US & World News

Banks in the world are preparing in peace to work with a new Greek currency.

Some financial institutions have never cleared the drachma of their computer systems after the adoption of the euro by Greece in 2001. They would be ready in a flash if the problem of debt forced the country to return to the good old banknotes and coins denominated in drachmas.

In any case, banks are accustomed to change: they have managed the transition of financial markets to the euro in 1999 and the emergence of currency as the Estonian kroon (up ; its replacement by the euro in 2011) and the Kazakh tenge with the breakup of the Soviet Union.

Moreover, it stirs behind the scenes since 2009, when the onset of the debt crisis in Greece, says Hartmut Grossman, American society ICS Risk Advisors works with banks Wall Street.

"Many companies, particularly in Europe and also here, studying it for a long time," said Hartmut Grossman. "All financial institutions are prepared for this eventuality. The departure of Greece in the euro area is not a new idea."

The European Union says it wants to keep the euro in Greece. Polls show that the Greeks want to keep the single currency. But they also voted last Sunday for parties opposed to the bailout of the EU and the International Monetary Fund, which has again raised doubts about the maintenance of the country within the Ten- Sept.

EXCHANGE CONTROL

If Greece leaving the euro, it certainly would impose exchange controls, say bankers, which would not prevent dealings in the new currency.

"The rooms specializing in foreign exchange markets can be ready fast enough. It depends on exactly how to pass out of the euro area, "said Lewis O'Donald, chief risk officer of London-based investment bank Nomura Japan

.. The currency ……. not freely tradable, as the Chinese yuan, followed in markets other than through the use of derivatives such as contracts term for example

. If Greece chooses a fixed exchange rate, everything will depend on the exchange ratio used. If the government chooses a euro for a new drachma, such parity would not be sustainable for very long and would involve major losses for banks Banks

. é ; tudié opportunities to protect themselves but few have taken concrete steps

. "Banks are very, trè s reluctant to start shouting fire. They know what's going on (would) and what would a panic, "said a London lawyer to advise financial institutions

. Most people just check the law applicable to their contracts, are covered against defects and examine all the legal problems that an outflow of Greece to the euro could raise … Simulations

…… have been made. But we do not really know how to operate an output

…. ….. "For transactions denominated in euro, what will their status in case of change in the nature of this currency?" asks Miles Kennedy, a partner at PricewaterhouseCoopers

.

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America Movil, the phone giant owned by Mexican billionaire Carlos Slim, said Thursday it will buy the California-Simple Mobile to expand its market presence ; American.

This is the second external expansion of the group within days.

Simple Mobile is a mobile virtual network operator, with more than one million subscribers. In March, the number of subscribers of Tracfone, the U.S. subsidiary of America Movil, reached just over 20 million.

America Movil, the leading provider of mobile services in Latin America, announced Tuesday its intention to increase its stake in Dutch KPN to 28%, thus taking hold in Europe as part of a transaction of more than 2.5 billion euros.

Bertelsmann announced Wednesday for the first quarter of 2012 up 13% of operating profit and 5% of its turnover, confirming its annual target of moderate growth CA

The first media group in Europe – which has among others the broadcasting group RTL and publisher Random House – said that its operating profit (EBIT) reached 280 million euros against 248 million a year ago.

"For the full year, we are confident to achieve our goal of moderate growth in sales, EBIT stable at a high , and an increase in profit after minority interests, "said Thomas Rabe said in a statement, chief executive of Bertelsmann. 

RTL Group also announced Wednesday an increase in sales during the first quarter. Growth on French and German advertising markets offset a continued decline in Southern Europe and East.

Bertelsmann, which focuses on digital and abroad to spur growth, announced in late March a change in legal structure, which might suggest that the group is more strongly opposed to an introduction scholarship.

European shares rebounded Tuesday to midday, after a session that had brought equity markets in Europe to a low of three months.

The rebound is still limited as tensions persist in the euro area.

In Paris the CAC 40 rose 1.18% to 3135.03 points. In Frankfurt, the Dax gained 0.69% and London, the FTSE is 0.32%. The pan-European index Stoxx 50 in advance for its share of 0.93%.

The values, Michelin, a time reserved to decline, lead of almost 7.11% and the best performance of the CAC 40 after the publication of its turnover for the first quarter showing lower sales volumes offset by price increases.

STMICROELECTRONICS lead of more than 4.50% despite announcing a first-quarter loss attributed to the decline in sales in the segment of products for mobile phones and the impact a court decision.

Essilor rose by nearly 1.61% after announcing strong organic growth over the first three months of the year. 

NOVARTIS was down 1.18% after confirming expect a slight deterioration in profitability this year after a first quarter affected by an interruption production on one of its sites in the U.S. and unfavorable basis for its subsidiary Sandoz.

On the bond market, Bunds are below their record highs Monday, the market pausing, but they remain attractive to the extent that the uncertainty in the euro area is now affecting his core.

After the resignation of the government, the Netherlands, however, successfully awarded two bond lines that allowed them to raise two billion euros. 

Sign of the tensions in the euro area, Italy had to pay Tuesday unprecedented efficiencies since January in connection with auctions of zero coupon bonds or indexed.

Investors also sought a high premium for a tender Spanish short term.

On the foreign exchange market, the euro is changing the balance of around 1.3163 dollar but failed to really bounce back despite the successful bond issue in the Netherlands and after experiencing its worst day in a week Monday.

The European currency hit a 20-month low against the pound sterling at 81.45 pence, weighed down by concerns over the euro area.

Small and medium businesses, entrepreneurs and self-family businesses, which account for most of the economic fabric of the country, paying a heavy price for the Greek crisis. The European Commission is trying to address the funding problems they suffer. In Greece, six out of ten SMEs have seen their incomes decline in 2011.

Up to a thousand individual companies will put the key under the door every week in Greece in the first half of 2012 due to the serious crisis that is sinking the country, said Friday the European Commission, which seeks to root the problem.  

"Greece is facing an economic crisis and social crisis which is reflected in the situation of small and medium enterprises: six out of ten companies have seen their incomes decline in 2011 and 150,000 jobs were lost," said the Commission in a press on the sidelines of the visit to Athens Friday the European Commissioner for Industry, Antonio Tajani. "It is estimated that during the first half of 2012, up to 1,000 small businesses have closed every week," said the statement, which does not provide estimates on the number of companies created in parallel.

The Commission therefore calls for increased aid to these companies, self-entrepreneurs and family businesses, which form the bulk of the Greek economic fabric. Since last September, the European Union through its Task Force for Greece including trying to find ways to overcome the credit crunch affecting SMEs, banks, deficit, cut off from markets and dependent on the ECB, having suspended loans. In March, a special guarantee fund, with 500 million euros, was created by the EU to promote through the European Investment Bank lending to SMEs up to a billion euros.

According to the Commission, in 2010, Greece had 742,600 very small businesses, employing a total of 2.512 million employees, over 85% of total employment in the country, a record level in the EU. These structures produce 35.3% of the value added of the country against 21.8% on average in the EU. With 14% of employees on average in Greece, against 33% in the rest of the EU, large companies they create 28% of the value added, highlighting the low productivity of small businesses in Greece, the Commission added.

The Italian government expects an economic contraction slightly less than 1.3% in 2012, said Monday the Secretary of State for Economy Gianfranco Polillo.

On an Italian television channel, he said that the macroeconomic forecasts of the government may be revised at a meeting Monday night and approved es Wednesday.

The previous government forecast for 2012, conducted last year, had forecast a contraction of 0.4%.

The Bank of Italy has scheduled its next down 1.5%, -1.3% the European Commission and the Italian employers' organization Confindustria -1.6%.

The blacklist of tax havens in 2012 was reduced to a trickle, from 18 to 8 members this year. The government is attacked for its laxity. The headquarters of the Cayman National Bank in George Town. The Cayman Islands belong to the core of tax havens.

The list of states considered by France as uncooperative in terms of transparency and exchange of tax information has been updated for 2012.

Surprised, she has been drastically reduced: exactly eleven states have been removed (Anguilla, Belize, Costa Rica, Dominica, Grenada, Cook Islands, Islands and Caicos Turkey, Liberia, Oman, Panama, Saint Vincent and the Grenadines have been removed from this list) for a single added (Bostwana). Among the endless extras, we can see Brunei, Marshall Islands, Montserrat, Nauru, Niue Island, or the Philippines.  

In total, in less then ten states listed on French blacklist of tax havens. The withdrawal was decided, either because these countries have concluded with France a bilateral agreement to exchange any information necessary for the application of their tax law, or in reciprocal because the Global Forum on Transparency and Exchange of Information in Tax Matters (OECD) has removed himself from the list.

Sometimes this can lead to some contradictions, as in the case of Costa Rica came out of the French list, even as the World Forum reminded last week that "the law might hinder the effectiveness of exchange of information ".

"A sustained vigilance"

Asked about this issue by Nicole Bricq, general rapporteur of the Finance Committee of the High Assembly, Valérie Pécresse has ensured that the states concerned were subject to sustained vigilance. "The challenge for the coming years was to put the agreements under vigilance" has justified the Minister of Budget. Before insisting: "I think we should be very firm on the implementation of agreements." But Valérie Pécresse admits, some countries with which France has signed agreements are still experiencing "pain points" in the image of Switzerland. Recently a delegation of Bercy was sent to Geneva to say that the implementation of the agreements was not satisfactory.

According to figures released by the Ministry, 77 000 French bank accounts abroad were identified in 2010, three times more than in 2007. Ms. Pécresse also said that tax audits had reported 16 billion euros in 2010, "1 billion more than in 2009," did she congratulated.

An enthusiasm not shared advocates the fight against tax havens. According to the NGO CCFD-Terre Solidaire (Catholic Committee against Hunger and for Development), at least 20 billion euros each year would continue to escape the budget of the French government because of tax evasion. In a report last October, the NGO also points out that according to the Tax Justice Network, it is not 8 but 54 states in the world who cultivate a "high degree of financial opacity", nearly a quarter countries of the planet should be placed on the gray or black list.

Specifically, the inclusion on the blacklist French is not trivial for states. For businesses located there are heavily taxed by France. The rate of withholding tax on passive income (dividends, interest, royalties) are 50% when they are poured into an entity present in the territory uncooperative. In addition, certain provisions of the parent-subsidiary regime are removed as the exemption of 95% of corporation tax on dividends paid by a subsidiary to its parent.

Deficit to around 6.4 billion euros in February, the balance of foreign trade has suffered because of the cold spell which caused an increase in energy purchases. Customs estimate that exports have benefited from "buoyant manufacturing sales".

The trade deficit widened substantially France in February compared with the previous month, reaching 6.398 billion euros, Customs said Friday. "In February, the surge in imports is partly attributable to energy purchases related to the cold wave, which leads to relativize the rising deficit to -6.398 billion euros, after -5593000000 in January," said Customs in a statement.  

"The cold wave that hit France and implementation of maintenance work on three French refineries led to a sharp surge in energy supply (electricity and refined petroleum products)", said the Customs. Imports amounted to 43.553 billion euros and exports 37.155 billion when adjusted for seasonal variations and the number of working days.

Exports have benefited from "buoyant manufacturing sales, while those of agricultural products and military equipment contract sharply again," commented Customs. Exports of transport equipment have found "their best", due to large supplies of satellites and a recovery in exports of motor vehicles.  

Dynamic exports to Russia and the Middle East

Customs also noted "the good performance of electronic and electrical equipment and metal products (oil and nuclear industries)." By region, exports remained nearly stable to the countries of the European Union but have been "particularly strong" to Europe outside the EU (deliveries of parts of satellites to Russia) and the Near and Middle East (aeronautics and industrial equipment). In contrast, sales to America have been reduced (fuel, after a peak in January, and chemicals).

Import side, in addition to the surge in purchases of energy products, Customs stressed that "the level of aircraft acquisitions to Germany is also occasionally very high." "Import growth also reflects the continued strength of metals purchases, pharmaceuticals, industrial machinery, household appliances and electrical products and automotive industry," the statement said.

Regions, in February, increased purchases from the EU has accelerated: from Germany for the aerospace, Spain, Belgium and Sweden for energy products. Imports also increased since the rest of Europe (Switzerland for electricity and the pharmacy, Russia for natural hydrocarbons and refined products), but shrank from the Middle East. The deficit of 12 months completed end of February stood at 70.051 billion euros. The negative balance record set by France in 2011 was also again revised up to 70.437 billion, after a first revision to 70.104 billion euros on 8 March.

BNP Paribas and Societe Generale Wednesday reaffirmed their commitment to carry through their plan to reduce balance sheet.

Speaking at a conference organized by Morgan Stanley in London, Jean-Laurent Bonnafe, the CEO of BNP Paribas, has announced that the bank would be able to completed by the end of her program initiated in the second half of 2011, at the height of the debt crisis in the euro area.

He recalled that the group had given the end of February to the U.S. bank Wells Fargo loan portfolio to oil companies and sold in early March a 28 , 7% in the property company Klépierre. 

"Our number one priority remains the implementation of our plan to reduce balance (…) In all, we have already achieved 70% of the program," said ; John Lawrence Bonnafé.

BNP Paribas announced in September will reduce by 10% the size of its balance sheet by the end of 2012. In late 2011, its assets amounted to 1.965 billion euros against 1.998 billion at end-2010.

Speaking at the same conference, the CEO of Société Générale Frédéric Oudéaa assured that SocGen, whose market capitalization has shrunk by half last year, was also determined to achieve the reduction of its balance sheet.

"The deleveraging will continue," said Frederic Oudéa. "We have clear objectives."

During the fourth quarter of 2011, SocGen sold for 10 billion euros in assets, but analysts still expect the bank's most significant disposals to strengthen its solvency.

"BNP CLEARLY IN ADVANCE"

"On the 'deleveraging' (reducing balance, Ed), BNP Paribas is clearly ahead, with an impact on NLP ('profit and loss', Ed) quite limited. It's rather good news, "said Alex Koagne, an analyst at Natixis

." However, the Company General ; eral, I think they come to do their 'deleveraging' on the sale of loans but they are now waiting on disposal of business units, "he says ……

… "It's been several months since they announced they would sell assets and there was still nothing yet."

To strengthen their financial strength undermined by the crisis in the euro area and alleviate tensions in interbank liquidity, European banks have also begun to re reduce and diversify their funding sources and reduce their financing needs

. Their difficulties in dollar funding has also forced the European Central Bank has injected over $ 1.000 billion euros of liquidity to three years (LTRO) in the European banking system.

BNP Paribas said the bank had reached since the beginning of the year 60% of its funding needs for 2012, raising 12 billion euros between January 1 and March 22.

Societe Generale, for its part said it has raised 7.6 billion euros of debt since the beginning of the year, with a maturity average of 6.3 years.

SocGen is continuing its efforts to restructure its BFI, said its CEO. This table and a reduction of 50 to 60 billion euros of liquidity needs by 2013 in these activities.

In exchange, like most European banking stocks, securities of French banks have closed in the red Wednesday because of investor concerns about growth in the U.S. and the budgetary situation of Spain.

In Paris, BNP Paribas and Societe Generale ended the session down 1.3% and 2.89% respectively. Credit Agricole – who canceled his participation at the London conference – sold 2.82%. The European banking index ended down 1.45%.

Sales of new homes fell again in February in the United States. The lack of foreclosures flooding the housing market of goods at bargain prices. Average prices of back nine, however.

The housing market is still recovering from nine United States. Sales of new single in February fell for the second consecutive month, according to figures released Friday by the Washington Department of Commerce. They fell 1.6% from January, seasonally adjusted data, to 313,000 annualized transactions. He had declined by 5.4% the previous month (revised up).

Sales of new single are depressed for several years in the United States. Over the whole of 2011, sales fell 5.3%. The government has identified this year that 306,000 sales, is the lowest number ever recorded in its annals, dating back to January 1963. Sales of new homes suffer from competition caused by the high number of foreclosures caused by the crisis, resulting in the housing market an influx of goods sold at bargain prices detrimental to developers.

Despite the decline in sales, the average transaction price in February rose 2.2% on month and 1.8% yoy, to $ 267,700 dollars.

The ministry said there were 150,000 new homes for sale in the U.S. in late February, as much as a month earlier when the supply of such goods had fallen to its lowest level since January 1963 at least.