Gold Rush ??? -A few years ago annual production was 13,000,0000 ozs,it is now 10,000,000 ozs worldwide,although figures for Russia and China are vague and possibly unreliable.We do know,however,that they do not export in any volume that which they do mine.  I have a friend ,a board member ,of a company ,that produces 1,000,000 ozs per annum.it s no secret that they have enough ore above ground for about two years production,they are ,at the moment,not mining.  Now,onto consumption,prefaced by the admission that I reside in Thailand,and I am speaking as I see the situation here and indeed the surrounding countries of S.E.Asia.  The general population buy gold to keep for weddings and the rainy day syndrome.They do not buy as an investment or for trading,the spread is too great.  The Chinese will,if the coming year is thought to be unfavourable.  India,the largest consumer, placed tax on imports a couple of years ago of  (I believe) 5%.  My question to my self at the time was answered by an Indian who was trying to come to an agreement with the company mentioned above,to no avail of course,when he reminded me of our conversation of sometime before,years in fact,when he predicted that middle class Hindu brides,say five or ten million every year,would swallow world production.  The presumption I now have confirmed to myself is that most markets are manipulated,you and I will be allowed to gamble in shares bonds and propery,because they are our decisions and will be our fault.The underpinning we used to enjoy fifteen years ago ,is no more.Good luck and God bless you all ... $1000 dollars of gold stuffed under the mattress a hundred years ago would be more valuable today than $1000 in cash stuffed under the same mattress, so people saying pieces of paper issued by a central bank are a better bet than gold are clearly talking nonsense, how are those Hapsburg thalers, Reich marks or Czarist rubles doing these days?  But, and it is a huge but, gold only retains its value in a civilized society, it is spectacularly useless when society breaks down a fact about which many gold buyers seem to be completely unaware. How the heck do you think gold coins will save your neck when the Morlocks are coming over the garden fence?  The mere fact of owning gold will mark you out for immediate attack. The first time you go to the market to buy your bag of rice with a gold sovereign is the moment your fate is sealed.  Historically Jews and other persecuted groups kept their wealth in gold as they figured it was their passport when the crisis came, all it meant was that the bad guys knew to strip them naked and steal their clothes and luggage after chasing them out while the peasants ransacked their homes looking for the secret stash.  Think of those caches of gold dug up by archeologists, which we are told were hidden to keep it safe from the Vikings and ask yourself how much use all that gold was to its original owner. 

Beware of the Anglo-Saxons barbarians - how they destroyed a Christian civilization - they will distroy today's Europe just the same

See also : http://www.economist.com/blogs/graphicdetail

“it was only 'a failure of animal spirits' (to use Keynes' description of the loss of confidence) that caused the 1930s economic depression.” ...It was the same economic measures of calling in their loans (as they are doing to Greece, Spain, etc.) and tightening the money supply as well as raising interest rates that caused the FED orchestrated “Great Depression” of 1929. This is what precipitated the Stock Market Crash – and then they used that as the excuse for further controls on the money supply, instead of doing what Keynes wanted: flow more money into the system to stop the growth of unemployment so as to kick-start the economy again. This time though they used the “bad debt trading of derivatives on the housing bubble” to orchestrate this upcoming depression. If the people of Ireland, Greece, Spain, Italy etc. were given a fair paper ballot referendum (not computers so easily manipulated as the Bush elections showed us in America) then I believe they would get out of the Euro. Argentina managed it, and now the IMF and the FED are seething and frothing at the mouth and taking them to court or rather suing them because they had the audacity to want their national sovereignty back! Check out "fractional reserve" lending on "The Money Masters" on You Tube to get a clear picture as to how the whole civilized world is being fleeced for the gain of a few private individuals. It is not a conspiracy theory, it is simple fact. Another of their goals is to have us fight amongst ourselves, instead of trying to solve the real problem which is “fractional reserve lending.” The German taxpayers, for example, are rightly angry but for the wrong reasons! The ECB is pulling the wool over their eyes just like the FED is pulling the wool over the eyes of America. The ECB is making out that they need money to bail out Greece, Spain, etc. when they have really lent out far more than they have in their vaults already! They are also being backed by the FED with “fractional reserve” dollars to the tune of 85% of their assets. The whole Ponzi scheme is based on thin air dollars – so in effect there is no need to fleece the German taxpayer as well. But it does serve to divert attention from the real culprits: private banking in the form of the ECB, the FED and the IMF! In this way the Greeks are seen as lazy, no-good for nothings to the Germans and the Germans are seen as “Nazis” by the Greeks. Divide and conquer is an age old adage and it is diverting attention from the real culprit: Private Banking in the form of the FED and the ECB and they are getting away scot-free when they are causing this depression in the first place. Since everything anyway is based on “fractional reserve lending” or “thin air” debt, then why are interest rates up and money tight in both America and Europe? This is the cause of the economic crisis – not because some Greek café owner didn’t give out a receipt to a customer! The FED did it in 1929 to cause the Great Depression: raise interest rates and tighten the money supply just when they should be doing the opposite according to Keynes to get out of this slump. Private banking is orchestrating this depression and it is getting worse and worse every day leading to more nations slowly falling under their total control. It is ironic that Greece is the first victim of this multi-headed Hydra from Greek Mythology composed of the IMF, the FED, the ECB, the NCBs, and others! Even Hercules would have a hard time with this one as there are too many heads working in concert this time to enslave the world in debt. Whenever nations or empires printed or coined their own money that was debt and interest free the world prospered. The Romans with their bronze coins, England with her Tally Sticks, and Lincoln with his “Greenback Dollars” printed directly by the US Treasury. Many would argue that money would be worthless if we cut out private banking to print our money, but just the opposite would happen. If a country can issue a debt-laden interest bearing bond on good faith to a private bank to print its money, it can also issue a debt-free paper note to the public directly!

A deepening recession in the 17-nation eurozone sent shares lower on Thursday amid evidence that the problems of the single currency's crisis-hit periphery were spreading northwards to affect monetary union's core economies of Germany and France.

Despite an easing of financial tensions in the second half of the year, gross domestic product in the members of the monetary union dropped by 0.6% in the final three months of 2012, a heftier decline than the markets had been expecting.

An across-the-board fall in output that affected both large and small economies meant that the eurozone economy failed to register an increase in activity in a single quarter of 2012, with a flat first three months of the year followed by three successive drops in output. The combination of weakening activity and high budget deficits prompted a warning from the credit rating agency Standard & Poor that Spain, France, Italy and Portugal were at risk of a downgrade in 2013.

Although Britain also registered a fall in output in the final three of 2013 and is one quarter of contraction away from triple-dip recession, Moritz Kraemer, managing director of European sovereign ratings at S&P said it was not a foregone conclusion that the UK would be stripped of its coveted AAA rating.

Eurostat, the EU's statistics office, said seven eurozone countries – Greece, Spain, Italy, Cyprus, the Netherlands, Portugal and Finland – were already officially in recession after suffering two or more successive quarters of falling output.

The poor performance of the eurozone's two biggest economies meant the drop in GDP in the fourth quarter was worse than the 0.1% fall in the third quarter. Consensus among analysts polled by Reuters had been for a 0.4% drop.

Germany's main stock market index, the DAX, fell by 1% yesterday, with shares in Paris, Milan and Madrid also losing ground. The euro dropped against the dollar and the yen on the foreign exchanges amid speculation that the European Central Bank will cut interest rates in a response to the fall in output.

The US grew by 2.2% in 2012 and Japan by 1.9%, while GDP in the eurozone contracted by 0.5%.

EUROPE - Official data released this morning showed that the Spanish economy shrank by 1.3% in the second quarter of 2012, on a year-on-year basis. That's worse than the first estimate, of a 1% drop in GDP. The contraction in the first three months of 2012 has also been revised down to -0.6% year-on-year, from -0.4%. On a quarterly basis, Spain shrank by 0.4% between April and June, and 0.3% between January and March. This comes a day after Spanish GDP data for 2011 and 2010 were revised down, showing that Europe's fourth-biggest economy is in rather worse shape than feared. The news comes as Spain prepares to welcome the EC president, Herman Van Rompuy. He will hold talks with the Spanish PM, Mariano Rajoy, today: another piece of euro-diplomacy in the approach to key events in September. Spain is also holding an auction of short-term debt this morning, but that should go smoothly, given the recent recovery in Spanish sovereign debt.Angela Merkel has urged other politicians to rein in their criticism of Greece.

Elsewhere, political tensions remain high in the eurozone after a war of words over the weekend in Germany regarding Greece's future. Alexander Dobrindt, general secretary of the Bavarian sister party to Angela Merkel's Christian Democrats, began the spat by declaring that Greece would quit the single currency by 2013. But with the Bundesbank chair, Jens Weidmann, launching another full-throated attack on the European Central Bank's plan to buy Spanish and Italian debt – warning that bond-buying could be 'addictive, like a drug' – there's still no unity on how to address the crisis …

With unemployment officially nudging 790,000 – although believed to be far bigger with the closure of some 150,000 small and medium-sized businesses over the past year – there are fears that Greece, the country at the centre of Europe's worst financial debacle in decades, is slipping inexorably into political and social crisis, too. Rising racist tensions and lawlessness on the streets this week spurred the soft-spoken mayor of Athens, Giorgos Kaminis, to describe the city as "beginning to resemble Beirut".With unemployment officially nudging 790,000 – although believed to be far bigger with the closure of some 150,000 small and medium-sized businesses over the past year – there are fears that Greece, the country at the centre of Europe's worst financial debacle in decades, is slipping inexorably into political and social crisis, too. Rising racist tensions and lawlessness on the streets this week spurred the soft-spoken mayor of Athens, Giorgos Kaminis, to describe the city as "beginning to resemble Beirut".

Staple foods became 20 to 40% more expensive between July 2010 and February 2011, shows the Z.F. index calculated based on prices in Bucharest hypermarkets. ZF selected 15 products whose price it has been following since 2008, once every six months, at the same Bucharest hypermarkets, Carrefour Orhideea and Real Afi Cotroceni. These products were chosen because they are most often to be found in Romanians' purchase basket. (Z.F.)

In the calculation of this index, ZF chose one brand from each category of products, a brand that is well positioned in terms of market share, produced by one of the top-five players in the category. Therefore, one kilo of Băneasa flour costs 2.8 lei in February, 41.4% more than in July 2010. 1 Kilo of Lemarco sugar now costs 4.295 lei, compared with 3.28 lei, an increase of 30.9%. Similarly, the price of Floriol vegetable oil (1 litre) rose over 35%, from 5.11 lei to 6.91 lei. Data from the National Statistics Institute (INS) point to a 10.2% price increase for flour in the July 2010 - January 2011 period. Similarly, the increase amounted to 8.1% for sugar. The only products whose prices fell, of those analysed by ZF, were beer, mineral water, apples, with the decline amounting to 6.1%, 0.1% and 12.4% respectively.

ATHENS—Greece was paralyzed by a nationwide general strike Wednesday as hundreds of thousands of workers, shopkeepers and civil servants walked off the job in a 24-hour protest over the government's austerity program. The strike affected public services, with government ministries, local government offices, courts and schools all closed, and hospitals and many state-owned enterprises running with reduced staff. Mass transit around the capital ground to a halt as bus, trolley, tram and subway operations were suspended, and Athens's electric rail operated on a reduced schedule. More than four dozen domestic flights were canceled ahead of a four-hour walkout by air traffic controllers, and ferry operations to Greece's islands were also suspended. "The austerity measures are beginning to affect all of society even more now. The economic situation is becoming very difficult for both Greek businesses and for workers," said Anthony Livanios, an independent political economist and commentator. "Even so, the government appears determined to continue with its policies." Recent public opinion polls showed seven out of ten Greeks expect the austerity program to continue even beyond 2013 when the current bailout deal with the EU and IMF ends. The ruling Socialists have seen their popularity drop sharply in the past year, although they still retain a 3.5 percentage-point lead over the center-right opposition.

BERLIN - The succession of European Central Bank President Jean-Claude Trichet will not be a topic at this week's Group of 20 meeting and will be dealt with after March, German Finance Minister Wolfgang Schaeuble said on Friday. "We will then see (if there will be a German candidate). The important thing is that we will have a good candidate," Schaeuble added in an interview with German radio channel Deutschlandfunk.BCE,EURO,Dollar,RON,Crisis Agerpres, Mediafax
FRANKFURT - Emergency borrowing from the European Central Bank remained exceptionally elevated for a second straight day on Friday, intensifying speculation that one or more euro zone bank might be facing new funding problems. ECB figures showed banks borrowed more than 16 billion euros in high-cost emergency overnight funding, the highest amount since June 2009 and well above the 1.2 billion euros which banks were taking before the figure first jumped on Thursday. The ECB gives no breakdown of the borrowing figures and declined to comment on Friday when asked for an explanation for the jump. Traders remained unsure whether the spike was due to a serious funding issue or whether a bank had simply made an error earlier in the week by not borrowing enough at the ECB's regular weekly funding handout. If a bank, or number of banks, did not get enough funding, and were unable to make up the difference in open markets, they would be forced to use the ECB's emergency facility until the next ECB tender came around. The next ECB offering is on Tuesday, banks get the money on Wednesday, meaning any change would evident in figures published early on Thursday. "As no bank or banking group from any euro zone country is aggressively seeking money in the interbank market at the moment, it is likely that something went wrong at the main refinancing operation," said one euro zone money market trader. "The bank or banking group needs to tap the ECB for the money whether they like it or not, or they are doing that so as not to appear active on the money market and to thereby be stigmatized," he added

European bank shares were down 1 percent by 1100 GMT while the euro fell against the dollar and other major currencies for much of the morning. Money markets showed little reaction, however. Key euro bank-to-bank lending prices remained on a downward trajectory, a direction traditionally at odds with rising tensions. The theory that the spike was due to human error appeared to be supported by data from the ECB's latest weekly funding operation. Banks borrowed the lowest amount since June at the tender, 19 billion euros less than the previous week and well below expected demand of around 160 billion euros.

However, a monetary source in Italy, speaking on condition of anonymity, told Reuters that the increase in borrowing was not a technical problem and was a sign that money markets were still not functioning correctly and geographically split in the wake of the global financial crisis. The source said the Italian banking system continued to have good access to money markets, while high-level Spanish financial source said the jump was not down to Spanish banks. The borrowing jump added extra complexity to the question of whether the ECB will scale back, or extend, its money market support measures at its next meeting on March 3.

ECB President Jean-Claude Trichet said in a recent interview that the health of money markets had improved, although Belgium's Guy Quaden said this week liquidity support remained necessary. "If the increased use of the marginal borrowing facility is due to new problems in the banking system this would call for an extension of the ECB's liquidity support," said UniCredit analyst Luca Cazzulani. "The ECB knows exactly who is borrowing the money and why they are doing it. If it is due to a mistake then it should not influence their thinking at all." The extra 0.75 percent which banks have to pay for overnight funding from the ECB normally means it is used only as a last resort. The last time before this week that overnight borrowing exceeded 10 billion euros was on June 24, 2009, when it was 28.7 billion euros, the highest ever. This year, emergency overnight borrowing has been above 1 billion euros only twice. Traders said while mistyping the required amount or missing the ECB's tender altogether would be an unlikely mistake, it could happen. "It would be a huge oversight and pretty unlikely but it is possible if a lot of things conspired against you," said one London-based money market trader. "If it is a mistake then someone's boss is not going to be very happy." A number of banks, mainly from the euro zone's most debt-strained countries but also troubled banks in core countries, remain barred from open money markets and almost completely dependent on the ECB for funding.

Romania's Gross Domestic Product fell by 1.2% last year, less than analysts' and authorities' forecasts, which hovered around 2%.
The Romanian economy rose by 0.1% in the last three months of 2010 against the preceding quarter, contrary to most analysts' expectations of a decline. Analysts, however, say that the figure was very close to zero and could be later revised, with the "plus" or "minus" sign being less relevant. "This positive figure can be explained by revisions of past data. The -1.2% decline can only be explained if historical series were revised. There could be major revisions both for 2010 and for 2009. One cannot rule out the possibility that the minus of the first quarter has been turned into a plus. If 2009 data have not been revised, one could only come up with 1.2% if first-quarter economic growth were positive," commented Nicolaie Chideşciuc, chief-economist of ING Bank. He says considering that the 2010 economic decline was lower than expected, there is a big chance this year's economic growth could exceed 0.2%. The austerity measures adopted by the authorities, the VAT hike and the 25% public sector wages cut, were reflected in the GDP dynamics. After the economy's feeble return to positive territory in the second quarter, the seasonally-adjusted GDP dipped back into negative territory in the third quarter. The GDP fell 2.5% in the third quarter against the corresponding period of 2009, after a decline of just 0.5% in April-June of 2010 (z.f.)

Romania's public debt continued to rise last year at a fast pace of 31.6%, amid massive state borrowing, and reached 194 billion RON (46 billion euros), accounting for 38% of GDP.

"The growth rate of the public debt is significant. And its level has neared 40% of GDP. The situation is made worse by the fact that the debt structure has a big short-term component, which is more volatile. A problem we will have to solve is modification of the debt structure by extending loan deadlines," comments Aurelian Dochia. Can Romania function without further boosting its public debt? "The public debt is expected to stabilise. Now it is not small at all. We are nearing the maximum bearable limit. The important thing is to think why we are taking this debt on. If we boost the debt to finance wage and pension spending, the markets can become nervous. If we build motorways, it is not a tragedy," believes Ionuţ Dumitru, chief economist of Raiffeisen Bank. The Finance Ministry has managed to slightly reduce the budget deficit last year, but the fast rate of growth of the public debt and the weak prospects of economic growth remain the main vulnerabilities.(Z.F.)

Financial-Banking Analysis

For the new democracies and market economies of the Eastern European region, 2009 has been a rude awakening, the biggest shock since they switched from Soviet communism to western capitalism 20 years ago. "There is no doubt the region is in deep crisis," said the European Bank for Reconstruction and Development last week. "The worst output collapse since the great recession that followed the end of communism."

Most analysts expect the National Bank of Romania to come with a less optimistic forecast as far as this year's price increase is concerned, after last autumn it expected inflation to slow down to 3.4% in December 2011, i.e. close to the official target of 3%. According to an internal survey conducted by the Association of Financial-Banking Analysts, the average analyst forecast for the 2011 inflation is 4.3%, i.e. also above the upper inflation target limit.
The main risks now have to do with the international trend of making food and fuels more expensive, which has already been felt on the Romanian market. Last year consumer prices climbed nearly 8%, although the official inflation target was 3.5%. The shock of the VAT hike from 19% to 24% in the summer, as well as the food price increases that occurred in autumn overturned the downward trend of inflation.

The sheer frequency of legislative modifications in Romania, which exasperates both citizens and the business world, does not only stem from the need to change legislation after the revolution of 1989, but also from the ease with which the governments that succeeded each other during the last 20 years adopted emergency ordinances. The champion of emergency ordinances is the Cabinet of former prime minister Mugur Isărescu, who, in a single year (2000) issued 297 emergency ordinances, while in the same year Parliament adopted 683 laws, which means a total of 980 pieces of legislation. The database of the Legislative Council offers a complete picture of what happened in the legislative field over twenty years. In Romania, there are currently a huge number of pieces of legislation in force, individual and international, 95,618 on January 28, 2011, of which only 1,958 were issued before 1989. Each law needs to be abided by because one cannot cite ignorance of the existence of that piece of legislation as an excuse. The rate of legislative modifications explains the bewilderment of common people, as well as of companies and accountants, when such legislative modifications occur, and explains why lawyers and legal consultants are so successful. (Autor: Iulian Anghel Z.F.)

The complete destabilisation of the Arab world by the imminent fall of the Mubarak regime in Egypt will reset the strategies of world leaders. We could witness policies of stockpiling and rationing fuels and basic products, believes professor Daniel Dăianu. The imminent fall of the Mubarak regime under pressure from the hundreds of thousands of people taking to the streets for the sixth day in a row will change the balance of power in international politics. Economically speaking, the prices of oil and food, already under pressure, are the most affected by the Middle East instability.
The political change in Egypt, which has now reached a population of 80 million, is a "Lehman Brothers" of the Arab world, says professor Daniel Dăianu.
"This is a very difficult situation, a Lehman Brothers of the Arab world, it is a much too hot potato for everybody. It is an event with a major political impact, the most important one since the fall of the Berlin Wall, it could mark this decade," says economist Daniel Dăianu. The collapse of American bank Lehman Brothers is the biggest bankruptcy in the history of the United States and the trigger of the international economic crisis.
Daniel Dăianu believes the political unrest in Northern Africa and the Middle East comes at a time when all countries have had to make spending cuts as a result of the world economic crisis, with the very viability of the welfare state being questioned. (Z.F.)

Health insurance costs - Romania

Those who want to have the comfort of knowing the health insurance covers annual investigations or even treatment in foreign clinics, must take out at least several hundred euros annually of their pockets, but the price of such a policy can go up to as much as several thousand euros. Expats and large corporations' managers are the main clients of "luxury" health insurance, and the number of policies sold annually can reach several hundreds. However, these clients benefit from the best conditions, and insurers do not think twice before paying the bills for some complicated procedures, regardless of where they were performed.
"The number of policies covering treatment abroad rose visibly last year, but the market has not reached maturity, yet. We can see demand increasing for these products owing to the frequent cases of malpraxis in Romania or of hospitals lacking medical products," comments Cristian Fugaciu, general manager of Marsh insurance broker.
The price of insurance on the basis of which a client has access to treatment abroad starts from 700 euros per year and can reach 2,000-3,000 euros per year on average in the case of complex products. There are however policies without restrictions for insured sums or treatment location that can top 8,000 euros per year.BCE, Citigroup, Comisia Europeana, FMI, Federal Reserve, Germania, Grecia, Irlanda, Marea Britanie, PIB, Rusia, SUA, Spania, Standard and Poor's, Ungaria, Uniunea Europeana, economie, obligatiuni, zona euro

Of the 4.57 billion euros that the European Union allocated to Romania between 2007 and 2013 for infrastructure, the Transportation Ministry had attracted as little as 47 million euros until December 2010 - i.e. 1% of the amount. This is the lowest percentage of EU funds attracted out of all the chapters, although this was the sector that needed investments the most. So, an activity that is expected to drive Romania out of recession, such as infrastructure works (which would not only create jobs, but also a new dynamic for connected businesses - cement, asphalt, concrete), and, once the infrastructure was modernised, it would help goods transport companies and tourism, is all but frozen.
Who is to blame and who will pay for this?
The situation could see allocations change because the EU is preparing to reallocate amounts for the 2007-2013 period, with some of the unspent money potentially to be redistributed to other countries. The same people have been at the helm of the Transportation Ministry for years - Radu Berceanu (PDL, transportation minister twice in 2006-2007 and 2009-2010), Gheorghe Dobre (PDL, transportation minister between 2004 and 2006, currently secretary general of the Transport Ministry), Ludovic Orban (PNL, minister between 2007 and 2008), Anca Boagiu (PDL, currently transport minister, who also held this position in 2000, when she succeeded Traian Băsescu), and the results are showing today: the infrastructure is extremely poor, and the "free" money for building roads and motorways is stuck because of the Ministry's inaction. ( Z.F.)

Denmark's Vestas, the world's leader in the field of wind farm technology, with turnover worth above 6bn euros in 2009, decided to open an office in Romania this year considering the company has already sold turbines with a 450 MW capacity for investments in Dobrogea. After six years' research, Vestas now says it is time it started developing domestically.
"We have been eyeing Romania over the past five or six years, but it is now that we decided to open a local office. This is a decision that proves the domestic market has reached a certain maturity. We are in the right place at the right moment. Romania is the most promising country in Eastern Europe," says Hans Jorn Rieks, chairman for Central Europe with Vestas.
The best-known wind farms due to be equipped by Vestas are the ones being built by Energias de Portugal in two towns of Dobrogea, Pe[tera and Cernavod`.
According to Rieks, the big concern as regards the Romanian market is legislation. "The existence of clear legislation will open the market to several players as banks are always looking at something tangible and are not willing to take on risks," he says. (Z.F)

BRUSSELS, Jan. 27 - The European Financial Stability Facility (EFSF), the rescue fund set up by Eurozone countries last May, Tuesday saw strong demand for its debut bond issued to raise cash for Ireland. Demand for the five-year bond was reportedly nearly nine times of the 5 billion euros (6.8 billion U.S. dollars) on offer, which is seen as a sign of confidence in the facility. Klaus Regling, chief executive of the EFSF, said that the strong demand "confirms confidence in the strategy adopted to restore financial stability in the euro area." The 440-billion-euro (580-billion-U.S. dollar) EFSF is not offered directly by eurozone countries, but guaranteed by them to borrow money by issuing bonds on the market for debt-laden eurozone members. According to the aid package endorsed by European Union (EU) finance ministers last November to Ireland, the EFSF, will raise 17.7 billion euros in total for Dublin.

Earlier this month, the European Commission also raised 5 billion euros for Ireland through its first bond issuance under the European Financial Stabilization Mechanism (EFSM), which is guaranteed by the EU's budget. Markets snapped up the bond within one hour.

Recently, Grzegorz Konieczny, general manager of Franklin Templeton and portfolio manager of FP (Fondul Proprietatea), was quoted as saying by Reuters that the Government had to sell holdings in order to pay back the IMF programme. He said Fondul Proprietatea (Property Fund) expected the Government could raise nearly 1.5 euros selling shares in state-owned companies in the next couple of years. Agerpres,Mediafax,
So far, the authorities have only paid interest on the nearly 20 billion-euro record-high loan sealed with the IMF, the European Commission and the World Bank nearly two years ago.
The first principal payment will be made on August 6th 2012 and will amount to 546 million special drawing rights (SDR), i.e. over 600 million euros at the current SDR value.
"The repayment of the loan is done in instalments. There is no major pressure involved. Under no circumstances is the Government unable to repay the loan unless it sells holdings in state-held companies. The sale is a solution that can be considered. The Government's intention to sell stakes on the stock exchange has been previously announced. It is not unexpected. But I don't think the Government is forced to do this amid pressure to repay the loan," said analyst Aurelian Dochia.
On another note, as part of the new precautionary arrangement with the IMF, the state-run companies will be much better monitored, considering the high level of arrears, and the Fund believes the resources derived from privatising viable companies could provide cheaper financing of the budget deficit, sources close to the negotiations say.
On the other hand, while the arrangement with the IMF will continue in some form or another, the continuation of the agreement with foreign banks on maintaining exposure to Romania is not ironclad, and may be dropped, as parent banks maintain exposure voluntarily, sources close to the talks say. (Z.F.)

The outgoing head of the CBI today strongly criticised the government's lack of strategy for economic growth and warned that ministers would fail to reduce Britain's budget deficit without measures to boost demand. Sir Richard Lambert used his last big speech as director general of the employers' organisation to accuse the Conservative-Liberal Democrat coalition of taking policy initiatives for political reasons "apparently careless of the damage that they might do to business and to job creation". Speaking on the eve of the release of official growth figures expected to show a slowdown in the pace of economic expansion in the final three months of 2010, Lambert backed plans to cut the deficit but said they had to be accompanied by increased output and employment, which would increase tax receipts. "The sooner we can get output back up to the levels that were expected before the recession, the quicker government revenues will rise to narrow the fiscal gap. "It's not enough just to slam on the spending brakes. Measures that cut spending but killed demand would actually make matters worse." Lambert said the government had been single-minded, even ruthless, in the pursuit of spending cuts but had not been "nearly so consistent" when it came to policies that supported growth. "It's failed so far to articulate in big picture terms its vision of what the UK economy might become under its stewardship."