Germany’s Gabriel says EU break-up no longer unthinkable

German Economy Minister Sigmar Gabriel addresses a news conference in Berlin Germany, December 19, 2016. REUTERS/Fabrizio Bensch

 

Germany’s insistence on austerity in the euro zone has left Europe more divided than ever and a break-up of the European Union is no longer inconceivable, German Vice Chancellor Sigmar Gabriel told Der Spiegel magazine.

Gabriel, whose Social Democrats (SPD) are junior partner to Chancellor Angela Merkel’s conservatives in her ruling grand coalition, said strenuous efforts by countries like France and Italy to reduce their fiscal deficits came with political risks. Continue reading

Greece and Iran: The Dark Side of the Relationship

As you can glean from the article, there’s a lot more to the EU than business as usual. Some things will never see the light of day, but here we have a glimpse into the darker inner workings and depth of corruption within the Greek system. Greece is an extremely sick nation.

Greek problems aren’t limited to a constant economic and political hammering by Germany. The wounds are many, and bone deep.

It makes you wonder where you would even start to get your nation out of this mess if you were an honest Greek.

 

Greek Prime Minister Alexis Tsipras meets with Iranian Supreme Leader Ayatollah Ali Khamenei in Tehran, on February 8, 2016. (Image source: Office of the Supreme Leader)

 

  • The Iranian government, with these two cases (Kabis and Noor 1), seems to hold in its hands a bomb that can blow up the Greek economic and political system. If Greek authorities seriously investigate these cases, they will trigger a domino-effect of disclosures that could well destabilize Greece’s government.
  • Iran can blackmail and manipulate its political influence inside Greece, or Iran can use its ability to destabilize a member of NATO and Eurozone, Greece, to strengthen its international position.

As Sunnis and Shiites are fighting for regional hegemony in the Middle East — Syria, Yemen — Greece, as geographical gate for Europe and the Balkans, is a trophy country for the Iranian regime. In recent years, the Iranians have been exploiting the corrupt establishment’s thirst for money. Through drug dealing and oil smuggling, Iran seems to be trying to buy political influence and access to the Greek media. Well-informed diplomatic sources say that the Iranian Embassy in Athens is extremely active in Greece’s political and economic life behind the scenes. Continue reading

Euro Crisis and Contagion Coming In 2017

A euro crisis and contagion is almost certain in 2017, Irish economist and writer David McWilliams has warned:

“It is almost certain that there will be another euro crisis in 2017. The last time we had a euro crisis, the focus of attention was Greece; today the vortex is Italy.

Italy is not Greece. Italy is the third-largest economy in the Eurozone. Italy is the second-largest manufacturing nation in the EU after Germany. Italy is the largest debtor in Europe. Continue reading

Are Italy’s Banks About to Explode?

Insight from January of 2016 for today regarding the Italian economic crisis:

 

Italian banking stocks saw another day of meltdown on January 19 as skittish investors were spooked by the country’s burgeoning toxic loan crisis.(GIUSEPPE CACACE/AFP/Getty Images)

Italian banking stocks saw another day of meltdown on January 19 as skittish investors were spooked by the country’s burgeoning toxic loan crisis. (GIUSEPPE CACACE/AFP/Getty Images)

 

How a banking crisis in Italy could reverberate around the world

The value of Italy’s third-largest bank has plummeted by 60 percent since the start of this year. There are signs many are pulling money out of Banca Monte dei Paschi, out of Italian banks, and out of Italy in general. Even if the nation is not hit by a banking crisis imminently, the dire situation in Italy’s banks and its whole economy could still cause a financial disaster in Europe that would reverberate around the world.

We’re not talking a Greece-type crisis here. Italy is the eurozone’s third-largest economy, and the eighth largest in the world. Its economy is over seven times the size of Greece’s. An economic collapse in Italy would put Europe in a crisis far, far worse than the ongoing Greece crisis. Continue reading

A Time Bomb

ROME/BERLIN (Own report) – Following Italian Prime Minster Matteo Renzi’s defeat in Sunday’s referendum, Berlin is urging Rome to quickly form a “capable government” and resume its adjustment to the German model of austerity. “The economic problems have to be tackled at the roots,” said Jens Weidmann, head of Germany’s central bank, yesterday. German financial experts are floating the idea of a cabinet of technocrats, modeled on the Mario Monti government. Monti ruled for a year and a half beginning in November 2011, without having been democratically elected and initiated an austerity program considered extremely harsh. Time is pressing: the bank crisis, caused, to a large extent, by bankruptcies due to German austerity dictates, which has been festering in Italy for a long time, is threatening to escalate. The Monte dei Paschi di Siena tradition bank’s recapitalization planned this week is acutely endangered. It cannot be ruled out that its bank crisis could soon spread to other Italian credit institutions and to German banks. Continue reading

Potential “Systemic Crisis In Eurozone” After Italy Votes No, Renzi Resigns

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Italy’s Prime Minister Matteo Renzi has said he will officially resign Monday, after voters apparently rejected his proposals for constitutional reform. What should investors keep an eye out for after his defeat?

Although the referendum on Sunday was officially on Renzi’s plan for legislative overhaul, it was widely seen in Italy as a vote of confidence in the prime minister and his government. In voting “no” — projections suggest 59% of those in the ballot made that choice — the Italians have set the stage for an early election and perhaps given local populist parties the chance to deliver a Brexit- or Trump-style shake-up. Continue reading

EURO PLUNGE: Single currency could ‘COLLAPSE’ against dollar amid record losing streak

Investors have frantically dumped the single currency over 10 consecutive trading sessions – the worst performance since the euro was introduced in 1999.

Head of the European Central Bank (ECB) Mario Draghi failed to ease fears after warning that the eurozone recovery depends on action by monetary policymakers. Continue reading

Eurozone banks are in DEEP trouble: Wall Street top bankers issue warning to EU

EUROPE’s biggest banks are vulnerable and pose a huge risk to financial stability, according to some of Wall Street’s top bankers.

Financial heavyweights from the US and Switzerland joined forces to sound the alarm over Deutsche Bank and its peers.

Goldman Sachs’ president Gary Cohn hit out at eurozone banks for failing to clean-up their balance sheets after the financial crisis. Continue reading

US fine for Deutsche Bank will DESTROY EU economy stability, warns Eurozone finance chief

GLOBAL finance leaders issued a fresh warning on economic stability for the EU today, slamming the huge U.S. fine for Deutsche Bank as a mass destabilisation of Germany’s largest bank.

Jeroen Dijsselbloem, the chairman of euro zone finance ministers, said that the U.S. Department of Justice’s demand that Deutsche Bank pay $14 billion for its role in the sub-prime mortgage crisis is too big and will undermine financial stability.

“Let’s hope it is an opening bid,” Dijsselbloem said on the sidelines of the International Monetary Fund and World Bank annual meetings in Washington. “These kinds of fines are completely oversized, and they are damaging to financial stability.” Continue reading

Italy set for SHOWDOWN with Germany over Deutsche Bank’s rescue package

RELATIONS between Germany and Italy are set to hit breaking point, if Berlin’s steps in to rescue Deutsche Bank, after blocking Rome from doing the same earlier this year.

The leader has reportedly begged Germany to let him loan cash to Italy’s banks, as investors have increasingly lost confidence in the institutions, which are saddled with billions of pounds worth of bad loans.

In particular, Italy’s oldest bank Monte Dei Pasche has looked close to collapse several times this year, and Mr Renzi is still trying to secure a £4.2billion (€5bn) cash injection from investors for the lender. Continue reading

Germany’s BIGGEST Bank ON BRINK: Deutsche Bank hits RECORD LOW as Merkel rules out bailout

DEUTSCHE Bank shares have reached their lowest level in more than two decades, as fears flare over the troubled firm’s future.

Deutsche’s value has now plunged by more than half this year, as concerns over low interest rates and the struggling eurozone economy also plauge the bank.

Chris Beauchamp, chief market analyst at trading platform IG, said: “The parlous state of Deutsche Bank exploded onto everyone’s radar once again. Continue reading

Italy’s PM Unloads On Deutsche Bank’s Unfixable Problem: “Hundreds And Hundreds Of Billions Of Derivatives”

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After a tumultuous week for Deutsche Bank which saw the DOJ demand a $14 billion settlement for the bank’s past RMBS transgressions, it was another bad day for the giant German lender, whose stock and contingent converts tumbled after the investing community realized that even a modest $5.5 billion final settlement would leave it perilously undercapitalized and likely scrambling to raise more cash.

As SocGen’s Andrew Lim calculated, Germany’s biggest bank would be “significantly undercapitalized” even if an eventual settlement with the DoJ can be covered by the bank’s reserves. Any settlement above €5.4 billion would imply a capital increase is needed just to pay the fine, he wrote. Continue reading

The Failed EU Design – The Great Divide West v East

QUESTION: I saw you at your presentation in Dresden last year. Things in the East are rather different from the West in Europe. Do you have any comments on this great divide? Continue reading

Alexis Tsipras claims creditors are making Greek crisis worse

All roads still lead to Berlin, the powerhouse of Europe, which is now economically dominating the continent. Cypress was yesterday’s target, today it’s still Greece.

 

Prime minister hits out about delay in deal to resolve debt crisis when there is ‘light at the end of the tunnel’

Speaking at the Thessaloniki annual trade fair, where Greek leaders traditionally outline economic policy, Tsipras blamed a spat between the EU and the International Monetary Fund for putting off badly needed private investors.

“I would say that what is creating conditions of delay in regaining trust of markets and investors is the constant clash and disagreements between the IMF and European institutions,” he told reporters in a traditional no-holds-barred exchange. Continue reading

Europe’s stock markets PLUNGE amid fears ECB has run out of tools to save eurozone

THE European Central Bank (ECB) has shocked markets by today taking no action to prop up the eurozone, despite warning signs the economy is struggling to cope with Britain’s vote to leave the European Union (EU).

Stock markets in Europe were in the red after the ECB unexpectedly left policy unchanged amid the worrying outlook for the eurozone.

A flurry of dire data in the weeks after the Brexit vote has pointed towards a sharp slowdown for the bloc, prompting expectations the central bank would take decisive action.

Continue reading