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France, Belgium, Luxembourg agree on Dexia rescue deal & Qatar Investment Authority to take over Dexia Luxembourg?

Reuters reports that France, Belgium and Luxembourg governments reached an agreement on Sunday on a rescue package for Dexia, which will be put to the stricken Franco-Belgian bank's board later in the day for approval.

Dexia confirms having entered into exclusive negotiations with an international group of investors in which the State of Luxembourg will participate for the disposal of Dexia Banque Internationale à Luxembourg. The Board of Directors of the Dexia group will take a decision on a potential offer by the end of the exclusive

List of European banks in risk - by P/B-ratio (price-to-book ratio)

Wikipedia: The price-to-book ratio, or P/B ratio, is a financial ratio used to compare a company's book value to its current market price. Book value is an accounting term denoting the portion of the company held by the shareholders; in other words, the company's total tangible assets less its total liabilities. The calculation can be performed in two ways, but the result should be the same each way.

Gillian Tett, FT: America’s six key lessons for a ‘euro Tarp’

For Gillian there are at least six key points, of which the last is good, which Europe needs to consider:

Dexia press release 4 October 2011

Regulated information

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Holger Schmieding: Europe is probably going to fall into recession in the fourth quarter

“Europe is probably going to fall into recession in the fourth quarter,” said Holger Schmieding, chief economist at Joh. Berenberg Gossler & Co. in London.

“Leading indicators are pointing to a modest recession,” and the European Central Bank “will probably go to a softer stance soon,” Schmieding said in a radio interview on “Bloomberg Surveillance” with Ken Prewitt and Tom Keene.

EU economic governance: European Parliament approves Commission comprehensive package of proposals for legislative measures

The European Parliament, sitting in Strasbourg on 28 September, approved the Commission's proposals for six pieces of legislation setting out robust new rules for the future economic governance of the EU and the euro area. This "six-pack" was tabled by the Commission exactly one year ago as part of its comprehensive response to the financial and economic crisis. It has been the subject of sometimes tough negotiations between the Council of Ministers and the European Parliament.

German Parliament Approves Expansion of EFSF

German Chancellor Angela Merkel's ruling coalition closed ranks Thursday in passing a bill to reform the euro-zone bailout fund without having to rely on votes from opposition parties, according to parliament voting results.

A total of 315 lawmakers from Ms. Merkel's coalition of Christian Democrats, Bavarian Christian Social Union and the pro-business Free Democrats voted in favor of the bill to expand and reform the European Financial Stability Facility. Thirteen coalition lawmakers voted against the bill and two abstained.

Euro zone banks overnight deposits with the European Central Bank

Update 25 October 2011: The European Central Bank said banks in the euro area accessed less emergency overnight funding and deposits also fell.

Financial institutions borrowed 4 billion euros ($5.6 billion) at the rate of 2.25 percent, the ECB said, down from 4.6 billion the previous day. Banks also parked 198 billion euros with the Frankfurt-based central bank, down from 202 billion euros the day before.

European renewal – State of the Union Address 2011 - José Manuel Durão Barroso 28 September 2011

It is in French AND English;

European Parliament
Strasbourg, 28 September 2011

Handelsblatt: Deutsche Bank Sees Higher Greek Writedowns

Deutsche Bank calculations show writedowns on Greek sovereign debt holdings may exceed the 21 percent to which banks and insurers agreed, Handelsblatt said, citing Charlotte Jones, a controller for the German lender.

The writedowns for the European institutions may amount to 25 percent or more, Jones said, according to the German newspaper, which didn’t specify where she made the comments.

Strong demand for EU € 4 billion 15y bond in support of Ireland and Portugal

The European Union (EU) placed yesterday a € 4 billion bond with 15 years maturity, notifying strong investors' demand for this benchmark bond. The operation took place under the European Financial Stabilisation Mechanism (EFSM) and was carried out by the European Commission on behalf of the EU. From the proceeds Ireland and Portugal will receive € 2 billion each as further loans as part of their financial assistance packages, in line with the overall funding requirements.

Letter from David Cameron and other G20 leader to French President Nicolas Sarkozy

President Sarkozy,

Three years after our first Leaders’ meeting, reverberations of the global financial crisis are still being felt by citizens and governments around the world. For many advanced economies the path out of the deep and prolonged recession will be difficult. This will impact on growth in emerging markets, and there is more limited room for manoeuvre than in 2009.

Yesterday Roubini, today El-Erian (PIMCO) talks about Euro TARP

Yesterday, Nouriel Roubini presented his 8 Urgent Steps to Prevent Depression open letter. One of his steps was:

Undercapitalized euro zone banks and banking systems should be strengthened with euro zone-wide public financing (Euro TARP)

EFSF revamp screwed after Slovenia topple government after confidence vote - delay until 2012

In mid July Merkozy decided the terms for a revamped EFSF, that tiny office in Avenue JFK in Luxembourg, currently sitting on 750 bn euros.

Lawmakers in Ljubljana voted 51-36 today to topple Prime Minister Borut Pahor’s administration, according to parliament’s press service. General elections are likely to be held as early as December, which may force a postponement of a vote to back the legislation enhancing the EU rescue fund, known as the European Financial Stability Facility.

Silvio Berlusconi says "credit rating agency S&P's opinions on Italy seems to stem from media views more than reality

Standard and Poor's cut its unsolicited ratings on Italy by one notch, warning of a deteriorating growth outlook and damaging political uncertainty, in a move that took markets by surprise and added to pressure on the debt-stressed euro zone.

S&P's downgraded its unsolicited ratings on Italy to A/A-1 from A+/A-1+ and kept its outlook on negative, sending the euro more than half a cent lower against the dollar.

FT reports: Siemens parked 4 to 6 bn euros at ECB - withdrew 500 million+ from either SocGen or Credit Agricole 2 weeks ago

FT reports that Siemens withdrew more than half-a-billion euros in cash deposits from a large French bank two weeks ago and transferred it to the European Central Bank, in a sign of how companies are seeking havens amid Europe’s sovereign debt crisis.

In total, Siemens has parked between €4bn ($5.4bn) and €6bn at the ECB’s facilities, mostly through one-week deposits, this person said. Only a handful of large companies have the banking licences that allow them to deposit cash directly with the ECB.

China charms Europe, but Beijing has own agenda

Europe's frail economies are wobbling under the weight of their debts. Their urgent austerity measures are stunting growth and driving unemployment higher, and their citizens are clamoring for improvements. That has changed the complexion of European dealings with booming China. Crisis-hit European countries are swooning over China's $3.2 trillion cash pile — the world's biggest foreign exchange reserves — even though many are angry about what they view as unfair Chinese practices.

Greece Government in Emergency Talks on Cutbacks

Greece's government was meeting over the weekend after receiving fresh warnings from its euro-zone partners that future aid will be withheld unless it can produce conclusive steps to bring its unruly budget deficit into line.

Prime Minister George Papandreou aborted a planned trip to New York and Washington this week to preside over emergency meetings in Athens to identify new savings that will convince other euro-zone governments that targets can be met.

Why Europe has only a month to solve debt crisis

If Europe's leaders do not restructure the euro and European debt within a month, the markets will force it on them.

The highly publicised three-way phone conversation between German Chancellor Angela Merkel, French President Nicolas Sarkozy and Greek Prime Minister George Papandreou may have calmed the markets but it provides no solution for Europe's economic and banking woes. If anything, by delaying decisions, it makes the crisis worse.

Euro-Zone Finance Ministers and US' Geithner Debate Ways Of Easing Tensions

-- Geithner urges Europe to overcome damaging divisions, remove "catastrophic risk"

-- Juncker says debt crisis makes stimulus measures impossible

-- Finnish collateral demands discussed but no agreement reached yet

-- Agreement reached on economic governance

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