THE TAKING OVER OF CHRISTIAN NATIONS OF EUROPE 2end PILLAR

Brussels - The EU (read Germanys governor/administrator of Greece) task force

advising the Greek government on reforms demanded by international lenders defended its legitimacy on Wednesday (26 October), saying it is not eroding the country's sovereignty, just hours after Germany demanded "permanent" foreign supervision of Athens. Headed by a German EU official, Horst Reichenbach, the 25-strong task force was launched on 20 July, just one day ahead of an EU summit paving the way for a second Greek bail-out under strict reform demands notably from Germany, the largest contributor to the euro zone lifelines. Speaking to media in Athens on Wednesday, Reichenbach set out areas his team is focusing on: health care and public administration reforms, tax collection and increased spending of EU structural funds. Amid reports of shortages of medicine, hospital equipment and blood, the German official said his team was ready to help the Greek health ministry in "reducing the expenditure for pharmaceuticals" because "Greece has much higher expenditure for pharma than other member states." Reichenbach insisted that his work was not to "rubberstamp" or "criticize" plans by the Greek ministers, but to facilitate expertise and help from the EU commission and member states. For instance, experts from France and Germany could help Greek magistrates in changing the system so as to accelerate court cases, he said. "Clearly, concerns about sovereignty should be taken seriously," he said in response to a question. "The justification of the task force lies in the fact that the Prime Minister of Greece has asked for such support from the European Commission," he explained. "If it had been the commission who took the initiative and imposed it on Greece I would feel much less convinced this is the way to go ahead," he added. The task force was however a plan floated by EU commission chief Barroso and "supported by the 23-24 June European council consultations with Prime Minister Papandreou," according to a statement by the EU commission itself. Earlier on Wednesday, German Chancellor Angela Merkel spelled out her vision for the future in Greece: even more foreign supervision. "It's not enough that the troika [EU-IMF-ECB] comes and goes every three

months. It would be desirable to have a permanent supervision in Greece," she told the Bundestag before flying to Brussels where she intended to bring this up. A spokesman for the Greek mission in Brussels refused to comment on the Merkel statements and only said that the EU task force was asked for by his Prime Minister.

European leaders said they secured a deal

European leaders said they secured a deal to reduce Greece's debt after they labored overnight and into Thursday morning to find agreement on what they had billed as a blockbuster package to stem the Continent's debt crisis. French President Nicolas Sarkozy said after the marathon negotiating session that the leaders had reached agreement with private banks on a "voluntary" 50% reduction of Greece's debt in the hands of private investors. He also said they had agreed to expand the firepower of the euro zone's bailout vehicle, known as the European Financial Stability Facility, by four- or five-foldsuggesting it could provide guarantees for around 1 trillion, or about $1.4 trillion, of bonds issued by countries such as Spain and Italy.

Mr. Sarkozy expressed satisfaction that the Greek debt agreement wouldn't be forced on holders of Greek bonds. "France wanted to avoid the drama of a Greek default, when you remember the consequences of the failure of Lehman Brothers, and it's done," he said. Hours before the European leaders' summit was set to start, European Union authorities couldn't confirm that a full package to stem the region's sovereigndebt crisis, including the size of a haircut on Greek bonds held by private investors, would be announced Wednesday. Costas Paris has details on the Markets Hub. Such summits rarely end without ostensible agreement among the leaders on the way forward. But many officials had warned beforehand that it would take weeks to negotiate the details of any agreement. After a day marked by a brawl among Italian lawmakers debating cutbacks in the country's pension system, Italian Prime Minister Silvio Berlusconi took time out from the Brussels summit to call into a popular Italian television show shortly after midnight, criticizing the European Central Bank and dismissing reports he plans to call for early elections. Governments, led by Germany, had begun the day seeking a real cut in the value of Greek government bonds held by private investors of as much as 60%. The banks, led in negotiations by Charles Dallara of the Institute of International Finance, a Washington-based international bank lobby group, offered a new proposal Tuesday night that officials said had fallen far short of that. Officials said Ms. Merkel, Mr. Sarkozy and International Monetary Fund Managing Director Christine Lagarde met with Mr. Dallara in the middle of their summit. According to a person familiar with the matter, Mr. Sarkozy warned him that in the absence of an arrangement, private creditors would face a Greek default and 100% losses on their investments. The most important new element was a call by European leaders for a plan to provide guarantees on banks' medium- and long-term debt funding. While details aren't clear, the provision is aimed at helping alleviate a drought in the market for bank bonds threatening to leave some banks short on funding next year. Experts said such a program could prove more important than the higher-profile efforts to coax banks to beef up capital cushions. The other component of Europe's bank-strengthening plan calls for large banks to maintain so-called core Tier 1 capital ratios of 9%, after adjusting the values of their government bond portfolios to reflect market prices. Banks will have until June 30, 2012, to come up with any additional necessary capital. Late Wednesday, the European Banking Authority statement Late Wednesday, the European Banking Authority said leading banks in 13 countries will need to come up with an additional 106.4 billion in so-called core Tier 1 capital by

that date. The EBA said it based its evaluation on a sample of 70 banks across the continent. Banks in Greece, Spain and Italy face the biggest capital holes, and together account for about two-thirds of the overall amount that needs to be raised. The French, Portuguese and German banking sectors each face capital deficits of 5 billion to 9 billion. The EBA deemed banks in the U.K. and Ireland, among others, as having enough capital. Italy's economy continues to be a concern. In a letter sent to European Union leaders Wednesday, Mr. Berlusconi promised partial reform of the Italian pension system, state-asset sales targeting revenue of 5 billion a year and a loosening of labor laws to make layoffs easier. In the letter Mr. Berlusconi reiterated a key pledge to balance the country's budget in 2013, and acknowledged that, despite having approved a 60-billion austerity package this summer, the government still has to face a heavy debt burden as well as stagnant growth. The leaders, in their plan to boost the firepower of the EFSF to stop further contagion, agreed on two ways of doing this, which would run side-by-side. Under one method, the EFSF would indirectly finance guarantees covering the initial losses that buyers of Spanish and Italian bonds would suffer in the event of default. The other is to set up a fund seeded with EFSF money as well as with contributions from cash-rich nations such as China. The head of the EFSF, Klaus Regling, is due in China Friday to discuss how Beijing might contribute to the fund's finance. In a parallel effort, Mr. Sarkozy plans to call China's President Hu Jintao Thursday to discuss the matter, a French government official said Wednesday. German Chancellor Angela Merkel said she was "very satisfied"with the outcome!
Date: oct.27.2011

Mircea Halaciuga, Esq. 0040724581078 Financial news - Eastern Europe