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The gloomy economic outlook could convince the EU to show some flexibility on deficits of countries like Spain, but the tidal wave of fiscal austerity will continue until the debt crisis will not be overcome.

The European Commission publishes its updated economic forecasts Thursday for 2012 and 2013 for 27 economies of the bloc. According to several sources, they show a significant drop in activity and will spur debate among member states on a revision of targets for this year and next year.

A European official working directly on the case told Reuters on condition of anonymity that the current targets would gradually appear untenable and could be adjusted upon publication of economic forecasts Spring, May 11

"The (European) Commission does not want to look ridiculous by insisting on unrealistic goals and there will be adjustments," he said. 

According to three other sources of high rank, the Commission could allow member states to go beyond a few decimal points their goals for 2012 while keeping unchanged those of 2013, when most European countries promised to return to below 3% under the Stability and Growth.

The EU executive could also decide to defer a year, until 2014, achieving this goal to reflect the change in environment since the publication in November An estimate of the growth was still 0.5% in 2012 and 1.5% in 2013. 

REVISION "SMALL OR VERY SMALL"

For several weeks, several countries, including Italy and Spain have questioned the paradigm of austerity inspired by Germany and called for a shift of policies e ECONOMIC towards less spending cuts and measures to support the growth and fight unemployment.

European leaders have addressed this issue in late January at an informal summit and on Monday, Britain, the Netherlands, Italy, Spain and eight other countries felt that the euro area should try to focus on reactivation of growth in the EU rather than solely on fiscal consolidation. 

Spain is particularly under the spotlight since the new center-right government announced in December that the deficit would reach 8% of GDP or more in 2011, well above the pre ; visions.

If Madrid continues to provide, at least in public, that the deficit will be reduced to 4.4% this year, the threat of a recession makes this task almost impossible.

One source said that Spain and other countries hoped the Commission would show a certain "understanding" while many economies are facing recession in their second three years. This source added, however, that we should not expect a revision other than "small or very small."

According to the Wednesday edition of the newspaper El Pais, the Spanish Prime Minister Mariano Rajoy could request within ten days to review the Community executive from 4.4% to 5% over the current target of deficit reduction.

Rajoy and his economy minister, Luis De Guindos, met with Jose Manuel Barroso, Commission president, and Olli Rehn, Commissioner for Economic and Monetary Affairs, last Tuesday Aftern s that Reuters found that Brussels plans to sanction Madrid for not sufficiently reduce the deficits. 

NO APPETITE NORTH

The economies of both the euro area and EU shrank by 0.3% over the last three months of the year and despite signs of stabilization, analysts questioned ; s by Reuters believe that activity will fall by 0.4% in the euro area in 2012 before recovering to sluggish growth in 2013.

But, with a support plan for 130 billion euros to Greece only adopted and faults are doing day in Portugal, the European Commission and countries whose fiscal position is the most sound estimate that deficit reduction must remain a top priority. 

"Y-Will there a discussion of deficits in the Eurogroup? Perhaps, but there is little or no appetite or sympathy at all for a softening of goals," explained , a European source involved in discussions. "Ask the Belgians, or the northern countries (EU) or the Germans."

Under pressure from the European Commission, Belgium has announced the freezing of € 1.3 billion of expenditures in excess of 11.3 billion euros in savings already announced es. The country has no intention to be flexible with their peers.

Germany, Finland, the Netherlands and Luxembourg are also reluctant to revise downwards the targets because they believe that fiscal consolidation is a precondition for a sustainable growth in the future and that the European crisis is above all a crisis of confidence.

"Review downward targets would be of no help," the source said, adding that it would also undermine the credibility of the new rules on monitoring deficits and debt which the EU has since the crisis began in 2009. 

Under these rules, a country must now submit its budget to advance to the Commission and can be automatically sanctioned and fined in case of deficit greater than 3% of GDP and debt greater than 60% of GDP.

Last month, 25 of 27 Member States have even gone further by agreeing to a rule limiting their deficits to 0.5% throughout the primary cycle.

The Swiss group has nominated Tuesday for the resumption of the LyondellBasell refinery. Threatened with closure, the site located in Berre is stopped since January 4. Over 350 employees are affected. LyondellBasell refinery in Berre

This is a gleam of hope for employees of LyondellBasell refinery. Threatened closure of the site-Berre l'Etang located in the Bouches du Rhone interested investment group Klesh. In parallel, the Swiss group has already made an application for three Petroplus refineries in Europe, including the site of Petit-Couronne, in Normandy.

The group Klesch just sent following discussions with the Inter advice and a letter of intent after which he expressed interest in buying the refinery and steam cracker, "say the unions CFE / CGC, CFDT, CFTC, CGT and FO in a statement, asking the current management and public authorities to investigate this possibility "with the utmost seriousness." Contacted by AFP, the Swiss refused to any immediate comment

. "A credible alternative to the closing"

According to the unions, this track, initiated by the unions after the announcement in November by the French chemist Arkema a sale of its vinyl (PVC, chlorine) to Klesch, "opens a credible alternative to the closure of the refinery." Fabien Astier, CGT, highlights the consistency of the project, which would develop synergies between the refinery, steam cracker and the Arkema Fos-sur-Mer. Asked about the profile of Klesch, presented by the unions of Arkema, hostile to the sale of vinyls, like a "gravedigger," Mr. Astier said "remain vigilant". "We are not ready to sign a blank check," he warned. The group must "demonstrate its credibility through a machine vision, financial and social in line with our requirements on this site in the interests of employees and the entire petrochemical site Berre," said the Inter.

The current management had announced the proposed closure of the refinery September 27, 2011, after failing to find a buyer, citing "heavy losses". This project, which was to receive 370 of the approximately 1,250 employees who work on the total complex of the U.S. group. LyondellBasell around the Etang de Berre, had resulted in the immediate vote of strike, with blocking units, for nearly two weeks before the granting by the direction of a reprieve. The refinery is currently "mothballed", that is to say, but stopped maintained to be ready to restart in case of buyer, that unions are actively looking.

NYSE Euronext has submitted a bid for the London Metal Exchange (LME) while his German counterpart, Deutsche Börse has not done anything, said Friday Reuters sources familiar with the matter.

This information confirms an article published Friday by the Financial Times that NYSE Euronext and CME Group submitted bids on the LME, valuing up to one billion pounds (1.2 billion euros).

The FT adds that Intercontinental Exchange has also made an offer and hired JPMorgan as advisor.

The LME has responded by claiming to have received "many offers" to purchase.

"Everything is on track with lots of offers to consider for the board next week," said a spokesman for the world leader of industrial metals. The board will meet next Thursday.

Analysts and industry sources value the LME from 0.5 to 1.5 billion pounds, anticipating earnings growth based on new products and its self-clearing.

A source familiar with the matter estimated that a merger between NYSE Euronext and the LME would make sense.

"LME is complementary to the activities of NYSE Euronext. If realized, this operation would achieve synergies and above what would be interesting for customers of both parties, they would have access to the products of both companies but ; through a single entry point, which would be cheaper, "said this source

. NYSE Liffe market concerns including transactions on cocoa, robusta coffee, white sugar, milling wheat, wheat foraged, rapeseed, corn or malt barley

. Citing

someone familiar with the matter, the Financial Times reports that about half of the fifteen companies that have accessed the accounts of the LME showed a tender in an initial closed Wednesday. 

The FT said that potential candidates such as Deutsche Börse abstained and it is unlikely that the London Stock Exchange submit an offer.

A source familiar with the matter told Reuters in September that would link to the Singapore Exchange LSE to submit a joint bid on the LME.

Tens of thousands of protesters gathered Sunday around the Greek Parliament and some clashed with police a few hours of the vote by MPs on a bill consisting of austerity measures such drastic and unpopular required by the EU and the IMF in exchange for a new rescue plan.

Greek Prime Minister of Greece Lucas Papademos warned against the "economic chaos" in case of rejection, while Germany has warned that Greece should stop being a "well bottomless "`.

After three days of tension and political threats, Parliament began shortly after 14:00 (12:00 GMT) to examine the bill to save 3.3 billion euros thanks to lower wages, pensions and job cuts public. 

The vote must take place before midnight (2200 GMT), said the finance minister, Evangelos Venizelos, "because on Monday morning, the banking and financial markets should have received the message that Greece can and will survive. "

"If the law is not adopted, the country will go bankrupt," warned the Minister that a Communist deputy threw the pages of the bill on the floor of the Assembly.

About twenty members of the coalition of Lucas Papademos have threatened in recent days to vote against the text and six government members submitted their resignations, but the Prime Minister will still theoretically supported by a large majority.

But the Greek population does not intend to accept the new austerity measures without saying anything. 

"The Greek people RAISE"

Tens of thousands of people gathered in the afternoon around Parliament to lobby MPs, the largest mobilization for months.

"Enough is enough!" Exclaimed Manolis Glezos, 89, a veteran of the extreme left.

"They have no idea what it means to an uprising of the Greek people. And the Greek people, ideas all political persuasions, is beginning to lift, "said the hero of the resistance to the Nazis during World War II

.

"annihilation These measures will not go", he further promised, mouth covered by a mask to protect themselves from tear gas fired by police to de pledge Syntagma Square, Parliament

. Some protesters responded by throwing stones and Molotov cocktails at police ….. At least fourteen

…. protesters injured were taken to hospital, police said, and about fifty others treated on site , mostly for choking. At least eight policemen were also injured.

"There is tear gas into the interior of the Assembly," said an MP, Panagiotis Lafazanis.

The new austerity plan is the price to pay for the release of an aid program of 130 billion euros from the EU and the IMF – the second since 2010.

Greece has to touch the money before March 20 to repay a state loan of 14.5 billion euros.

"Bottomless well"

Germany has turned up the heat a notch Sunday warning that Europe expected actions and not words.

"The promises of Greece are no longer sufficient for us," warned the German finance minister, Wolfgang Schäuble. 

Referring to the new austerity plan in which the Greek deputies must vote this Sunday, the minister said in an interview published by the Welt am Sonntag that the previous did not e ; tee implemented in their entirety.

Wolfgang Schäuble said that the Germans are largely in favor of an international aid to Greece. "But it's important to say that it can be a bottomless pit. This is why the Greeks will finally have to clog the well. Then we can put something. At least people are now beginning to realize that it will not work with a bottomless pit.

"Greece must do its homework to become competitive, it requires a new rescue plan or some other way that we do not want to (…)" he says referring to an output the euro area.

Asked if such an outcome is possible, Wolfgang Schäuble responds: "Everything is in the hands of the Greeks themselves. But even in that event, on which no table, they remain an integral part of Europe ".

"We are pleased to offer our assistance, but we should not give others the impression that they have not done enough. Each state is responsible for itself," explains he said.

The dramatic improvement of winning markets and credit rates in Euro for five weeks raise questions about its duration, especially as the underlying foundation to the crisis in the euro area are still in place.

Many professionals are that economic growth remains low, even zero or negative in the eurozone, and that risks such as governance, yet non-existent for the euro, the French elections and the potential frictions in the Franco-German couple remain. 

But they believe along with the upturn would last – and this became evident endlessly repetitive – the European Central Bank and its refinancing operation long-term (LTRO) three years after which it lent in December nearly 500 billion to European banks, which have escaped and a liquidity crisis.

LTRO a second, scheduled for 29 February should further inflate the first balloon of oxygen.

Under the title "Too good to be true," strategists rate Societe Generale stressed that "illusions are not yet on the brink of extinction, a good amount good news is already in progress ". 

Vincent Chaigneau, head of rates strategy at SG, estimates that the market behaves as if the Greek problem was solved, as if the banks would buy sovereign debt, as if the U.S. economy had gone out of business and even as if China was to be the turbo world.

But it does not exclude the risk appetite remains largely intact over the next two weeks.

This return to the active risquésa permits, among other things, to rate countries 'peripheral' in the euro area to relax dramatically (-170 basis points to 5.6% Italian for 10 years from its high of November, -135 bp for the 10-year Spanish). 

"Debt device should begin to run out of fuel," said Vincent Chaigneau, who feels that if there is agreement on the Greek case, it will be difficult to implement: "The devil is in the dice ; details. "

He advocates an easing of positions on the 'peripheral', as Hans Lorenzen, credit strategist at Citigroup, for whom this "rally will likely continue, and probably reach a level that does not fundamentals. "

The ECLIPSE EUPHORIA Do NOT NEED SECURITY

"Thus, we estimate that over this rally progresses, more investors will take the opportunity to take a stand on quality," says Hans Lorenzen. 

This relaxation of the assets risquésa the distinction of not having removed the need for security and has therefore not resulted in massive outflow of low-risk assets such as loans German government (Bund). The 10-year Bund yield has evolved over the first six weeks of the year between 1.79% and just over 2%.

Hans Lorenzen advises on the market for corporate bonds (corporate credit), to phase out of cyclical sectors and sensitive sectors 'peripheral' to defensive sectors and less exposed to risk device.

Particularly sensitive to the crisis of sovereign debt in euro, the market for bank debt, almost closed in the second half of 2011, walked away on top speed, with premiums (spreads) that have contracted considerably and a primary market that is out of his coma to find a form insolent to the point of welcoming new financial institutions in Italy and Spain. 

Citigroup said that the bank maintains growth forecasts 2012 and 2013 significantly below the consensus.

"This will translate over time by a sharp rise in corporate default rates. Risks Greece, Portugal, the risk of failed auctions or even the French elections may harbor a negative scenario, "he says

. "A victory of Francois Hollande would create great uncertainty in the markets about the commitment of France to the (new) pact in the European budgetary its current form, "he wrote in a note

. However, he said, as quantitative easing (QE) in the United States, the positive effect on asset prices could last well beyond the second LTRO

.. Assuming that ……. this second operation leads banks to borrow as much as in the first, the total would be around € 1.0 billion, enough to provide much the liquidity needs of banks in 2012, of around 800 billion euros

.

The new home sales fell 13% in the third quarter. At the same time, housing starts increased by 11%. Professionals denounce the consequences of the austerity measures the government. An employee on a construction site offices and accommodation in Marseille.

The new home sales by developers are still down in the third quarter. They fell in France by 12.9% yoy in the third quarter, according to the Ministry of Housing, which reported Tuesday alongside a 11.4% increase in housing starts and permits 22.6% built between August and October 2011.

For all of 2011, the number of new homes sold by developers to fall, according to Michel Mouillart, professor of economics at the University of Paris X-Nanterre, between 97,000 and 98,000 against 115,000 in 2010, a down 15%, far from the record 127,000 in 2007. In 2012, Mr. Mouillart expects a further decline to 85,000, far off the figure of the previous crisis (79,000 in 2008). "The year 2012, with 340,000 starts in 2012 against 350,000 in 2011 should mark a decline that feeds the decline in demand. To reverse this decline, it will be tough in the absence of public support for devices private construction, "said Michel Mouillart.

China will begin a cycle of easing monetary policy next month, via a lowering of reserve requirements for banks, a sign that the country feared the consequences of the global economic downturn, according to a survey released Tuesday by Reuters.

Of 19 analysts surveyed, 10 thought that the Chinese central bank will decrease by 50 basis points in the reserve requirement ratio, currently at 21.5%, a level which, according to the bank, affects their profitability and lending capacity.

Two weeks ago, the Chinese central bank said China was ready if necessary to adjust its monetary policy.

Eight analysts believe that the lower reserve requirement ratio will occur in the first quarter 2012 and one analyst expects the second quarter.

Last week, a majority of market participants did not see any easing before the first quarter of 2012, but the worsening debt crisis in the euro zone could precipitate the decision of the Chinese monetary authorities.

Inflationary pressures have led them to meet several times the interest rates and bank reserve requirements since October 2010.

Since then, inflation has decelerated slightly to 5.5% last month, but remains above the official target of 4%.

Angela Merkel and Nicolas Sarkozy are considering the establishment of a Stability and Growth limited to a few countries in the euro area, the Welt am Sonntag reported on Sunday.

A new deal would avoid waiting for a treaty reform could drag on, the newspaper quoted German government sources.

German Chancellor and French President could unveil the next week this proposal as part of a plan against the debt crisis.

"Based on these measures," the newspaper, "there should be a majority in the European Central Bank for a more strong capital markets.

The UMP, which is now called the "party of the rights and duties", proposes a cap on income-tested benefits, to encourage the RECIPIENT of the RSA to work and to decreasing unemployment benefits. A strategy to capture the voices of lower-middle class. Decryption. The UMP held Tuesday, November 22 its first national convention in Lambeth (North). "We give the kick off of our presidential campaign," he told the Secretary General of the UMP, Jean-Francois Cope.

Tuesday night was held the first of three national conventions of the UMP, which must deliver the program of the presidential party in 2012. This meeting was devoted to economic and social. On the menu include: the end of 35 hours and the introduction of a social VAT renamed "anti-offshoring tax." Above all, the fight against assistantship.

The private owners of Greek sovereign debt have formed a committee of creditors in the hope to start as soon as possible discussions on the implementation of a 50% discount on Greek paper, said Thursday Charles Dallara, President of the Institute of International Finance (IIF).

The owner of this association, which represented the banks in the negotiations on a new aid to Greece, said he expected the discussions to a conclusion within a few weeks.

In late October, leaders of the euro area reached an agreement on a 50% discount on the shares of Greek debt and a new tranche of 130 billion euros.

In the previous agreement of July 21, this discount was only 21%.Charles Dallara said the figure of 50% was "final".

The government crisis Lucas Papademos has passed Wednesday without a surprise first hurdle in getting the trust of the Greek Parliament but dissension arose in the coalition could complicate the implementation of reforms to save the country from bankruptcy.