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Increase In IMF Funds Crisis Threatens To Come To A Halt

Copy of 5_washington_Foto_BuccinoWASHINGTON (Dow Jones) – The target of the Europeans increased crisis preparedness resources of the International Monetary Fund (IMF) is threatening to seize up. Just before the start of the IMF spring meeting in Washington, expressed in particular Brazil, China, Canada and major developing countries are reluctant to increase the short-term lending capacity of the IMF. (Photo: Buccino)

Brazil was not yet ready to call a certain amount of additional resources of the IMF, because the decisions agreed reform of the IMF voting power are not enough, said Finance Minister Guido Mantega. Brazil and other major developing countries are striving for a stronger influence in the IMF, which is intended to reflect their growing importance in the world.

"Some countries show a greater enthusiasm in addressing the emerging market for more money, as in the reform of the IMF’s voting rights, because they will lose influence," Mantega said in allusion to the states of the euro zone. Federal Finance Minister Wolfgang Schäuble (CDU), had tried in advance of the IMF’s annual meeting, to avoid linking the increased funding to the IMF reform, because he feared that the reform could drag on longer and thus the increase in crisis prevention tool. Europeans had to their meeting in Copenhagen decided on a combination of their shields EFSF and ESM, thereby increasing its anti-crisis to around 800 billion euros, or about 1 trillion U.S. dollars. The euro-zone countries had hoped that the IMF would expand its lending capacity in return for a similar size. However, things are starting already, that the sum will remain significantly lower. Canadian Finance Minister Jim Flaherty, the hopes of the euro zone with tough criticism of the European crisis put a damper offset policy. The European situation is still dangerous and still not have the financial fire-walls of the Euro zone sufficient, said Flaherty. In addition, the European banking system was "hopelessly under-capitalized." Only for the European Central Bank (ECB), the Canadian praise had left: the actions of the ECB for crisis containment are "valuable" was. China also proved reluctant to embrace larger IMF Resources: Foreign Minister Liu Weimin made ​​an increase in particular progress on the IMF voice reform depends on how the agency Xinhua reported. The Minister said that in 2010 adopted reforms to be ratified would have to make a budget increase is possible. ECB board member Joerg Asmussen said at a conference in Washington, by increasing its financial firepower to around $ 1 trillion would have the Europeans "do their part done ". Now let "our partners in the series" to increase the lending capacity of the IMF. Asmussen expressed his confidence that an agreement can be reached by an increase in IMF crisis funds this weekend. The IMF chief Christine Lagarde, meanwhile, their wishes clear after a budget increase screwed down: Before the meeting of 20 leading industrial and emerging economies (G20) at the weekend said Lagarde, the IMF is the desired increase of around 400 billion dollars come closer. Hope you have commitments of over 320 billion dollars in new funds and more, said the IMF director. At the G-20 meeting will Lagarde reach the "critical mass" for its planned doubling of the IMF’s resources to Europe in the to help combat the debt crisis. So far, the IMF out put 381 billion dollars to support needy countries. delaying Santander opposition to increased funding also comes from the poorer countries of the world where the view is widespread that Europe is rich enough to help themselves. The Group of 24 developing countries (G-24) stated that they needed more time to decide on participation in the increase. "There needs to be worked out in detail, how large the contribution of the affected countries, and some countries cut more time," said the G-24 Chairman, India’s Finance Minister Pranab Mukherjee. The IMF members had in 2010 agreed to major give emerging economies a greater voting power. Some countries, including the United States have not ratified the amendment date. China, Brazil and India have not therefore participate in the planned increase of IMF resources. They have in recent years partly paid bonuses and are now hoping for a conversion of those funds in voting. , the increase of the IMF quota and voice reform should be linked, then threatened a delay until January 2013. Because of the IMF’s 188 member countries, the Steering Committee has asked to implement the already agreed quota and voice reform in 2010. Otherwise, threatening a loss of legitimacy and credibility.

Strong demand for the first EFSF bond

LONDON (Dow Jones) – The first issue of the European financial stabilization facility (EFSF) with a maturity of five years has met on Tuesday as strong demand from investors. The issue was oversubscribed more than eight times, for the offered volume of EUR 5 billion bids were received for more than 40 billion EUR from over 500 addresses, as a syndicate bank said.

The price indication for the initial return was set at six basis points over mid-swaps. The mid-swap is an important benchmark in the interbank market. The three banks, Citigroup, HSBC and Societe Generale are joint lead managers in this first EFSF emission, with the EUR 5 billion to be included in the capital market to Ireland to help the financial crunch. The EFSF has all three major rating agencies are an "AAA" rating.
As part of the Support Programme for Ireland EFSF plans in the years 2011 and 2012 a total capital raising of up to EUR 26.5 billion. After the acute debt crisis in the spring of 2010, the EU had put up with the International Monetary Fund (IMF), the Euro-shield with a total volume of 750 billion EUR. Its core consists of the EFSF, which has a circumference of 440 billion EUR and is supported by the euro countries. Added to IMF assistance come in the amount of EUR 250 billion and a credit line of the EU Commission of 60 billion EUR.

DJG / DJN / apo / mle / dok

Return on the bond EFSF by 6 to 8 basis points over mid-swaps

LONDON (Dow Jones) – The European financial stabilization facility (EFSF) on Tuesday set at an initial price indication, according to an underwriter, the initial return for its first bond with a maturity of five years at 6 to 8 basis points over mid-swaps.

Midswaps are an important benchmark in the interbank market. The three banks, Citigroup, HSBC and Societe Generale are joint lead managers in this first EFSF emission, with the EUR 5 billion to be included in the capital market to Ireland to help the financial crunch. The EFSF has all three major rating agencies are an "AAA" rating.
As part of the Support Programme for Ireland EFSF plans in the years 2011 and 2012 a total capital raising of up to EUR 26.5 billion. After the acute debt crisis in the spring 2010 the EU had put up with the International Monetary Fund (IMF), the Euro-shield with a total volume of 750 billion EUR. Its core consists of the European Financial Stability Facility (EFSF), which has a circumference of 440 billion EUR and is supported by the euro countries. Added to IMF assistance come in the amount of EUR 250 billion and a credit line of the EU Commission of 60 billion EUR.

DJG / DJN / apo / mle / dok

exceeds Greece savings targets

ATHENS. Even Finance Minister Giorgos Papakonstantinou progress reports: In 2010 he was able to cut the budget deficit to 19.45 billion euros – to 30.9 billion last year. Therefore, the deficit was reduced by 37 percent. In the consolidation program that Greece has voted with the EU and the International Monetary Fund (IMF), a savings target was set of 33.2 percent. The success is due primarily to the account of drastic cuts in budgetary expenditures, which were reduced from the previous year by 9.1 percent. The specification of the savings program was 7.5 percent.

On the revenue side of the finance ministers failed to be objective, however: instead of expected tax revenues increased six percent to only 5.5 percent. A consequence of the recession: According to preliminary calculations, the Greek economy last year shrunk to about four percent.

The budget figures showed that Greece are under the EU agreed with IMF and consolidation program, said in a statement to the Athens Finance. The implementation of the savings targets is a prerequisite for the granting of international assistance loans of 110 billion €. The money will be in several installments by 1 Quarter of 2013 and paid to allow the highly indebted country to refinance to a large extent, bypassing the capital markets.

The Greek Government, meanwhile, feeling against the hopelessness: In summer, the economy would grow on swinging, Development Minister Mihalis Chrysohoidis said on Thursday. The booming exports would end the recession in its debt-ridden country.

By 2010, exports had increased by eight percent, although the overall economic performance was probably shrunk by more than four percent. Chrysohoidis called the success of the export sector a "new miracle" – but the orders from the European Union of Greek companies have recently increased by 15 percent.

Greece experienced the highest budget deficit in 2009 of all euro countries: 15.4 percent of gross domestic product (GDP). Last year, the debt ratio, according to preliminary calculations, to 9.4 percent – a remarkable success. In this year, 7.4 percent can be achieved. For 2014, sees the consolidation program envisages a deficit of only 2.6 percent. So that Greece would then meet for the first time the requirements of the EU Stability Pact, which imposes an upper limit of three percent of GDP.

Why did the Greeks have made is the most ambitious fiscal consolidation program of all euro countries. Whether the bill is a success is uncertain. For the draconian austerity measures have driven the country deeper into recession. Also this year the GDP, according to the latest projections, by about three percent decline. The tax revenue bubble therefore more modest than originally thought. The Minister of Finance, more needs to save in order to achieve its objectives and consolidation of the economic cycle to cut even more money – a vicious circle.

The only bright spot so far: the Greek exports. They grew last year despite the recession, to nearly eight percent. Exports to EU countries rose by 15 percent even. After two weak years, tourism could grow again this year, especially since most of the Greek hoteliers have reduced their prices. Tourism contributes almost one-fifth of GDP and is thus an important pillar of the economy. Development Minister Michalis Chrysochoidis said on Thursday that he expected in the summer so a return to growth. The Minister is therefore more optimistic than the experts of the EU and the IMF, for the fourth quarter with a slight economic growth expected before. Portugal can also reduce deficit

Even if the economy should pick up again sooner than expected: the remains precarious debt dynamics of the Mediterranean country. According to IMF calculations, the debt later this year will reach 152 percent of GDP next year and increase to 158 percent. Until 2014 the debt ratio to decline again, but only slowly. Debt of this magnitude are, according to many economists not to use sustainable – especially not when the financial markets is so high risk premiums as they currently require to pay the €-crisis states. Stubbornly remains therefore speculations about a previous or subsequent impending restructuring of the Greek national debt – even if denied on Thursday the governments in Athens and Berlin and the European Commission this scenario again with emphasis.

The highly indebted Portugal has made progress on its austerity measures, according to the government probably faster than expected. The budget deficit last year was probably down to the target market of 7.3 percent of gross domestic product, Finance Minister Fernando Teixeira dos Santos said on Thursday. Then, in his words indicate, the most recent government data. Accordingly, the government revenues have risen in 2010 to 4.6 percent more than expected, while spending 3.7 percent less than predicted grew.

2009 the deficit was still 9.3 percent. This year, the government is targeting a deficit of 4.6 percent. It counts on a cut in wages and salaries in the civil service and tax increases. In this way they will prevent, to Greece and Ireland’s next Euro member aid from the European Union (EU) and International Monetary Fund (IMF) to take claim of need. Many experts expect, however, that the low growth country but ultimately from the euro rescue must resort to billions in aid. politicians and experts doubt continue to Greece

Nevertheless, the doubts are growing among politicians and economists that Greece manages for long without a debt. The President of the Federation of German Industries (BDI), Hans-Peter Keitel is calling for an immediate rescheduling program for Greece in order to reassure the financial markets. "Greece is to relieve only by a rescheduling of the debt crisis. The restructuring program would have to start today rather than tomorrow," BDI President Keitel said in an interview with Handelsblatt (Friday edition). The debt burden is already high and will continue to grow oppressive.

The euro-zone countries now have to provide clarity. "It is counterproductive to aggravate the situation by 2013 artificially and then take a cut debts," Keitel said. The creditors know the Greek government bonds and debts had already been priced in, argued the BDI President.

Fierce criticism Keitel practiced at the finance ministers of the euro countries. "The harm daily utterances of individual finance ministers about the pros and cons of individual measures. Let the financial markets only with actions, not calm, with speeches," said Keitel. Therefore, the countries of the Euro-zone hire expertise as quickly as possible tools to present that could be implemented immediately. "Otherwise, the financial markets to force solutions," the BDI President said.

Coffers of the States

Foreign exchange and gold reserves

The world is changing. Financial crisis and debt crisis have shifted the balance of power, all states are facing bankruptcy. Blessed is he who has reserves and are one or the other gold bullion in the cellar. Which countries made in recent years have mostly aside and where not too much to be had.
It takes into account the foreign exchange reserves, the gold treasure and special drawing rights (SDRs) at the International Monetary Fund (IMF), one in the 1960s, artificial currency unit.