative plan for this meeting will draft a constitution and then follow other elections, parliamentary and presidential perhaps.The country will never be ready, but it will not be more ready in July than in October after Ramadan. There will inevitably be imperfect, but it is important to have a legitimately elected Government. For completeness, we wait …

The apparatus of the former dictator Ben Ali has it been eradicated?

It is obviously still there because Ben Ali's party was, on paper, two million members, but in reality few hundreds of thousands of dignitaries and officials. The Department of the Interior, the main body is always present. Leaders were dismissed and sanctions against those who fell were involved in repression during the revolution. But the bulk of the unit is still in place. However, it is a police and judiciary who have no democratic culture. There are also groups that focus on destabilizing because they have much to lose with the change of regime.

As during the Revolution, there was in late April and early May, fires in prison that freed hundreds of prisoners to organize the chaos in the country. Obviously there are clans who play the politics of the worst. Especially as the links between Gaddafi and former presidential guard Ben Ali, who took refuge in Libya, are still active. Last week, a Libyan commando with explosives was arrested in northern Tunisia. That is why the fall of the regime of Colonel Qaddafi would be a huge relief for Tunisia.

That said, Tunisians must maintain their state apparatus because there is no other. It is important not to like in Iraq where most civil servants have been dismissed by the Americans after the 2003 invasion, which fueled the civil war. One should keep this unit, while framing it.But this will be a long and difficult process. That's what happened after the death of Franco in Spain in 1975. The police and justice authoritarian remained in place. Tunisia also, they will gradually, supported and replaced and most run by generations who are more attached to human rights.