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Spain has asked banks Thursday to raise a further € 50 billion to protect themselves from the consequences of the housing crisis.

In a statement on the financial sector reform, the Ministry of Economy said that banks will increase to 80%, their provisions for problem assets.

Madrid said that no public money would be used for banking reform and institutions had until the end of the year to increase their level of provisions. 

The aim of this reform is to trigger a new wave of consolidation in the sector to develop, four years after the bursting of the housing bubble, banks stronger and restore confidence vis-à-vis Spain, which could still be a victim of the debt crisis in the euro area if ever it were to worsen.

Took office in December, the new right-wing government led by Mariano Rajoy is committed to restructuring the banking sector in the country once and for all. 

The previous government, Socialist Jose Luis Rodriguez Zapatero, had forced some 45 regional savings banks, the "cajas" – for the most highly exposed to noxious claims after the collapse of the housing market in 2007 – to merge with each other and to raise capital, brandishing the threat of nationalization for those who do not would comply with its guidelines.

With the austerity measures taken by the two successive governments to Spain to avoid being carried away by the debt crisis, an unemployment rate that reached 23% the labor force and a likely recession into the fourth largest economy in the euro area – the second in four years – bank loans do not increase. 

But their potential losses are so high – $ 176 billion according to the Bank of Spain 18% of GDP – that markets are not likely to repeat immediately trust sector.

The bank most threatened by the banking reform is Bankia, the result of the merger of seven "cajas" became the fourth bank, which is particularly exposed to the real estate sector.

The property, which has already received 4.5 billion euros of state aid, a portfolio of 41 billion euros in loans to developers and 11 billion of real estate with were seized.

Hungary has pledged Friday talks with the IMF and the European Union that could lead to an agreement by February of "support growth" but that may come up against the willingness of Prime Minister Viktor Orban, to keep control over economic policy.

While Budapest dismissed all claims with the International Monetary Fund since he took office in spring 2010, the decision of the head of the Conservative government to reconnect with the institution led by Christine Lagarde is a clear political defeat.

He assured that the government did not act in an emergency, Hungary continued to borrow in the markets and the agreement would not affect the financing of public debt.

"We are not dependent on the goodwill of others," he said.

The IMF representative in Budapest was not immediately available to comment on these statements.

The airline offers Silvio Berlusconi to "escape with Ryanair" while Italian Prime Minister through a political crisis that could lead him to step down. Screenshot known site www.ryanair.com / it's November 8, 2011

"Dear Silvio, a new opportunity to escape with Ryanair." It is this formula that the low-cost airline has launched an advertising campaign on its website to promote its flights to 9.99 euros from Rome.

With a photograph of the Italian Prime Minister taking in hand the new calendar of charity of the company filled with scantily clad women, Ryanair offers Berlusconi to "escape", while the head of government is experiencing a major political crisis in the country that could lead to step down.

This is not the first time that Ryanair uses the news to advertise.In August this year, the company overdone the matter Depardieu, who had urinated in the hallway of an aircraft during a flight on August 17. "We are not the only ones who piss on the competition," was written at the time Ryanair on its website. One thing is certain, if the company is ready to surf the news, this is rarely the best of taste …

Whirlpool fall, however, more than 10% after the announcement of a comprehensive plan to reduce costs, justified by the weak demand.

The euro retreated against the dollar after the seven-week high hit the previous day in the wake of the Brussels agreement on the management of the debt crisis.

In the bond market, the Italian bond yield to 10 years has exceeded 6% after the award of the Treasury, while the German Bund futures cut their losses.

Brent crude dropped below the threshold of $ 110 and U.S. crude has returned close to 92 dollars.

Commerzbank will in the third quarter a depreciation of 750 million euros on its holdings of Greek sovereign debt, told Reuters on Wednesday several people familiar with the matter.

The second German bank has already passed such a depreciation of 760 million euros in the second quarter, more than the 21% discount that international creditors had agreed in July, as part of a new rescue plan for the Greece.

Given the further deterioration of the Greek financial situation in recent months, it is now a discount of 50% which is regularly discussed, which led to the further depreciation of Commerzbank, said a source.

Commerzbank, which is to publish its quarterly November 4, declined to comment.

The residual value of assets of the Commerzbank in Greek sovereign debt is estimated at 2.2 billion euros.

At the summit on Sunday, the leaders of the euro area have asked for more rigor to Silvio Berlusconi. An agreement is drawn further on how to stop the contagion of the debt crisis … but it will be a new record Wednesday for details. Angela Merkel and Nicolas Sarkozy leave a press conference at the summit in Brussels, October 23, 2011.

European leaders Sunday traced the outline of a plan to end the debt crisis that threatens the euro area, despite disagreements, and pressured the Italian leader Silvio Berlusconi seemed to hear their calls in a pinch.

A summit in Brussels has apparently helped a little closer Franco-German couple, who previously showed strong differences on how to strengthen the clout of the Fund to support the euro area (EFSF), a financial need to stop the contagion of debt.

A "broad agreement" is emerging on this issue, assured French President Nicolas Sarkozy, while this issue poisoned relations between Paris and Berlin for several days."Discussions are progressing well, there is no blockage," he said.

Careful, however, the French president warned that he would "still many hours of discussions" to reach a final solution Wednesday, during a new European summit which aims this time decisive.

After a standoff, Paris was forced to abandon his idea of ​​involving the European Central Bank (ECB) in strengthening the firewall in the euro area. German Chancellor Angela Merkel adamantly opposed on the grounds that it would have violated the legal prohibition against the European Central Bank (ECB) to help governments fiscally.

Two scenarios for the EFSF

Now, two scenarios, but matching multiple variants are still under consideration to give the EFSF firepower of at least 1000 billion euros, according to figures circulating.One proposes to act as an insurance system of partial public debt of countries in difficulty, the other is considering creating a kind of special fund to accept contributions from outside investors, which could be backed by the International Monetary Fund.

The President of the European Union, Herman Van Rompuy said after meetings on Sunday that "combined, these two models could have a cumulative effect." Executive Director of the IMF, Christine Lagarde, has expressed his satisfaction as he left the meeting Sunday evening. "We made very good progress, it was really an effective meeting, and I hope it is really in the right direction for Wednesday," she said.

The model involving the IMF, however, cause controversy, because countries such as China could invest."The Chinese said they were interested, but some member states are skeptical about the idea of ​​integrating a Chinese contribution to the EFSF," said one diplomat.

In addition to the EFSF, the answer to the crisis is to stabilize the over-indebted Greece, creditor banks impose on the country's heavy losses, recapitalize them for the shock and therefore more arming the EFSF.

In detail, the countries of the euro area have agreed to require banks losses of at least 50%. Greece is currently stifled by a huge debt of some 350 billion euros. Negotiations are ongoing with the financial sector.

Concerning the recapitalization of banks, the amount proposed is approximately 108 billion euros, according to a European source. The Europeans have yet to define the terms of the plan.Announcements should be made Wednesday on this.

"There will be no solution to this crisis pan-European if Europe does not take a global decision," stressed the Prime Minister of Greece, George Papandreou.

The Australian Minister of Finance, Wayne Swan, on Monday accused European leaders of having "lost time" past 18 months and urged them to present a serious plan, otherwise endanger world growth.

Worried about a contagion of the crisis, European leaders have also shown severe Sunday against Italy awash in a debt of 1,900 billion euros. Rome is accused of failing to meet its commitments to fiscal restraint and not enough to reform its economy.

Berlusconi will pension reform

"We have made it clear to Berlusconi that Italy must do everything to be up to its responsibilities," said German Chancellor. "This is not to appeal to the solidarity of partners if we do not have the necessary efforts," warned Mr Sarkozy for his part.

These stern warnings seem to have been heard by the Italian head of government: the latter announced his intention to convene an extraordinary cabinet meeting Monday to reform the pension system. Rome causes irritation of its partners who fear a major crisis in the euro area if the public accounts are not firmly held.

Last project: the reform of the governance of the euro area. EU leaders appointed Van Rompuy at the head of the summit meetings of the euro area alone, in addition to his cap pattern of the EU.The EU countries not members of the euro area, such as Sweden, do not like this two-speed Europe that is taking shape. They got a top-27 Sunday to take place Wednesday, one hour before that of the single euro area. British Prime Minister David Cameron has postponed the official visits he had made in New Zealand and Japan to attend this crucial meeting.

Time for the cons-offensive for the UMP. Ousted from the media spotlight by the success of the Socialist primary, the majority party holds a High Mass on Tuesday to "dismantle" the draft Francois Hollande. Main angle of attack: the cost of its proposals. Francois Hollande won Sunday, October 16 the PS primary for the presidential election with 56.6% of the vote.

Francois Hollande will be the main opponent to Nicolas Sarkozy in the battle of 2012 to the Elysee. The presidential majority, ousted the media for several weeks because of the primary PS, is preparing to make a bitter attack on the Socialist candidate and designated program. The first will be chopping Francois Fillon Prime Minister was the guest log 20 hours tonight on France 2. And tomorrow, the UMP holds a convention on the PS project.The main points on which the tenor of the majority party will attack Francois Hollande.

Tax increases

According to the draft of the PS, François Hollande wants to tackle tax loopholes. Of the 70 billion niches created since 2002 and consists cancel 50 billion, including tax exemption for overtime or reduced VAT in catering. The UMP will not fail to note that with the PS to power, the French will see their taxes increase by $ 50 billion. Unlike Nicolas Sarkozy, who has hammered throughout his five-year that he was not elected to raise taxes, Francois Hollande has already announced that there will be increasing the tax burden .The member from Corrèze is this view more honest than the head of state since the past two years, the main conservation measures taken by the government are deletions, and movement of the plane on tax loopholes. The draft budget for 2012 also provides for the creation of five new taxes. Result: The tax burden in France next year will reach 44.5% of GDP, exceeding the level at the beginning of the quinquennium of Nicolas Sarkozy. The other project in Holland, is a major tax reform: it proposes to merge the income tax and the CSG, to tax capital on a par with the work and to broaden the base of this new tax . For businesses, it supports a higher tax rate on companies that do not invest. We can therefore speak of a general increase of the capital tax, businesses and households. François Hollande will struggle to pretend otherwise.He must convince them that these increases are fair and equitable.

Retirement at age 60

Despite the embarrassment caused by the words of Pascal Terrace, retired adviser, François Hollande promised to restore the legal age of retirement at age 60, against 62 years since the reform of 2010. "The first decision that I will take on the issue of pensions is to allow those who have paid 41 years and have 60 years to leave," he said at the last televised debate against Martine Aubry. Employees who have accumulated 41 years can retire at 60 "but they will have a discount," he said. Still: this is where the majority of the risk to most door overhang, while life expectancy is increasing and all European countries have rejected the legal age of retirement at 65 or 67 years.Especially since the measure would cost about 25 billion euros by 2014, and much more en suite. François Hollande, however, can meet that beyond the boundaries of age, he advocated a systemic reform of the pension system to ensure the long-term funding, which will focus more on wages alone, and its support for an increase the contribution period.

The creation of 60,000 jobs in Education

François Hollande announced its desire to recreate the 60,000 job cuts in Education since 2007. The President of the General Council of Corrèze said that 12,000 jobs would be created per year for an annual cost of 500 million euros, 2.5 billion euros over five years.The faculty, which had partially detached from the PS in 2007 to vote Bayrou, and parents, frustrated with deletions of classes in September, will certainly appreciate this proposal. The UMP for its part will not fail to note the exorbitant cost – 100 billion euros over a period of full activity, or 40 years – this measure, and the question of its funding in times of reduced deficit. And here, Francois Hollande has remained unclear. These new posts will be offset by redundancies in other departments, he said. The member from Corrèze drew a parallel with the plane of 3 billion euros announced by Nicolas Sarkozy for the renovation of prisons.Does it mean that François Hollande give it up, while the number of inmates incarcerated in France reached a record? It is soft to the right stick to be beaten …

Youth employment and contract generation

Francois Hollande supports the proposal dear to Martine Aubry to create 300,000 jobs for the future. He wants the focus on youth in the neighborhoods where unemployment this population exceeds 40%. This represents a cost of three to four billion euros a year. It will be financed by eliminating exemptions on overtime. The UMP will scoff beautiful on the use of old recipes, François Hollande will always remember that the youth employment in 1997 have three-quarters of them to get a firm foothold in the world of work.And do not forget that the government does not hesitate, either, to use the weapon assisted contracts: 500,000 are budgeted in 2011. However, Francois Hollande will be more difficult to defend its contract generation – the possibility for an employer who hires a young and maintains a senior employment in the same position to be exempt from charges for three years. I must say that Martine Aubry has given the right arguments to criticize the measure: during the primary campaign, the mayor of Lille pointed to the cost -8000000000 euros – and windfall – the companies, which in any case need to hire, will turn to the cheap solution for them. Even the unions are not convinced. Francois Hollande wants to fund it by redeploying 25 billion euros of social contribution exemptions provided to enterprises.Jobs few or no qualifications will therefore suffer the consequences. Still give a response argument to Francis Holland exempts the government today to payroll companies that hire young apprentices or alternately.

The nuclear

If Francois Hollande says it wants to free itself of nuclear, he refused to submit commitments total output. The member from Corrèze has however promised to spend 75% of nuclear electricity to 50% by 2025. He says that the plan is financially sustainable: the necessary funds will come from cuts in tax loopholes and the introduction of a carbon tax on industries that emit lots of greenhouse gas emissions. This remains unclear. The UMP retorted that out nuclear power will be very expensive – € 750 billion at least according to the owner of the Atomic Energy Commission.No one would deny that the output of nuclear power has a price. This is a societal choice. The Germans themselves are willing to pay for it. The French, if they elect Francis Holland in 2012, will also.

The Slovak Parliament has not met Tuesday night a sufficient majority to adopt the strengthening of the European Relief Fund. The opposition Social Democrats said it was ready to vote in exchange for early elections. Slovak and European flags fly over the castle of Bratislava

As feared, the Slovak Parliament rejected on Tuesday the strengthening of the Financial Assistance Fund of the countries in the euro area, potentially exacerbating the debt crisis. There is indeed no "plan B" to circumvent the veto.

"Of the 124 deputies present, 55 elected officials voted in favor, 9 against and 60 did not vote," noted the Vice-Speaker of Parliament Pavol Hrusovsky, after the vote. Without the 22 members of the SAS did not participate in voting, the coalition could not consider getting a required majority of 76 elected members.

Considering that the Slovaks are too poor to pay for the mistakes of others, Richard Sulik, the leader of this party, opposed the EFSF, unless that Slovakia is provided to pay his bill, an event swept by Brussels.

The result of this vote should logically lead to the collapse of the center-right party Radicova Ms. Iveta SDKU-DS who had associated with a motion of confidence in his cabinet.

EU leaders decided on July 21 to give the EFSF new powers including increasing its lending capacity to 440 billion euros. An envelope that could be used to recapitalize European banks.

But to become effective, these measures were to be ratified by the parliaments of 17 countries in the euro area, which had set up in mid-October. Sixteen countries have already approved these changes, Slovakia is the only one to refuse to ratify it.Bratislava had already refused to participate at the forefront of aid to Greece decided in spring 2010.

Strengthening the EFSF represents a contribution of 7.7 billion euros for this small country, entered the eurozone in 2009. Given the risk of paralysis, Bratislava has raised the possibility of a second parliamentary vote, in which the opposition Social Democratic Party (Smer-SD) could support the strengthening of EFSF. No date has been set for that vote.

The leader of the opposition Smer-Social Democrats SDn Robert Fico, former prime minister, warned that he would abstain from voting on Tuesday but could then provide support to the government in a second vote provided that early elections are held.

The European Commission had in turn put pressure indicating "strongly hopes" a positive vote to help ensure "the stability of the euro area".Monetary union is by no means destitute. But she should return to EFSF old formula, with a lending capacity and lower private supposed to allow new tools to stem contagion from the crisis in countries like Spain and Italy.

Already, the decisions taken on July 21 are partly obsolete. On the one hand, the EFSF will have probably still be muscular to leverage its clout to reassure markets on its ability to cope with a possible spread of the crisis in Italy or Spain.

On the other hand, the leader of the finance ministers of the euro area Jean-Claude Juncker acknowledged Monday that the losses will suffer the creditor banks in Greece are likely to be greater than expected.

Made outstanding contributions in the second aid package to Greece, decided July 21, banks had committed to eventually accept a depreciation of 21% of their portfolio of Greek bonds, in order to relieve Athens , awash in debt of close to 350 billion euros. But this figure of 21% now seems outdated. "The discussions focus on a discount of 50%" today, said a European government source told AFP.

If this threshold is reached, Greece would move to a default similar to Argentina in 2001. The country's creditors in the end had to accept a discount of about 70% on a debt four times less than that of Athens.

Greece, however, snatched on Tuesday troika comprising its creditors (European Commission, European Central Bank and International Monetary Fund) the promise of payment in November of 8 billion euros.

This will prevent an immediate collapse and allows it to buy time in negotiations to restructure its debt in the euro area. The fears weighing on the banking system led the Europeans to agree to recapitalize their banks. The Commission President José Manuel Barroso, will also Wednesday "proposals" in that it will present to the Commissioners.

Inflation in the euro area in September rose abruptly and unexpectedly to 3.0%, its highest level in nearly three years, greatly undermining the chances of the European Central Bank cut rates in October .

Inflation reached 2.5% in August, is already well above the objective of the ECB, whose primary mission is to maintain price inflation slightly below 2%.

Economists polled by Reuters were expecting a figure of 2.5% in September as in August. However, they believe that inflation will fall soon because of the economic downturn.

"It's not a good figure, but I do not panic.That said, I think these figures imply that the ECB will not lower interest rates next week, "he tempered Martin Van Vliet, economist at ING, who said that inflation will decline in coming months because of lower oil prices and supply.

Markets anticipated more rate cuts key ECB, in support of the European economy and to offset the fiscal restraint measures introduced by most European countries.

The investment bank JPMorgan said last week anticipating a 50 basis point ECB rate to 1.0%.

According to a survey this week by Reuters, 56 of 76 economists surveyed felt that the rates will be unchanged at the monetary policy meeting in October, which will be the last of the ECB President Jean-Claude Trichet.

However they planned a rate cut in early 2012.

THAT WILL LOWER RATES?

After raising rates twice this year, the ECB changed its attitude at the September meeting and opened the door to future cuts.

According to many economists, it would be the next President of the ECB, Italian, Mario Draghi, Jean-Claude Trichet decides to lower the house money before taking office.

They argue that if Mario Draghi had to take such action in its first monetary policy meeting in November, it might then be portrayed as a supporter of lower rates.

This would imply, however, that Jean-Claude Trichet left as the last measure of his eight-year term rate cuts in a context of high inflation: such a decision contrary to fundamental principles of the ECB, would be enough to ruffle the supporters of the 'budgetary orthodoxy.

The euro area may therefore have to await further signs of a slowdown, or a decline in inflation, to get a breath of fresh air in the form of lower rates. However, such signals may soon appear.

"The slowdown has driven down commodity prices.Therefore, we should observe a slowing of inflation in energy prices, which was the main driver of core inflation in recent months, "warned Clemente De Lucia, an economist at BNP Paribas.

PPR confirmed its interest in the Italian Brioni suit and felt that the deterioration in the credit markets posed a risk to the sale of Redcats, a subsidiary of distance selling.

The group that owns Gucci and Puma, in the very focus on luxury and sports fashion, is in discussions for several weeks with high-end Italian tailor, had they learned from sources close to the matter.

The sources said the Italian company would be valued around 350 million euros.

"We are in discussions with them, as with others, but nothing is finalized," said the CEO of PPR François-Henri Pinault a few journalists during a trip to China last weekend, according to the spokesman for PPR.

The CEO added that PPR was in competition with others, as well as investment funds.

He also said to be interested in Chinese brands have a "strong identity," but said not to have found so far.

Asked about the sales process of Redcats (La Redoute, Vertbaudet and Cyrillus), François-Henri Pinault has recognized that the deterioration in the credit markets might complicate the operation.

"Access to credit is crucial.There is a risk, for sure, and we watch it closely, "he said.

PPR was happening in late July to begin the process of transfer of Redcats, which he sought to draw between 1.5 billion and 2.0 billion euros.

With the turmoil that has gripped financial markets, the valuation problems it poses and the deterioration in the credit markets, many bankers fear a setback to the resumption of mergers and acquisitions initiated this year.

Already, some observers doubt that the auction held for Redcats to succeed.