IMF surveillance, intended to detect economic vulnerabilities and imbalances, was inadequate. While staff sometimes pointed to booming credit, gaping current-account deficits or stagnant productivity, they downplayed the implications. This reflected a tendency, conscious or not, to think that Europe was different. Its advanced economies did not display the same vulnerabilities as emerging markets. Strong institutions such as the European commission and the European Central Bank (ECB) had superior management skills. Monetary union, for some less-than-fully articulated reason, changed the rules of the game. Such self-serving claims were in the interest of European officials, but why was the IMF prepared to accept them? One answer is that European governments are large shareholders in the Fund. Another is that the IMF is a predominantly European institution, with a European managing director, a heavily European staff and a European culture.  Still on familiar ground, the report goes on to criticise the IMF for acquiescing to European resistance to debt restructuring by Greece in 2010; and for setting ambitious targets for fiscal consolidation – necessary if debt restructuring was to be avoided – but underestimating austerity’s damaging economic effects.  More interestingly, the report then asks how the IMF should coordinate its operations with regional bodies such as the European commission and the ECB, the other members of the so-called troika of Greece’s official creditors. The report rejects claims that the IMF was effectively a junior member of the troika, insisting that all decisions were made by consensus.

A cultural association based near Barcelona is asking the mobile messaging service WhatsApp to add the porrón to its list of emojis, claiming the spouted glass pitcher possesses a “cultural and social meaning” that warrants recognition. In a petition at Change.org, the Blaus de Granollers argue that the wine flask – beloved of locals and feared and abused in equal measure by tourists who struggle to master its vinous stream – is “a symbol of our land” that occupies a unique place in Catalan culture. “[It] is much more than a kitchen tool,” the group says in a letter to WhatsApp’s CEO, Jan Koum. “It helps to create community, to strengthen bonds during meals.” The porrón, it adds, is passed from hand to hand, allowing many people to drink from the vessel, thereby creating a sense of cohesion and equality.  “It makes you feel part of a team. Besides, it helps us Catalans remember our roots – and you already know that if you lose your roots, you lose your identity.”

Perpetually weak growth has bedevilled attempts to tackle Greece’s chronic debt problem. Back in May 2010, when the European commission, the European Central Bank and the International Monetary Fund organised the first bailout, it was assumed that a rapid recovery and tight budget controls would see Greek national debt as a share of gross domestic product fall steadily. These forecasts proved to be wildly optimistic. As Greece sank deeper and deeper into recession, the debt ratio carried on rising, and now stands at about 180% of GDP.  Unfortunately, lessons have not been learned. The 2015 bailout package assumes that Greece will run a budget surplus, once debt interest payments are excluded, of 3.5% of GDP year in and year out. The IMF, which now has a more realistic assessment of Greece than the commission or the ECB, says few countries have managed to sustain budget surpluses of this size, and that Greece could do so only by further cutting wages and pensions. The IMF also thinks “it is no longer tenable” to imagine that Greece can move from having one of the eurozone’s weakest productivity growth rates to the highest. The IMF says that without debt relief, Greece’s debt could hit 250% of GDP by the middle of the century. Germany would prefer those discussions to be delayed until after its election in autumn next year. But the chances are that Greece will be back in the headlines before then.

   After the countless institutions and committees created on a European level, but also at the level of the EU member states, to ensure financial stability, why is the ECB bringing back the issue of state aid for banks?  Doesn't this automatically discredit the central bank in the Eurozone as overseer of the banks of systemic importance?  A day after the statements of the ECB officials, it was the turn of the governor of the Bank of Italy, Ignazio Visco, to mention that "in times of high uncertainty, the intervention of the state cannot be ruled out", because there is a risk of confidence in the banking system decreasing, as Financial Times writes. The questioning of the application of the European banking resolution framework, just a few months after its coming into effect, shows that indeed, the situation of the banking system in Europe is much more dire than the authorities will admit. Nevertheless, it is quite unlikely we will see defaults, in the classic sense of the word, among banks of systemic importance, but the escalation of the tensions between the governments of the Eurozone and the "separatist" tendencies is very likely. Until the market is allowed to function and to "clean up" the bank balance sheets, the European crisis will continue, despite the states' interventions, because it is increasingly clear that the printing press of the ECB will not help with financial stabilization and does not resolve the problem of the banks' solvency.  Any other "solution" does nothing but impose unbearable costs on European citizens and transform the resumption of economic growth into an impossible dream.

Italy's economy failed to grow between April and June as the country struggled with its creaking banking sector. GDP growth shrank to 0% in the second quarter compared to 0.3% in the first quarter.Germany's economy also slowed in the second quarter, albeit less markedly than had been expected.  Europe's largest economy expanded by 0.4%, down from 0.7% in the first quarter, but above forecasts of 0.2%. Overall, a second estimate of GDP across the eurozone confirmed that growth halved to 0.3% from 0.6% in the first three months of the year.GDP also fell across the 28-nation European Union to 0.4% from 0.5% between the first and second quarters.  In Italy, analysts had expected GDP to grow by between 0.1% and 0.3%.Italian Prime Minister Mario Renzi, is battling to reduce the bad debt in its banking sector, which is currently buried under €360bn worth of bad loans. Monte dei Paschi di Siena, Italy's third largest bank and the world's oldest lender, is saddled with €46.9bn of bad debt.  Alberto Bagnai, economic policy professor at the University of Chieti-Pescara, said: "There is no way to solve the banking problem without economic growth. If the whole nation doesn't start earning more it can't pay back its debts - public or private." The government expects the country to grow by 1.2% this year. However, the International Monetary Fund recently reduced its economic growth from 1.1% to 1%.The new data means that growth in the Eurozone's three biggest economies - Germany, France and Italy - has either slowed or completely stalled between the first and second quarters. France recorded no growth between April and June after GDP rose by 0.7% in the first quarter, boosted by business from the Euro 2016 football tournament.

Six investors, including American funds Apollo Global Management and KKR, are interested in the platform that will manage non-performing loans of approximately 9 billion Euros of the portfolio of "Banca Monte dei Paschi di Siena" SpA, sources quoted by Reuters claim. They also state that "Monte dei Paschi" has informed the potential bidders that the deal concerning the platform will go ahead, even though with slightly different terms than initially. The oldest bank in Italy is selling its 27.7 billion Euros non-performing loan portfolio as part of a complex scheme for the securitization of loan, as part of its complex rescue plan. "Monte dei Paschi" is working together with Italian investment bank "Mediobanca" on creating a platform that would manage the NPL portfolio and to bring in a partner that would improve the debt collection activity. "Monte dei Paschi" has announced on Friday that the platform would manage 9 billion Euros in NPLs, meaning one third of the loans sold as part of the aforementioned scheme.  According to sources, the bidders for the "Monte dei Paschi" platform are Cerved Credit Management, KKR in tandem with Varde Partners, Apollo Global Management, Cerberus, Prelios - together with Christofferson Robb & Company - and Lone Star. The "Monte dei Paschi" officials and those of the other parties mentioned made no statements about the report by Reuters.

Turkey tried to assure its citizens and the outside world on Thursday that there will be no return to the deep repression of the past, even though President Tayyip Erdogan has imposed the first nationwide state of emergency since the 1980s.  With Erdogan cracking down on thousands of people in the judiciary, education, military and civil service after last weekend's failed coup, a lawmaker from the main opposition party warned that the state of emergency created "a way of ruling that paves the way for abuse". Announcing the state of emergency late on Wednesday, Erdogan said it would last at least three months and allow his government to take swift measures against supporters of the coup that attempted to topple him over the weekend.  It will permit the president and cabinet to bypass parliament in passing new laws and to limit or suspend rights and freedoms as they deem necessary. For some Turks, the move raised fears of a return to the days of martial law after a 1980 military coup, or the height of a Kurdish insurgency in the 1990s when much of the largely Kurdish southeast was under a state of emergency declared by the previous government.   Deputy Prime Minister Mehmet Simsek - who previously worked on Wall Street and is seen as one of the most investor-friendly politicians in the ruling AK Party - took to television and Twitter in an attempt to calm nervous financial markets and dispel comparisons with the past. "The state of emergency in Turkey won't include restrictions on movement, gatherings and free press etc. It isn't martial law of 1990s," he wrote on Twitter. "I'm confident Turkey will come out of this with much stronger democracy, better functioning market economy & enhanced investment climate." But markets were less than confident. The lira currency was near a new record low, while the main stock index was down 3.6 percent. The cost of insuring Turkish debt against default also surged.  Erdogan blames a network of followers of an exiled U.S.-based cleric, Fethullah Gulen, for the attempted coup in which 246 people were killed and hundreds more wounded as soldiers commandeered fighter jets, military helicopters and tanks in a failed effort to overthrow the government.