Half of Europe's public debt should be taken over by the European Union. In this way, it would be the EU ministers who set the interest rates on the securities destined to end up under the control of the EFSF fund, created to support countries with sovereign debt at risk. The proposal, which refers to the previous project by Tremonti Juncker (in that case a maxi issue of bonds guaranteed by the EU) is launched in the columns of the Financial Times by Giuliano Amato and Guy Verhofstadt, former premier of Belgium but was also signed by a large group of excellent European personalities. Amato will speak today at Forum East, organized by East magazine, Unicredit and the OECD. The novelty with respect to the Tremonti plan lies in the fact that it would not be a question of launching new issues, but of transferring old bonds already in circulation, providing them with the EU guarantee, which would allow the states called to honor the coupons to pay lower interest. The idea, Amato argues, is a replica of what Franklyn Delano Roosevelt did in 1933 by taking over the bond stocks of the individual states of the Union. It is both a technical and a political proposal. “Today – write the proponents – Europe is losing the war against rating agencies: governments regularly elected by citizens are weaker than self-referential agencies”. Apparently the situation benefits Germany, given that the euro (weaker than the old mark would be) favors exports. "But in the long run we will all lose: a default in the suburbs would send pension funds and insurance companies in the North to the bottom".
GREECE: ECOFIN SAYS YES TO THE SUMMER LOAN
BUT "VOLUNTARY" HELP WILL TAKE MORE TIME
"Greece has bought precious time to start its real recovery." This is the comment with which Silvio Peruzzo, economist at RBS, welcomed the news that the finance ministers of the Eurogroup authorized on Saturday the loan for 8,7 billion euros which will allow Greece to avert the risk of default. “ For the markets – explains Peruzzo – this has a precise meaning: Greece today has the money to make it to the end of the summer. In the meantime it will take many discussions before arriving at a concrete result on the front of the involvement of private individuals. But I believe that by mid-September they will be able to do it”. The goal of reaching an agreement this week with banks and insurance companies, especially French and German, for a "voluntary intervention" in favor of Greece proved to be too optimistic.
In the meantime, the president of the Eurogroup Jean-Claude Juncker stressed, "I don't see any risk of contagion for Italy and Belgium". Meanwhile, he added Juncker, Ireland and Portugal, which have received loans for 146 million, "will soon be in a position to return directly to the financial market". Berlin Finance Minister Wolfgang Schauble does not miss the opportunity to show his ferocious face: “It is clear – he said in an interview with Der Spiegel – that we are preparing ourselves so as not to be caught unprepared by the event most improbable: the default of Greece”.
TIM GEITHNER LEAVING IN AUGUST? HE SAYS NO
BUT OBAMA WANTS TO REBUILD THE WHOLE TEAM
Tim Geithner, US Treasury secretary, could resign immediately after the vote on the widening of the federal deficit. The match, by law, must be completed by August 2nd. The news made the rounds in Washington after it became known that Geithner has once again taken up residence in New York. “I did it to allow my son to graduate from the old school,” Geithner said, but he was not believed.
Many think that the president will have to renew the team to try to attack the unemployment issue just over a year after the challenge for confirmation in the White House. In reality Geithner is the only survivor of the team chosen by Barack Obama at the time of his inauguration. Since then, Lawrence Summers, Christina Rohmer, Peter Orszag have left while Austan Golbee, the economist who replaced Rkhmer, will return to the University of Chicago in August.
Meanwhile Shaun Donovan, the staff member who deals with the housing problem, yesterday declared that "house prices in the US will never fall again". “Prices – he added – have reached a more than sustainable level. The important thing now is to ask ourselves when they will go up again”.
THURSDAY THE EURO RATES RISE
FRIDAY DATA ON US UNEMPLOYMENT
Next Thursday, July 7, at 13 the president of the ECB Jean.Claude Trichet should announce in a press conference the new increase in the reference rates of the euro by a quarter of a point. The ECB meeting is undoubtedly the most important appointment of the week. The announcement of the data on the level of unemployment in the United States will follow the following day: forecasts speak of a confirmation of 9,1%.
MANEUVER. PESSIMISM IS SPREADING ON WSJ
MOEC (DB): ITALY WEIGHTS ON THE EURO RATES
“Unemployment rose in May. The indicators of industrial production signal a slowdown in June: yet the Italian financial law does not address the crux of growth, as underlined by the former undersecretary Mario Baldassarri: it is a dog chasing its tail, he argues, adding that the fiscal maneuver can further curb more development, with detrimental results on future revenues, which can mean more revenue holes and higher deficits”. This is how, on the front page of The Wall Street Journal, a roundup of opinions by economists from half of Europe kicks off who, starting with the new warning from Standard & Poor's, agree on the fact that there are "serious doubts" about the possibility that Italy you avoid a serious relapse with negative effects for everyone. Gilles Moec of Deutshe Bank, in particular, points out that after the next increase in rates of a quarter of a point next Thursday, the ECB could be forced to postpone further increases to avoid big troubles for Italy, so slow on the road to recovery. A very delicate passage for the future president of the ECB, Mario Draghi.
AFTER BOUNCE WEEK
WAITING FOR PROOF OF RATES
European stock exchanges are looking for confirmation. Indeed, after eight consecutive weeks of declines, the Old Continent's stock markets have recorded a robust rebound in the last five sessions: the European Stoxx 600 index has risen by 4% in the last five sessions, the largest weekly increase in the last 12 months. The Milan Stock Exchange did much better, posting a 7,1% increase during the week, which brings the performance back to positive since the beginning of the year (+1,7%).
Above all, the sectors most penalized by the Greek crisis benefited from this, starting with the banks targeted by speculation. An emblematic case is that of Mps: last Friday, on the last day of trading of the rights to the 2,15 billion euro capital increase, the stock posted a performance of 6,4%, after having lost 24% in the 10 sessions between 14 and 28 June when a strong overdraft accumulated, which would now be returning. The shares borrowed reached 500 million shares, equal to about 10% of the bank's capital.
WEEKEND PILLS
BEAUTIFUL CAPITAL OF FONSAI AMBER ARRIVES
According to what was written in Il Sole 24 Ore, the US fund Amber acquired the option rights to subscribe part of the capital increase of Fondiaria-Sai. The investor would aim to acquire between 2% and 5% of the capital of the insurance company.
BELTRATTI; WE WILL NOT QUOTE FIDEURAM
During an interview published in Milano Finanza, the president of IntesaSanpaolo, Andrea Beltratti, reiterated that the subsidiary Banca Fideuram, active in asset management, will not be listed. The manager also denied the possibility of creating an asset management hub in Italy.
IS IN THE. IN 2015, A GOP OF 20 BILLION
Over the weekend Il Sole 24 Ore reported some details of Enel's business plan. The business plan for 2015 indicates that the EBITDA of the electric giant should reach 20 billion euros compared to 17 billion in 2010, while net debt should fall from 45 billion at the beginning of 2011 to 37 billion euros. Net income, on the other hand, should rise from 4,5 billion to 5,5 billion euros. Enel has confirmed its dividend policy and is targeting a 60% payout.
NESTLE' BIG HIT IN CHINA
Nestlè is in the running for the purchase of the Chinese Hsu Fu Chi, a large producer of sweets and confectionery in China. If it comes to the conclusion, it will be the most important acquisition of a Chinese company by a Western group, the value is around 2,7 billion dollars
